United States District Court, Northern District of Illinois, E.D
July 10, 1985
CHARLES E. TAYLOR, PLAINTIFF,
SUBURBAN TEAMSTERS OF NORTHERN ILLINOIS FRINGE BENEFIT FUNDS, DEFENDANT.
The opinion of the court was delivered by: Bua, District Judge.
The above-captioned matter came before the Court for trial on
the merits of plaintiff's employee benefits claim. The Court,
having heard the testimony of witnesses on May 3, 1985, and
having reviewed the record and the exhibits submitted into
evidence by the parties, does hereby enter the following findings
of fact and conclusions of law pursuant to Rule 52(a) of the
Federal Rules of Civil Procedure.
I. FINDINGS OF FACT
1. The defendant is the Suburban Teamsters of Northern Illinois
Welfare Fund ("the Welfare Fund").
2. The Welfare Fund is a multi-employer employee benefit plan
within the meaning of the Employee Retirement Income Security Act
of 1974 ("ERISA"), 29 U.S.C. § 1002(1) and (3).
3. This is an action by plaintiff for a declaratory judgment to
clarify his rights to benefits under the Welfare Fund. This Court
has jurisdiction over this action under 28 U.S.C. § 1132(e)(1).
4. The Welfare Fund extends a variety of medical and insurance
benefits to eligible participants and their dependents according
to eligibility criteria and benefit amounts specified in a Plan
of Benefits ("the Plan").
5. Plaintiff, Charles E. Taylor, is a former participant in the
6. Plaintiff last worked for an employer making contributions
to the Welfare Fund on his behalf ("a contributing employer") on
or about August 18, 1981 when he was laid off.
7. Plaintiff's date of birth is December 24, 1927 and thus
plaintiff was 53 years old at the time he last worked for a
8. At the time plaintiff ceased working for a contributing
employer, the Welfare Fund's Plan of Benefits dated June 1, 1981
(Ex. 1) was in effect.
9. The June 1, 1981 Plan provided in Class S an option for
participants who left covered employment for various reasons,
including layoffs, to continue their participation in the Fund
and their eligibility for benefits under the Plan by making
self-contributions to the Fund. (Ex. 1, pp. 15-19, 57-67). In
addition to paying the self-contribution amounts specified in the
June 1, 1981 Plan (Ex. 1, pp. 62-67), coverage under Class S
required, among other things, a written application submitted to
the participant's union business office "not later than the 28th
consecutive day following the last date on which he or she worked
for a Contributing Employer . . ." (Ex. 1, p. 16, 63).
10. The June 1, 1981 Plan also specified eligibility criteria
for retired employees of Contributing Employers. In pertinent
part, the eligibility provision of the June 1,
1981 Basic Retirement Medical Expenses Benefits provided:
An employee who (1) has been eligible for benefits
under this Plan for 10 or more calendar years and who
has attained age 55, or, if later, has been eligible
for 10 or more calendar years preceding the date of
his or her retirement, (2) retired on or after June
1, 1981 while covered under Class A, B, C, D or S of
this Plan, and (3) has made written application to
the Trustees of the Welfare Fund for these Retiree
and Spouse benefits, and has been found by the
Trustees to have fulfilled all eligibility
requirements of this Plan, shall be eligible for
these Basic Retirement Medical Expense Benefits from
the date such application was accepted by the
Trustees. (Ex. 1, p. 79).
11. When he was laid off in August 1981, plaintiff was aware of
the requirement of self-contributions to maintain his
participation in the Fund. (R. 14).
12. Trustee Venard testified that he told the plaintiff in
August 1981 of the self-paid Class S and that the plaintiff could
receive retiree welfare benefits when he retired if he remained
a participant in the Fund by making self-contributions. (R. 34).
13. Plaintiff did not file an application to maintain his
Welfare Fund eligibility under Class S on or before September 15,
1981, 28 days after his last day worked for a contributing
employer, or any time thereafter. (R. 24).
14. Plaintiff did not pay self-contributions to the Welfare
Fund at any time after August 18, 1981. (R. 24).
15. No contributions were received by the Welfare Fund from any
contributing employer on behalf of plaintiff for any period
subsequent to August 18, 1981. (R. 24).
16. Plaintiff was not eligible for the Basic Retirement Medical
Expense Benefits ("Retiree Benefits") under the June 1, 1981 Plan
because he had not yet attained age 55 when he left covered
employment and he retired after June 1, 1981 while not covered
under Class A, B, C, D or S of the Plan. (R. 24, Ex. 1, p. 79).
17. By electing not to maintain his coverage under Class S of
the Plan by making self-contributions, plaintiff ceased to be a
participant in the Fund on September 15, 1981, 28 days after his
last day worked for a contributing employer, in accordance with
the provisions of the June 1, 1981 Plan. (R. 20; Ex. 1, p. 57).
18. The Trustees adopted a new Welfare Plan of Benefits
effective September 1, 1982 (Ex. 2) and a new Retiree Plan of
Benefits effective October 1, 1982. (Ex. 3, R. 33).
19. The Trustees do not dispute that, under the new eligibility
provisions of the October 1, 1982 Retiree Plan, the plaintiff
would have been eligible to apply for and receive the medical
expense benefits available to retirees under the October 1, 1982
Plan if he had been a participant in the Welfare Fund on or after
20. On August 6, 1982, plaintiff came to the office of the
Welfare and Pension Funds to discuss his retirement plans. At
that time, plaintiff was given Exhibit 4 by the Fund Manager,
James Ewing. Exhibit 4 is a form indicating the pension benefits
to which plaintiff is entitled if he retired effective January 1,
1983, a week after his 55th birthday, and the earliest date
plaintiff could retire. (R. 16-18).
21. Plaintiff advised the Pension Fund in early October 1982
that he would seek an Early Pension Benefit to be effective
January 1, 1983. (R. 18).
22. In a letter dated October 15, 1982 (Ex. 5), Ewing sent
plaintiff the appropriate pension applications and also enclosed
prepared application forms for Retiree Welfare Fund coverage. (R.
18-20). With respect to the Retiree Welfare Fund coverage, Ewing
The gold covered booklet that is enclosed describes
the current Welfare benefits available to eligible
retirees. The eligibility requirements appear on page
7. You would think from reading them that
you qualify for Welfare benefits after retiring, but
since the book is dated October 1, 1982 it has been
interpreted to apply only to those participants who
were either still working at October 1, 1982 or were
actually retired at that time.
You would come under the eligibility rules in effect
in the previous book, which went into effect June 1,
1981. The rules in that book required that you
remained employed through your 55th birthday. You may
want to delay your retirement for a little longer in
hopes of getting these Welfare benefits. Please call
me up if you want to talk about this some more. (Ex.
23. Ewing testified that, if plaintiff delayed his retirement
and worked in covered employment causing contributions from a
contributing employer to be made to the Welfare Fund on his
behalf after October 1, 1982, plaintiff would have become a
participant in the Welfare Fund after October 1, 1982 and his
eligibility for retiree welfare benefits upon later retirement
would have been determined by the provisions of the October 1,
1982 Plan. (R. 20).
24. Plaintiff submitted his application for an Early Pension
Benefit and Retiree Welfare Fund Coverage on or about October 22,
1982. (Ex. 6).
25. On October 28, 1982, Ewing advised plaintiff by letter that
his application for an Early Pension Benefit had been approved,
You were not approved for retirees Welfare Fund
Benefits as you left active employment and coverage
under the Fund at the age of 53. To be qualified for
this benefit you would have to have remained covered
through the age of 55 according to the terms of the
Welfare Fund Summary Plan Description in effect at
the time you left us. You have the right to appeal
this determination on your Welfare Fund coverage.
Instructions on filing an appeal are attached. (Ex.
26. On April 20, 1983, the Trustees denied plaintiff's appeal.
On April 21, 1983, plaintiff was advised by letter that the
appeal had been denied by the Welfare Fund trustees because:
It has been a long standing policy of the Trustees of
the Fund to consider an applicant as coming under
whatever Welfare Plan of Benefits was in effect when
he was last covered for those benefits, either
through employment or self-payments that followed a
period of employment. According to our records Mr.
Taylor was last employed in our jurisdiction on
August 18, 1981 when he was 53 years old, and did not
self-pay after that. The Plan in effect in August
1981 required a Participant to remain covered to the
date of his retirement and to the age of 55 to
qualify for post-retirement Welfare benefits, and
that was the basis for the denial of his most recent
appeal. (Ex. 8).
27. At a September 22, 1982 meeting of the Welfare Fund
trustees, the issue presented by plaintiff's Retiree Welfare Fund
application had been previously considered for another applicant.
(R. 22-23). The Trustees determined that the applicant, Donald
Swanquist, was ineligible for the October 1, 1982 Retiree
Benefits because "[i]t was the sense of the Trustees that the
Plan in effect when a participant ceases to be actively engaged
in Covered Employment is applicable in determining that
participant's eligibility for benefits." (Ex. 9, p. 8).
28. The testimony of Fund Manager Ewing and Welfare Fund
Trustee Venard establishes that the Welfare Fund has consistently
determined retiree benefit eligibility of former Welfare Fund
participants in accordance with the Plan of Benefits in effect at
the time the individual's participation in the Fund ceased,
without regard to eligibility or benefit changes effective
subsequent to the termination of a particular former participant.
(R. 25-26, 28, 34-35).
29. There is no evidence that plaintiff's application for
Retiree Plan coverage was treated differently than any other
former participant similarly situated. The testimony
establishes consistent treatment of persons similarly situated to
plaintiff. (R. 25-26). Plaintiff presented no evidence and
elicited no testimony to rebut this finding.
30. The Welfare Fund trustees have not acted in bad faith or in
an arbitrary or capricious manner in denying plaintiff's Retiree
Welfare Plan application.
31. To the extent that any of the foregoing findings of fact are
deemed to be conclusions of law, they are hereby adopted as
conclusions of law.
II. CONCLUSIONS OF LAW
On the above and foregoing findings of fact, the Court makes
the following conclusions of law:
1. This Court has jurisdiction over this action pursuant to
28 U.S.C. § 1331, because the complaint is brought under
29 U.S.C. § 1132(e)(1). Venue is proper in this district under
28 U.S.C. § 1391(b).
2. A district court has a limited standard of review of
trustees' determinations and interpretations concerning benefit
eligibility and coverage issues. A decision by the trustees may
be overturned only if it was arbitrary and capricious in light of
the language of the Plan. Wardle v. Central States Pension Fund,
627 F.2d 820, 823-24 (7th Cir. 1980), cert. denied,
449 U.S. 1112, 101 S.Ct. 922, 66 L.Ed.2d 841 (1981).
3. It is plaintiff's burden to prove that the Trustees'
decision was arbitrary and capricious. Bayles v. Central States,
Southeast and Southwest Areas Pension Fund, 602 F.2d 97, 99 (5th
Cir. 1979). As noted above, plaintiff has offered no evidence and
elicited no testimony to rebut the finding that the Trustees have
consistently applied the same rule to applicants similarly
situated to the plaintiff: the Trustees apply the Plan in effect
when a particular individual's participation in the Fund ceased.
In addition, plaintiff has not shown the rule itself to be
anything other than logical and fair.
4. The Court concludes that the application of the June 1, 1981
Plan of Benefits to the plaintiff's October 1982 Retiree Benefit
Plan application was proper and fair, and not arbitrary and
capricious. Cf. Lehner v. Crane Co., 448 F. Supp. 1127, 1128,
1134-36 (E.D.Pa. 1978) ("plaintiff's eligibility for benefits is
to be determined by the plan in effect when his employment ended
and not by the plan which became effective thereafter.") Since it
is undisputed by the parties, the Court also finds that
plaintiff's application for Retiree Welfare Fund coverage was
properly denied under the provisions of the June 1, 1981 Plan of
5. Plaintiff's estoppel argument is rejected in light of
Reiherzer v. Shannon, 581 F.2d 1266, 1267 fn. 1 (7th Cir. 1978).
The vast majority of courts considering this argument have
rejected the use of estoppel principles in cases of this sort.
6. Even if the estoppel doctrine was accepted in this type of
case, plaintiff has failed to show any information on which he
detrimentally relied. Plaintiff's contention that Ewing initiated
and encouraged the idea of early retirement for plaintiff is not
supported by the trial testimony. Indeed, Ewing testified and his
letter to plaintiff shows that Ewing advised a delay in
retirement for plaintiff. In addition, plaintiff never testified
that he was misled in any way or detrimentally relied on any
information or representation by anyone.
7. Plaintiff could have continued his Welfare Fund coverage
under Class S by applying for Class S coverage and making
self-contributions prior to September 15, 1981 and continuing to
pay until the retirement age of 55. Had he done so, plaintiff
would have remained a participant in the Fund and could have
qualified for Retiree Welfare Plan coverage under the July 1,
1981 Plan of Benefits, even if the October 1, 1982 Retiree Plan
had not been adopted. However, since plaintiff failed to maintain
covered employment either under Class S or up to the date of the
October 1, 1982 Plan, his termination as a participant in the
Welfare Fund on September 15, 1981 was not unfair, arbitrary or
8. To the extent that any of the foregoing conclusions of law
are deemed to be findings of fact, they are hereby adopted as
findings of fact.
Based on the foregoing findings of fact and conclusions of law,
it is hereby ordered that:
1. Final judgment is hereby entered in favor of defendant and
2. Pursuant to Rule 52(b) of the Federal Rules of Civil
Procedure, the Court reserves the right to amend the above
findings and conclusions or to make additional findings and
conclusions upon motion of either party made no later than ten
days from entry of this order.
IT IS SO ORDERED.
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