Gannon v. NYSA-ILA Pension Trust Fund & Plan , 523 F. App'x 752 ( 2013 )

12-2965-cv
Gannon v. NYSA-ILA Pension Trust Fund & Plan
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY
ORDER FILED ON OR AFTER JANUARY 1, 2007 IS PERMITTED AND IS GOVERNED BY FEDERAL
RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN
CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE
EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION
"SUMMARY ORDER"). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY
PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals
for the Second Circuit, held at the Thurgood Marshall United
States Courthouse, 40 Foley Square, in the City of New York, on
the 17th day of April, two thousand thirteen.
PRESENT: JOHN M. WALKER, JR.,
DENNY CHIN,
Circuit Judges,
JANE A. RESTANI,
Judge.*
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SUSAN H. GANNON, in her individual capacity
as Plan beneficiary and on behalf of all
others similarly situated, SUSAN H. GANNON,
as Executor of the Estate of Richard
Gannon,
Plaintiff-Appellant,
-v- 12-2965-cv
NYSA-ILA PENSION TRUST FUND AND PLAN,
FRANK M. MCDONOUGH, personally and in his
capacity as a Member of the Board of
Trustees of the NYSA-ILA Pension Trust
Fund and Plan, ANTHONY PETRIZZO,
personally and in his capacity as a
Member of the Board of Trustees of the
NYSA-ILA Pension Trust Fund and Plan,
*
The Honorable Jane A. Restani, of the United States
Court of International Trade, sitting by designation.
MAURICE C. BYAN, personally and in his
capacity as a Member of the Board of
Trustees of the NYSA-ILA Pension Trust
Fund and Plan, JOSEPH CURTO, personally
and in his capacity as a Member of the
Board of Trustees of the NYSA-ILA Pension
Trust Fund and Plan, JOHN BOWERS,
personally and in his capacity as a
Member of the Board of Trustees of the
NYSA-ILA Pension Trust Fund and Plan,
ALBERT CERNADAS, personally and in his
capacity as a Member of the Board of
Trustees of the NYSA-ILA Pension Trust
Fund and Plan, STEPHEN KNOTT, personally
and in his capacity as a Member of the
Board of Trustees of the NYSA-ILA Pension
Trust Fund and Plan,
Defendants-Appellees.**
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FOR PLAINTIFF-APPELLANT: EDGAR PAUK, Brooklyn, New York
(Robert Bach, New York, New York,
on the brief).
FOR DEFENDANTS-APPELLEES: JAMES R. CAMPBELL (Donato Caruso,
on the brief), The Lambos Firm,
LLP, Tarrytown, New York, and
Kevin J. Marrinan and John P.
Sheridan, Marrinan & Mazzola
Mardon, P.C., New York, New York,
on the brief.
Appeal from the United States District Court for the
Southern District of New York (Forrest, J.).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,
ADJUDGED, AND DECREED that the judgment of the district court is
AFFIRMED.
**
The Clerk of the Court is directed to amend the
official caption to conform to the above.
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Plaintiff-appellant Susan H. Gannon1 appeals from the
judgment entered June 27, 2012, pursuant to the district court's
June 25, 2012 memorandum and order dismissing appellant's first
cause of action under § 502(a)(1)(B) of the Employee Retirement
Income Security Act of 1974 ("ERISA"), but awarding damages on
her second cause of action under ERISA § 502(a)(1)(A),
(c)(1)(B). See 29 U.S.C. § 1132(a)(1), (c)(1)(B). Defendants-
appellees NYSA-ILA Pension Trust Fund and Plan and its Board of
Trustees (collectively, the "Fund") have not appealed the award
of damages and thus the only issue before us is the dismissal of
appellant's first cause of action. We assume the parties'
familiarity with the facts, procedural history, and
specification of issues for review.
This case involves the interpretation of the following
provisions of the 2002 NYSA-ILA Pension Plan (the "Plan").
Article III, section 1 provides two ways for an employee to
become eligible for a "Service Retirement Pension": by
completing twenty-five consecutive years of service (the
"consecutive 25 provision"), or by completing twenty-five years
of service over a thirty-five year period with the final five
years being consecutive (the "25 out of 35 provision").
1
Mrs. Gannon was substituted as party plaintiff for her
late husband Richard Gannon.
Meanwhile, section 4 sets out two break-in-service rules
applicable to all pension benefits. One rule, applicable prior
to January 1, 1976, caused a Plan participant to forfeit for
both vesting and accrual purposes any unvested years earned
prior to a break-in-service lasting more than two years (the
"three-year rule" or the "pre-ERISA break-in-service
provision"). The second rule, effective on January 1, 1976,
caused a participant to forfeit unvested pre-break years of
service only if he experienced a break-in-service equal to his
total years of prior service (the "parity rule" or "post-ERISA
break-in-service provision"). Following lengthy litigation in
McDonald v. Pension Plan of the NYSA-ILA Pension Trust Fund, No.
99 Civ. 9054, 2004 WL 2050166 (S.D.N.Y. Aug. 6, 2004)
(hereinafter "McDonald IV"), aff'd, 450 F.3d 91 (2d Cir. 2006)
(per curiam) (hereinafter "McDonald VI"), the Fund amended the
pre-ERISA break-in-service provision so that, prior to 1976, the
three-year rule applied only for vesting purposes and the parity
rule applied for accrual purposes, unless the three-year rule
provided a greater benefit.
Here, Richard Gannon was eligible for a pension under
the consecutive 25 provision because he worked thirty-one
consecutive years from 1979 to 2009. Pursuant to the parity
rule, however, the five years he worked from 1969 to 1973 were
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excluded from his accrued benefit because he had a five-year
break-in-service from 1974 to 1978. Appellant argues that the
Fund should have applied the 25 out of 35 provision for accrual
purposes instead of the consecutive 25 provision, because under
McDonald, the 25 out of 35 provision trumped all break-in-
service rules.
Reviewing the district court's preclusion analysis de
novo, see Bank of N.Y. v. First Millennium, Inc., 607 F.3d 905,
919 (2d Cir. 2010), we agree with the district court that
McDonald did not require the Fund to adopt Gannon's proposed
interpretation of the 25 out of 35 provision. Therefore, we
affirm for substantially the reasons set out in its thorough and
well-reasoned thirty-page opinion. We add the following only to
address appellant's arguments that certain aspects of the
district court's reasoning were erroneous.
First, appellant argues that the district court erred
in applying a deferential standard of review. Because the Plan
grants the Board of Trustees "sole and absolute discretionary
authority" to interpret the Plan, Plan art. IX, § 19, the
district court should ordinarily review the Fund's
interpretations of the Plan under an arbitrary and capricious
standard of review. See Novella v. Westchester Cnty., 661 F.3d
128, 140 (2d Cir. 2011). Appellant argues that this standard
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should not apply because the Fund never actually offered an
"interpretation" of the 25 out of 35 provision. In its motion
to stay in the district court, the Fund represented that it had
never considered appellant's proposed interpretation because
appellant had never presented it during the administrative
review. In any event, the Fund, by excluding Richard Gannon's
pre-break service years pursuant to the parity rule, implicitly
applied an interpretation of the Plan that rejected appellant's
construction of the 25 out of 35 provision. Because the Fund's
interpretation is reasonable and not arbitrary or capricious,
the district court properly afforded it deference.
Second, appellant argues that granting summary
judgment was improper without permitting discovery into the
consistency of the Fund's interpretation. Appellant agreed
below, however, that the facts were undisputed and that the case
turned on a single legal question: the proper interpretation of
the Plan.2 The district court need only consider "evidence of
how the Plan language has been interpreted by the Plan
2
Moreover, appellant did not allege in the complaint
that the Fund interpreted the 25 out of 35 provision
inconsistently. To the contrary, the claim was pled as a
putative class action, alleging that the way the Fund applied
the parity rule to Richard Gannon was typical of the way it
applied the rule to "no less than 100" similarly situated
workers. Class Action Compl. ¶ 53(a), Gannon v. NYSA-ILA
Pension Trust Fund & Plan, No. 09 Civ. 10368, 2012 WL 2505600(S.D.N.Y. June 25, 2012), ECF No. 1.
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administrators in the past" if "the Plan language is not, by
itself, clear and unambiguous." I.V. Servs. of Am., Inc. v.
Trs. of Am. Consulting Eng'rs Council Ins. Trust Fund, 136 F.3d
114, 120 (2d Cir. 1998). We agree with the district court that
the Plan clearly and unambiguously provides that the break-in-
service rules "apply for purposes of all pension benefits."
Plan art. III, § 4(a) (emphasis added). Thus, the district
court could grant summary judgment without considering evidence
of the consistency of the Fund's interpretation. Cf. Gallo v.
Madera, 136 F.3d 326, 330-31 (2d Cir. 1998) (concluding that an
interpretation contrary to the Plan's clear language was
arbitrary and capricious despite evidence that the trustees'
consistently interpreted the Plan in that manner).
We have considered appellant's remaining arguments and
find them to be without merit. Accordingly, we AFFIRM the
judgment of the district court.
FOR THE COURT:
Catherine O'Hagan Wolfe, Clerk
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