The opinion of the court was delivered by: MCCURN
MEMORANDUM-DECISION AND ORDER
The plaintiff Dumac Forestry Services, Inc. (Dumac) has brought this action seeking overpayments mistakenly made to the defendant National Electrical Benefit Fund (NEBF).
Under the terms of successive collective bargaining agreements executed by the New York State Tree Trimming and Line Clearance Contractors and Local Union No. 1249, International Brotherhood of Electrical Workers (IBEW), Dumac was required to make contributions on behalf of its employees to the NEBF in an amount equal to one percent of Dumac's gross monthly labor payroll.
From October 1977 through June 1982, Dumac erroneously made payments in an amount equal to three percent of its gross monthly payroll. By letter dated July 28, 1982, Dumac notified the NEBF that it had regularly paid at the higher rate during the aforementioned period. the NEBF subsequently refunded excess contributions made from July 1979 through June 1982 in compliance with the trustees' policy which limited refunds to a thirty-six month period. The NEBF refused to refund those contributions made from october 1977 through July 1979. These payments form the basis of this controversy.
The court has before it plaintiff's motion for summary judgment seeking a refund of the disputed overpayments or, in the alternative, seeking an offset of monthly contributions due now and in the future with the overpayments already made. The defendants cross move for summary judgment on the grounds that plaintiff's cause of action under the Employee Retirement Security Act of 1974, 29 U.S.C. § 1001 et seq. (1985) (ERISA) must fail because the trustees' policy restricting refunds was promulgated through the reasonable exercise of their discretion and that plaintiff's common law claims based on the alleged fraud and negligence of the trustees are pre-empted by ERISA.
This is ripe for summary judgment. No dispute issues of fact exist.
The sole issue before the court is whether Dumac, as a matter of law, is entitled to a full refund of its mistaken overpayments under either federal common law principles of restriction or under section 403(c)(2)(A), 29 U.S.C. § 1103(c)(2)(A) (1985).
A. General Equitable Principles
ERISA provides that plan assets shall never inure to the benefit of the employer and shall be held for the exclusive benefit of the plan participants and their beneficiaries. ERISA, section 403(c)(1), 29 U.S.C. § 1103(c)(1). The Multiemployer Pension Plan Amendments Act (MPPAA) amended the foregoing section and created a limited exception to the general rule.
Section 403(c)(2)(A)(ii) provides, in relevant part:
In the case of contribution. . . made by an employer to a multiemployer pension plan by a mistake of fact or law [section 403(c)(1)] shall not prohibit the return of such a contribution or payment to the employer within six months after the plan administrator determines that the contribution was made by such a mistake.
29 U.S.C. § 1103(c)(2)(A)(ii).
The court must determine whether section 403(c)(2)(A)(ii) necessarily entitles the plaintiff to all of its erroneous payments or whether the statute is permissive, only requiring the NEBF to act in a reasonable manner in determining refund eligibility.
In the case at bar, the trustees have promulgated a policy which restricts refunds to the thirty-six months preceding the determination that payments were incorrectly made by an employer.
General principles of equity govern the return of contributions made by mistake. See, e.g., Award Service Inc. v. N. Cal. Retail Clerks Unions, 763 F.2d 1066 (9th Cir. 1985). This is so whether the cause of action derives from federal common law or is implied by statute. An examination of the ...