Opinion
No. 04 Civ. 513 (LAP).
August 16, 2005
MEMORANDUM AND ORDER
Plaintiff Calogera Candela ("Plaintiff") and Defendants Mason Tenders' District Council Welfare Fund and Trustees of the Mason Tenders' District Council Welfare Fund (collectively, "Defendants") have filed cross-motions for summary judgment on the issue of whether Defendants' refusal to grant Plaintiff retiree medical benefits from the Welfare Fund was appropriate. Because Defendants' denial of said benefits was neither arbitrary nor capricious, Plaintiff's motion for summary judgment is denied, and Defendants' motion for summary judgment is granted.
I. Background
The Mason Tenders' District Council of Greater New York and Long Island is an umbrella organization for six affiliated local unions and is the sponsor of several ERISA-governed employee benefit plans, including the Mason Tenders' District Council Welfare Fund (the "Welfare Fund"). The Welfare Fund provides medical benefits to collectively-bargained employees in the construction industry. The Welfare Fund's medical benefits plan (the "Plan") is administered by the Trustees of the Mason Tenders' District Council Welfare Fund (the "Trustees").
According to the terms of the Plan:
The Board of Trustees . . . has the exclusive right, power, and authority, in its sole and absolute discretion, to administer, apply and interpret the Plan. . . . Without limiting the generality of the foregoing, the Board of Trustees . . . shall have the sole and absolute discretionary authority to: Take all actions and make all decisions with respect to the eligibility for, and the amount of, benefits payable under the Fund. . . .
(Affidavit of John Virga, sworn to on September 22, 2004, Ex. A at 93.)
In order for active employees to be eligible for medical benefits from the Plan they are required to work for at least 400 hours from May through October to obtain medical benefits coverage for the following January through June. Similarly, employees must work at least 400 hours from November through April to obtain coverage for the following July through December. In addition, in order for active employees to receive retirement benefits under the Plan they must receive a pension from the Mason Tenders' District Council, and: (1) be a pensioner under the Pension Fund and have twenty or more years of credited services under the Pension Fund, or (2) have been "eligible for [medical] benefits from the Welfare Fund as an active employee during at least two of the five calendar years immediately before his retirement date." Id. at 8.
Plaintiff worked for employers making contributions to the Welfare Fund from 1984 through 1991 and from June 1998 until August 6, 1999. Plaintiff does not assert that he has twenty or more years of service under the Pension Fund. Plaintiff does, however, assert that he is eligible for benefits under the "at least two of the five calendar years immediately before his retirement" provision because he was eligible for benefits for all of 1999 and for six months of 2000. Plaintiff was credited with working 692 hours from May 1998 though October 1999, 528 hours from November 1999 through April 1999, and 706.5 hours from May 1999 through October 2000, entitling him to medical benefits from January of 2000 to June of 2001. Plaintiff was injured on the job on August 6, 1999 and subsequently retired. Plaintiff began receiving a disability pension effective February 1, 2000.
However, Plaintiff was denied retiree medical benefits in a letter dated May 8, 2002 because the Trustees determined he did not meet the eligibility requirements of an active employee during two of the five years immediately before his retirement date. Plaintiff appealed the Trustees' decision in a letter dated June 25, 2002, disputing the finding of the Trustees and asserting he was an active employee during calendar years 1999 and 2000. In a letter dated October 10, 2002, the Trustees denied Plaintiff's appeal because he was not covered under four of the requisite six month eligibility periods (viz., May through October of 1998, November through April of 1998-99, May through October of 1999 and November through April of 1999-2000). Plaintiff disputes the Trustees' interpretation of the eligibility requirements that "during at least two of the five calendar years" means four six-month periods comprising two full years.
Plaintiff filed the present Complaint on January 22, 2004. The parties currently cross-move for summary judgment. Plaintiff argues: (1) that Defendants wrongfully denied his claim for retiree medical benefits because he was eligible for coverage in both 1999 and 2000 as the requirement mandates only coverage "during" two of the five years and not for two full years; and (2) that Defendants' interpretation of the Plan was misleading and failed to inform Plaintiff of his rights and responsibilities under the Plan. Defendants argue that: (1) under the arbitrary or capricious standard the denial of Plaintiffs benefits should be upheld as the Trustees' interpretation was reasonable; and (2) there was no breach of fiduciary duty as Defendants are under no obligation to provide Plaintiff with a precise, pre-decisional interpretation of the Plan.
Although Plaintiff includes three causes of action in his Complaint, the first two unquestionably advance the same argument, that the Trustees' interpretation of the Plan language "during two of the last five years" is incorrect.
Because Defendants' denial of Plaintiff's benefits was not arbitrary or capricious and because Defendants met their fiduciary duties towards Plaintiff, Defendants' motion is granted, and Plaintiff's motion is denied.
II. Discussion
The parties agree that Defendants' denial of medical benefits is reviewable under the arbitrary or capricious standard laid out in Firestone Tire Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). This standard applies when a benefit plan confers upon the administrator discretionary authority to determine eligibility. Id. An administrator's interpretation of a benefits plan will be upheld unless his decision is arbitrary or capricious. See Pagan v. NYNEX Pension Plan, 52 F.3d 438, 441 (2d Cir. 1995); Murphy v. International Business Machines Corp., 23 F.3d 719, 721 (2d Cir. 1994), cert. denied, 513 U.S. 876 (1994). A court may "overturn a decision to deny benefits only if it was `without reason, unsupported by substantial evidence or erroneous as a matter of law.'" Pagan, 52 F.3d at 442 (quoting Abnathya v. Hoffman-LaRoche, Inc. 2 F.3d 40, 45 (3d Cir. 1993). Thus, Plaintiff must do more than argue that the denial of benefits was the wrong decision; he must show that the denial of benefits was unreasonable. Plaintiff has not met this burden.
As to Plaintiff's first claim, Plaintiff's sole argument regarding the denial of medical benefits concerns the Trustees' interpretation of the word "during" in the Plan's eligibility requirement. This requirement states that in order to receive retirement benefits a plan participant must "remain a union member, and . . . [be] eligible for benefits from the Welfare Fund as an active employee during at least two of the five calendar years immediately before your retirement date. . . ." (Affirmation of Calogero Candela, sworn to on November 3, 2004, Ex. 3 at 1.)
The Trustees have interpreted "during at least two of the five calendar years" to mean two full years or four complete half-year disability periods. This is by no means an unreasonable interpretation. Plaintiff essentially argues that the Trustees ought to replace the phrase "during at least two years" with the language "part of two" years. Plaintiff's interpretation, however, would make the plan requirement even more ambiguous. Plaintiff's version could be interpreted as meaning any part of two years — one year and a day, one year and six months, one year and 364 days. Moreover, merely showing that one possible interpretation can be replaced with another is not sufficient to overturn a plan administrator's interpretation under the arbitrary or capricious standard. See, e.g., Jordan v. Retirement Committee of Rensselear Polytechnic Institute, 46 F.3d 1264, 1272 (2d Cir. 1995) ("as between two reasonable interpretations of the same provision the arbitrary or capricious standard requires the court to uphold the administrator's interpretation"). Accordingly, the Trustees' decision to deny benefits to Plaintiff was not arbitrary or capricious, and judgment on that claim is granted to Defendants. Judgment is also granted to the Trustees on Plaintiff's claim that Defendants denied him retirement benefits.
Plaintiff's remaining claim is that the Trustees' interpretation itself is misleading and fails to inform participants of their rights and responsibilities. However, Defendants cannot be compelled to provide participants a predecisional ruling on an application for benefits, as Plaintiff suggests here. Such a requirement would render meaningless the deferential arbitrary and capricious standard that is given to the Trustees' interpretation of the Plan. See, Morse v. Stanley, 732 F.2d 1139, 1147 (2d Cir. 1984) ("Were we to require the Trustees to spell out the circumstances in which accelerated distribution [of benefits] would be granted or denied, we would read out of the plan the discretionary powers expressly granted to the Trustees to act as varying circumstances arise"). Accordingly, judgment is granted for the Trustees and against Plaintiff on Plaintiff's claim that Defendants failed in their fiduciary responsibilities.
III. Conclusion
For these reasons, Plaintiff's motion for summary judgment is denied, and Defendant's motion for summary judgment is granted. The Clerk of the Court shall mark this action closed and all pending motions denied as moot.
SO ORDERED.