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Haeberle v. Board of Trustees of Buffalo Carpenters Healthcare

decided: June 9, 1980.


Appeal from a judgment entered in the United States District Court for the Western District of New York, Chief Judge John T. Curtin, dismissing the complaint after a directed verdict in favor of defendant in an action seeking a declaration of entitlement to a pension and damages for benefits withheld. Affirmed.

Before Smith*fn* and Feinberg, Circuit Judges, and Gagliardi, District Judge.*fn**

Author: Gagliardi


Appellant George Haeberle commenced this action against The Board of Trustees of Buffalo Carpenters Pension Fund ("the trustees") alleging that they had wrongfully denied him a pension. Haeberle was born in 1908, and was employed in the carpentry trade during his adult years. In 1955, he joined a local union affiliated with the Carpenter's District Council of Buffalo ("the union"). Six years later, in 1961, the union and the Construction Industry Employer's Association ("the employers") established the Buffalo Carpenter's Pension Fund in order to provide pension benefits to union members. In that same year, the trustees, comprised of two representatives of both the union and the employers, created a pension plan ("the plan"), providing that a member who reached age 65 and retired would be eligible for a pension if he had earned a minimum of fifteen pension credits.*fn1 In recognition of employment prior to the establishment of the plan, the plan awarded a full credit to employees for every year of membership in the union before 1961 regardless of the number of hours worked in the given year. The pre-1961 credits were designated "past service credits" to distinguish credits earned after the implementation of the plan. Another feature of the plan, the break in service rule, provided that an employee who failed to work a minimum of 150 hours in any one of three consecutive fiscal years would forfeit all previously earned credit.

In September 1975, the union notified Haeberle by letter that he had earned no credits for the two previous fiscal years, and that unless he earned at least 150 hours credit prior to May 31, 1976 he would suffer a break in service on that date. Sometime during October, 1975, Haeberle went to speak to Donald F. Bodowes, the fund administrator. According to the trial testimony of both Haeberle and Bodowes, Haeberle inquired about ERISA,*fn2 which Bodowes acknowledged would require amending the plan, and about pension eligibility requirements under the amended plan. Sometime after this visit, Haeberle left for Florida, where he spent the winter. He returned to Buffalo on approximately May 1st, 1976 and shortly thereafter again went to Bodowes' office. Although the trustees did not formally amend the plan to comply with ERISA until June 11, 1976, effective June 1, 1976, Bodowes advised Haeberle during this second conversation that Haeberle would not have sufficient pension credits to qualify for a pension under the amended ERISA plan.

Haeberle commenced this action on August 31, 1977 before he had formerly applied for and been denied pension benefits. The complaint nevertheless alleged that the trustees refused to award Haeberle the pension to which he was entitled under ERISA, and additionally, that the trustees had failed to amend the plan to conform it with ERISA by June 1, 1976, as allegedly required by that statute. The trustees, in their answer, asserted that Haeberle had failed to exhaust his administrative remedies, pursuant to Section 503(2) of ERISA, 29 U.S.C. ยง 1133*fn3 To remedy the defect, Haeberle requested and was granted a hearing before the trustees in May 1978. The trustees informed Haeberle by letter dated July 25, 1978 that they had denied his request for pension benefits. In summary, the trustees rejected Haeberle's application because they contended that by suffering a break in service on May 31, 1976, thereby forfeiting all previously earned credits, Haeberle could not qualify for a pension under the vesting provision of the amended plan which became effective on June 1, 1976. Haeberle then filed an amended complaint on the day of trial alleging that defendant had failed to comply with ERISA's requirements by June 1, 1975, as mandated, and that it had failed to provide a description of the plan to participants within 120 days of compliance.

At the jury trial, plaintiff testified to the following conversation with Bodowes in October 1975:

Donald Bodowes got my file out and said "yes, you have a vested interest under the new law and I will place a tab on your file and when our plan is accepted by the Government which we figure will be the following year, you will be entitled to a portion of a pension.'

Bodowes in contrast recalled the meeting differently.

A. Mr. Haeberle approached me in the Fund office and indicated to me that he felt that he was eligible for a form of pension from the Buffalo Carpenters Pension Fund. I reviewed his record and his record indicated that he did not have the required fifteen pension credits at that time and it was brought up by Mr. Haeberle the fact that perhaps he would be covered under the new upcoming ERISA and at that time I explained to him that ERISA was new to us as it was to most everyone; that we had not embarked on any form of vesting which he indicated to me would provide a route for him for his pension and I indicated to him at that time that I was aware of the fact that somewhere sometime we were going to have to have vesting incorporated in our plan. What form of vesting, I had no idea.

Q. Okay. Now, Mr. Bodowes, did you ever tell, during that conversation, did you tell Mr. Haeberle that (his pension) was vested?

A. No, I did not.

Following this conversation, Bodowes made a notation on Haeberle's file as follows: "(i)n on 10/28/75 was advised to wait for new pen. rules re vesting."

Plaintiff testified that he had not discussed the union letter warning of the break in service with Bodowes, nor had he made any effort to seek 150 hours of employment before departing for Florida.*fn4 On cross-examination concerning his activity in May following Bodowes' advice that he would not qualify for a vested pension under the amended plan, plaintiff explained that he had not attempted to seek employment because he believed there was insufficient time to accumulate 150 credit hours in order to forestall the impending break in service.*fn5 In addition to the salient portion of trial testimony set forth above, appellant acknowledged that the union sent him annual notices reflecting his accumulated pension credits as well as ...

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