Bunn v. Esmark, Inc.

577 F. Supp. 954, 1984 U.S. Dist. LEXIS 20380
CourtDistrict Court, N.D. Illinois
DecidedJanuary 16, 1984
DocketNo. 83 C 0136
StatusPublished

This text of 577 F. Supp. 954 (Bunn v. Esmark, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bunn v. Esmark, Inc., 577 F. Supp. 954, 1984 U.S. Dist. LEXIS 20380 (N.D. Ill. 1984).

Opinion

MEMORANDUM ORDER

BUA, District Judge.

Plaintiff Bunn filed the instant lawsuit alleging that he had been wrongfully denied disability pension benefits by defendant Esmark. Esmark subsequently filed a Motion for Summary Judgment which is now before the Court. For the reasons stated herein, defendant’s Motion for Summary Judgment is hereby granted.

[955]*955On July 7, 1953, plaintiff Jerry Bunn began working in the Processing Unit of Swift & Co.1 in Washington, D.C., as an unskilled laborer. He worked in that unit until October 22,1969 when the unit closed. On the date of the closing, Bunn received a separation allowance under the collective bargaining agreement of $2,920.20. He later received a letter from the Swift Pension Board informing him that because his “services terminated on October 22, 1969,” he was entitled to a deferred retirement pension of $83.55 a month beginning on his 65th birthday.

On October 27, 1969, Bunn was asked to come to work at Swift’s Washington Sales Unit which had remained open. Bunn’s position at the Sales Unit was considered temporary until September 1,1970 when he assumed the position of a truck driver. Bunn continued at the Sales Unit until September 16, 1977 when that unit terminated operations. On that date, Bunn received a check from Swift in excess of $2,000 representing unexercised vacation, one week’s guarantee, and a separation allowance.

On September 19, 1977, Bunn suffered a stroke. Because of the stroke, Bunn was required to undergo physical therapy until February, 1978, during which period defendant extended Bunn’s major medical insurance benefits although it states it was not required to do so.

In early 1979, Bunn’s attorney wrote Swift to determine whether Bunn would qualify for disability benefits under the pension plan of the applicable collective bargaining agreement, the Driver’s Contract. By return mail, Swift, through G.L. Colson of its Contract Administration office, informed Bunn’s attorney that Bunn was not entitled to benefits under the Driver’s Contract because he was not an employe at the time of the stroke.

In 1981, another attorney for Bunn wrote to defendant Esmark, Inc. inquiring about Bunn’s eligibility for disability benefits. Ultimately, plaintiff’s counsel was answered by Stephen Ward, the Pension Board’s Secretary, who explained that when Bunn was rehired by Swift (in 1969) he was considered to be a new employe and that therefore at the time of his ultimate termination in 1977 he did not have the requisite ten years of credited service in to qualify for a disability pension.2

Following receipt of Ward’s letter, Bunn filed the instant lawsuit. Thereafter, the Pension Board convened and denied Bunn’s request for the same reasons as set out in the letter from Ward.

Defendant now contends that summary judgment should be entered in its favor. In support of its position, defendant furthers two arguments:3 (1) the Esmark Pension Board rationally concluded as a matter of law that plaintiff was not entitled to a disability pension because he did not have the required ten years of credited service; and (2) the Pension Board’s decision should be upheld because the undisputed evidence establishes that plaintiff suffered his disability after his employment had been terminated.

On review, the Court is bound by the decision of the Pension Board unless [956]*956plaintiff can establish that it was “arbitrary, fraudulent or in bad faith.” Martinez v. Swift & Company, 656 F.2d 262, 263 (7th Cir.1981) (quoting Matthews v. Swift & Company, 465 F.2d 814, 821 (5th Cir.1972)). If the Pension Board’s decision is “rationally supported,” it must stand. Matthews, supra at 264. Furthermore, if the Pension Board does not address a particular issue in its decision, plaintiff must prove that the Board could not fairly and in good faith decide against him upon the evidence presented to the Court. Matthews v. Swift, 465 F.2d 814, 821 (5th Cir. 1972).

The Lack of Ten Years Credited Service

The specific ground upon which the Pension Board relied in denying plaintiff’s request for benefits was plaintiff’s lack of ten years credited service. Plaintiff argues, however, that he should have more than ten years credited service because the break in his employment in 1969 was not a separation but a layoff, which is not considered to be a separation from employment until in effect for two years or longer.

Plaintiff has plainly failed to demonstrate to the Court that it could prove that the decision of the Pension Board was arbitrary, fraudulent, or in bad faith. The evidence here presented so strongly supports the decision of the Board that no question of fact remains as to the rational basis for such decision. Accordingly, summary judgment may properly be entered in defendant’s favor. See, Gehrhardt v. General Motors Corp., 581 F.2d 7 (2d Cir.1978).

It is undisputed that, upon his 1969 termination from employment at Swift’s Processing Unit when that department shut down, Bunn received a separation allowance in the amount of $2,920.20.

Paragraph 71 of the Amalgamated Meat Cutters Contract states:

Separation allowances shall be paid to employes having one (1) or more years credited service (including such employes in layoff status and whose plant seniority has not been forfeited) who are permanently separated from the service ... arising out of the closing of a department or unit ... when it is not expected that they will be reemployed.”

Article IV of the Esmark Pension Plan expressly states at paragraph 5(a) that:

Employes will no longer be considered participants hereunder and will lose all credited service ... if, prior to January 1, 1976, they:
(v) are separated from employment whether or not paid a separation allowance. If subsequently re-employed, no credit will be given for prior service. [emphasis added]

In light of the above, it would appear clear from the fact of the payment of the separation allowance that when Bunn was forced to leave his position at the Processing Unit he was not laid off but separated from employment. Plaintiff argues, however, that the payment of the separation allowance was erroneous and that the defendant actually only intended to lay off the plaintiff. Such a contention is not even remotely supported by the record.

When Bunn was first terminated, Swift apparently could not anticipate that he would be rehired in another unit. It therefore paid the separation allowance. Bunn was, however, rehired, albeit in a different unit, when one of the individuals there was unable to come to work. For some time, Bunn’s status at the new unit was merely temporary. It was only after he had been at the new unit nearly one year that he was made a permanent employe.

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577 F. Supp. 954, 1984 U.S. Dist. LEXIS 20380, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bunn-v-esmark-inc-ilnd-1984.