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BOBO v. 1950 PENSION PLAN

October 4, 1982

THEODORE BOBO, Plaintiff,
v.
1950 PENSION PLAN and DUNLOP TIRE AND RUBBER CORPORATION, Defendants


Curtin, District Judge.


The opinion of the court was delivered by: CURTIN

This is an action for a declaratory judgment brought by the plaintiff pursuant to Rule 57 of the Federal Rules of Civil Procedure and 28 U.S.C. § 2201. Plaintiff seeks to clarify his rights under the Employment Retirement Income Security Act [ERISA], 29 U.S.C. § 1001 et seq., and to obtain other relief.

Many of the facts are not disputed, and I will briefly set them forth. Plaintiff is a former employee of the Dunlop Tire and Rubber Corporation [Dunlop]. He retired on September 1, 1972, at the age of 46, due to a disability. He began receiving a monthly disability pension of $462. Under the terms of the 1950 Pension Plan, this amount was calculated with the expectation that Mr. Bobo would not be eligible for an award of Social Security disability benefits. Plaintiff contends that he received a telephone call from the head of the Dunlop Personnel Department soon after his benefits began. He was informed that if he did receive a disability award, he was to forward evidence of the award to the Personnel Department.

 Plaintiff received a certificate of disability award from the Social Security Administration on or about December 7, 1973. Pursuant to this award, plaintiff was to receive $252.50 per month as of September, 1973. Mr. Bobo sent a copy of the certificate to the Dunlop Personnel Department. He sent the copy via certified mail and received a card back from the Department marked "Received 1/3/74 Personnel." Plaintiff then continued to receive the two awards simultaneously, for a total of $714.50 per month from September, 1973, until October, 1979.

 In June, 1979, the plaintiff was advised that because he had been receiving Social Security disability benefits since September, 1973, his pension would have to be reduced by the amount of the overpayment. In August, 1979, he received a letter which computed the amount of the overpayment of $15,190.00. The defendant informed Mr. Bobo that three alternative methods were available for repayment: lump sum repayment, withholding of pension benefits, or a 50 percent reduction of pension benefits. Mr. Bobo was sent a second letter in September, 1979, informing him that the Employee Benefits Committee would select one method of repayment if Mr. Bobo did not make a choice. A third letter was sent in September, 1979, notifying plaintiff that his pension benefits would be reduced by 50 percent until the entire repayment was recovered.

 Defendant then reduced plaintiff's monthly pension from $462.00 to $217.00, deducting the amount of his Social Security award. The pension was further reduced to $122.50 to allow the defendant to recover the overpayment. Defendant informed Mr. Bobo that he would continue to receive this reduced pension through December, 1989.

 Plaintiff contends that these actions violate the provisions of ERISA. Plaintiff claims that he is an uneducated man who relied upon the individuals charged with the administration of the 1950 Pension Plan -- the trustees -- to calculate the correct amount of his pension and to provide him with accurate information regarding his rights and responsibilities under the Plan.

 Plaintiff charges that the Plan administrators breached their fiduciary duty by failing to provide Mr. Bobo with material to enable him to understand the provisions of the Plan. Mr. Bobo says that he was never advised that his pension benefits would be reduced to reflect a Social Security disability award until 1979. Further, he claims that the correspondence he received from the defendant was ambiguous and did not adequately inform him of the circumstances. Finally, he argues that the defendant should be estopped from recapturing the alleged overpayment or reducing his pension in any way, since the large amount of the debt was the result of their failure to take any action when Mr. Bobo supplied them with a copy of the award in 1973.

 Plaintiff seeks a declaratory judgment stating that he is not indebted to the defendant and that he is entitled to the full amount of the pension benefits. In addition, plaintiff has filed a claim for $50,000 for mental anguish. Plaintiff has demanded a jury trial on all the issues.

 At this time, the defendant has moved to dismiss the complaint for lack of subject matter jurisdiction pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure. In the alternative, the defendant requests that the court strike the jury trial demand and dismiss the claim for damages for mental anguish.

 Subject matter jurisdiction over the action is predicated upon section 502(e)(1) of ERISA, 29 U.S.C. § 1132(e)(1). That section provides:

 
Except for actions under subsection (a)(1)(B) of this section, the district courts of the United States shall have exclusive jurisdiction of civil actions under this subchapter brought by the Secretary or by a participant, beneficiary, or fiduciary State courts of competent jurisdiction and district courts of the United States shall have concurrent jurisdiction of actions under subsection (a)(1)(B) of this section.

 Section 502(e)(1) of ERISA does not create any substantive rights but is merely a jurisdiction-conferring statute. Defendant argues that plaintiff bases the substance of his cause of action upon section 203 of the Act, 29 U.S.C. § 1053(a). Defendant further contends that plaintiff is not entitled to the protection of section 203, because it applies only to individuals who were employees under a Plan at the time of ERISA's effective date, January 1, 1976. Since Mr. Bobo was not employed as of that date, defendant contends he may not state a claim under section 203.

 The court agrees with the defendant that plaintiff is not entitled to a claim under section 203, since ERISA's vesting provisions were not effective until years after he began receiving his pension. See Fremont v. McGraw-Edison Co., 606 F.2d 752, 755 (7th Cir. 1979); Haeberle v. Board of Trustees of Buffalo Carpenters, 624 F.2d 1132, 1137 (2d Cir. 1980). This does not mean, however, that the action must be dismissed.

 Plaintiff has asserted a second substantive jurisdictional basis under ERISA, claiming that defendants have violated their fiduciary duties under section 404(a)(1), 29 U.S.C. § 1104(a)(1), by failing to make a timely determination regarding plaintiff's monthly allowance and by allowing him to become ...


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