James Price v. Bd of Trustees of the Ind. Laborer's Pension Fund

632 F.3d 288, 50 Employee Benefits Cas. (BNA) 1673, 189 L.R.R.M. (BNA) 3197, 2011 U.S. App. LEXIS 591, 2011 WL 93043
Court of Appeals for the Sixth Circuit·Decided January 12, 2011·No. 09-3897, 09-4204·Published·Cited by 17 cases

Opinions

OPINION

McKEAGUE, Circuit Judge.

This appeal arises at the intersection of numerous areas of complex federal law. We are called upon to sift through this complexity in the hopes of adding clarity. For many years prior to this appeal, James Price received occupational disability benefit payments under an employee benefit plan established and maintained in accordance with the Employee Retirement Income Security Act of 1974 (“ERISA”). Price’s benefits were discontinued after the trustees amended the plan to limit the payment of occupational disability benefits to a period of two years. He then filed suit in federal district court, challenging the denial of his benefits and alleging that the plan amendment violated ERISA because his occupational disability benefits had vested as a matter of law. The district court determined that Price’s occupational disability benefits did indeed vest under this court’s Yard-Man line of cases and, accordingly, found that the amendment as applied to Price violated ERISA. The pension plan now appeals this determination, arguing that the benefits were not vested. After considering all of the relevant bodies of law, we conclude that the district court failed to apply the appropriate standard of review when analyzing Price’s claim. Accordingly, we VACATE the district court’s opinion and order and REMAND for further proceedings consistent with this opinion.

I.

The facts in this case are undisputed. The Indiana State District Counsel of Laborers and Hod Carriers Pension Fund (the “Fund”) is a multi-employer employee benefit pension plan established and maintained in accordance with ERISA. As required by ERISA, the Fund has a written pension plan document (the “Plan”), which sets forth the terms of the benefits provided by the Fund. The Plan indicates that Fund participants must be union employees, working under various collective bargaining agreements. In addition, the Plan also provides that the Fund will be administered by a Board of Trustees (the “Board”). The Board in turn possesses authority to make benefit determinations, interpret the Plan, and amend the Plan. In granting the Board amendment power, Section 15.1 of the Plan specifically states:

Any amendment to the Plan may be made retroactively by the majority action of the Board of Trustees present and voting in order to bring the Plan in compliance with the Act and any subsequent amendments thereto. It is the desire of the Board of Trustees to maintain the Plan as a qualified Plan and Trust under Code sections 401(a) and 501(a).
The Trustees who are present and voting may amend the Plan by majority action. However, no amendment shall be made which results in reduced benefits for any Participant whose rights [291]*291have already become vested under the provisions of the Plan on the date the amendment is made, except upon the advice and counsel of an enrolled actuary.

James Price first began receiving disability benefits under the Plan in 1990, after a series of work-related injuries left him unable to work. Price’s benefits were initially approved under the Plan’s “Total and Permanent Disability Benefit” category. In 2001, the Fund notified Price that he no longer qualified for benefits under this category, but advised him that he could continue receiving benefits under Article 7A’s provisions for “Occupational Disability Benefit.” At the time Price began receiving Occupational Disability Benefits, payment of those benefits was limited according to terms set forth in Section 7A.5, which stated that “[t]he Occupational Disability Benefit shall be payable only during continued Occupational Disability and until Early Retirement Age under section 2.1(n).” In 2004, the Board exercised its amendment authority under Plan Section 15.1 and amended Section 7.A5 (the “Amendment”) to state the following:

[T]he Occupational Disability Benefit shall be payable only during a Participant’s continued Occupational Disability and—
(b) effective for Occupational Disability Benefits commencing prior to January 1, 2005, for a period not to exceed December 31, 2006, or, if earlier, the Participant’s attainment of Early Retirement Age....

Because Price began receiving Occupational Disability Benefits prior to January 1, 2005, his benefits were discontinued after December 31, 2006, according to the Amendment.

Price appealed the discontinuation of his Occupational Disability Benefits to the Board, arguing that the Amendment as applied to him violated ERISA. The Board denied Price’s appeal and stated in a written letter to Price’s attorney that Occupational Disability Benefits could be amended under the terms of the Plan. Price then filed suit in federal district court under 29 U.S.C. § 1132(a)(1)(B). His complaint alleged that the Amendment violated ERISA because it deprived him of a benefit that had vested as a matter of law.

After a short period of discovery, the parties cross-filed for summary judgment. The district court granted judgment in favor of Price under this court’s precedent in Int’l Union, United Auto., Aerospace, & Agrie. Implement Workers of Am. v. Yard-Man, Inc., 716 F.2d 1476, 1482 (6th Cir.1983). Price v. Bd. of Trustees of the Ind. Laborer’s Pension Fund, et al., 2:07-ev-00933 at 7, 2009 WL 799639 (S.D.Ohio Mar. 24, 2009). According to the lower court, Price’s Occupational Disability Benefits vested under Yardr-Man at the time he began receiving the benefits because the Plan promised benefits “until Early Retirement Age.” Id. at 8. The district court read this provision as an indication that the parties intended the benefits to vest. Id. In separate orders, the lower court ordered the Fund to reinstate Price’s benefits and pay Price’s attorney’s fees. The Board and the Fund bring this appeal, challenging the district court’s determination that Price’s Occupational Disability Benefits vested and its award of attorney’s fees in favor of Price.

II.

We review a district court’s grant of summary judgment de novo. Noe v. PolyOne Corp., 520 F.3d 548, 551 (6th Cir.2008). “[S]ummary judgment is appropriate ‘if the pleadings, the discovery [292]*292and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.’ ” Schreiber v. Philips Display Components Co., 580 F.3d 355, 363 (6th Cir.2009) (quoting Fed.R.Civ.P. 56).

III.

We begin by noting that disability benefits are a welfare-type benefit under ERISA, and as such, ERISA’s statutory vesting requirements do not apply. See 29 U.S.C. § 1002(1); Robinson v. Sheet Metal Workers’ Nat’l Pension Fund, Plan A, 515 F.3d 93, 98 (2d Cir.2008).

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James Price v. Bd of Trustees of the Ind. Laborer's Pension Fund, 632 F.3d 288, 50 Employee Benefits Cas. (BNA) 1673, 189 L.R.R.M. (BNA) 3197, 2011 U.S. App. LEXIS 591, 2011 WL 93043 (6th Cir. 2011).

632 F.3d 288 (James Price v. Bd of Trustees of the Ind. Laborer's Pension Fund) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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