Foley v. International Brotherhood of Electrical Workers Local Union 98 Pension Fund

Opinions of the United
2001 Decisions States Court of Appeals
for the Third Circuit
11-8-2001
Foley v. Local 98 Pension
Precedential or Non-Precedential:
Docket 00-2767
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Filed November 8, 2001
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
Nos. 00-2767 and 00-4427
EDWARD J. FOLEY, SR.
v.
INTERNATIONAL BROTHERHOOD OF ELECTRICAL
WORKERS LOCAL UNION 98 PENSION FUND;
INTERNATIONAL BROTHERHOOD OF ELECTRICAL
WORKERS, LOCAL 98; SCOTT ERNSBERGER; JOHN J.
DOUGHERTY, in his capacity as a TRUSTEE and as an
officer and BUSINESS MANAGER OF LOCAL 98; EDWARD
NIELSON, in his capacity as a TRUSTEE and as an officer
of LOCAL 98; JOSEPH AGRESTI, in his capacity as a
TRUSTEE; THOMAS J. REILLY, JR., in his capacity as a
TRUSTEE; DENNIS LINK, in his capacity as a TRUSTEE;
WILLIAM RHODES, in his capacity as a TRUSTEE; ROY
DANTZ, in his capacity as a TRUSTEE; LARRY J.
BRADLEY, in his capacity as a TRUSTEE; FRED J.
COMPTON
International Brotherhood of Electrical Workers Local
Union 98 Pension Fund, Scott Ernsberger, John J.
Dougherty, in his capacity as a Trustee, Edward Nielson,
in his capacity as a Trustee, Joseph Agresti, in his
capacity as a Trustee, Thomas J. Reilly, Jr., in his
capacity as a Trustee, Dennis Link, in his capacity as a
Trustee, William C. Rhodes, in his capacity as a Trustee,
Roy Dantz, in his capacity as a Former Trustee, and
Larry Bradley, in his capacity as a Former Trustee
(Collectively the "Defendants"),
Appellants in No. 00-2767
EDWARD J. FOLEY, SR.
v.
INTERNATIONAL BROTHERHOOD OF ELECTRICAL
WORKERS LOCAL UNION 98 PENSION FUND;
INTERNATIONAL BROTHERHOOD OF ELECTRICAL
WORKERS, LOCAL 98 OF AMERICA; SCOTT
ERNSBERGER; JOHN J. DOUGHERTY, in his capacity as
a TRUSTEE and as an officer and BUSINESS MANAGER
OF LOCAL 98; EDWARD NIELSON, in his capacity as a
TRUSTEE and as an officer of LOCAL 98; JOSEPH
AGRESTI, in his capacity as a TRUSTEE; THOMAS J.
REILLY, JR., in his capacity as a TRUSTEE; DENNIS
LINK, in his capacity as a TRUSTEE; WILLIAM RHODES,
in his capacity as a TRUSTEE; ROY DANTZ, in his
capacity as a TRUSTEE; LAWRENCE J. BRADLEY, in his
capacity as a TRUSTEE,
Appellants in No. 00-4427
and FRED COMPTON
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civ. No. 98-906)
District Judge: Honorable Lowell A. Reed, Jr.
Argued October 9, 2001
Before: SCIRICA, GREENBERG, and COWEN,
Circuit Judges
(Filed: November 8, 2001)
Laurance E. Baccini (argued)
Linda B. Hollinshead
Wolf, Block, Schorr & Solis-Cohen
1650 Arch Street, 22nd Floor
Philadelphia, PA 19103-2297
2
Richard B. Sigmond
Sagot, Jennings & Sigmond
Penn Mutual Towers, 16th Floor
510 Walnut Street
Philadelphia, PA 19106-3683
Attorneys for Appellants
Daniel P. McElhatton (argued)
Schubert, Bellwoar, Cahill & Quinn
Two Penn Center, Suite 1400
1500 JFK Blvd.
Philadelphia, PA 19102-1890
Edward J. Foley, Jr.
Garagozzo, Foley & Collazzo
410 N. 8th Street
Philadelphia, PA 19123-3903
Attorneys for Appellee
OPINION OF THE COURT
GREENBERG, Circuit Judge.
This matter comes on before this court on appeal from an
order of the district court entering judgment in favor of
appellee Edward J. Foley, Sr., and against the International
Brotherhood of Electrical Workers Local Union 98 Pension
Fund (the "Pension Fund" or the "Fund"). 1 Foley claims that
the Pension Fund's Board of Trustees ("Trustees")
improperly declined to grant him an exception to the
pension Plan's service eligibility provisions that would have
permitted him to receive a higher level of benefits than that
_________________________________________________________________
1. There is some question as to which of the defendants the district court
entered judgment against. While the court apparently intended to enter
judgment only against the Fund, and the district court docket reflects
this disposition, the individual defendants nevertheless have appealed.
Inasmuch as we conclude that Foley was not entitled to a judgment
against any of the defendants, the question is of no practical
significance. However, as a matter of convenience, we will treat all the
individual defendants except Fred Compton as appellants, as they in fact
appealed.
3
to which he otherwise was entitled. Following a bench trial,
the district court concluded that the Trustees arbitrarily
and capriciously declined to apply the exception to Foley in
the manner they had applied it to other employees seeking
its benefit. Thus, it entered judgment in his favor on
August 29, 2000. Appellants assert that the district court,
when reviewing the Trustees' decision, erred in its
application of the arbitrary and capricious standard, as
Foley was not similarly situated to other employees to
whom the Trustees had applied the exception. Appellants
also appeal the district court's subsequent award of
attorneys' fees to Foley by order of December 8, 2000. For
the reasons set forth below, we will reverse the district
court's judgment on the merits and, accordingly, we also
will reverse the award of attorneys' fees.
I. BACKGROUND
Foley is the former President of the International
Brotherhood of Electrical Workers Local 98 (hereinafter "the
Union") and a former Trustee of the Union's Pension Fund.
He worked in covered employment for Fund pension
purposes, i.e., employment in the electrical industry, from
1959 until his employer laid him off in 1971. Then, from
1972 through 1980, Foley worked in his family's tire
business, returning to employment in the electrical
industry in 1981. Following his return to the electrical
industry, Foley was elected the Union's President and he
served as a Trustee of the Pension Fund from 1987 through
July 1996. In July 1996, Foley retired and sought pension
benefits.
Under the Plan provisions, Foley forfeited all credited
service earned prior to his return to work in 1981 because
of a break-in-service provision which provided, in the years
applicable to Foley, that accrued pension credits lapsed
when a Plan participant did not work 600 hours in covered
employment for a consecutive two-year period. There is,
however, an exception to the break-in-service provision,
known as the available-for-work exception, wherein the
Plan provides that an employee shall not forfeit credited
service if he was continuously available for work within the
jurisdiction of the Union and unable to obtain covered
4
employment.2 Based on this exception, in 1988, shortly
after Foley began his tenure as Trustee, the Trustees agreed
to excuse his break-in-service pursuant to their
understanding that work had not been available to him in
covered employment from 1972 to 1980.
On October 28, 1994, however, Fred Compton, a former
Union president and Trustee, sent Laurance Baccini,
counsel to the Pension Fund, a letter stating that the 1988
decision was incorrect because the Trustees at that time
based their decision on fabricated information improperly
skewed in Foley's favor. Upon receipt of Compton's letter,
the Trustees appointed a subcommittee to investigate
Compton's allegations. Then, in February 1995, based on
the subcommittee's recommendations, the Trustees
reversed the 1988 decision because they concluded that
there was insufficient evidence to substantiate Foley's claim
that work was unavailable and that he was available for
covered employment in the 1972-1974 period.
In July 1996, Foley applied for pension benefits but,
based upon their 1995 decision, the Trustees denied his
application insofar as it sought credits for the period
between 1959-1971. Foley appealed but was not successful
as the Trustees determined that he still had not presented
sufficient information to establish his entitlement to credit
for the disputed years of credited service.
On February 23, 1998, Foley commenced this action
under the Employee Retirement Income Security Act, 29
U.S.C. S 1001, et seq. ("ERISA"), in particular 29 U.S.C.
SS 1132(a)(1)(B) and (a)(3), which action, as subsequently
amended, named the Fund, the Union, the Trustees, and
various Union officers as defendants. In his complaint Foley
_________________________________________________________________
2. The relevant Plan provision states:
Notwithstanding anything to the contrary in paragraph (a) and (b),
an employee shall not have forfeited any of his Credited Service
(past or future) or the right to any death benefit regardless of
his
number of years of credited service if:
(1) he was continuously available for work within the jurisdiction
of
the Union and was unable to obtain covered employment.
Article I, Definitions, Section C "Break in Service" (c)(i).
5
asserted that the Trustees improperly applied a more
demanding evidentiary standard to him than to other
employees who had been granted an exception to the
break-in-service provision notwithstanding a provision in
the Plan that all "interpretations and decisions shall be
applied in a uniform manner to all Employees similarly
situated." In addition to his ERISA claims, Foley also
asserted claims under the Labor Management Reporting
and Disclosure Act of 1974, 29 U.S.C. S 401 et seq.,
("LMRDA"), and the Internal Revenue Code, 26 U.S.C.
SS 411 and 412. Following the parties' cross-motions for
summary judgment, the district court dismissed all but
Foley's ERISA claims. See Foley v. IBEW Local Union 98
Pension Fund, 91 F. Supp. 2d 797 (E.D. Pa. 2000).3 We
make no further reference to the dismissed claims, as Foley
has not cross-appealed from their dismissal and has not
asserted that we should affirm on the basis of these claims.
After a bench trial in August 2000, the district court
found that the Trustees arbitrarily and capriciously acted
contrary to the terms of the Plan when they denied Foley
credit for time during his employment in the electrical
industry prior to his 1971 layoff. See Foley v. IBEW Local
Union 98 Pension Fund, 112 F. Supp. 2d 411, 416-17 (E.D.
Pa. 2000) ("Foley"). On August 29, 2000, the court entered
judgment against appellants, and on December 8, 2000,
entered an order granting Foley's motion for attorneys' fees.
See Foley v. IBEW Local Union 98 Pension Fund, No. Civ. A.
98-906, 2000 WL 1801273 (E.D. Pa. Dec. 7, 2000).
Appellants have timely appealed from the judgment and
order.4
II. STANDARD OF REVIEW
We reverse factual conclusions of the district court only
if they are clearly erroneous, see Fed. R. Civ. P. 52(a), but
exercise "plenary review over the trial court's choice and
_________________________________________________________________
3. Foley included Compton as a defendant but the parties later dismissed
the action against him by stipulation. He is not a party on this appeal.
4. The district court had jurisdiction over this matter pursuant to 29
U.S.C. S 1132(e) and 28 U.S.C. S 1331 and we have jurisdiction under 28
U.S.C. S 1291.
6
interpretation of legal precepts and its application of those
precepts to the historical facts." Orvosh v. Program of Group
Ins. for Salaried Employees of Volkswagen of Am., 222 F.3d
123, 129 (3d Cir. 2000) (citation and internal quotation
marks omitted). Where, as here, the plan administrator has
discretion to interpret the Plan and the authority to
determine eligibility, we review a denial of benefits under an
"arbitrary and capricious" standard. Id. Under this
standard:
a plan administrator's decision will be overturned only
if it is clearly not supported by the evidence in the
record or the administrator has failed to comply with
the procedures required by the plan. A court is not free
to substitute its own judgment for that of the
defendants in determining eligibility for plan benefits.
Orvosh, 222 F.3d at 129 (internal quotations and citations
omitted).5 Further, "the district court cannot, by couching a
legal conclusion as a finding of fact, prevent appellate
review of legal errors." Louis W. Epstein Family P'ship v.
Kmart Corp., 13 F.3d 762, 766 (3d Cir. 1994) (citation and
internal quotation marks omitted).
III. DISCUSSION
The Trustees denied Foley credit for the disputed years of
service because the subcommittee's investigation
demonstrated that work had been plentiful between 1972
and 1974, but that Foley was unavailable for work during
that period due to his employment in the family tire
business. The Trustees also found that Foley failed to
produce any evidence supporting his claim.
Under the "arbitrary and capricious" standard of review,
the district court was bound to affirm this decision if it was
not contrary to the Plan's terms and was rationally related
to a legitimate Plan purpose. See Orvosh, 222 F.3d at 129-
31. The district court determined that although the
Trustees believed in good faith that they were treating Foley
_________________________________________________________________
5. Foley unsuccessfully argued in the district court that the court should
review the Trustees' decision on a de novo basis but he does not make
that contention on this appeal.
7
the same as any other applicant seeking the benefit of the
break-in-service exception, they actually treated him
differently from other employees similarly situated in that
they arbitrarily and capriciously subjected his application
to a more demanding evidentiary standard and a stricter
level of scrutiny than those of other employees. See Foley,
112 F. Supp. 2d at 416. A district court, however, may not
substitute its judgment for that of a plan's trustees in
determining a claimant's eligibility for benefits, and, as we
discuss below, the record demonstrates that the Trustees
here did not arbitrarily and capriciously treat Foley as not
being similarly situated to other employees to whom the
exception to the break-in-service rule had been applied.
The record shows that during a Trustees' meeting in
1979, they determined that Foley forfeited the credits he
earned from 1959-1971 as he had a two-year break in
service as of 1973. In 1984, when, after resuming
employment in the electrical industry, Foley inquired as to
the status of those credits, Compton informed him that
they had been forfeited and that it was "too late" to save
them.
In 1988, six months after Foley was elected President of
the Union, he appointed himself, Paul Gilmore, and James
Mackin to three of the six positions on the Fund's Board of
Trustees. Shortly thereafter, the Board of Trustees granted
Foley credits for the years 1959-1971, reversing its prior
forfeiture of his credits even though he had not applied
formally for their reinstatement. Indeed, Foley did not
present documentary evidence to support the award of
credits at the time he was awarded the credits. Instead,
Mackin and Gilmore spoke on Foley's behalf, and the
Trustees appear to have accepted their statements as true.
The record shows, however, that Mackin and Gilmore did
not have first hand knowledge of the germane facts as they
had not been employed full time in the electrical industry
during the 1972 to 1974 period.
In October 1994, however, the Trustees received
Compton's letter, "seriously question[ing]" the 1988
decision and stating that "the [1988] pension trustees may
have been either misled or misinformed" when they
reinstated Foley's credits. Confronted with this formal
8
written challenge, the Trustees determined that they were
obliged to review the facts and, accordingly, created the
subcommittee to investigate the issues Compton raised in
his letter.
The subcommittee rendered its report in late 1994 or
early 1995. It found that work opportunities were"plentiful"
from 1971 through 1974 and, according to the record
available to it, the hours electricians worked during that
period evidenced "full employment, a few visiting brothers
working and a decent amount of overtime." The
subcommittee also determined that the Trustees in 1988
primarily relied on Gilmore's statement that Foley was
available for work but Gilmore admitted to the
subcommittee that he knew only of Foley's availability after
1975. The subcommittee interviewed Foley, who stated that
he went into the family business in 1972 and periodically
checked to see if electrical work was available.
We recognize that the subcommittee noted that the lack
of evidence supporting Foley's alleged availability for work
in the electrical industry and inability to find work was not
"unique" and that the "available for work-no work available"
exception had been applied liberally. In fact, the
subcommittee's report included a list showing each case in
which the exception had been applied since 1980.
Consequently, the subcommittee recommended that the
Trustees construe the exception more strictly than they had
in the past and that if they did so in Foley's case, they also
should "examine" the included list, making"appropriate
adjustments." Id. at 254 255.6
_________________________________________________________________
6. According to the list, in addition to Foley, 20 other employees applied
for the benefit of the exception, only one unsuccessfully. Eight who were
successful had signed the Union's "out-of-work" book signaling their
availability for work. In three cases, the Trustees testified as to having
first hand knowledge as to each employee's availability for work and in
three other cases the employees had constant contact with the Union,
and one submitted a letter detailing his work history.
The district court found these distinctions from Foley's case "not
meaningful or persuasive." Foley, 112 F. Supp. 2d at 414 n.2. It pointed
out that during the period at issue, 1972-1974, a time that the Trustees
found that work opportunities were plentiful, nine employees had been
granted the "available for work-work not available" exception. Id.9
In February 1995, following their review of the
subcommittee's report, the Trustees unanimously voted to
remove the credited service from Foley's pension record but
advised him that at any time he could submit a request for
reconsideration attaching relevant documentation. The
Trustees also resolved to reinvestigate all other individuals
to whom the "available for work-no work available"
exception had been applied. See Foley, 112 F. Supp. 2d at
413.
In July 1996, when Foley applied for benefits, he did not
submit additional information supporting a credit for
service from 1959 to 1971. Accordingly, the Trustees
awarded Foley pension benefits taking into account his
break in service. Foley appealed the decision, but the
Trustees concluded that they had "insufficient evidence as
to the unavailability of work and Mr. Foley's inability to
obtain covered employment during the Plan years 1972,
1973 and 1974."
The district court found that the Trustees acted in good
faith and believed they did not treat Foley differently than
other employees. Foley, 112 F. Supp. 2d at 415. However,
the court determined that the Trustees actually held Foley
to a stricter standard "than any other individual in like
circumstances," id., arbitrarily and capriciously violating
their duty to interpret the Plan and apply decisions"in a
uniform manner to all Employees similarly situated." Id. at
416 (citation omitted).
The district court made much of the fact that the
Trustees appointed the subcommittee to investigate the
circumstances under which Foley had been granted the
exception in 1988, yet failed to form a subcommittee to
examine "any other plan participant's pension application."
Foley, 112 F. Supp. 2d at 415. As the district court
_________________________________________________________________
However, of these nine, only two met the exception during 1973, and
the remaining seven could not find work from 1974-1975. Most of those
who could not find work in 1974-1975 were out-of-town workers who
signed the out-of-work book. Of the two that met the exception in 1973,
the Trustees had first hand knowledge of both employees' record.
10
recognized, however, the allegations of impropriety that
Compton raised in his letter "justified a review of plaintiff's
claim to determine whether there was any impropriety." Id.at 414 n.2. Thus, given the allegations of impropriety in the
Compton letter, and in light of their fiduciary duties to the
Fund, the Trustees reasonably and appropriately appointed
the subcommittee in Foley's case.
The district court next took issue with the actions the
Trustees took upon receipt of the subcommittee's report.
See id. The court seems to have been of the view that
because the investigation yielded "no evidence of
wrongdoing or deceit," the Trustees were bound to grant
Foley's application for benefits as they had with"a number
of individuals who sought refuge under the break-in-service
exception . . . who, like Foley, produced a minuscule
amount of evidence." Id. The court also seemed frustrated
with the fact that the Trustees had not conducted an
investigation with respect to the other employees who were
granted the benefit of the exception. Id. at 415. These cases
differed from Foley's, however, in that these employees'
eligibility for the exception never was challenged. Further,
the subcommittee did not uncover any evidence suggesting
that any of them acquired pension credits through
improper means.7
In essence, the court held that because Foley was
"similarly situated" to other employees who had benefitted
from a liberal interpretation of the available-for-work
exception, the Trustees' failure to award him the break-in
service credits was "arbitrary and capricious." Foley, 112 F.
Supp. 2d at 416. The premise of the court's decision was,
however, erroneous as Foley was not similarly situated to
rank and file Union members who had been granted the
benefit of the exception. Rather, he was a Trustee when he
sought to have service credits added to his pension record,
and he appointed the Trustees who spoke on his behalf and
apparently voted to grant him the benefit of the exception.
Moreover, Foley's case was the only one under the
_________________________________________________________________
7. Apparently, the Trustees referred the matter to the Fund professionals
for follow-up. Several individuals who were granted the benefit of the
exception now are deceased. See Appellants' Br. at 34.
11
available-for-work exception where issues of impropriety
were raised, and his case was the only one in which the
employee's entitlement to benefits under the exception was
challenged. Furthermore, upon review of the
subcommittee's report, the Trustees recognized that they
did not have evidence to support the application of the
exception to Foley.
It is also significant that at a time that he should have
been "continuously available for work" in order for his
break in service to be excused, Foley was engaged in the
family tire business and thus had an incentive not to work
in the electrical industry. When the district court made its
determination that the Trustees acted arbitrarily and
capriciously, it should have recognized that this
circumstance distinguished Foley's case from those of other
supposedly "similarly situated" employees who were granted
the benefit of the exception, as Foley made no showing that
they had incentives equivalent to his to eschew employment
in the electrical industry. In the circumstances, it cannot
reasonably be held that the Trustees arbitrarily and
capriciously treated Foley differently from other employees
similarly situated, and thus the district court erred in
reaching its result.
We emphasize that in focusing on the fact that credit
under the available-for-work exception had been granted
liberally in the past rather than examining whether the
Trustees' decision was contrary to Plan language or
whether it was rationally related to a legitimate Plan
purpose, the district court did not properly credit
significant evidence. This evidence included the
subcommittee's finding that work was plentiful from 1972-
1974, the Trustees' own recollections and understanding
regarding the availability of work during that time,
Gilmore's admission to the subcommittee of his lack of
knowledge of the germane facts, Foley's failure to present
evidence, and the circumstances in which Foley was
originally granted the exception. The court, however, should
have relied on this evidence as it was not free to substitute
its judgment for that of the Plan administrators. See
Orvosh, 222 F.3d at 129.
12
Moreover, the district court's holding binds the Trustees
to a result that was a consequence of poor administrative
practices, that the Trustees later corrected. In effect, the
district court's decision improperly "straitjackets" the
Trustees into granting benefits simply because of their past
practices. See Oster v. Barco of Cal. Employees' Ret. Plan,
869 F.2d 1215, 1219 (9th Cir. 1988) (holding that prior
record of granting requests is insufficient to establish that
committee denied request in arbitrary and capricious
manner and stating "[t]o hold otherwise would impair the
flexibility necessary for proper financial management of
such plans, a goal of Congress in holding ERISA fiduciaries
to the ``prudent man' standard") (citation and internal
quotation marks omitted). See also Nazay v. Miller, 949
F.2d 1323, 1336 (3d Cir. 1991) (plan administrator's
decision not to waive requirement "was neither arbitrary
nor capricious and did not constitute an abuse of
discretion" where plan administrator waived requirement on
14 previous occasions). We are particularly troubled by the
fact that the district court effectively read the break-in-
service forfeiture provision out of the Plan, as under the
court's conclusions it is difficult to see how it ever could be
applied in the face of an employee's claim that he is entitled
to the benefit of the exception.8
The district court's opinion also is problematical for
another quite fundamental reason. While we know that the
break-in-service exception was excused in 20 other cases in
which employees claimed its benefit, the district court had
no way of knowing the number of situations in which
employees lost credits by reason of a break in employment
during a consecutive two-year period but did not seek the
benefit of the exception. Certainly if there were such
employees, they were treated the same as rather than
differently from Foley.9 But the district court did not
consider this possibility.
_________________________________________________________________
8. Foley argues that the Trustees did not raise a"straightjackets"
argument in the district court. We are satisfied, however, that they
sufficiently made the contention to preserve it for this appeal.
9. The subcommittee's report said that "[g]enerally, the available for
work-no work available exception has been applied liberally in almost all
13
In summary, we conclude that in appointing a
subcommittee to investigate the claims against Foley, the
Trustees acted quite responsibly and consistently with their
obligations as fiduciaries. Moreover, inasmuch as the
Trustees' decision to deny the disputed benefits was not
contrary to the Plan's terms and was rationally related to a
legitimate Plan purpose, the district court erred in
determining that the Trustees acted in an arbitrary and
capricious manner. Furthermore, because Foley was not
similarly situated to the other employees who were granted
the benefit of the exception, the Trustees were not bound to
grant him the benefit of the exception merely because they
had applied it in other cases. Accordingly, we will reverse
the judgment of the district court.10
_________________________________________________________________
cases in which it has been invoked." The report, however, did not advise
the Trustees of the number of cases in which the break-in-service
forfeiture provision had been applied without the employee invoking the
exception. Moreover, the parties' briefs do not suggest that there was any
evidence on this point in the district court. In this regard, we point out
that Foley had the burden of proof as he brought the action and had to
demonstrate that the Trustees acted arbitrarily and capriciously. While
we cannot be certain of the number of employees who did not receive the
benefit of the break-in-service exception following an interruption of
employment and forfeiture of credits, it may have been substantial. The
list attached to the subcommittee's report reveals that over a period of
about 15 years from 1980 until the subcommittee made its report, only
21 employees sought the benefit of the exception. Yet, according to the
district court, the Fund had more than $130,000,000"in its coffers"
when Foley applied for fees. See Foley v. IBEW Local Union 98 Pension
Fund, 2000 WL 1801273, at *4. A reasonable inference can be drawn
from the size of the Fund that it must have provided for benefits for
many employees and thus it well may be that many have lost pension
credits by reason of breaks in service. Yet inasmuch as we only can
speculate on this fundamental point, we do not understand how we can
uphold the decision of the district court that the Trustees acted
arbitrarily and capriciously. We add, however, that even without
considering the possibility that some employees did not obtain the
benefit of the break-in-service exception, our result would be the same
as that we reach.
10. The appellants contend that the district court erred in entering
judgment against Scott Ernsberger, whom they describe as the Fund's
"third party contract administrator," by reason of circumstances
14
particular to him, and that the court also erred in calculating damages.
In view of our result, we do not reach these issues as we are reversing
the judgment as to all appellants, including Ernsberger on common
grounds and directing judgment to be entered in their favor, and
because there will not be any damages to calculate.
11. Certain of the defendants unsuccessfully sought attorneys' fees in
the district court but inasmuch as they are not at this time seeking
these fees we do not review the district court's order denying their
application.
IV. ATTORNEYS' FEES
Finally, we come to the question of the attorneys' fees
which ERISA permits when a participant, beneficiary or
fiduciary succeeds on any significant issue in the litigation
which achieves some of the benefit sought from the suit.
See 29 U.S.C. S 1132(g)(1). In light of our conclusions, it is
clear that Foley has not prevailed on a significant issue in
the litigation and thus, we will therefore reverse the district
court's award of attorney fees. See Hensley v. Northwest
Permanente P.C. Ret. Plan & Trust, 258 F.3d 986, 1002-03
(9th Cir. 2001).11
V. CONCLUSION
For the foregoing reasons, we will reverse the district
court's judgment of August 29, 2000, and its order of
December 8, 2000, and will remand the matter to the
district court to enter judgment for the defendants.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
15