FISCHER v. CARPENTERS PENSION AND ANNUITY FUND OF PHILADELPHIA AND VICINITY
MEMORANDUM. ( SIGNED BY HONORABLE JOHN R. PADOVA ON 8/5/11. ) 8/5/11 ENTERED AND COPIES E-MAILED.(gn, )
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
FREDERICK G. FISCHER, JR.
CARPENTERS PENSION AND ANNUITY
FUND OF PHILADELPHIA AND
Plaintiff Frederick O. Fischer, Jr. filed this action against his pension plan, Defendant
Carpenters Pension and Annuity Fund of Philadelphia and Vicinity, asserting that Defendant
improperly terminated his Supplemental Pension payments due to his collection of Social Security
disability benefits. He asserts claims under the Employment Retirement Income Security Act of
1974 ("ERISA"), 29 U.S.C. § 1001 et seq., and the Americans with Disabilities Act (the "ADA"),
42 U.S.C. § 2000e-5 et seq. The parties have filed cross-motions for summary judgment. We held
argument on the Motions on July 13,2011. For the following reasons, we grant summary judgment
in Defendant's favor on all of Plaintiffs claims, except the ERISA claim that Defendant breached
its fiduciary duties to Plaintiff. On that claim, we find there to be genuine issues ofmaterial fact that
prevent the entry ofjudgment in either party's favor.
The following facts are undisputed. Plaintiff joined the Carpenters' Union in 1965, and is
a participant in the Carpenters Pension and Annuity Fund of Philadelphia and Vicinity. (Plaintiffs
Statement of Material Facts ("PI. Stmt")) at ~~ 1-2; Defendant's Statement of Undisputed Material
Defendant complains that Plaintiff includes no record citations in his Statement ofMaterial
Facts, but it nevertheless admits certain facts in its response to the Statement.
Facts ("Def. Stmt") at ~ 2.) Plaintiff chose to take early retirement in 1999, and began receiving
monthly pension benefits from the Plan effective June of that year. (PI. Stmt ~ 2; Def. Stmt ~ 3;
Appx.49.) His benefits included both an Early Retirement Pension and a temporary Supplemental
Pension payment. 2 (J. Obuchowicz Decl. ~ 10.)
Prior to receiving benefits, Plaintiff met with Pension Fund staff in their offices and
completed an application for benefits. (Def. Stmt ~ 5.) On May 5, 1999, in connection with his
pension application, Plaintiff signed a form entitled "Pension and Health Welfare Regulations
Government Participants Applying for Retirement with the Carpenters' Pension Plan." (Appx. 57.)
The form, which Plaintiff signed, advised Plaintiff that "No Retired Member can be employed in any
capacity [in the Construction Industry], for more than 40 hours in anyone month without Suspension
of Benefits." Od.) There is no signed form in the record indicating that Plaintiff was advised that
his Supplemental Pension payments could also be suspended if he began receiving Social Security
In July 2004, following his retirement, Plaintiff became eligible to receive Social Security
disability benefits. (PI. Stmt ~ 7.) On November 23, 2004, the Social Security Administration sent
Plaintiff a Notice of Award, which advised him that he would receive as a lump sum disability
benefits for July 2004 through October 2004, and then would receive $1,774.00 in disability benefits
for each month thereafter. (Appx.29.)
In each of the years 2005, 2006 and 2007, Plaintiff completed and returned to Defendant a
"Certificate of Right to Receive Pension." (Appx. 14, 16.) Each year, the form certificates, on
2At the time his benefits were terminated in 2008, Plaintiff was receiving an Early Retirement
Pension of$l,752.46 each month, as well as a Supplemental Pension in the same amount, for a total
monthly payment of$3,504.92. (See Appx. 9, 18)
which Plaintiff's name and address were preprinted, provided as follows:
I state: (1) I am the same person named on this statement who is
receiving a Pension from the Carpenters' Pension & Annuity Fund of
Philadelphia; (2) I have read the Fund notice on Rules Regarding
Post-Retirement Employment and continue to qualify for receipt of
Pension Benefits in accordance with the applicable provisions of the
Carpenters' Pension & Annuity Plan regarding work after retirement,
and (3) I have not and am not receiving a Social Security Disability
Benefit Check while receiving (if applicable) my Carpenter
(Appx. 14, 16.)
Plaintiff signed each certificate, and returned each to Defendant, thereby
representing on each occasion that he was "not receiving a Social Security Disability Benefit Check."
On May 9,2008, Defendant sent a letter to Plaintiff stating that it was "recently informed that
[Plaintiff was] receiving a Social Security Disability Award." (Appx. 17.) Defendant requested that
Plaintiff send it a copy of his award letter, along with the date he first became eligible to receive the
In June 2008, Defendant confirmed that Plaintiff was eligible for and had been
receiving Social Security disability benefits. (Def. Stmt
13.) By letter dated June 25, 2008,
Defendant notified Plaintiff that his Supplemental Pension benefit was terminated. (Def. Stmt ~ 14;
It enclosed with the letter "the language of Section 3.04 ... of the Carpenters
Pension and Annuity Plan of Philadelphia & Vicinity" (Appx. 18), which stated as follows:
Section 3.04 Carpenter's Supplemental Pension Payment. Each
Active Vested Participant who commences to receive an Early
Retirement Pension pursuant to Section 3.03 of the Plan prior to the
first day ofthe month following the month in which his 62nd birthday
occurs shall be eligible to receive a Carpenter's Supplemental
Pension Payment payable on the first day of the month as of which
such active Vested Participant commenced to receive his Early
Retirement Pension and on the first day of each month thereafter, to
but not including the earliest of the following four dates:
The first day of the month following the month in which such
Participant's 62nd birthday occurs.
The first day of the month following the month in which the
death of such Participant occurs.
If such Participant becomes entitled to a disability pension
from social security, the first day of the month as of which
such Participant becomes so entitled.
If such Participant's pension payments, payable pursuant to
Section 3.03 of the Plan, are suspended pursuant to Section
3.06 of the Plan, the first day of the month as of which such
Vested Participant's payments under Section 3.03 are
suspended, in which event his entitlement to Carpenter's
Supplemental Pension Payments will be canceled and he will
receive no further such payments at any time in the future.
The amount ofeach Carpenter's Supplemental Pension Payment shall
be equal to a percentage of such Participant's Accrued Monthly
Pension detennined as of the date he ceased to be an Active
Participant. IfsuchActive Vested Participant had completed 30 years
of Credited Service at the time he ceased to be an Active Participant,
such percentage shall be 100%, otherwise such percentage shall be
100%, minus 12 of 1% times the number ofmonths in the period from
the date of his pension payments commence to the first day of the
month following his 62nd birthday.
(Appx.20.) This language appears to be excerpted from the "Carpenters Pension and Annuity Plan
Of Philadelphia and Vicinity, as Amended and Restated Effective May 1,2002" (the "2002 Plan"),
as it is identical in all respects to the language in the 2002 Plan. (Appx. 224-25; see infra, n.3.)
Defendant further advised Plaintiff in the June 25, 2008 letter that it had overpaid him by
$82,120.98, which was the amount that the Plan had paid him in Supplemental Pension payments
between July 2004 and June 2008. (Def. Stmt ~ 14; PI. Stmt ~ 9; Appx. 18.)
On July 14, 2008, Plaintiff appealed Defendant's detenninations that he was no longer
entitled to Supplemental Pension payments and that he had been overpaid for such benefits. (Def.
Stmt, 16; Appx. 21.) In a handwritten letter commencing his appeal, Plaintiff stated that he "would
like to be able to review the files of the plan in connection with the preparation of an appeal."
(Appx. 21.) On August 10, 2008, counsel for Plaintiff sent a letter to Joseph Obuchowicz, the
Pension Plan manager, stating that he would be forwarding an authorization from Plaintiff enabling
counsel to obtain "his records as well as all files associated with the Plan ... as they relate
specifically to [Plaintiff]." (Appx.22.) Nineteen days later, on August 29, 2008, Mr. Obuchowicz
forwarded to counsel Plaintiffs pension file and the 2002 Plan. (Appx.24.)
On September 16, 2008, counsel filed Plaintiff s formal appeal and an accompanying
Memorandum of Law, in which he argued, among other things, that the 2002 Plan did not govern
Plaintiff s rights, because it specifically stated that it was only "effective ... as to persons who retire
or otherwise terminate employment covered by the Plan on or after [May 1,2002]." (9/16/08 Ltr.,
attached as Ex. H to Plaintiffs Complaint; Appx. 61,205.) On September 24, 2008, the Pension
Plan's Board of Trustees denied Plaintiffs appeal. (Def. Stmt , 18; Appx.79-80.) Plaintiffs
counsel again wrote to Mr. Obuchowicz on October 17,2008, asserting that "the Section 3.04 set
forth in the initial [denial] letter does not apply to [Plaintiff] as is set forth more fully in [his
Memorandum of Law on appeal]." (Appx. 81.) Plaintiffs counsel requested that Defendant now
send to him "every version ofthe subject Pension Plan and all amendments thereto from its inception
to the present." (Id.) Plaintiffs counsel sent a follow-up request on November 3, 2008. (Appx.83
("[P]lease forward the documents requested in our [October 17, 2008] letter.").) Judith Sznyter,
counsel for the Pension Plan, responded in a letter dated November 19,2008, that Defendant had
already provided counsel "with all relevant documents" and that she failed to see the relevance of
"all prior plans." (Appx. 86-87.)
Plaintiff commenced the instant action in June 2010. At a conference with the Court on
September 16,2010, Plaintiff again argued that Defendant's reliance on the 2002 Plan was improper
because the 2002 Plan applied only to individuals who retired on or after May 1, 1992. Following
the conference, we issued an order requiring Defendant to produce to Plaintiff a copy ofthe Pension
Plan that was in effect when Plaintiff elected early retirement. (9116/10 Ord., Docket No.7.)
Thereafter, Defendant produced to Plaintiff "The Carpenters Pension and Annuity Plan Of
Philadelphia and Vicinity, As Amended and Restated Effective May I, 1989 (With All Amendments
Adopted Through April 2, 1996)" (the "1996 Plan"). (Appx.88.) The language in Section 3.04 of
the 1996 Plan is identical to the Section 3.04 language that Defendant cited as the basis for its
termination of Plaintiffs benefits in its June 25, 2008 letter. 3 (Appx. 106-07; Appx. 20.)
Plaintiffnow asserts four claims against Defendant. 4 First, he claims that Defendant violated
ERISA, 29 U.S.C. § 1132(c)(I), by repeatedly failing to produce to him the 1996 Plan, which set
forth his rights and responsibilities in connection with his pension, instead producing only the 2002
Plan, which did not apply to him. Second, Plaintiff brings a claim pursuant to 29 U.S.C. §
1132(a)( 1)(b) that Defendant's suspension of Supplemental Pension payments due to his collection
of Social Security disability payments was both arbitrary and capricious and in violation of Erisa's
nonforfeitability provision, 29 U.S.C. § 1053(a), because it was grounded on a provision in the 2002
3The only difference between Section 3.04 in the 1996 Plan, and Section 3.04 the 2002 Plan
is that the 2002 Plan capitalizes "participant" in the numbered paragraphs while the 1996 Plan does
4Plaintiff initially asserted four additional claims pursuant to state law, but he has since
withdrawn those claims. (N.T. 7/13/11, at 29-30; 7/14/11 Ord., Docket No. 23.)
Plan, which did not apply to him, and because it deprived him of vested rights. Third, Plaintiff
claims that Defendant breached its fiduciary duty to him by failing to advise him at the time he opted
for early retirement that his Supplemental Pension payments would be terminated if he began
receiving Social Security disability benefits, in violation ofERISA, 29 U.S.C. § 1132(c)(3). Fourth,
he claims that Defendant discriminated against him on the basis ofhis disability when it terminated
his Supplemental Pension payments on account of his receipt of Social Security disability benefits,
in violation of the ADA, 42 U.S.C. §§ 12112(a) and § 12132. In connection with each claim,
Plaintiff seeks "compensatory damages in a sum in excess of$82, 120.98," as well as attorneys fees.
Both parties have moved for summary judgment on all claims.
Summary judgment is appropriate "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 oflaw." Fed. R. Civ. P. 56(a).
An issue is "genuine" if "the evidence is such that a reasonable jury could return a verdict for the
nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A factual dispute
is "material" if it might affect the outcome of the case under governing law. Id.
"[A] party seeking summary judgment always bears the initial responsibility ofinforming the
district court of the basis for its motion, and identifying those portions of [the record] which it
believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477
U.S. 317, 323 (1986). Where the nonmoving party bears the burden of proof on a particular issue
at trial, the movant's initial Celotex burden can be met simply by "pointing out to the district court"
that "there is an absence of evidence to support the nonmoving party's case." Id. at 325. After the
moving party has met its initial burden, the adverse party's response "must support the assertion [that
a fact is genuinely disputed] by: (A) citing to particular parts of materials in the record ... ; or (B)
showing that the materials [that the moving party has cited] do not establish the absence ... of a
genuine dispute ...." Fed. R. Civ. P. 56(c)(l). Summary judgment is appropriate ifthe nonmoving
party fails to respond with a factual showing "sufficient to establish the existence of an element
essential to that party's case, and on which that party will bear the burden ofproofat trial." Celotex,
477 U.S. at 322.
Defendant has moved for summary judgment on all claims, arguing that Plaintiff has not
established that it violated § 1132(c) by failing to produce the 1996 Plan in response to a written
request for that plan; that its termination ofhis Supplemental Pension payments was dictated by the
Plan documents and fully consistent with ERISA; that the summary judgment record conclusively
establishes that Plaintiff was notified that his Supplemental Pension payments would be terminated
ifhe received Social Security disability benefits; and that termination of his Supplemental Pension
payments did not violate the ADA as a matter of law. Plaintiff, in his Motion, maintains that
Defendant violated ERISA by failing to provide him with the 1996 Plan upon his request/ that
Defendant's termination ofhis Supplemental Pension payments was arbitrary and capricious and in
violation of ERISA's nonforfeitability provision; that the record evidence conclusively establishes
that Plaintiff was not notified that his Supplemental Pension payments would be terminated if he
times, Plaintiff articulates his claim more generally, as one that "Defendant failed and
refused to provide [him] with information and documentation needed to assess, prepare and
prosecute [his] Appeal from Defendant's denial of benefits." (Pl.'s Mot. for Summ. Judg. at 4.)
However, his Motion for Summary Judgment ultimately makes clear that his primary complaint is
that Defendant "failed and refused to forward the version ofthe subject Plan that was in effect at the
time Plaintiff entered into his Early Retirement Agreement," which is the 1996 Plan. (Id. at 8.)
received Social Security Disability benefits; and that termination of his Supplemental Pension
payments constituted disability discrimination in violation of the ADA.
ERISA Claim for Failure to Produce Documents
Plaintiff's claim for failure to produce documents arises under § 1132(c)(I) of ERISA.
Under § 1132(c)(1), a pension plan participant may bring a civil action to obtain statutory penalties
of up to $100 day, and other relief that a court deems appropriate, when the participant requests
information from the pension plan administrator that "the subchapter" requires the administrator to
furnish to the participant, and the administrator does not produce the information within thirty days
ofthe participant's. 29 U.S.C. § 1132(c)(I).6 This provision is penal and, as such, is to be narrowly
construed. Kollman v. Hewitt Assocs .. LLC, 487 F.3d 139, 144, 146 (3d Cir. 2007) (citing Groves
v. Modified Ret. Plan, 803 F.2d 109, 118 (3d Cir. 1986)). In order to prevail on a claim under §
1132(c )(1), the plaintiff must produce evidence ofa written request that "provide [d] ... clear notice
to a reasonable plan administrator ofthe documents which, given the context ofthe request, should
be provided." Kollman, 487 F.3d at 146. In addition, the plaintiff must identify a provision in the
subchapter that "specifically require[d]" the administrator to furnish the documents that the
6In pertinent part, § 1132(c)(1) states:
Any administrator ... who fails or refuses to comply with a request
for any information which such administrator is required by this
subchapter to furnish to a participant or beneficiary ... by mailing the
material requested to the last known address of the requesting
participant or beneficiary within 30 days after such request may in the
court's discretion be personally liable to such participant or
beneficiary in the amount of up to $100 a day from the date of such
failure or refusal, and the court may in its discretion order such other
relief as it deems proper.
29 U.S.C. § 1132(c)(1).
participant requested. Groves, 803 F.2d at 116.
Here, Plaintiff asserts that Defendant violated § 1132(c)(1) when it failed to produce the 1996
Plan within thirty days of his July 2008 request and all subsequent requests. (See N.T. 7113111, at
11-12.) However, the only July 2008 request in the record is a handwritten note from Plaintiff,
stating that "he would like to be able to review the files of the plan." (Appx.21.) We conclude as
a matter of law that this imprecise handwritten note did not provide Defendant with "clear notice"
that Plaintiff wanted a copy of the 1996 Plan, much less that he wanted Defendant to produce the
1996 Plan to him. Indeed, the first and only written request in the record that even arguably
requested the production of the 1996 Plan was Plaintiff s counsel's October 17, 2008 letter, which
requested that Defendant "provide ... a copy of every version of the subject Pension Plan and all
amendments thereto from its inception to the present," and even that request was undeniably vague,
in that it did not specifically target the 1996 Plan, and plainly overbroad. (Appx. 81.) Unfortunately,
Plaintiff does not address the adequacy of any of his written requests under the "clear notice" test.
See Kollman, 487 F.3d at 146. Without any such advocacy, and in the absence of a written request
in the summary judgment record that specifically requests the 1996 Plan, we conclude that Plaintiff
has not met his burden on summary judgment of pointing to evidence of a written request that was
sufficiently clear to trigger Defendant's production obligations under § 1332(c)(I).
Even more fundamentally, we conclude that Plaintiff has failed to meet his burden of
establishing the legitimacy of his § 1132(c)(1) claim in the face ofDefendant' s summary judgment
motion, because he has not even attempted to point to an ERISA provision that required Defendant,
in 2008, to produce the 1996 Plan, much less required Defendant to produce "every version of [the
plan] and all amendments thereto from [the plan's] inception," as he requested in October 2008.
(Appx. 81.) As noted above, § 1132(c)(1) only requires that an administrator produce infonnation
that it is required "by the subchapter to produce." 29 U.S.C. § 1132(c)(l). We pressed Plaintiffs
counsel at oral argument to identify an applicable provision in the subchapter, and he was unable to
(N.T. 7/13/11, at 15-16.)
Moreover, the primary subchapter provision that governs an administrator's duty to provide
plan documents to plan participants upon request is § 1024(b)(4). That provision states that an
administrator shall, upon written request of any participant or
beneficiary, furnish a copy of the latest updated summary plan
description, and the latest annual report, any tenninal report, the
bargaining agreement, trust agreement, contract, or other instruments
under which the plan is established or operated.
29 U.S.C. § 1024(b)(4)(emphasis added). Section 1024(b)(4), by its plain tenns, requires that the
administrator, upon written request, provide only "the latest updated summary plan description."
Id. (emphasis added.) As such, "outdated plan descriptions do not fall into any ofthe categories of
documents a plan administrator must provide to plan participants under § 1024(b)(4)." Shields v.
Local 705 Inn Bhd. of Teamsters Pension Plan, 188 F.3d 895, 903 (7th Cir. 1999) (quotation
omitted) (emphasis added). Accordingly, § 1024(b)(4) did not require Defendant to produce any
prior versions ofthe pension plan, including the 1996 Plan. See Femino v. NFA Corp., Civ. A. No.
05-019, 2006 WL 1997626, at *7 (D.R.1. July 17, 2006) (finding that administrator did not violate
§ 1132(c) by failing to produce 1995 summary plan description instead ofmost recent summary plan
description); Shields, 188 F.3d at 903 (affinning district court finding that administrator did not
violate § 1132(c) in conjunction with § 1024(b)(4) by failing to provide outdated versions of
plaintiffs pension plan).
Under these circumstances, we conclude that Plaintiff has not met his burden of pointing to
evidence in the record that could support a violation of § 1 132(c)(1), both because he does not
clearly identify a written request that would trigger liability under § 1132(c)(1), and because he cites
no law that required Defendant, in 2008, to produce the outdated 1996 Plan to him. We therefore
enter judgment in Defendant's favor on Plaintiffs § I 132(c)(I) claim.
ERISA Claim Under § 1132(a)(I)(B) to Recover Benefits
Plaintiffs ERISA claim for improper denial of his benefit arises under 29 U.S.C. §
1132(a)(1)(B), which authorizes a participant to bring an action for arbitrary and capricious
termination of benefits, and 29 U.S.C. § 1053(a), which provides that certain retirement benefits
cannot be forfeited by a plan participant.
Arbitrary and Capricious Denial
Under § 1132(a)(1)(B), a participant or beneficiary ofan ERISA plan may bring a civil action
"to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of
the plan, or to clarify his rights to future benefits under the terms of the plan." 29 U.S.C. §
1132(a)(1 )(B). "Where, as here, the plan gives the administrator discretionary authority, we review
the administrator's exercise of that authority under an 'arbitrary and capricious' standard ...."7
Vitale v. Latrobe Area Hosp., 420 F.3d 278,281-82 (3d Cir. 2005) (citations omitted). Under that
standard, the court may overturn an administrator's decision only ifthe decision is "without reason,
unsupported by substantial evidence or erroneous as a matter oflaw." Viera v. Life Ins. Co. ofN.
Am., 642 F.3d 407,413 (3d Cir. 201l) (quotation omitted). Where the administrator must interpret
7The Plan in the instant case provides that the Board ofAdministration "shall have authority
to control and manage the operation and administration of the Plan" and "shall have the right to
decide in their sole and exclusive discretion all questions arising from or respecting the
interpretation, application or administration ofthe Plan." (Appx. 123 (1996 Plan); Appx. 244 (2002
the terms of a plan, it is bound by the plain language of the plan document.
Environmental Resources Management Inc. Health & Welfare Plan, 81 F.3d 335,339 (3d Cir. 996)
Here, as noted above, Plaintiff argues that the Defendant improperly denied him
Supplemental Pension benefits based on his receipt ofSocial Security disability benefits. However,
the plain terms of § 3.04 in both the 1996 Plan and the 2002 Plan provide that Plaintiffs
Supplemental Pension payments were to be discontinued when he became "entitled to a disability
pension from social security." (Appx. 106, 224.) Under these circumstances, we cannot possibly
conclude that Defendant's decision to discontinue Plaintiffs Supplemental Pension payments was
arbitrary and capricious; to the contrary, as Defendant points out, that result was dictated by the plain
language ofthe operative Plan. Accordingly, we deny Plaintiffs Motion insofar as it asks us to find
Defendant to have acted arbitrarily and capriciously in denying benefits, and we conclude to the
contrary that the undisputed record evidence establishes that Defendant's denial of benefits was
neither arbitrary nor capricious.
Denial of Benefits as Violative of the Nonforfeitability Provisions
Plaintiff argues, in the alternative, that Defendant's denial ofhis benefits violated ERISA's
nonforfeitability provision, which, in his view, prohibited Defendant from reducing his vested
Supplemental Pension benefits on account of his receipt of Social Security disability benefits.
"[T]he concept of ... nonforfeitable rights [is] critical to the ERISA scheme." Alessi v.
Raybestos-Manhattan, Inc., 451 U.S. 504, 510 (1981) (citations omitted.). Thus, ERISA provides
that "[e]ach pension plan shall provide that an employee's right to his normal retirement benefit is
nonforfeitable upon the attainment of normal retirement age."
29 U.S.C. § 1053(a) (the
In arguing that the termination of his benefits violated the
nonforfeitability provision~ Plaintiff relies exclusively on a case that is no longer good law, Utility
Workers Union of America v. Consumers Power Co., 637 F.2d 1082 (6th Cir. 1981) (holding that
ERISA prohibits the reduction of pension benefits by the amount that a retiree receives in workers'
compensation benefits), vacated and remanded, 451 U.S. 1041 (1981), rev'd~ 663 F.2d 1074 (6th Cir.
Under the controlling caselaw, Plaintiff's claim of nonforfeitability is clearly meritless. In
Alessi, the United States Supreme Court specifically considered whether pension offsets for Social
Security payments and/or workers compensation benefits violated
and concluded that they did not. 451 U.S. at 516-17. As the Supreme Court made clear,
the nonforfeitability provision ensures that a retiree's overall right to a pension is protected, but does
not guarantee a pension in a particular amount. Id. at 512 (citing Nachman Corp. v. Pension Benefit
Guaranty Corp., 446 U.S. 359, 372-73 (1980)). The Court further noted that Congress, in ERISA,
did not prohibit "integration," a method by which "benefit levels are determined by combining
pension funds with other income streams available to the retired employees," and "expressly
preserved the option ofpension fund integration with benefits available under ... the Social Security
Act, 42 U.S.C. § 4016." Id. at 514 (citing 29 U.S.C. § 1054(b)(1)(i)) (additional citations omitted).
The Alessi Court further clarified that such approved integration applies to all Social Security
benefits, without distinguishing between benefits due to disability and wages lost due to retirement.
Id. at 519-20. Under this clear Supreme Court precedent, Plaintiffis simply incorrect that ERISA's
8When asked at oral argument to cite another case to support Plaintiffs nonforfeitability
argument, Plaintiffs counsel was unable to do so. (N.T. 7/13111, at 35-36.)
nonforfeitability provision prohibits Defendant from offsetting his Social Security disability payment
from his Supplemental Pension payment.
In sum, based on the undisputed record evidence and under the controlling law, we reject
both Plaintiffs argument that Defendant's denial of his benefits was arbitrary and capricious, and
his argument that the denial violated ERISA's nonforfeitability provision. Moreover, because the
summary judgment record establishes that the denial of his benefits was fully consistent with the
terms of the Pension Plan and with Defendant's obligations under ERISA's nonforfeitability
provision, we grant summary judgment in Defendant's favor on Plaintiffs claim pursuant to §
1 132(a)(1)(B) to recover his Supplemental Pension benefits.
ERISA Claim for Breach of Fiduciary Duty
In connection with his breach of fiduciary duty claim, Plaintiff argues in his motion that the
record evidence conclusively establishes that Defendant did not notifY him at the time he opted for
early retirement that his Supplemental Pension benefits would be suspended if he began receiving
Social Security disability benefits and that he was instead led to believe that there was no such
limitation. Defendant argues in its cross-motion that the record evidence establishes that Plaintiff
was notified, repeatedly, of the limitation on his Supplemental Pension payments. 9
9Defendant moved, in its written summary judgment motion, for judgment in its favor on
"all" of Plaintiffs claims, but it did not directly address Plaintiffs fiduciary duty claim. In fairness
to Defendant, the breach of fiduciary duty claim was not central to Plaintiffs Complaint or
particularly well-defined in Plaintiffs own summary judgment motion. The claim is, however,
encompassed in Count II of the Complaint, which states "The decision by Defendant that denied
Plaintiffofthe rights and benefits due Plaintiff under his Early Retirement Plan was arbitrary, illegal,
capricious, unreasonable, and not made in good faith and is a breach of Defendant's fiduciary duty
owned [stet] to Plaintiff ...." (CompI. ~ 32 (emphasis added).) In any event, Defendant clarified
at oral argument that it was, in fact, moving for judgment in its favor on the breach of fiduciary duty
claim. (N.T. 7/13/11, at 23-24.)
Plaintiffs breach of fiduciary duty claim under ERISA arises under § 1 132(a)(3), which
"acts as a 'safety net, offering appropriate equitable relief for injuries caused by violations that [§
1132] does not elsewhere adequately remedy.'" Jordan v. Federal Express Corp., 161 F.3d 1005,
1012 (3d Cir. 1997) (quoting Varity Corp. v. Howe, 516 U.S. 489,512 (1996)). The United States
Supreme Court has charged lower courts with defining the "contours of fiduciary duties" under
ERISA. Hartev. Bethlehem Steel Corp., 214 F.3d 446, 452 (3d Cir. 2000) (citing Varity Corp., 516
U.S. at 497). Pursuant to this charge, the United States Court of Appeals for the Third Circuit has
"held that administrators generally have a fiduciary duty 'not to misinform employees through
material misrepresentations and incomplete, inconsistent or contradictory disclosures. '" Harte, 214
F.3d at 452 (quoting In re Unisys Corp. Retiree Medical Benefit "ERISA" Litig., 57 F.3d 1255, 1264
(3d Cir. 1995)).10
To establish a breach of fiduciary duty claim, '''a plaintiff must establish each of the
following elements: (1) the defendant's status as an ERISA fiduciary acting as a fiduciary; (2) a
misrepresentation [or omission] on the part of the defendant; (3) the materiality of that
misrepresentation [or omission]; and (4) detrimental reliance by the plaintiff on the
misrepresentation [or omission]. '" Araujo v. Draft Foods Global, Inc., 387 Fed. App'x212, 217 (3d
Cir. 2010) (quoting Daniels v. Thomas & Betts Corp. 263 F.3d 66, 73 (3d Cir. 2001)). In situations
JOIn Harte, the Third Circuit considered a plaintiff s breach of fiduciary duty claim against
an administrator, which alleged that the administrator had failed to advise the plaintiffthat plaintiff s
two-year break in service due to a disability would constitute a break in "continuous" service for
pension purposes, thereby disqualifying him from receiving a particular level of benefits under his
retirement plan. The court stated that the administrator "may be held liable for breach of fiduciary
duty" where the plaintiff "might predictably and reasonably presume, after reading the pertinent part
of the plan, that he is still employed." 214 F.3d at 453.
involving omissions, the ERISA fiduciary has an "affirmative duty to speak when [he] knows that
silence might be harmful." Harte, 214 F.3d at 452 (quoting Bixler v. Central Pa. Teamsters Health
& Welfare Fund, 12 F.3d 1292, 1300 (3d Cir. 1993)). This duty "extends to 'those material facts,
known to the fiduciary but unknown to the beneficiary, which the beneficiary must know for its own
protection.'" Id. (quoting Glaziers & Glassworkers Union Local No. 252 Annuity Fund v.
Newbridge Sec .. Inc., 93 F.3d 1171, 1182 (3d Cir. 1996)). A fiduciary's omission is therefore
material "if 'there is a substantial likelihood that it would mislead a reasonable employee in making
an adequately informed retirement decision.'" Harte, 214 F.3d at 452 (quoting Unisys, 57 F.3d at
1264). Where "reasonable minds can differ on whether a misleading statement or omission would
affect a reasonable employee's retirement decision," that issue is one for the fact-finder. Id. (citing
Fischer v. Philadelphia Elec. Co., 994 F.2d 130, 135 (3d Cir. 1993)).
Here, neither party disputes that Defendant is an ERISA fiduciary, which can be subject to
a breach of fiduciary claim. There are, however, genuine issues of material fact as to whether there
was an omission that is, whether Defendant failed to advise Plaintiff, at the time he accepted early
retirement, that his Supplemental Pension benefits would be terminated ifhe began receiving Social
Security Disability benefits; whether that alleged omission was material; and whether Plaintiff
detrimentally relied on that omission. The summary judgment record contains Plaintifr s deposition
testimony that no one sat down with him to go over his Pension application when he filled out the
application, and no one gave him a copy of the Pension Plan when he opted to accept early
retirement. (Appx.356-57.) It also contains Plaintiffs testimony that he did not know at the time
he opted for early retirement that his receipt of Social Security disability benefits would result in the
early termination ofhis Supplemental Pension payments. (Appx. 360.) Plaintiff further he testified
at his deposition that, when he was considering early retirement, it was important to him not only
that he would be able to collect both Pension and Supplemental Pension payments, but also that he
would be able to work to supplement that pension income, and that he decided to retire early
precisely because all ofthose income streams would be available to him. (See Appx. 357 ("I retired
because they presented to me an opportunity where 1 could retire early and also offered me the
ability, while retired, to work.");1l Appx. 365; see also Appx. 361-62 (testifying that he "probably"
would not have retired ifhe had known that his Supplemental Pension payment could be terminated
because he was receiving Social Security disability benefits).
On the other hand, the summary judgment record also contains contrary evidence.
Specifically, the record contains evidence that that Plaintiff was, in fact, provided with Plan
documents when he retired and that Defendant routinely sends a Summary Plan Description to each
active Plan participant every five years. (See Obuchowicz Decl., dated 1111111, at ~ II (stating that
Plaintiff "would have received a Retiree Summary Plan Description" at his retirement appointment);
id. at ~ 5.) There is also evidence that Plaintiff was notified that he could not simultaneously collect
a Social Security disability check and his Supplemental Pension payments in the "Right to Receive"
cards that Defendant mailed to Plaintiff annually. (Appx. 47-48.) Defendant emphasizes that
Plaintiff falsely completed the Right to Receive cards on at least three occasions, because he
represented by signing the cards that he was not receiving Social Security disability benefits when,
in fact, he was. (ld.)
Under these circumstances, we conclude that there are genuine issues of material fact that
IIIndeed, Plaintifftestified that, for the first five years ofhis retirement, he continued to work
to supplement his pension income. (Appx. 358-59.)
prevent the entry ofsummary judgment in either party's favor on the breach offiduciary duty claim. 12
We therefore deny both parties' summary judgment motions insofar as they pertain to the breach of
fiduciary duty claim.
American with Disabilities Act Claim
Plaintiff also claims that Defendant's denial of his Supplemental Pension benefits violates
§ 1211(a) of the ADA, which provides in pertinent part as follows:
No covered entity shall discriminate against a qualified individual
with a disability because of the disability ofsuch individual in regard
to employment compensation, job training, and other terms,
conditions, and privileges of employment.
42 U.S.C. § 12112(a).
According to Plaintiff, Defendant's denial of his benefits under his
Supplemental Pension denies him equal compensation on account of his disability in violation of
§ 12112(a), because non-disabled Pension Plan participants are permitted to receive income from
"three sources," i.e., (1) the Early Retirement Pension Plan Payment, (2) the Carpenters
Supplemental payment, and (3) income derived from employment both inside and outside the
construction industry, while disabled participants are not only denied their Supplemental Pension
payments, but also lose their ability to earn work income. 13
12This case is similar to Jordan v. Federal Express Corp., 116 F.3d 1005 (3d Cir. 1997), in
which the court found that there was a genuine issue of material fact as to whether an ERISA plan
administrator had breached his fiduciary duty to the plaintiff/retiree, where the plaintiff was not
advised until after his retirement and subsequent divorce that he could not transfer his plan benefits
to his new wife and that the plan was irrevocable. Id. at 1008-09, 10 17. In that case, the
irrevocability and transfer restrictions were in the plan documents, but plaintiff had never received
or requested a complete copy of the plan. Id. at 1016.
13Plaintiff also asserts that his denial ofbenefits under these circumstances violated § 12132
of the ADA, which provides as follows:
[N]o qualified individual with a disability shall, by reason of such
Plaintiff's argument is meritless. In Leheny v. City of Pittsburgh, 183 F.3d 220 (3d Cir.
1999), the Third Circuit made clear that there is no ADA violation where "every employee is offered
the same plan, regardless ofthat employee's contemporary or future disability ."14 Id. at 230; see also
McKnightv. General Motors Corp., 550 F.3d 519, 529 (6th Cir. 2008) (concluding that benefit plan
that provided for a reduction in retirees' supplemental benefits if they became eligible for Social
Security disability payments did not violate the ADA because "each plaintiff had equal access to the
same benefit plan; thus, they ... received equal treatment from [their employer].") Here, Plaintiff
has presented no evidence that employees are -- or were at the time he retired -- offered different
plans based on whether or not they were disabled. To the contrary, the record evidence appears to
disability, be excluded from participation in or be denied the benefits
of the services, programs, or activities of a public entity, or be
subjected to discrimination by any such entity.
However, as Defendant correctly points out, Plaintiffcannot take advantage of § 12132, because that
provision only applies to "public entities," and the ADA defines "public entity" as "any State or
States or local government; and the National Railroad Passenger Corporation, and any commuter
authority ...." 42 U.S.C. § 12131(a). Because Defendant is not a public entity, we enter judgment
in Defendant's favor insofar as Plaintiff claims that the denial of benefits violated § 12132.
14Leheny involved an early retirement plan for Pittsburgh police officers. Under the plan,
officers of a certain age, with years of service that met a certain threshold, were offered early
retirement with a pension equal to 75% of their average month pay. Disabled officers, who were
entitled to workers compensation, could opt instead to collect 50% of their average monthly pay
along with 66 2/3 % oftheir workers' compensation benefits. The disabled officers contended that
this plan violated the ADA, because "non-disabled retirees [we]re able to obtain new employment
for any amount ofcompensation, [while the disabled officers], because of their disability ... [were]
limited to the 66 2/3% workers compensation benefits they receive." 183 F.3d at 229. The Third
Circuit rejected that argument, noting that its precedent dictated that employees receive "'equal
treatment'" when they are given the opportunity to join the same plan with the same schedule of
coverage. Id. at 230 (quoting Ford v. Schering-Plough Corp., 145 F.3d 601, 608 (3d Cir. 1998)).
Accordingly, '''[s]o long as every employee is offered the same plan regardless of that employee's
contemporary or future disability status, then no discrimination has occurred even if the plan offers
different covemge [to employees with disabilities]." Id. (quoting Ford, 145 F.3d at 608.) The
Leheny court therefore found no ADA violation on the facts of that case. Id.
show just the opposite, i.e., that the 1996 Plan and the 2002 Plan were standard plans that were
offered to every employee in the relevant time periods.
Accordingly, Plaintiff has not established a violation of the ADA. We therefore grant
Defendant's Motion insofar as it seeks judgment in its favor on the ADA claim, and deny Plaintiff's
Motion for Summary Judgment insofar as it pertains to that claim.
For the foregoing reasons, we deny Plaintiff's Motion for Summary Judgment in its entirety
and grant Defendant's Motion for Summary Judgment insofar as it seeks judgment in its favor on
Plaintiff's claim that Defendant violated § 1132(c)(1) of ERISA by failing to produce a copy ofthe
1996 Plan in a timely fashion, the claim that Defendant arbitrarily and capriciously denied Plaintiff
benefits under the Plan documents or denied benefits in violation of ERISA's non-forfeitability
provision, and the ADA claim. At the same time, we deny Defendant's Motion insofar as it seeks
dismissal of Plaintiff's breach of fiduciary duty claim, because there are genuine issues of material
fact as to that claim.
An appropriate Order follows.
BY THE COURT:
i John 0/- Padova, J.
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