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Schmidt v. Sheet Metal Workers' Naitonal Pension Fund

October 17, 1997




Appeals from the United States District Court for the Western District of Wisconsin.

No. 96 C 141--John C. Shabaz, Chief Judge.

Before BAUER, HARLINGTON WOOD, JR., and ROVNER, Circuit Judges.

ROVNER, Circuit Judge.



Richard A. Schmidt ("Richard") initiated this ERISA action against the Sheet Metal Workers' National Pension Fund ("NPF" or "Fund") and its Board of Trustees ("Trustees") to recover the portion of his father's death benefit that the Fund disbursed to Richard's sister. Although Richard's father failed to designate a beneficiary for his death benefit, Richard contends that his father intended that he be the sole beneficiary and that the proper designation was never made only because a benefit analyst employed by the Fund sent the wrong form after speaking with Richard and his father over the telephone. Richard therefore argues that he is entitled to the contested benefits either under an estoppel or breach of fiduciary duty theory. He further contends that defendants violated ERISA by failing to adequately notify him of his appeal rights. After discovery, the district court granted summary judgment to defendants on each of Richard's claims. Richard now challenges that disposition here, and defendants cross-appeal from the denial of their request for an award of attorney's fees. We agree that defendants were entitled to summary judgment on each of Richard's claims under ERISA. We also do not believe that the district court abused its discretion in refusing to award attorney's fees. We therefore affirm the judgment below.


On March 4, 1994, Allen J. Schmidt ("Allen") was told by his doctors that he had pancreatic cancer and that he had but a few months to live. Allen was not married at the time, and he therefore wished to designate his son Richard as the sole beneficiary of the pension benefit that would be payable upon his death by the NPF, a multi-employer benefit trust fund maintained under ERISA. On March 10, Allen called the Fund's administrative office to inquire about the procedure for designating his son as the sole beneficiary of his death benefit. He spoke on that occasion to Eunjae Lee, an NPF benefit analyst. *fn1 Allen explained to Lee that he was terminally ill and that he wished to designate his son as the sole beneficiary of his pension death benefit. Because Allen believed that Lee was not fully understanding his request, he asked Richard to attempt to explain it to her. Richard reiterated to Lee that Allen was terminally ill and that he wished to designate Richard as the sole beneficiary of his death benefit. Lee indicated to Richard that she understood and that she would send the proper paperwork. Several days later, the Schmidts received a "Pension or Vesting Application," which they promptly completed and returned to the Fund. On that application, Allen designated Richard as his primary beneficiary and his daughter, Ginger Riphahn, as the successor beneficiary. It turned out, however, that Lee had sent the Schmidts the incorrect form. The "Pension or Vesting Application" was exactly that--an application for pension benefits, and was not the proper mechanism for designating a beneficiary for a pension plan death benefit. A death benefit beneficiary was properly designated only once a plan participant submitted to the Fund the "benefit designation card" included in the front of the Fund's pension plan booklet (the "Booklet"). *fn2 This Booklet had been mailed to all plan participants in 1990.

Allen died on April 16, 1994, and on August 29, 1994, Richard received a letter from Lee explaining that because his father had failed to name a beneficiary for his death benefit, the $22,693.13 benefit would be divided evenly between Allen's surviving children in accordance with section 7.01 of the pension plan. *fn3 Lee included with this letter another copy of the Booklet, which sets out the death benefit eligibility rules and an individual's appeal rights. Upon receiving Lee's letter, Richard called the Fund's administrative office and this time spoke with Barry Sweger, an assistant benefits coordinator. Richard explained to Sweger that Lee had sent his father the wrong form after their March 10 telephone conversation, and Sweger indicated that Richard should write down exactly what had happened and note that his letter was to be considered an appeal to the Fund's Board of Trustees. Sweger explained that all information substantiating Richard's position should be included in the letter and that any supporting documentation should be appended. Sweger told Richard to mail the letter to him and that the Trustees then would consider Richard's appeal at their next meeting. Richard did as he was told, mailing his letter to Sweger on September 30, 1994. He received a letter in response which indicated that his appeal had been received and that it would be considered at the next meeting of the Fund's Trustees. By letter dated May 30, 1995, Richard was notified that the Appeals Committee of the Board of Trustees, consisting of two of the six trustees, had considered his appeal at their May 2 meeting and had determined to deny it. The letter provided the following explanation of the Appeals Committee's decision:

As Mr. Schmidt died before he had become a Pensioner, and as he left no surviving spouse, a Death Benefit was payable under [section 7.01]. The designation of beneficiaries for such a benefit is to be made on the form established by the Fund Trustees, in accordance with Section 7.05. This form is a card, found in each Pension Booklet, designating beneficiaries to receive the Sheet Metal Workers National Pension Fund Death Benefit.

Mr. Schmidt did not have such a designation on file at the time of his death. The designation of beneficiary section completed by Mr. Schmidt on the pension application received shortly before his death is not the form required by the Trustees to designate beneficiaries for a Death Benefit, but is a designation of beneficiary for pension benefits, in the event any such payments are payable after the death of the retiree.

As is provided for in Section 7.01, as no Death Benefit beneficiary designation had been filed by Mr. Schmidt in accordance with Section 7.05, the Death Benefit is payable to Mr. Schmidt's surviving children. As Mr. Schmidt left two surviving children, you and Ginger Riphahn, each of you receives one-half of the Death Benefit. (R. 32, Ex. J (emphasis in original).)


We review the district court's grant of summary judgment on Richard's ERISA claims de novo. Klosterman v. Western Gen. Management, Inc., 32 F.3d 1119, 1122 (7th Cir. 1994). We must affirm the judgment for defendants if the record reveals that there is no genuine issue of material fact and that they are entitled to judgment as a matter ...

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