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Donald J. Tompkins v. Central Laborers' Pension Fund

March 30, 2012

DONALD J. TOMPKINS, PLAINTIFF-COUNTERDEFENDANT,
v.
CENTRAL LABORERS' PENSION FUND, DEFENDANT-COUNTERCLAIMANT.



The opinion of the court was delivered by: Sara Darrow United States District Judge

E-FILED

Friday, 30 March, 201 2 04:10:07 PM

Clerk, U.S. District Court, ILCD

ORDER

In 1999, after participating in the Central Laborers' Pension Fund (the "Fund") for over 20 years, Donald J. Tompkins ("Tompkins") applied for and began receiving "total and permanent disability" benefits. These benefits were terminated by the Fund on June 1, 2007, after the Fund discovered that he had been working full-time since July 2005. According to the Fund, Tompkins' ability to work full-time demonstrated that he was no longer totally and permanently disabled. Tompkins challenged the termination of his benefits under the Employment Retirement Income Security Act (ERISA) in this action. In response, the Fund filed a counterclaim alleging that Tompkins committed the tort of fraudulent concealment by failing to disclose that he began full-time employment in July 2005. Tompkins' three affirmative counts were resolved in favor of the Fund on summary judgment.

Presently before the Court is the Defendant-Counterclaimant Central Laborers' Pension Fund's counterclaim for the tort of fraudulent concealment. For the reasons set forth herein, the Court, having considered all of the evidence adduced at trial, hereby grants judgment in favor of Plaintiff-Counterdefendant Donald J. Tompkins and against the Fund on the counterclaim.

I. FINDINGS OF FACT

A. Background

1. Tompkins is and was, at all relevant times, a citizen of Rock Island County, Illinois.

2. The Fund is a pension fund administered pursuant to a pension Plan (the "Plan") and the provisions of the Employment Retirement Income Security Act of 1974, as amended, ("ERISA"), 29 U.S.C. § 1001 et seq.

3. In November of 1978, Tompkins, through his employment with certain participating employers, began working in Laborers' Local 309 and became a participant in the Fund through that employment.

B. The Plan Provisions

i. The July 1, 1995 Summary Plan Description and First Restated Plan

4. At some time after July 1, 1995, and prior to 1999, the Fund created a booklet containing a Summary Plan Description, revised and effective as of July 1, 1995 ("July 1, 1995 Summary Plan Description"), and the Fund's Restated Plan Rules and Regulations -- Amended and Restated Effective October 1, 1994 ("First Restated Plan"). (See Fund's Ex. 1)

5. The July 1, 1995 Summary Plan Description, which provides a lay interpretation of the formal terms of the First Restated Plan, provided a description of a "Disability Pension" for participants that become permanently and totally disabled. (See Fund's Ex. 1 at 1, 15, 21-22, 37.)

6. The July 1, 1995 Summary Plan Description included the following:

If I retire with a Disability Pension, May I work?

If you are a disability pensioner, your pension will be suspended for any months in which you have earnings from any employment or gainful pursuit. You must report all and any earnings to the Trustees in writing within 15 days after the end of the month in which you had such earnings. If you fail to report as required, you will be further penalized for 12 more months. (Fund's Ex. 1 at 37.)

7. The First Restated Plan included provisions regarding eligibility for a Disability Pension due to becoming totally and permanently disabled (Section 3.7), the amount of the Disability Pension (Section 3.8), the payment terms for a Disability Pension (Section 3.9), the Plan's definition of "total and permanent disability" as of July 1, 1995 (Section 3.10), the necessary proof of total disability needed to qualify for a Disability Pension (Section 3.11), and the options available to a disability pensioner if he ceases to be totally and permanently disabled (Section 3.12). (Fund's Ex. 1 at 63-65.)

8. The First Restated Plan defined Total and Permanent Disability, in part, as follows:

Section 3.10. Total and Permanent Disability Defined.

A Total and Permanent Disability shall mean that the Employee is totally and permanently unable as a result of bodily injury or disease to engage in any further employment or gainful pursuit whether as a Laborer or in any other occupation or employment of any kind. The Trustees shall be the full and final judges of Total and Permanent Disability and of entitlement to a Disability Pension hereunder.

A Disability Pensioner shall report any and all earnings from any employment or gainful pursuit to the Pension Fund Office in writing within 15 days after the end of each month in which he had such earnings. If a Disability Pensioner fails to make timely reports as required by this section, he shall be disqualified for benefits for up to 12 months in addition to the duration of such employment for each such violation. (Fund's Ex. 1 at 64.)

9. The Fund mailed copies of the booklet containing the July 1, 1995 Summary Plan Description and First Restated Plan to plan participants at some point after July 1, 1995, and prior to Tompkins application for disability benefits in July 1999.

10. At the time the Fund mailed copies of the booklet to its participants, Tompkins was a contributing participant in the Plan but had not been receiving any form of pension benefits, and there is no direct evidence that Tompkins was actually aware of any of the relevant provisions of the July 1, 1995 Summary Plan Description or the First Restated Plan.

ii. Amendment No. 5, adopted May 19, 1997

11. The Plan's definition of Total and Permanent Disability in section 3.10 was amended by Amendment No. 5. Amendment No. 5 was adopted by the Fund on May 19, 1997. Section 3.10 of Amendment No. 5 set forth amendments to the Plan that included a "$14,000 provision" to total and permanent disability (italicized):

Section 3.10 is deleted in its entirety and replaced with the following: Section 3.10. Total and Permanent Disability Defined.

A Total and Permanent Disability shall mean that the employee is totally and permanently unable as a result of bodily injury or disease to engage in any further employment or gainful pursuit as a Laborer or other Building Trades Crafts employment in the construction industry for remuneration or profit, regardless of the amount, or unable to engage in further employment or gainful pursuit of non-Laborer or other non-Building Trades Crafts employment for which the employment is considered full-time and a primary source of income. For such non-Laborer or other non-Building Trades Crafts employment, provided a physician, selected by the Trustees, considers the disability to be total and permanent, the Participant may earn up to $14,000 per calendar year in the non-Laborer or other non-Building Trades Crafts employment and be considered totally and permanently disabled for purposes of section 3.10. Such disability must be considered total and permanent and will continue during the remainder of the Participant's life. The Trustees shall be the full and final judges of Total and Permanent Disability and of entitlement to a Disability Pension hereunder.

A Disability Pensioner shall report any and all earnings from any employment or gainful pursuit to the Pension Fund Office in writing within 15 days after the end of each calendar year for which he had such earnings. If a Disability Pensioner fails to make timely reports as required by this section, he shall be disqualified for disability benefits for up to 12 months in addition to the duration of such employment for each such violation. (Fund's Ex. 2.)

12. Section 3.11 of Amendment No. 5 imposed an obligation on participants to provide the Fund with authorization for the release of a participant's Social Security earnings:

Section 3.11 is deleted in its entirety and replaced with the following:

. . . the Participant must furnish, at the request of the Trustees, an annual release whereas the Trustees may obtain Social Security information for any given year or years to establish proof of continued Total and Permanent Disability. (Fund's Ex. 2.)

13. The Fund did not mail or otherwise provide a copy of Amendment No. 5 to Tompkins, and there is no direct evidence that Tompkins ever received or was made aware of the terms set forth in Amendment No. 5.

iii. Amendment No. 7, adopted November 10, 1998

14. The Plan's definition of Total and Permanent Disability in section 3.10 was also amended by Amendment No. 7, which was adopted by the Fund on November 10, 1998. Amendment No. 7 also included the "$14,000 provision" change to the definition "Total and Permanent Disability" as set forth in Amendment No. 5. In relevant part, Amendment No. 7 included the following:

Section 3.10, Total and Permanent Disability Defined, is deleted in its entirety and amended to read as follows:

Section 3.10 -- Total and Permanent Disability Defined:

A Total and Permanent Disability shall mean that the Employee is totally and permanently unable as a result of bodily injury or disease to engage in any further employment or gainful pursuit as a Laborer or other Building Trades Crafts employment in the construction industry for remuneration or profit, regardless of the amount, or unable to engage in further employment or gainful pursuit of Non-Laborer or other non-Building Trades Crafts employment for which the employment is considered full-time and a primary source of income. For such non-Laborer or other non-Building Trades Crafts employment, provided a physician, selected by the Trustees, considers the disability to be total and permanent, the Participant may earn up to $14,000 per calendar year in non-Laborer or other non-Building Trades Crafts employment and be considered totally and permanently disabled for purposes of Section 3.10. Such disability must be considered total and permanent and will continue during the remainder of the Participant's life. The Trustees shall be the full and final judges of Total and Permanent Disability and of entitlement to a Disability Pension hereunder.

A Disability Pensioner shall report any and all earnings from any employment or gainful pursuit to the Pension Fund Office in writing within 15 days after the end of each calendar year for which he had such earnings. If a Disability Pensioner fails to make timely reports as required by this section, he shall be disqualified for disability benefits for up to 12 months in addition to the duration of such employment for each such violation.

If disability benefits were paid for a month for which benefits were later determined should not have been paid, the overpayment shall be recoverable through deductions from future pension payments in an amount not to exceed 25 percent of the monthly pension amount (before deductions), except that the Plan may withhold up to 100 percent of the first monthly pension payment made upon the beginning of future pension payments. If a Participant dies before recovery of overpayments has been completed, deductions shall be made from the benefits payable to his Beneficiary or Spouse, subject to the 25 percent limitation on the rate of reduction. (Fund's Ex. 3.)

15. The Fund did not mail or otherwise provide a copy of Amendment No. 7 to Tompkins, and there is no direct evidence that Tompkins ever received or was made aware ...


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