Hayes v. Twin City Carpenters & Joiners Pension Plan et al

Filing 52

OPINION AND ORDER denying 33 Plaintiff's Motion for Summary Judgment; granting in part and denying in part 35 Defendants' Motion for Summary Judgment. See Order for specifics. (Written Opinion). Signed by Judge Eric C. Tostrud on 7/10/2019. (RMM)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA

Steven Hayes,
File No. 17-cv-05267 (ECT/BRT)
Plaintiff,
v.
Twin City Carpenters & Joiners Pension
Plan, et al.

OPINION AND ORDER

Defendants.

Gregory R. Merz and John M. Nichols, Gray Plant Mooty, Minneapolis, MN for Plaintiff
Steven Hayes.
Amanda R. Cefalu and Henry M. Helgen, III, Kutak Rock, Minneapolis, MN for
Defendants Twin City Carpenters & Joiners Pension Plan, et al.

In this ERISA lawsuit, Plaintiff Steven Hayes seeks to recover pension benefits from
Defendant Twin City Carpenters & Joiners Pension Plan (“the Plan”). The Plan began
paying Hayes a monthly retirement benefit in March 2011. The Plan suspended his benefits
in October 2013, after receiving information suggesting Hayes may have violated a Plan
rule that prohibited pensioners from working in certain employment for forty hours or more
per month. Following a lengthy administrative-appeal process, the Plan’s Claim Appeals
Committee affirmed the initial decision to suspend Hayes’s benefits.
Defendants have filed cross-motions for summary judgment.

Hayes and
Should their

summary-judgment motion be denied with respect to Hayes’s benefit claim, Defendants
alternatively seek remand of that claim. Defendants’ summary-judgment motion will be

granted against Hayes’s breach-of-fiduciary duty claim. The benefits claim will be
remanded to the Committee for further consideration consistent with this Opinion and
Order and in all other respects, the Parties’ summary-judgment motions will be denied. To
summarize, the administrative process that led to the decision to suspend Hayes’s benefits
was flawed, though not so seriously as to warrant heightened or de novo review of the
Committee’s final decision.

But the Committee’s decision cannot survive

abuse-of-discretion review. This is because the Committee adjudicated Hayes’s claim
under inapplicable Plan terms, nothing about the Committee’s decision or adjudicative
process suggests it considered or construed applicable terms that, when examined closely,
are materially different from the terms the Committee considered, and the terms the
Committee should have applied pose significant interpretive challenges.

Because it

remains unclear whether Hayes is entitled to the benefits he seeks, a remand is the
appropriate remedy.
I1
December 2010 to March 1, 2011—Hayes applies for, and is approved to receive,
unreduced early retirement benefits under the Plan. The Plan is a multi-employer pension

1

The facts in this section are taken from the Complaint, Answer, and documents in
the administrative record of Hayes’s pension-benefit claim and, unless noted otherwise, are
undisputed. The Parties did not jointly file the entire administrative record. Instead, Hayes
and Defendants each separately filed a subset of documents from the record that each
considers relevant to the pending motions. See Merz Aff. ¶¶ 2–3, Exs. A, B (filed by Hayes)
[ECF No. 41]; Cefalu Aff. ¶¶ 2–3, Ex. 1 (filed by Defendants) [ECF No. 37]. Many
documents were filed by both Hayes and Defendants; some documents were filed by only
one or the other. Regardless, the Parties’ administrative-record submissions share identical
pagination (appearing in the lower right corner of each document beginning with the prefix
“CARPS”). Therefore, and in the interests of convenience and efficiency, citations to
2

fund, Compl. ¶¶ 2, 7 [ECF No. 1]; Answer ¶ 2 [ECF No. 9], and Hayes is a participant in
the Plan, Compl. ¶¶ 6, 13; Answer ¶¶ 6, 13. In December 2010, Hayes applied to the Plan
for “Unreduced Early Retirement Benefit[s]” commencing March 1, 2011. AR 423–25,
see also AR 755, 1192–93; Defs.’ Mem. in Supp. at 4 [ECF No. 39]; Pl.’s Mem. in Supp.
at 4 [ECF No. 40]. In his application, Hayes identified February 28, 2011, as the last date
he “worked, or will work, in the Construction Industry.” AR 423. The Plan prohibited
retired participants who received benefits from being employed or engaging in work under
certain circumstances. AR 770–74, 1194–97. The Plan referred to this generally as
“Disqualifying Employment”—as in, employment that, if engaged in by the retiree, might
disqualify the retiree from receiving benefits. AR 770, 1194–95.2 In his application for
benefits, Hayes acknowledged his obligation to comply with these limitations. AR 425.
The Plan approved Hayes’s claim and began paying a monthly benefit effective March 1,
2011. AR 422.
October 2013—The Plan suspends Hayes’s benefits for engaging in Disqualifying
Employment. In a letter dated October 15, 2013, the Plan, through its Fund Administrator,
notified Hayes that it had “been informed that [he was] performing Disqualifying
Employment while continuing to receive [his] pension,” and that as a result his pension

documents from the administrative record will appear in this Opinion and Order with the
prefix “AR” and reference to the page number, simply as “AR __,” regardless of filer.
2

The Plan was designed to restrict certain pensioners from competing for jobs with
active union-member Plan participants. See Eisenrich v. Minneapolis Retail Meat Cutters
& Food Handlers Pension Plan, 574 F.3d 644, 649 (8th Cir. 2009) (citation omitted)
(describing the purpose and importance of Congress “allowing [ERISA] plans to suspend
the benefits of retirees who accept certain kinds of postretirement employment”).
3

benefits would be “suspended effective November 1, 2013.” AR 329–31. Under the Plan,
as the Administrator explained in the letter, “Disqualifying Employment” was: “Any
employment of forty (40) hours or more in a one (1) month period in Covered Employment
(defined as Employment for which an Employer has agreed to contribute to the Pension
Fund pursuant to the terms of a written Collective Bargaining Agreement or Participation
Agreement).” AR 330. The Administrator also quoted an “exception” to the general
suspension-of-benefit rule as follows:
Effective April 1, 2007, if you work more than forty (40) hours
per month in Covered Employment, the Plan will not suspend
your benefit unless your work in Covered Employment in that
month and the previous eleven (11) months totals more than
four hundred eighty (480) hours. If you have worked or been
paid for four hundred eighty (480) or more hours in Covered
Employment in the last twelve (12) months, your benefit will
be suspended. If you have worked or been paid for any
Disqualifying Employment that is not Covered Employment
during the twelve (12) month period, you are not eligible for
this exception to the rule and the Plan will suspend your benefit
for any month in which you work more than forty (40) hours
in Disqualifying Employment.
Id. The Administrator did not say whether it had considered this exception in Hayes’s case.
See AR 329–31. The Administrator notified Hayes that, to obtain reinstatement of his
pension benefit, he “must cease working in Disqualifying Employment and notify [the
Plan] in writing that [he had] done so.” AR 331. The Administrator requested copies of
Hayes’s tax returns for the years 2011, 2012, and 2013, and notified Hayes “that any
pension payments [he] previously received while working in Disqualifying Employment
will need to be reimbursed to the Plan.” Id. The Administrator explained that, if he
believed the suspension of his benefits was erroneous, Hayes could “contact the
4

Administrator to provide any information [he] may have to assist in resolving this issue.”
Id. The Administrator also informed Hayes that he had “the right to appeal this decision
to the Board of Trustees” and referred Hayes to the appeal-rights provisions of the
Summary Plan Description. Id. The Administrator did not describe in this letter the
information or rationale upon which it based its decision to suspend Hayes’s benefits. See
AR 329–31.
November 2013—Hayes disagrees with the Plan’s suspension of his benefits; the
Plan responds and clarifies its explanation for suspending benefits, and Hayes appeals.
Hayes responded to the Administrator in a letter dated November 4, 2013. AR 333. In his
letter, Hayes wrote that he disagreed with the determination that he was performing
Disqualifying Employment and requested copies of “all documents, records, and other
information relevant to [his] claim,” as permitted by the Plan. Id. (emphasis omitted). In
a letter dated November 8, the Administrator denied Hayes’s request for documents
relevant to his claim. AR 334–35. The Administrator explained that Hayes’s request for
documents could be approved only if he appealed the decision to suspend his benefits and
that, before the Plan would permit him to appeal, Hayes must first “explain ‘why the
determination should be reviewed.’” AR 334. The Administrator also explained that,
before he would be allowed to appeal, Hayes must provide information regarding (what
the Administrator previously determined to be) his Disqualifying Employment.

Id.

Finally, the Administrator took the position that, because in its view Hayes had failed to
notify the Plan of the Disqualifying Employment, the Plan was “entitled to ‘presume that
[Hayes had] worked for at least forty (40) hours in that month and any subsequent month’”
5

and that Hayes now had the burden of “demonstrating to the satisfaction of the Trustees”
that his benefits should not have been suspended under the Plan. AR 334–35. Hayes
responded with a letter to the Administrator on November 14. AR 336. In it, he wrote that
he disagreed with the Administrator’s determination and that “the purpose of this letter is
to file a formal appeal of that determination.” Id. Hayes requested that his appeal include
“a more thorough investigation that includes information from me and my employer, which
it does not appear was part of the original determination.” Id. In a second letter dated
November 18, Hayes provided information regarding his continued employment in
response to the Administrator’s request. AR 337. Hayes identified his employer as Alltech
Engineering Corporation in Mendota Heights, Minnesota, id.—the same employer for
whom Hayes had worked before he retired, AR 378. He described his job title as “Project
Manager” and his duties as sales, estimating, and managing industrial projects. AR 337.
December 2013—Hayes retains counsel, who contacts the Plan and elicits
additional explanation for the Plan’s decision to suspend Hayes’s benefits. Hayes retained
counsel, who wrote to the Administrator on December 19, 2013, repeating Hayes’s request
for records. AR 338–39. Hayes’s lawyer explained that his “objective in assisting Mr.
Hayes [was] to facilitate a resolution of this issue, and to provide a clearer understanding
for both parties as to the limited nature of Mr. Hayes’ employment with a contributing
employer, so as to avoid issues in the future.” AR 339. The Plan responded through its
counsel in a letter dated December 30. AR 340–42. In that letter, the Plan’s counsel wrote
that, owing to the “confusing” procedural posture of Hayes’s claim and “due to some loose
usage of terms in communications between the parties,” counsel would “explain the Plan’s
6

position on the issue.” AR 340. The Plan’s counsel disclosed that “a routine payroll audit
of Alltech” showed that Hayes had “done some work for pay” at Alltech after his pension
benefits commenced. Id. Counsel summarized a Plan term that he characterized as
requiring retirement-benefit recipients “to notify the Plan if he or she is starting any type
of work that is or may be disqualifying even if he or she does not expect to work 40 or
more hours per month,” and noted that the Plan had no record showing Hayes had notified
it of his continued employment with Alltech. Id. “In such a case,” the Plan’s counsel
wrote, the Plan’s “Trustees are entitled to ‘presume that you [the participant] have worked
for at least forty (40) hours in that month and any subsequent month.’” AR 340–41.
Counsel explained that the Plan “relied on the evidence that Mr. Hayes performed some
work for Alltech in applying the above presumption[] to suspend his benefit,” and that
Hayes now had “the burden of ‘overcom[ing] the[ ] presumption[] by demonstrating to the
satisfaction of the Trustees that they are not correct and that benefits should not actually be
suspended under the rules of the Plan.’” AR 341 (second alteration in original) (citation
omitted). The Plan’s counsel concluded his letter by asserting that “this matter is not
subject to appeal until Mr. Hayes has fulfilled his obligation to provide the requested
documents and has either provided evidence to rebut the above presumption or has declined
in writing to do so.” Id. (Counsel separately noted that Hayes’s retiree health coverage
was also “cancellable due to work in prohibited employment,” but directed Hayes’s counsel
to the Health Plan’s trustees to address this issue. Id.) Hayes’s counsel responded by letter
the next day (December 31) and committed to “work[ing] with Mr. Hayes to collect the
requested information” and submit it to the Plan. AR 343–44.
7

January 2014 to October 2014—Hayes’s counsel and the Plan communicate in an
effort to identify, gather, and submit information relevant to Hayes’s benefit claim. In
January 2014, Hayes and the Plan began an information-gathering process that would last
for over two years. (The Plan’s Claim Appeals Committee did not issue a final decision
on Hayes’s appeal until June 2, 2016, AR 951–57, but more on that later.)

This

information-gathering process included several more significant moments during its first
several months. In mid-January 2014, Hayes’s counsel submitted Hayes’s 2011 and 2012
tax returns. AR 345–50. Two months later, in mid-March, Hayes’s counsel provided the
Plan with an affidavit of Alltech’s CEO, Robert Lawrence. AR 352–55. In his affidavit,
Lawrence testified about the nature of Hayes’s post-retirement work, its significance to
Alltech, and Hayes’s compensation. See id. Lawrence testified that Hayes had “been paid
his regular wage rate as a Project Manager for 39 hours of work per month.” AR 353.
Lawrence acknowledged that Hayes’s income was “greater than what would seem to
correspond to an employee working 39 hours per month,” but attributed this to
discretionary bonus payments Alltech had made to Hayes in consideration for his “unique
circumstances as an employee.” AR 355. In August 2014, Hayes notified the Plan that he
was returning to work at Alltech on a full-time basis effective September 1, 2014. AR 360.
Though Hayes’s return to full-time work meant his right to claim pension benefits would
cease at that time, Hayes made clear that he intended that his “appeal remain[] active for
the suspension of benefits from November 1, 2013 through August 31, 2014.” Id. Hayes
also notified the Plan that he had terminated his relationship with the first lawyer who
represented him in his administrative appeal. Id. In October 2014, Hayes wrote to the Plan
8

asking about the status of his appeal. AR 361. At some point, Hayes also submitted his
2013 tax returns. AR 362–65.
November 2014 to January 2016—Hayes retains a new lawyer, who continues the
process of gathering and submitting relevant information to the Plan. In November 2014,
Hayes retained new counsel, AR 373, and the information-gathering process continued.
The next month, in December, Hayes’s new attorney requested and received a copy of
Hayes’s “pension file” from the Plan. AR 369, 371–72. On March 3, 2015, Hayes’s
counsel submitted to the Plan a memorandum and exhibits “as a supplement to the claim
submitted by Mr. Hayes on 14 November 2013.” AR 240–51. In the memorandum,
Hayes’s counsel argued that Hayes’s challenge to the decision terminating his benefits was
timely and sufficient, that Hayes had notified the Plan of his continued employment at
Alltech, that the Plan was incorrect to apply the forty-hour presumption to Hayes’s claim,
and that, presumption or not, Hayes had provided sufficient evidence to show that he never
worked more than thirty-nine hours per month for Alltech. See AR 240–50. Having
received no “formal response” to his March 3 submission, Hayes’s attorney emailed the
Plan’s counsel on July 14, 2015. AR 942. In his email, Hayes’s attorney described his
understanding that the Plan’s “Appeals Committee was seeking additional evidence
[beyond what was submitted with the March 3 memorandum] of the hours Mr. Hayes had
worked,” asked what kind of evidence the Plan sought, offered to facilitate the Plan’s
efforts to audit Alltech’s records of Hayes’s employment, and requested “any details” the
Plan could provide regarding “undocumented reports” that Hayes had worked more than
thirty-nine hours per month. Id. The Plan’s counsel responded the next day, identifying
9

categories of additional evidence the Plan believed would be probative of Hayes’s claim.
AR 941–42. On January 13, 2016, Hayes’s counsel provided the Plan with specific
information responsive to the categories of evidence identified by the Plan. AR 944. At
the same time, Hayes’s counsel also submitted documents showing Hayes’s expense
records (i.e., gas receipts, automobile maintenance expenses, telephone records, hotel
receipts, etc.) associated with his post-retirement Alltech employment. AR 3–165.
April 2016 to June 2016—The Plan’s Claim Appeals Committee affirms the initial
decision to suspend Hayes’s benefits, but bases its decision on inapplicable Plan terms. At
its meeting of April 21, 2016, the Appeals Committee decided to affirm the Administrator’s
initial decision to suspend Hayes’s retirement benefits, and the Plan’s counsel explained
the decision in a letter dated June 2, 2016. AR 951–57. In the letter, the Plan’s counsel
reviewed the evidence the Committee considered in reaching its decision, AR 951–52,
quoted what counsel described as the “relevant provisions of the Plan Document . . . in
respect to suspension of benefits,” AR 952–54, and explained the rationale underlying the
Committee’s decision, AR 954–57. In fact, the suspension-of-benefit provisions quoted in
the letter as having been considered by the Committee did not apply to Hayes’s claim. The
letter quoted the suspension-of-benefits provisions applicable to “Normal Retirement
Benefit[s],” AR 952–54, when it should have cited separate suspension-of-benefits rules
applicable to Unreduced Early Retirement Benefits, AR 1194–97, the type Hayes had
received and which were at issue in his claim. Leaving this error aside for now, counsel
explained that the Committee’s decision proceeded essentially in two steps. First, the
Committee determined Hayes had violated a Plan term requiring the submission of written
10

notice to the Plan “within thirty (30) days after starting work of a type that is or may be
Disqualifying Employment.” AR 953–54. In other words, the Committee determined that
the Plan required Hayes to submit written notice within thirty days of the date he
commenced his post-retirement employment with Alltech—March 1, 2011—of the fact
that he was continuing to work there, but that Hayes had not provided this notice. AR 954.
The Committee determined that, as a consequence of this failure, the Committee was
“entitled to presume Mr. Hayes was engaged in Disqualifying Employment to such an
extent that his benefit is subject to suspension from March 1, 2011 through August 31,
2014 (when Mr. Hayes advised the Plan he had returned to full time employment and
voluntarily suspended his benefit).” Id. Thus, the Committee determined, the burden fell
to Hayes to “prove ‘to the satisfaction of the Trustees that his work was not, in fact, an
appropriate basis, under the Plan, for suspension of benefits.’” Id. (citation omitted).
Second, the Committee reviewed the evidence before it and determined Hayes had failed
to meet his burden. AR 954–57. The Committee determined that much of the evidence
before it—including cell-phone records, receipts relating to vehicle usage, and income-tax
records—was not probative of whether Hayes had worked more than thirty-nine hours per
month for Alltech. AR 955–56. The Committee noted the absence of some information
“likely to be probative, including payroll summaries and paycheck or electronic deposit
stubs; emails; credit card statements, and; [sic] job sign in sheets and records,” and inferred
that “these documents, if disclosed, would not support Mr. Hayes’s claim.” AR 956. The
Committee discounted affidavits attesting that Hayes had worked thirty-nine hours every
month at Alltech after March 1, 2011, as “self-serving and unsupported by any objective
11

documentary evidence.” Id. Though the Committee had received “anecdotal evidence
from other Alltech employees, who reported anonymously that Mr. Hayes was regularly
employed for much more than 39 hours per month during the relevant period,” it “did not
rely upon the anonymous reports that Mr. Hayes was working significantly above 40 hours
per month due to the fact these accounts were from sources whose credibility could not be
verified.” AR 956–57. The Plan’s counsel closed the letter by advising Hayes that, because
his “appeal was denied,” he had the right to receive access to documents and other
information relevant to his benefit claim and that he had the right to bring a civil action
under ERISA. AR 957.
December 2016—Hayes retires again, and the Plan begins recouping overpaid
benefits. Hayes retired again effective December 31, 2016. AR 192. Hayes’s retirement
triggered the reinstatement of his pension benefits.

However, the Committee’s

determination that Hayes had engaged in Disqualifying Employment while receiving
retirement benefits between March 2011, and the suspension of his benefits effective
November 1, 2013, meant the Plan believed it had overpaid benefits to Hayes in the amount
of $233,508.48. AR 192–93. The Plan contained a provision addressing this situation:
“Overpayments attributable to payments for any month or months for which you engaged
in Disqualifying Employment will be deducted from pension payments otherwise paid or
payable subsequent to the period of suspension of benefits.” AR 774. In a letter dated
December 8, 2016, the Administrator notified Hayes that the Plan would recoup the
overpayment by deducting amounts from his monthly pension benefits until the full amount
of the overpayment had been recovered. AR 192–93.
12

November 2017—Hayes commences this action. Hayes commenced this action on
November 29, 2017. See Compl. In his complaint, Hayes named as Defendants the Plan,
the Board of Trustees of the Plan, the Claims Appeals Committee, and individuals who
served on the Board of Trustees and Appeals Committee. Compl. ¶¶ 2–5. Hayes has since
agreed “to not pursue claims against the Individual Defendants.” Stipulation ¶ 3(a) [ECF
No. 22]. Hayes asserts claims under just the Employee Retirement Income Security Act of
1974, 29 U.S.C. § 1001, et seq. (“ERISA”). See Compl. ¶¶ 63, 67, 71. He seeks recovery
of pension benefits the Plan did not pay him in the amount of “at least $79,781.50.” Id.
¶ 61. Hayes also seeks relief with respect to benefits the Plan determined were improperly
paid and therefore have been, or will be, recovered by the Plan through offset. Id. ¶ 65.
Hayes alleges that “Defendants wrongfully have recovered and continue to recover from
Plaintiff’s past and future pension benefits alleged overpayments of pension benefits paid
to Plaintiff from March 1, 2011 through October 31, 2013, which such amount Defendants
have determined to be $233,508.48.” Id. ¶ 66. Hayes also alleges that Defendants breached
fiduciary duties in the adjudication of his claim. Id. ¶¶ 68–71. Hayes seeks to recover
past-due benefits, equitable relief, interest, and attorneys’ fees. Id. at 16–17, ¶¶ 1–6.
II
Summary judgment is warranted “if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
Fed. R. Civ. P. 56(a). A dispute over a fact is “material” only if its resolution might affect
the outcome of the suit under the governing substantive law. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986). A dispute over a fact is “genuine” only “if the evidence is
13

such that a reasonable [fact-finder] could return a verdict for the nonmoving party.” Id.
“The evidence of the non-movant is to be believed, and all justifiable inferences are to be
drawn in his favor.” Id. at 255 (citation omitted). Especially relevant to suits under ERISA,
“in ruling on a motion for summary judgment, the judge must view the evidence presented
through the prism of the substantive evidentiary burden.” Id. at 254. As the Supreme Court
explained in Anderson, a public-figure defamation case:
[A] court ruling on a motion for summary judgment must be
guided by the New York Times [Co. v. Sullivan, 376 U.S. 254
(1964)] “clear and convincing” evidentiary standard in
determining whether a genuine issue of actual malice exists—
that is, whether the evidence presented is such that a reasonable
jury might find that actual malice had been shown with
convincing clarity.
Id. at 257. Here, it is necessary first to determine the burden Hayes faces in challenging
the decision to suspend his benefits and then to consider the Claim Appeals Committee’s
final decision in light of that burden, summary-judgment law, and ERISA.
A
The basic law governing the determination of the correct standard of review (i.e.,
the burden Hayes faces in challenging the suspension of his benefits) is settled. Suits
brought under § 1132(a)(1)(B) to recover benefits allegedly due to a participant are to be
reviewed de novo unless the benefit plan gives the administrator discretionary authority to
determine eligibility for benefits. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101,
115 (1989). If the plan grants the administrator such discretion, then “review of the
administrator’s decision is for an abuse of discretion.” Johnston v. Prudential Ins. Co. of
Am., 916 F.3d 712, 714 (8th Cir. 2019) (quoting McClelland v. Life Ins. Co. of N. Am.,
14

679 F.3d 755, 759 (8th Cir. 2012)). Here, there is no dispute the Plan grants the Trustees
“full authority to interpret and apply the provisions of” the Plan and “full authority to
determine all issues of eligibility for benefits, and issues regarding the amount and types
of benefits payable.”

AR 781. Ordinarily, the presence of this discretion-granting

language would be enough to warrant abuse-of-discretion review. Hayes argues the
decision to deny his claim should nonetheless be reviewed de novo because, he says, the
Plan committed several legal violations in adjudicating his benefit claim.
1
Hayes first argues that the Claim Appeals Committee lacked a quorum when it
affirmed the initial decision to suspend his benefits. Pl.’s Mem. in Supp. at 17–18. Hayes
contends that the absence of a quorum “negates every action the Committee took with
respect to [his] benefit claim,” and that “de novo consideration is required because the
Court cannot defer to, or for that matter review, a decision that as a matter of law is the
same as no decision at all.” Id. at 18. Hayes grounds this argument on McKeehan v. Cigna
Life Insurance Co., 344 F.3d 789 (8th Cir. 2003), an ERISA case he says stands for the
proposition that “[w]here a plan confers discretion on one party to make claims decisions,
but another person makes the decision, the Court must apply a de novo standard of review,”
Pl.’s Mem. in Supp. at 17, and on Minnesota Court of Appeals cases addressing the
consequences of a lack of a quorum under Minnesota law, id. at 18.
The record shows a quorum was present when the Claim Appeals Committee
decided Hayes’s claim, but why this is so requires explanation. Start by framing the issue.
A “quorum” is “[t]he minimal number of officers and members of a committee or
15

organization, usually a majority, who must be present for valid transaction of business.”
The American Heritage Dictionary of the English Language 1439 (4th ed. 2009). To
determine whether a quorum existed at any given committee meeting, it usually is
necessary to know (1) the identity and number of committee members, (2) the identity and
number of members whose presence the committee’s governing documents require for a
quorum, and (3) the identity and number of members who were present at the meeting in
question. Here, the Parties agree on the second and third of these questions. The Plan says
that “[a] quorum of a Committee is a majority of the members of the Committee,” AR 1249,
and two trustees attended the meeting at which a final decision was made on Hayes’s claim,
AR 548–56. To state the obvious then, for two trustees to be “a majority of the members
of the Committee,” AR 1249, the Claim Appeals Committee must be comprised of three
or fewer members. Hayes avers the Committee had four members when it made a final
decision on his claim, Pl.’s Mem. in Supp. at 14, 17, and Defendants say it had three, see
Defs.’ Resp. Mem. at 2–4 & n.1 [ECF No. 44].
The Parties’ dispute over this issue boils down to whether an “alternate” member of
the Claim Appeals Committee must be counted to determine the number of Committee
members. Hayes says he must, Pl.’s Reply Mem. at 2–3 [ECF No. 47], and Defendants
say not, Defs.’ Resp. Mem. at 3 n.1. Citing to minutes of a February 2015 annual meeting
of the Board of Trustees, Hayes asserts that, when it made a final decision on his claim in
April 2016, the Claim Appeals Committee was “composed of Trustee Hamilton, Trustee
Johnson, Trustee Perrier, Alternate Trustee Marquis, Fund Counsel Anderson, and the

16

Fund Administrator.” Pl.’s Mem. in Supp. at 14; D 64.3 Defendants do not dispute this
description of the Committee’s composition in April 2016.4 The Parties agree that the
Plan’s counsel and administrator were non-voting Committee members and do not count
in resolving whether a quorum existed. Pl.’s Mem. in Supp. at 14; Defs.’ Resp. Mem. at 3
n.1. Of the Committee members eligible to vote, two were present at the April 2016
meeting: Hamilton and Perrier. AR 548, 554–55. Hayes argues that the Committee
consisted of four “voting” members, and that two is not “a majority of the members” of a
committee of four. Pl.’s Mem. in Supp. at 14. Of course, to argue as Hayes does that the
Committee had four voting members requires including Alternate Trustee Marquis in the
count. Defendants argue that the Plan requires counting alternate trustees only if they were
“empowered [to] act ‘in the absence of a regular Trustee.’” Defs.’ Resp. Mem. at 3 n.1
(quoting AR 1240).
An alternate trustee should not be counted to determine the Committee’s overall
size, and therefore the Committee acted with a quorum when it met and rendered the final
decision on Hayes’s claim. By definition, an alternate trustee or committee member has

3

The pagination prefix “D” appears on a handful of documents in the administrative
record—all minutes of annual meetings of the Board of Trustees—at the end of Exhibit A
to the Affidavit of Gregory R. Merz. ECF No. 41. No explanation is given for why these
documents have a different pagination prefix, but it does not seem to matter. The Parties
do not dispute that these documents are part of the administrative record.
4

The Parties seem to agree, but do not explain why, minutes of the Board of Trustees’
February 2015 “Annual Meeting” show the Claim Appeals Committee’s composition in
April 2016. Perhaps there was a February 2016 annual meeting, but the Committee’s
composition was not addressed or altered. Perhaps there was no February 2016 annual
meeting. Regardless, there is no good reason to second-guess the Parties and their
agreement on this issue.
17

no vote unless serving (as an alternate) for an absent regular member. See AR 1240. It
would make little sense to determine a committee’s size by counting individuals whose
voting power is contingent on the absence of regular committee members. Put another
way, alternate members usually are not intended to increase a committee’s size for all
purposes; they are intended as a safeguard against the unavailability of regular members
with respect to particular actions.

The Plan is consistent with this common-sense

understanding. It says “[a]n alternate Trustee will act in the absence of a regular Trustee
in the order in which they are designated as alternates.” Id. (emphasis added). Though the
Plan also says that “[f]or purposes of determining a quorum, designated alternate
Trustee(s), if any, will be included,” AR 1242 (second alteration in original), this is best
understood to refer to determining a quorum at any given meeting, not to determining the
size of a committee. The sentence appears in a section of the Plan regarding the conduct
of meetings (entitled “Meetings – Notices; Quorum; Voting.”), not the composition of
committees. Id. Committees—their identities, purposes, and composition—are addressed
separately. AR 1249–51. Hayes cites several cases for the proposition that decisions made
without a quorum are invalid, Pl.’s Mem. in Supp. at 18, but he cites no authority that
would support counting an alternate trustee or member to determine a committee’s size.
To summarize then, the Claim Appeals Committee had three members at the time it made
a final decision on Hayes’s benefit claim, and two of those members (a majority) attended
the meeting and voted on Hayes’s claim, meaning the Committee acted with a quorum.5

5

The determination that the Committee acted with a quorum at its April 2016 meeting
obviates the need to consider Defendants’ argument, supported by the extra-record
18

2
Hayes next argues that procedural irregularities tainted the Committee’s decision to
suspend his benefits and require the decision to be reviewed here de novo. Pl.’s Mem. in
Supp. at 19–24. Hayes begins this argument by citing Woo v. Deluxe Corp., 144 F.3d 1157
(8th Cir. 1998), and describes its rule: “In this Circuit, material, probative evidence
demonstrating that (1) a serious procedural irregularity existed, which (2) caused a serious
breach of the plan administrator’s fiduciary duty to a plan participant require[s] the Court
to apply a less deferential standard of review [to] the fiduciary’s decision.” Pl.’s Mem. in
Supp. at 19 (citing Woo, 144 F.3d at 1160).

“The Supreme Court’s decision in

[Metropolitan Life Insurance Co. v. Glenn, 554 U.S. 105, 115–16 (2008)] abrogated Woo
to the extent Woo allowed a less deferential standard of review based on merely a conflict
of interest.” Boyd v. ConAgra Foods, Inc., 879 F.3d 314, 320 (8th Cir. 2018) (citation
omitted). But the Eighth Circuit “has not definitively resolved the impact of Glenn on the
‘procedural irregularity component’” of Woo. Waldoch v. Medtronic, Inc., 757 F.3d 822,
830 n.3 (8th Cir. 2014) (quoting Wrenn v. Principal Life Ins. Co., 636 F.3d 921, 924 n.6
(8th Cir. 2011)), as corrected (July 15, 2014); see also Leirer v. Proctor & Gamble
Disability Benefit Plan, 910 F.3d 392, 396 (8th Cir. 2018) (citation omitted) (same).
Assuming the procedural irregularity component of Woo remains good law, “[t]he mere
presence of procedural irregularities . . . does not warrant the less deferential standard.”

Declaration of Rick Lemke [ECF No. 45], that the Committee considered Hayes’s claim
again at its June 1, 2016 meeting and that a quorum was present at that meeting. Defs.’
Resp. Mem. at 3–4; Pl.’s Reply Mem. at 3–5 (objecting to the submission and consideration
of the Lemke Declaration).
19

Hillery v. Metro. Life Ins. Co., 453 F.3d 1087, 1090 (8th Cir. 2006) (citation omitted). “To
invoke this standard, any alleged procedural irregularity must be so egregious that it might
create a ‘total lack of faith in the integrity of the decision making process.’” Id. (quoting
Layes v. Mead Corp., 132 F.3d 1246, 1251 (8th Cir. 1998)). The procedural irregularities
Hayes identifies do not meet this standard, leaving no need here to determine whether the
procedural irregularity element of Woo remains good law.
Hayes points out that the Plan required the Claim Appeals Committee to “consist of
an equal number of Employer and Union Trustees,” AR 1249, and he asserts that the
Committee responsible for the final determination of his claim did not meet this
requirement, thus denying him “a Committee composed of Trustees who represented the
competing interests of management and labor in equal number,” Pl.’s Mem. in Supp. at 19.
It is true that the Committee’s overall composition did not meet this requirement when the
final decision on Hayes’s claim was made. The Committee tilted in favor of Union
representation—Hamilton was an Employer Trustee, and Johnson and Perrier were Union
Trustees. AR 1259. But this flaw does not give any reason to doubt the integrity of the
Committee’s process. The two trustees who attended the April 2016 Committee meeting
and made the final appeal decision, Hamilton and Perrier, came respectively from the
Employer and Union sides, and that 1:1 ratio of Employer-to-Union composition is at least
consistent—if not compliant—with the intent of the Plan. Though Hayes expresses the
concern in his briefing that “his claim appeal did not have the critical mass of opinions and
perspectives the Trust Agreement ordained as necessary to reach a decision on behalf of
the Plan,” Pl.’s Mem. in Supp. at 20, the Committee’s 2-to-1 Union-to-Employer
20

representation would, if anything, risk tilting that “mass of opinions and perspectives” in
his favor. Even if these concerns established the existence of a “serious procedural
irregularity,” Hayes has not shown how the Committee’s composition actually “caused a
serious breach of the plan administrator’s fiduciary duty to” him, as Woo requires, 144 F.3d
at 1160; he does not connect the flaw he identifies to the Committee’s final decision.6
Hayes asserts that “the process leading up to the final decision on appeal was
pockmarked with numerous irregularities” beyond the Committee-composition issue. Pl.’s
Mem. in Supp. at 20. He identifies three in particular: the Plan’s initial refusal to provide
him with requested documents; the Plan’s instructions to Hayes early in his claim process
that he would be permitted to appeal only if he first “explain[ed] ‘why the determination
should be reviewed,’” AR 334; and the time between the Plan’s initial decision to suspend
his benefits in October 2013, and the final decision on appeal in June 2016. Pl.’s Mem. in
Supp. at 20. Each of these concerns has support, but none rises to the level sufficient to
prompt de novo or other heightened review of the Claim Appeals Committee’s final
decision under Eighth Circuit law.
The Administrator’s initial refusal to give Hayes the documents he requested,
AR 334; violated the Plan, AR 1216 (“Upon request and free of charge, the claimant (or
claimant’s duly authorized representative) will receive reasonable access to and copies of
all documents, records, and other information relevant to the claim.”); and perhaps ERISA,

6

Hayes cites no authority apart from Woo and the Eighth Circuit’s ensuing line of
procedural-irregularity cases to support his argument that the Committee’s composition
justifies de novo review.
21

29 U.S.C. § 1024(b)(4). But the Plan later provided Hayes with a copy of his file. AR 369.
Hayes does not explain how the delayed production of these documents prejudiced him,
and he cites no authority applying heightened review under similar circumstances.
It is true that the Administrator and the Plan’s counsel first told Hayes that he could
not appeal the suspension of his benefits without clearing preliminary hurdles. AR 334
(Administrator writing on November 8, 2013 that, before he could appeal, Hayes must first
“explain ‘why the determination should be reviewed’”); AR 341 (Plan’s counsel writing
on December 30, 2013 that “this matter is not subject to appeal until Mr. Hayes has fulfilled
his obligation to provide the requested documents and has either provided evidence to rebut
the above presumption [that he had worked more than forty hours per month at Alltech] or
has declined in writing to do so”). These assertions contradict the Plan. It says that a
participant or beneficiary who receives an adverse benefit determination may “submit a
written appeal of the determination to the Plan Administrator explaining why the
determination should be reviewed,” and that any appeal “may” be accompanied by “written
comments, documents, records, and other information relating to the claim for benefits
which you or your beneficiary believes will support the claim.” AR 786 (emphasis added).
The phrase “explain[ing] ‘why the determination should be reviewed,’” AR 334, refers to
the content of an appeal, not to a prerequisite to an appeal, and the submission of documents
in support of any appeal—though usually wise—is permissive, not mandatory. Regardless,
the Plan did not hold to this position. The Plan’s subsequent communications with Hayes
did not reiterate it, and the Appeals Committee’s final decision contains no similar
rationale, see AR 951–57. Hayes does not explain how he was prejudiced by the Plan’s
22

initial assertion of this position; he does not describe how it altered his or his lawyers’
pursuit of his claim or caused a “serious breach of the plan administrator’s fiduciary duty”
to him. See Woo, 144 F.3d at 1160.
Though Hayes is correct that his administrative process lasted over thirty-one
months (from the October 15, 2013 suspension of benefits to the June 2, 2016 final
decision), and that this seems like an unnecessarily long time, Hayes shares responsibility
for this delay. The record shows that Hayes’s then-lawyers chose to pursue a process that
inevitably would take more time. Rather than file a single appeal consolidating Hayes’s
supporting evidence, they instead pursued an iterative process that involved going back
and forth with the Committee identifying, gathering, and submitting relevant information.
This was not unreasonable. Hayes’s lawyers may have concluded, for example, that a
back-and-forth administrative process held a greater chance of generating information
helpful to Hayes’s claim or a more complete record. Though it is true that the Plan took
too long to do certain things within this process, so did Hayes. For example, in March
2015, Hayes’s then-counsel submitted what he called a “supplement” to Hayes’s claim.
AR 240.7 The Plan did not respond to this submission, prompting Hayes’s counsel to email

7

Hayes seems to assert in his brief that his attorney’s March 2015 submission was
the appeal of his benefit suspension. Pl.’s Mem. in Supp. at 12. If that is what Hayes
means to say, he is incorrect. Hayes’s then-counsel repeatedly described his March 2015
submission as a “supplement” to Hayes’s claim or appeal, and not the appeal itself.
AR 240. He reserved the right to continue submitting—and did submit—additional
evidence supporting the claim, AR 240, 251, 944, meaning the submission might not be
Hayes’s final word on the appeal. And, to establish Hayes’s compliance with the Plan’s
sixty-day appeal deadline, AR 786, Hayes’s counsel asserted in his March 2016 submission
that Hayes had lodged his appeal through his letter of November 14, 2013, AR 245.

23

the Plan’s counsel in July, four months later. AR 942. The next day, the Plan’s counsel
identified additional evidence that Hayes might submit to support his claim, AR 941, but
that information was not submitted until January 2016, roughly six months later, AR 944;
AR 3–165. The record implies no reason why this part of the process had to take some ten
months (or, for that matter, why these things were not done earlier in the process). The
record does not suggest that Hayes was then seriously troubled by the duration of the
administrative process. Except for a four-month period from roughly August to November
2014, Hayes was represented by counsel throughout the process. See AR 360–61, 373.
Hayes identifies no contemporaneous objection to delay, and a thorough review of the
record filed with the Court shows that it contains no correspondence or other document
reflecting such an objection.8 In his briefs, Hayes asserts that the Plan’s “appeal procedure
did not bear even a passing resemblance to the appeal procedures provided by the Plan or
required under the Department of Labor regulations,” Pl.’s Mem. in Supp. at 22, that the
Plan “seriously flout[ed] the time periods provided by the Plan and the Department of
Labor Regulations,” id. at 24, and that the administrative process “fail[ed] to comply with
the claim processing deadlines provided by the Plan,” id. at 30. But no regulation, Plan
term, or deadline is cited to support any of these assertions. Considering the number of
possibly applicable regulations, see generally 29 C.F.R. § 2560.503–1, a guess as to which

8

The Claim Appeals Committee’s final decision on Hayes’s claim occurred June 2,
2016. AR 951. Hayes commenced this action on November 29, 2017, nearly sixteen
months after the Plan’s final determination of his benefit claim. See Compl.

24

ones Hayes thinks were violated would be impracticable.9 Hayes has not shown that the
delays he experienced were attributable to serious procedural irregularities caused by
Defendants.10
*
The Claim Appeals Committee’s final decision on Hayes’s administrative appeal
will be reviewed for abuse of discretion.
B
1
The Eighth Circuit applies two distinct tests to determine whether an ERISA plan
administrator’s benefits determination was reasonable and not an abuse of discretion. First,
to determine whether an administrator’s interpretation of plan terms was reasonable, the
court applies the five-factor test from Finley v. Special Agents Mutual Benefit Ass’n,

9

Hayes cites Gordon v. Metropolitan Life Insurance Co., 747 F. App’x 594 (9th Cir.
2019), as support for his argument that “a decision on the appeal of a denied claim ‘years
after the . . . deadline to do so’ is a ‘wholesale and flagrant violation of both ERISA and
the benefit plan’ and requires de novo review.” Pl.’s Mem. in Supp. at 24 (alteration in
original). Even if it were binding precedent, Gordon is distinguishable. There, the
administrator faced a ninety-day deadline to issue a final decision on a long-term disability
benefit claim, “failed to issue a final decision,” and failed to explain why it had issued no
decision. 747 F. App’x at 595. Here, Hayes has identified no “deadline” governing the
Appeals Committee’s final decision. The Committee issued a final decision. And the time
it took to issue the decision was for all practical purposes as much Hayes’s doing as the
Committee’s.
10

Hayes argues that the Committee’s decision to apply the Plan’s presumption of
Disqualifying Employment against him was a procedural irregularity. Pl.’s Mem. in Supp.
at 20–22. The Plan’s decision to apply the presumption was central to its substantive
decision to affirm the suspension of Hayes’s benefits. It will be considered as part of the
review of the Committee’s final decision and not as part of the determination of the
standard of review.
25

957 F.2d 617, 621 (8th Cir. 1992). King v. Hartford Life & Accident Ins. Co., 414 F.3d
994, 999 (8th Cir. 2005) (en banc); see also id. at 1014 (Gruender, J., dissenting). The five
factors to be considered ask whether the administrator’s interpretation (1) is consistent with
the goals of the plan; (2) renders any language of the plan meaningless or internally
inconsistent; (3) conflicts with ERISA; (4) is consistent with the administrator’s prior
determinations regarding the terms at issue; and (5) is contrary to the clear language of the
plan. Peterson v. UnitedHealth Group Inc., 913 F.3d 769, 775–76 (8th Cir. 2019). “While
these non-exhaustive factors ‘inform our analysis,’ the ultimate question remains whether
the plan interpretation is reasonable.” Id. at 776 (quoting King, 414 F.3d at 999). Second,
to determine whether an administrator reasonably applied its interpretation to the facts of
any particular case, the test is whether the decision is “supported by substantial evidence.”
Johnston, 916 F.3d at 714 (quoting Green v. Union Sec. Ins. Co., 646 F.3d 1042, 1050 (8th
Cir. 2011)). “Substantial evidence is more than a scintilla but less than a preponderance.”
Johnston, 916 F.3d at 714 (quoting Green, 646 F.3d at 1050); see also Jones v. Aetna Life
Ins. Co., 856 F.3d 541, 547–48 (8th Cir. 2017) (citations omitted) (same).
Other considerations are relevant to both tests. “If an administrator also funds the
benefits it administers . . . the district court ‘should consider that conflict as a factor’ in
determining whether the administrator abused its discretion.” Jones, 856 F.3d at 548
(quoting Silva v. Metro. Life Ins. Co., 762 F.3d 711, 718 (8th Cir. 2014)). “A decision
supported by a reasonable explanation . . . should not be disturbed, even though a different
reasonable interpretation could have been made.” Waldoch, 757 F.3d at 833 (alteration in
original) (citation and internal quotation marks omitted); see also Prezioso v. Prudential
26

Ins. Co. of Am., 748 F.3d 797, 805 (8th Cir. 2014) (“We must affirm if a reasonable person
could have reached a similar decision, given the evidence before him, not that a reasonable
person would have reached that decision.” (citation and internal quotation marks omitted)).
“[A] reviewing court must focus on the evidence available to the plan administrators at the
time of their decision and may not admit new evidence or consider post hoc rationales.”
Waldoch, 757 F.3d at 829–30 (citation and internal quotation marks omitted). “Courts
reviewing a plan administrator’s decision to deny benefits will review only the final claims
decision, and not the ‘initial, often succinct denial letters,’ in order to ensure the
development of a complete record.” Khoury v. Group Health Plan, Inc., 615 F.3d 946, 952
(8th Cir. 2010) (citing Galman v. Prudential Ins. Co. of Am., 254 F.3d 768, 770–71 (8th
Cir. 2001); quoting Wert v. Liberty Life Assurance Co. of Boston, 447 F.3d 1060, 1066 (8th
Cir. 2006))
2
The Claim Appeals Committee’s decision affirming the suspension of Hayes’s
benefits is easy to summarize from a distance: (a) The Committee understood the Plan to
prohibit a pensioner from receiving retirement benefits if the pensioner was working in any
employment covered by the Plan (including for any employer who contributes to the Plan)
for forty or more hours per month; (b) The Committee understood the Plan to require a
pensioner to give written notice to the Plan within thirty days of starting work of this type
regardless of the number of hours the pensioner actually anticipated working, and it
determined Hayes was required to provide this notice; (c) If a pensioner was required to
give this notice but did not, the Committee interpreted the Plan to require it to presume the
27

pensioner was working forty or more hours per month and that the pensioner had the burden
to show he was not, and it determined this presumption applied to Hayes because he had
failed to provide the required notice; (d) The Committee determined, after reviewing
evidence, Hayes had failed to rebut the presumption that he had worked forty or more hours
per month. AR 951–57.
The problem is that in reaching this final decision—including each of the decision’s
elements—the Committee evidently considered and applied inapplicable Plan terms. The
Committee’s

letter

describing

its

final

determination

incorrectly

quotes

suspension-of-benefit provisions applicable to Normal Retirement Benefits. AR 952–54.
But Hayes was not receiving Normal Retirement Benefits; all agree he applied for and was
receiving Unreduced Early Retirement Benefits, a different class of benefits. Defs.’ Mem.
in Supp. at 4; Pl.’s Mem. of Supp. at 4. The Plan contains a different subsection with
suspension-of-benefit rules applicable to Unreduced Early Retirement Benefits. AR 1194–
97. The Committee’s final decision should have cited to, and demonstrated consideration
of, the suspension-of-benefit rules applicable to Unreduced Early Retirement Benefits, but
it did not. The two sets of provisions seem different at first glance, but more on that in a
bit.
At least ordinarily, the law tilts in favor of finding an abuse of discretion when an
ERISA plan administrator reaches an adverse benefits determination based on an
inapplicable plan document or term. See, e.g., Huss v. IBM Med. and Dental Plan,
418 F. App’x 498, 504 (7th Cir. 2011). Applying the wrong term of a plan would run
counter as a general rule to the Eighth Circuit’s Finley factors. It is difficult to think of
28

something more “contrary to the clear language of the plan” and ERISA than adjudicating
a claim under inapplicable terms of and ERISA plan (and not adjudicating a claim under
applicable terms), and applying an incorrect term at least would pose a risk of inconsistency
with the goals of the plan. See Peterson, 913 F.3d at 775–76.
The Parties’ positions on how this issue should be resolved in the context of their
cross-motions for summary judgment are not clear. Hayes identifies this error and asserts
without elaborating that the suspension-of-benefit rules applicable to Normal Retirement
Benefits and applied by the Committee are “materially different from the” rules applicable
to Unreduced Early Retirement Benefits. Pl.’s Mem. in Supp. at 15 (citations omitted).
But Hayes does not rely on this error to argue that the Committee abused its discretion.
Defendants do not address this issue. They cite the Plan’s suspension-of-benefit rules
applicable to Unreduced Early Retirement Benefits and defend the Committee’s decision
as if the Committee had considered and applied these rules. See, e.g., Defs.’ Mem. in Supp.
at 3–4 (citation omitted); Defs.’ Resp. Mem. at 7. It seems, then, that Hayes and
Defendants would have the reasonableness of the Committee’s final decision judged
against the suspension-of-benefit rules for Unreduced Early Retirement Benefits though
the Committee’s final decision considered and applied different rules.
The Parties’ positions would make sense if the Committee actually had considered
the correct Plan terms and its citation in its final decision to the suspension-of-benefit
provisions for Normal Retirement Benefits was a clerical error, but that does not appear to
be the case. It is true that the record shows the Parties understood which Plan terms applied
and considered them at earlier points in the administrative process.
29

In earlier

correspondence,

for

example,

the

Plan

and

Hayes

cited

correctly

to

the

suspension-of-benefits provisions applicable to Unreduced Early Retirement Benefits.
AR 246, 329–31. But the Committee’s final written decision cites and applies only the
suspension rules for Normal Retirement Benefits and gives no indication the Committee
actually considered or applied the correct rules. See AR 951–57. Also, the minutes of the
Committee’s April 21, 2016 meeting at which it reached its final decision do not show the
Committee considered the correct Plan terms or acted on a basis other than what was
described in its final decision. See AR 548–56. They say only that the Committee voted
to “deny the appeal based on the recommendation and explanation provided by Fund
Counsel.” AR 555.
The conclusion that the Committee’s reliance on an inapplicable Plan term warrants
finding an abuse of discretion also would be dubious if there were no material differences
between the inapplicable and applicable plan provisions or application of the inapplicable
terms had no identifiable bearing on the Committee’s decision. But it is not possible to say
that is the case here. Some elements of the Committee’s decision implicate material and
potentially dispositive differences between the incorrect terms considered by the
Committee and the terms it should have applied, and some Plan terms the Committee
should have applied pose difficult interpretive problems. Consider, for example, the
Committee’s decision to presume Hayes was working forty or more hours per month
because he assertedly failed to give notice.
considered provides:

30

The inapplicable term the Committee

If a Pensioner has worked in Disqualifying Employment in any
month and has failed to give timely notice to the Plan of such
Disqualifying Employment, the Trustees will presume that he
worked for at least forty (40) hours in such month and any
subsequent month before the Participant gives notice that he
has ceased Disqualifying Employment.
AR 953, 1177. For purposes of this term, the Plan defines “Disqualifying Employment”
as:
[E]mployment or self-employment that is (i) in an industry
covered by the Plan when the Pensioner’s pension payments
began, (ii) in the geographic area covered by the Plan when the
Pensioner’s pension payments began, and (iii) in any
occupation in which Plan Participants work (including, but not
limited to carpentry, millwright, and pile-driving positions and
Alumni Employee positions).
AR 952–53, 1176. The term the Committee should have applied is different. It provides:
If a Pensioner has worked in Disqualifying Employment in any
month and has failed to give timely notice, the Plan is entitled
to presume that the Pensioner worked sufficient hours in that
month and all later months before the Pensioner gives the
required notice to cause suspension of benefits. The Pensioner
may overcome this presumption by providing evidence
satisfactory to the Plan that the work should not have resulted
in suspension of benefits.
AR 1196. For purposes of this term, the Plan defines “Disqualifying Employment” as
“[a]ny employment of forty (40) hours or more in a one (1) month period in Covered
Employment.” AR 1194. The Plan, in turn, defines “Covered Employment” to include
“[e]mployment for which the Employer has agreed to contribute to the Pension Fund.”
AR 1152. The applicable notice/presumption provision, and how it might apply to Hayes’s
claim, is difficult to understand because the inclusion of “work[] in Disqualifying
Employment” as a prerequisite (along with the failure to give timely notice) to the
31

presumption that a pensioner “worked sufficient hours . . . to cause suspension of benefits,”
AR 1196, makes no sense in view of the provision’s evident purpose. This is because one
element of the definition of Disqualifying Employment is “employment of forty (40) hours
or more in a one (1) month period.” AR 1194. But the point of the provision is to permit
the Committee to presume a pensioner violated the forty-hour rule and shift the burden to
the pensioner to show that he did not. Construed literally, then, the provision seems to
condition the Plan’s discretion to presume a violation of the forty-hour rule on first
establishing a violation of the forty-hour rule. That seems like a problem.11 In addition,
the inapplicable term the Committee considered says the presumption applies to the months
“before the Participant gives notice that he has ceased Disqualifying Employment.”
AR 1177 (emphasis added). The term the Committee should have applied uses a different
phrase; it says the presumption applies to months “before the Pensioner gives the required
notice to cause suspension of benefits.” AR 1196. How the Committee might have
interpreted the correct Plan terms or applied them to Hayes’s claim is not clear, but it cannot
reasonably be said that the differences between these terms would have no bearing on the
Committee’s decision.

11

The presence of poor drafting does not diminish a claims administrator’s
discretionary authority to interpret an ERISA plan. Plans sometimes contain “terrible”
word choices, Dame v. First Nat’l Bank of Omaha, 217 F.3d 1018, 1020 (8th Cir. 2000),
but “reconciling the conflicting provisions of the plan by dealing with the difficulties posed
by its language is precisely the task entrusted to a plan administrator vested with
interpretative discretion by the plan document,” Frye v. Thompson Steel Co., 657 F.3d 488,
495 (7th Cir. 2011). “[A]n administrator’s interpretation of uncertain terms in a plan will
not be disturbed if reasonable.” Kutten v. Sun Life Assurance Co. of Canada, 759 F.3d
942, 944 (8th Cir. 2014) (citation and internal quotation marks omitted).
32

Accepting the Parties’ invitation to judge the reasonableness of the Committee’s
final decision against Plan terms the Committee did not apply would go too far. It would
require implying assumptions about how the Committee might have understood materially
different, unclear Plan terms it did not consider, and it would require guessing as to how
the Committee might have applied those assumed understandings to the facts of Hayes’s
claim.
3
A remand to the administrator is appropriate when “an ERISA-regulated plan denies
a claim for benefits based on an unreasonable interpretation of terms in the plan,” King,
414 F.3d at 1005, and where it remains unclear whether a claimant was denied benefits to
which he was entitled, see Helfman v. GE Group Life Assurance Co., 573 F.3d 383, 396
(6th Cir. 2009) (citations omitted); Greenwald v. Liberty Life Assurance Co. of Bos.,
932 F. Supp. 2d 1018, 1048 (D. Neb. 2013). As discussed in Part II.B.2., above, the first
condition is present here. So is the second. Though the administrative record contains a
significant volume of information regarding Hayes’s post-retirement work at Alltech, none
of that information eliminates any genuine dispute of material fact about whether Hayes
violated the Plan’s forty-hour rule under any reasonable interpretation of the
suspension-of-benefit rules applicable to Unreduced Early Retirement Benefits.
C
An ERISA claimant may seek relief in the same complaint for benefits under
29 U.S.C. § 1132(a)(1)(B) and for equitable relief for breach of fiduciary duty under
29 U.S.C. § 1132(a)(3) “so long as [the] two claims ‘assert different theories of liability.’”
33

Jones, 856 F.3d at 547 (quoting Silva, 762 F.3d at 728 & n.12). The fact that a claimant
seeks “the same amount of money” under a § 1132(a)(3) claim as a § 1132(a)(1)(B) claim
does not mean the theories of liability are the same. Silva, 762 F.3d at 728 n.12. A theory
of liability under § 1132(a)(3) is the same if the arguments a claimant “makes to reach that
remedy” are not “alternate, equitable theories of liability.” Id. (citation omitted). In Jones,
for example, the Eighth Circuit determined that a claimant asserted different theories of
liability because one count asserted that she had been denied benefits under the plan, and
the second count asserted the administrator had “used a claims-handling process that
breached its fiduciary duties.” 856 F.3d at 547.
Here, Hayes does not pursue a different theory of liability under his § 1132(a)(3)
fiduciary-breach claim from his benefits claim under § 1132(a)(1)(B). Hayes alleges in his
Complaint that Defendants breached their fiduciary duties by suspending his benefits and
“recoup[ing] alleged overpayments from [his] past and future pension benefits.” Compl.
¶ 70. This is the same general basis upon which he seeks recovery of benefits under
§ 1132(a)(1)(B). In his summary-judgment briefing, Hayes identifies more particular facts
in support of this claim:
Defendants breached that [fiduciary] duty in manifold ways,
including applying a presumption to deny Mr. Hayes’ claim
contrary to the terms of the Plan, acting on his claim without a
Committee quorum, denying him access to documents he was
entitled to under the Plan’s claims procedures and failing to
comply with the claim processing deadlines provided by the
Plan. Ultimately, these breaches of fiduciary duty, singly and
in the aggregate, denied Mr. Hayes a full and fair review of his
claim, for which he is entitled to make-whole equitable relief,
including estoppel, reformation and surcharge.

34

Pl.’s Mem. in Supp. at 30 (citation omitted). These are the same facts and theories on
which Hayes grounds his claim for benefits. Even if they were not, as explained above,
his allegations that the Committee acted without a quorum, that he was denied access to
documents, and that the Committee failed “to comply with claim processing deadlines,”
id., are not supported and would not show a violation of § 1132(a)(3). Hayes’s allegation
that the Committee applied the forty-hour-rule presumption against him “contrary to the
terms of the Plan,” id., will be considered on remand.
ORDER
Based on the foregoing, and all of the files, records, and proceedings herein, IT IS
HEREBY ORDERED THAT:
1.

Plaintiff’s motion for summary judgment [ECF No. 33] is DENIED;

2.

Defendants’ motion for summary judgment [ECF No. 35] is DENIED IN

PART and GRANTED IN PART. The motion is denied to the extent Defendant seeks
summary judgment on Plaintiff’s claim under 29 U.S.C. § 1132(a)(1)(B). The motion is
granted to the extent Defendant seeks summary judgment on Plaintiff’s claim under
29 U.S.C. § 1132(a)(3); and
3.

This matter is REMANDED to the Plan for administrative proceedings

consistent with this Opinion and Order. The Court retains jurisdiction over this matter. 

Dated: July 10, 2019

s/ Eric C. Tostrud
Eric C. Tostrud
United States District Court

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