Kirschenheuter v. Board of Trustees of Gsc-Ila

Page 624

341 F.Supp.2d 624

William "Sonny" KIRSCHENHEUTER Plaintiff v. BOARD OF TRUSTEES OF THE GSC-ILA PENSION PLAN AND TRUST Defendants

No. CIV.A. 1:02CV765GRO.

United States District Court, S.D. Mississippi, Southern Division.

July 13, 2004.

Floyd J. Logan, Logan and Bise, Gulfport, MS, for Plaintiff.

Jeffrey Grant Pierce, Allen, Vaughn, Cobb & Hood, Gulfport, MS, for Defendants.

MEMORANDUM OPINION

GEX, Senior District Judge.

This cause is before the Court on the motion [15-1] for summary judgment and rebuttal motion [18-1] for summary judgment filed by the Defendant, Board of Trustees of the GSC-ILA Pension Plan and Trust, and on the Response filed by the Plaintiff, William "Sonny" Kirschenheuter. After due consideration of the evidence of record, the briefs of the parties, and the applicable law, and being otherwise fully advised in the premises, the Court finds as follows.

Statement of Facts

Kirschenheuter brings this litigation pursuant to section 1132(e)(1), Title 29, United States Code, disputing the amount of monthly disability benefits awarded him by the Board of Trustees of the GSC-ILA Pension Plan and Trust Agreement [the Board]. The GSC-ILA Pension Plan and Trust Agreement [the Plan] was established by the various employers and Local 1303 of the International Longshoreman Association [ILA] labor union for the purpose of providing retirement benefits to eligible longshoremen working in the Port of Gulfport, Mississippi, covered under the provisions of the collective bargaining agreement between the employers and the union. (Ct. R., Doc. 7, ¶ 4; Ct. R., Doc. 3, p. 1; see also Def's. Br., p. 2.) The Board is a body created under the terms and provisions of the Plan and vested with the duty of general administration of the Plan's terms and provisions. (Ct. R., Doc. 7, ¶ 3; Ct. R., Doc. 3, p. 2.)

Kirschenheuter was employed as a longshoreman at the Port of Gulfport for various employers under the collective bargaining agreement with the ILA from October 1, 1967, through September 30, 1997. (Ct. R., Doc. 7, ¶ 5.) On February 1, 1996, Kirschenheuter applied to the Board for disability benefits. (Ct. R., Doc. 15, Exh. 5, p. 1.) Although he was approved for early retirement at that time, his application for disability was denied because he had not yet received a Social Security disability award as required under the terms of the Plan.¹ (Id.)

On July 24, 1998, the Social Security Administration [SSA] determined that Kirschenheuter was disabled as defined by the Social Security Act and set the date of his disability at June 6, 1995. (Ct. R., Doc. 7, ¶ 6.) Kirschenheuter re-applied to the Board for a disability pension on July 21, 1998, and on January 6, 1999, the Board attorney advised Kirschenheuter that he had been awarded disability benefits in the amount of $440.23 per month effective August 1, 1998. (Id., ¶ 7; Ct. R., Doc. 3, p. 2.) Kirschenheuter was sent a check in the amount of $2,671.38 on or about January 6, 1999, and a check in the amount of $440.23 on or about January 29, 1999. Kirschenheuter refused both checks, disputing the administrator's calculation of his benefit. (Ct. R., Doc. 15, Exh. 5, pp. 2-3.) On March 18, 1999, the Plan administrator, Shannon Millette, sent Kirschenheuter's attorney a letter advising that Kirschenheuter's disability pension benefit was revised upward to $449.07 to correct an error in the initial calculation. (Ct. R., Doc. 17, Exh. 5.) Millette's letter indicated, however, that as Kirschenheuter had returned the previous checks, Millette would wait to hear from Kirschenheuter or his attorney before issuing new checks. (Id.)

Kirschenheuter remained dissatisfied with the Plan administrator's calculation of his benefits, and on September 3, 2002, initiated the present action against the board in the Chancery Court of Harrison County, Mississippi. (Ct. R., Doc. 1, Exh. A.) The Board removed the action to this Court on October 9, 2002, on the basis of federal question jurisdiction. (Ct. R., Doc. 1.)

Kirschenheuter claims that the Board erroneously determined the date of his disability and his years of service under relevant sections on the Plan. (Ct. R., Doc. 7, ¶ 8.) He contends that the correct amount of his monthly disability pension benefit is $642.00 retroactive to July 24, 1998, rather than the $449.07 retroactive to August 1, 1998, awarded by the Board. (Id., ¶ 9.)

The matter is currently before the Court on the motion for summary judgment and supplemental motion for summary judgment filed by the Board. (Ct. R., Docs. 15 & 18.)

Standard of Review

Summary judgment, where appropriate, is designed "to secure the just, speedy, and inexpensive determination of every action." Fed. R. Civ. P. 1, 56; Celotex Corp. v. Catrett, 477 U.S. 317, 327, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (citation and internal quotation omitted). A district court may properly grant a motion for summary judgment when, after viewing the facts in the light most favorable to the nonmoving party, "[t]he pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." FED. R. CIV. P. 56(c); Deas v. River West, L.P., 152 F.3d 471, 475 (5th Cir.1998). Stated differently, summary judgment must be entered against a nonmoving party if that party fails to make a showing sufficient to establish the existence of a genuine issue of fact essential to that party's case. Celotex, 477 U.S. at 322-23, 106 S.Ct. 2548. The Court finds that no genuine issues of material fact exist in the case sub judice. The parties simply dispute the Plan's application to the facts at hand.

Legal Analysis

The Board asserts that it is entitled to judgment as a matter of law on the following bases: (1) Kirschenheuter has offered no evidence to support his contention that he is entitled to a monthly disability benefit of $642; (2) the administrator's interpretation of the Plan was legally correct; (3) the administrator's decision regarding Kirschenheuter's date of disability was not an abuse of discretion; and (4) Kirschenheuter has offered no proof to establish that the administrator failed to act in good faith. (Ct. R., Doc. 15.)

When reviewing a denial of benefits claim under 29 U.S.C. § 1132, the plan administrator's interpretation of the plan is reviewed de novo "unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan." Aboul-Fetouh v. Employee Benefits Committee, 245 F.3d 465, 472 (5th Cir.2001) (quoting Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 109 S.Ct. 948, 956-57, 103 L.Ed.2d 80 (1989)). "Where a plan does vest the administrator with such discretionary authority, courts review the decision under the more deferential abuse of discretion standard." Schadler v. Anthem Life Ins. Co., 147 F.3d 388, 394 (5th Cir.1998) (citing Barhan v. Ry-Ron, Inc., 121 F.3d 198, 201 (5th Cir.1997); Wildbur v. ARCO Chem. Co., 974 F.2d 631 636 (5th Cir.), modified on other grounds, 979 F.2d 1013 (5th Cir.1992)). Pursuant to Article 12 of the Plan in question, the Board is responsible for the general administration of the Plan. (Ct. R., Doc. 15, Exh. A of Exh. 2, § 12.01.) Section 12.05(h) provides:

... The Trustees shall have full authority to determine all questions of coverage and qualifications as to participation in and receipt of benefits under the Plan, and shall have the power to construe the provisions of this Trust Agreement and the terms used herein, and such questions as determined, or any construction so adopted by the Trustees in good faith shall be binding upon all parties and persons concerned.

(Id., Exh. A of Exh. 2, § 12.05.) The Board is further vested with the authority to employ any agents, legal counsel, auditors, and clerical and administrative personnel as may be necessary for the sound and efficient administration of the Trust. (Id., Exh. A of Exh. 2, § 12.05(d).) Based on the foregoing language, the Court finds that the Board is vested with discretionary authority to construe the terms of the Plan. As a result, its determination is reviewed under an abuse of discretion standard.

Judicial review of an administrator's interpretation under the abuse of discretion standard is a two-step process: first, the court must "determine whether the administrator's interpretation is legally correct; if it is not, the court must decide whether the decision was an abuse of discretion." MacLachlan v. ExxonMobil Corp., 350 F.3d 472, 481 (5th Cir.2003)(citing Abraham v. Exxon Corp., 85 F.3d 1126, 1131 (5th Cir.1996); Pickrom v. Belger Cartage Serv., 57 F.3d 468, 471 (5th Cir.1995)).

For the first part of the inquiry, the courts assess three factors to determine whether the interpretation is legally correct: (1) whether the administrator has given the plan a uniform construction; (2) whether the interpretation is consistent with a fair reading of the plan; and (3) any unanticipated costs resulting from different interpretations of the plan. In some cases, however, the court may skip this first part of the inquiry if it can determine that the decision was not an abuse of discretion.

MacLachlan v. ExxonMobil Corp., 350 F.3d at 481 (citing Wildbur v. ARCO Chem. Co., 974 F.2d 631 at 638; Duhon v. Texaco, Inc., 15 F.3d 1302, 1307 n. 3 (5th Cir.1994)).

If the administrator has applied a legally correct interpretation of the plan, then no further inquiry is required. However, if the Court determines that the administrator's interpretation is legally incorrect, then it must evaluate whether that interpretation constitutes an abuse of discretion. In conducting this analysis, the Court must look to: (1) the internal consistency of the plan under the administrator's interpretation; (2) any relevant regulations formulated by the appropriate...