The opinion of the court was delivered by: SWEET
Plaintiff Joseph Agro ("Agro"), a plumber by trade, seeks a declaratory judgment that he is entitled to pension benefits from the defendant Joint Plumbing Industry Board (the "Board"). The Board administers a Pension Fund (the "Fund") established on July 1, 1950, such Fund consisting of revenues from employer contributions made pursuant to agreements with Local Union No. 2 of the United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry (the "Union"), of which Agro is a member. Agro claims he is entitled to the pension pursuant to the Pension Plan (the "Plan") adopted by the trustees of the Fund. Jurisdiction is claimed under 28 U.S.C. § 1331 Et seq. and 29 U.S.C. §§ 185, 186 and 1132.
The initial plan, adopted in 1952, predicated pension eligibility on the following conditions: (A) attainment of age 65, (B) membership in good standing of the Union for at least 15 years, (C) such membership to be for at least five consecutive years immediately preceding the date of pension application, (D) employment for a contributing employer in each of the two annual periods immediately preceding the date of the pension application and (E) employment at the plumbing trade for at least 1,250 days during the period of membership in the Union. The Plan has been amended three times since 1952,
each amendment affecting the eligibility requirements for pension benefits. In 1963, pursuant to changes in federal pension laws, the Plan was amended, Inter alia, to delete Union membership as a condition of eligibility and to delete subdivisions "B" and "C" of the eligibility requirements. In 1966, on the advice of the Fund's actuarial consultant, the eligibility rules were amended to require, Inter alia, that the applicant have worked for a contributing employer in each of 15 consecutive years immediately prior to retirement, during which period he must have a total of at least 1,250 days of work for a contributing employer. In 1971 the rules were amended to provide eligibility for one who has either (i) met the requirements of the Plan as amended in 1966 or (ii) acquired 15 years of unbroken credited service, one-quarter year's credit being earned for each 35 days of contributing employment within a calendar year, and a break of credited service deemed to have occurred if the applicant lacks two-quarters credit within any three consecutive calendar years.
It is undisputed that Agro, a member of the Union since 1939, worked for a contributing employer in each of 13 separate years since 1950 and that during those years he worked at least 1,466 days for contributing employers. Agro asserts that he should be given credit as having worked for contributing employers for two additional years, 1952 and 1956, bringing his total to 15 years. Further, it is undisputed that even with 15 years of credit service Agro does not qualify under the Plan as amended in either 1966 or 1971. Therefore, plaintiff seeks to have the eligibility rules of the Plan, as amended in 1966 and 1971, declared to be arbitrary and capricious as applied to him. Additionally, Agro also seeks qualification under the grandfathering provision referred to at trial by a trustee of the Fund, Mr. Morris Olshina, asserting that as of the time of the 1966 amendment he had already qualified for his pension benefits. In sum, Agro seeks to recover under either of two main theories:
(1) That the 1966 and 1971 amendments are arbitrary and capricious as applied to him and that he need only satisfy the requirements existing after the 1963 amendment; or
(2) That by having already qualified for benefits at the time of the 1966 amendment, except for reaching the age of 65, he is entitled to benefits under the grandfathering policy.
(1) 1966 and 1971 Amendments
Agro first claims that the 1966 and 1971 amendments were arbitrary and capricious as applied to him. In the pre-trial order and pre-trial brief, and at trial, plaintiff did not contest the validity of the 1966 and 1971 amendments or the 15 consecutive year rule therein. His claim is that such rule, as applied to him, is arbitrary and capricious. This Court finds otherwise.
The 15 consecutive year requirement was suggested by the Fund's actuary for financial reasons and to prevent undeserving claimants from invading the Fund. See Mitzner v. Jarcho, 44 N.Y.2d 39, 403 N.Y.S.2d 490, 374 N.E.2d 388 (1978). In light of such reasons, the decision by the trustees to deny Agro pension benefits was not arbitrary or capricious. Agro did not comply with either the 15 year requirement or the continuous service requirement. His failure to work for a contributing employer from 1966 through 1969 was a voluntary decision on his part,
was, for the most part, for a time period subsequent to the 1966 amendment, and was admittedly to make more money abroad, when others may have been earning less in return for assuring their pension by working for contributing employers. Furthermore, for the six years immediately preceding Agro's retirement, most of which time the Fund was experiencing financial difficulties, Agro worked for a contributing employer in only two years and for a total of only 190 days. Even if Agro is credited with 15 years of contributory service, or his failure to obtain such is excused by his injury in 1971, his failure to comply with the continuous service requirement, based upon his voluntary decision to work abroad, precludes a determination that the denial of pension benefits was arbitrary or capricious.
Agro also asserts that he was not notified of the 1966 and 1971 amendments to the Plan, that his failure to comply with the requirements was therefore excusable and it was arbitrary and capricious to deny him pension benefits. It is unclear who Agro claims was under a duty to inform him of the new amendments, the Union, the Board, or both. Since subsequent to the 1963 amendment Union membership had nothing to do with the eligibility requirements, the Union was not required to give him notice.
The Board, which administers the Fund, has no direct or fiduciary relationship to the plaintiff. Subsequent to the 1963 amendment, which eliminated the requirement of Union membership, there was no specific or identifiable group of people who could qualify under the Plan. There has been no showing by Agro that the Board had any fiduciary relationship, or other duty, to all those who may have at one time or another worked for an employer who contributed money in their name. Absent any such showing it would be unreasonable to impose upon the Board a duty to give specific notice to such a group. In Posner v. Rockefeller, 31 A.D.2d 352, 297 N.Y.S.2d 867 (3d Dept. 1969), cited by plaintiff, the court required notice by the pension plan, but only "since the pension plan itself contains no express provision relating to delinquent contributions . . . ". Here, the Plan contained the express provisions Agro seeks to avoid. Additionally, there was uncontradicted testimony that general notice was given at Union meetings.
Furthermore, there has been no showing by Agro that the Union or the Board attempted to conceal the amendments from him or that he made any periodic effort to determine the then current eligibility requirements under the Plan. Finally, Agro introduced no evidence or testimony that had he known of the amendments he would have attempted to comply with them. Therefore, based upon all of the foregoing, the denial of pension benefits was not arbitrary or capricious.
(2) Grandfather Provision
The grandfathering provision referred to by the witness Olshina provides that a pension will be given to one who has qualified as of the time of an amendment to the Plan. Under this provision Agro seeks pension benefits on the ground that as of the 1966 amendment he qualified under the Plan. To succeed, Agro must establish that by the time of the 1966 amendment he qualified under the Plan as amended in 1963.
There is controversy over the eligibility requirements established by the 1963 amendment and therefore those in effect at the time of the 1966 amendment. This controversy arises from the recent Appellate Division decision in Huffe v. Jarcho, 64 A.D.2d 960, 408 N.Y.S.2d 793 (1st Dept. 1978) interpreting the 1963 amendment. This decision states that the 1963 amendment had the effect of requiring 15 years of non-consecutive service for a contributory employer. Agro asserts that he qualifies even under the interpretation set forth in Huffe. To succeed in this claim Agro must establish that he is entitled to credit for 1952 and 1956 as having worked for a contributory employer, bringing his total to 15 years. Alternatively, Agro contends that the decision in Huffe was incorrect, and that under the correct analysis of the 1963 amendment there is no 15 year requirement and that, irrespective of 1952 and 1956, he qualified for benefits as of the 1966 amendment. For the reasons set forth below, this court holds (i) that Agro does not qualify under the 1963 amendment as interpreted by the Appellate Division in Huffe, but that ...