In re Vorpahl, 695 F.2d 318, 320-22 (8th Cir. 1982); Calamia v. Spivey, 632 F.2d 1235, 1237 (5th Cir. 1980); Wardle v. Central States, Southeast Southwest Areas Pension Fund, 627 F.2d 820, 829-30 (7th Cir. 1980), cert. denied, 449 U.S. 1112, 101 S.Ct. 922, 66 L.Ed.2d 841 (1981); Rubin v. Decision Concepts, Inc., 566 F.Supp. 1057 (S.D.N.Y. 1983); Note, "The Right to Jury Trial in Enforcement Actions Under Section 502(a)(1)(B) of ERISA," 96 Harv.L.Rev. 737, 738 (1983). Appellants rely on Pollock v. Castrovinci, 476 F.Supp. 606 (S.D.N.Y. 1979), aff'd mem., 622 F.2d 575 (2d Cir. 1980), as authority for the proposition that they are entitled to a jury trial. In that case a plan beneficiary brought an action to obtain a share of the surplus of a terminated pension trust, and her recovery required a judicial reformation of the plan as amended.
There is no logical reason to require plaintiff in the latter case to give up his right to a jury simply because no payment is currently due. We do not write on a clean slate; in Pollock v. Castrovinci, 476 F. Supp. 606, 609 (S.D.N.Y. 1979), aff'd without opinion, 622 F.2d 575 (2d Cir. 1980), Judge Goettel of this Court considered the question of whether a beneficiary of a pension trust, suing pursuant to ERISA and alleging a violation of fiduciary duty and diversion of assets by the trustees, could demand a jury trial. In a detailed analysis of the issue, the Court in Pollock found that a jury trial was available.
The individual defendants are the trustees of the plan. The issue as to which plan governs the relationship of the parties is to be tried to the court without a jury, Pollock v. Castrovinci, 476 F. Supp. 606, aff'd without opinion, 622 F.2d 575 (2d Cir. 1980), as I ruled on the opening of the trial. Plaintiff was employed by Decision Concepts Inc. from September 4, 1973, until he left in July or August 1980. On April 1, 1975, the employer created a defined contribution pension plan for its employees, including plaintiff.
The limitation on amendments in the Washington Star plan did nothing more than prohibit diversion to any purpose other than for the exclusive benefit of participants. See also Pollock v. Castrovinci, 476 F. Supp. 606, 612 (S.D.N.Y. 1979), aff'd without opinion, 622 F.2d 575 (2d Cir. 1980), ("no . . . amendment shall enable [the employer] to recover or divert from the exclusive benefit of the Participants the fund already deposited in the Trust."). None of these cases involved language similar to that found in section 5.3 of the 1959 agreement.
Some courts have held that, at least in some circumstances, § 502(a)(1)(B) impliedly secures the right to a jury trial, and/or that such a right is guaranteed by the Seventh Amendment. See Pollock v. Castrovinci, 476 F. Supp. 606 (S.D.N.Y. 1979), aff'd without opinion, 622 F.2d 575 (2d Cir. 1980); Paladino v. Taxicab Indus. Pension Fund, 588 F. Supp. 37 (S.D.N.Y. 1984); Abbarno v. Carborundum Co., 682 F. Supp. 179 (W.D.N.Y. 1988); Vicinanzo v. Brunschwig Fils, Inc., 739 F. Supp. 882 (S.D.N.Y. 1990); Weber v. Jacobs Mfg. Co., 751 F. Supp. 21 (D.Conn. 1990); Resnick v. Resnick, 763 F. Supp. 760 (S.D.N.Y. 1991); Smith v. Union Mut. Ins. Co., 1990 WL 209456 (S.D.N.Y. 1990); Dawes v. First Unum Life Ins. Co., 1992 WL 350778 (S.D.N.Y. 1992).
At common law when a trust had fully performed its purpose without exhausting the trust estate, a resulting trust arose by operation of law for the benefit of the creator of the trust unless he had manifested a different intention. Pollock v. Castrovinci, 476 F. Supp. 606, 616 (S.D.N.Y. 1979), aff'd mem., 622 F.2d 575 (2d Cir. 1980); Wilson v. Bluefield Supply Co., 819 F.2d 457, 464 (4th Cir. 1987). Under ERISA employers may recapture surplus assets or amend plans to permit a reversion of such assets as long as the reversion does not violate ERISA and is not prohibited by the plan's language.
Although not of great significance in view of ERISA's legislative history, we note that the common law permitted reversion of surplus plan assets to the employer. See Wilson v. Bluefield Supply Co., 819 F.2d 457, 464 (4th Cir. 1987) (discussing the fiduciary obligations under common law of trusts); Pollock v. Castrovinci, 476 F. Supp. 606, 616 (S.D.N.Y. 1979) (same). B.
"Surplus" is the term used in the common law of trusts to describe any remaining assets in a trust after its purpose has been fulfilled. Under such circumstances, a "resulting trust" for the benefit of the creator of the original trust arises by operation of law, unless he manifested a contrary intent. Restatement (Second) of Trusts § 430 (1959); IV Scott, The Law of Trusts § 430, at 2985-86 (2d ed. 1956); see Washington-Baltimore Newspaper Guild Local 35 v. Washington Star Company, 555 F. Supp. 257, 260 (D.D.C. 1983), aff'd mem., 729 F.2d 863 (D.C. Cir. 1984); Pollock v. Castrovinci, 476 F. Supp. 606, 616 (S.D.N.Y. 1979), aff'd mem., 622 F.2d 575 (2d Cir. 1980). Since the resulting trust arises by operation of law, it is irrelevant that the original trust instrument — in this case, the Plan — made no reference to "surplus" — or, under the subsequently enacted ERISA, to "residual assets".
warding damages under § 502(c); and 2) that, in any case, Citibank's refusal to provide him with an SPD did prejudice him in that, lacking any written information about the Plan, he was forced to retain counsel and initiate this lawsuit in order to determine his rights under the Plan. While the Second Circuit has not ruled on the question of whether prejudice is a prerequisite for an award of penalties under § 502(c), district courts within the circuit have uniformly found awards of discretionary penalties to be inappropriate where the participant has failed to demonstrate that his rights have been prejudiced or that he has suffered "some degree of harm" from the failure or delay. Kelly v. Chase Manhattan Bank, 717 F. Supp. 227, 233 (S.D.N.Y. 1989); see also Plotkin v. Bearings Ltd., 777 F. Supp. 1105, 1108 (E.D.N.Y. 1991); Chambers v. European American Bank Trust Co., 601 F. Supp. 630, 638-39 (E.D.N Y 1985); Donaldson v. Hamburg Savings Bank, 568 F. Supp. 897, 900 (E.D.N.Y. 1983); Pollock v. Castrovinci, 476 F. Supp. 606, 618 (S.D.N.Y. 1979), aff'd without opinion, 622 F.2d 575 (2d Cir. 1980). Other district courts, however, have awarded penalties under § 502(c) without a finding of prejudice to the plaintiff.
This, unfortunately, is an overstatement. Not only does Howard v. Parisian, Inc., overlook the distinction which is implicit, if not express, as between traditionally "equitable" and traditionally "legal" relief, discussed in almost every decision cited in Howard v. Parisian, Inc., but it fails to cite Pollock v. Castrovinci, 476 F. Supp. 606 (S.D.N.Y. 1979), aff'd mem., 622 F.2d 575 (2d Cir. 1980), which cannot be reconciled with Katsaros v. Cody, 744 F.2d 270 (2d Cir. 1984), without acknowledging that Katsaros deals only with a claim for equitable relief. The Katsaros court said: There is no right to a jury trial of ERISA actions against pension fund trustees seeking the equitable remedy of restitution.