The opinion of the court was delivered by: Sand, District Judge.
Plaintiff Donald Carson was the business agent and later the
elected secretary-treasurer of defendant Local 1588. Local 1588
is a small union with a membership today of less than 300
workers, primarily from the cargo and shipping industries, and
assets worth approximately $176,000. Carson was the only full
time officer employed by the union for the entirety of the
approximately fifteen years he served. In 1988 Carson was
indicted and convicted on a variety of criminal charges and
left his position at Local 1588. The present motion involves
Carson's right to receive a pension from Local 1588 under
relevant portions of the Employee Retirement Income Security
Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq. (1988). In
this case, which is consolidated with United States v. Local
1804-1, et al., Carson moves for summary judgment under
Fed.R.Civ.P. 56(c). For the reasons discussed below, Carson's
motion for summary judgment is denied.
Donald Carson's involvement with Local 1588 began in the
mid-1970's and continued until 1988. In 1972, shortly before
Carson's tenure began, Local 1588 adopted a Constitution and
By-Laws. Article IX.E of the 1972 Constitution and By-Laws
provided in pertinent part:
All elected officers and Business Agents who have
served twelve (12) uninterrupted years of service
to the Local Union shall receive a pension until
their demise from the Local Union of forty (40%)
per cent of their last year's base pay. . . .
After [death], half of his pension goes to his
widow until she remarries or dies.
See Exhibit D of Appendix to Defendant's Brief in Opposition to
the Motion for Summary Judgment ("Defendant's Brief"). In 1979,
Local 1588 amended its Constitution and By-Laws but did not
alter the original pension provisions. See Exhibit E of
Appendix to Defendant's Brief. After Carson was convicted on
the criminal charges he became disqualified by federal law from
holding any position as an officer or employee of any labor
union and resigned his position at Local 1588.
Carson, thereafter, filed a lawsuit in the District of New
Jersey seeking to compel Local 1588, its officers, executive
board, and trustees to resume paying the $1,387.67 monthly
pension, and to guarantee that upon his demise payments would
be made at half the rate to his wife, Peggy Carson. Local 1588
obtained a stay in the New Jersey action pending the outcome of
a motion to consolidate this case with U.S.A. v. Local 1804-1,
et al., 90 Civ. 963 (LBS), in which Donald Carson is a named
defendant. This Court granted the consolidation of the cases
and the defendants filed an Answer and Counterclaim, which
subsequently has been amended.
A. Applicability of ERISA to Top-Hat Pensions
Donald Carson moves for summary judgment claiming that Local
1588 promised him a pension, began payment of its obligation
and presently is illegally withholding payments due. Summary
judgment may be granted if there is "no genuine issue as to any
material fact and . . . the moving party is entitled to a
judgment as a matter of law." Fed.R.Civ.P. 56(c). The moving
party has the burden of demonstrating "the absence of any
material factual issue genuinely in dispute." Heyman v.
Commerce & Indus. Ins. Co., 524 F.2d 1317, 1319-20 (2d Cir.
1975). In determining whether there is a genuine factual issue,
a court must resolve all ambiguities and draw all inferences
against the moving party. United States v. Diebold Inc.,
369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962); see
also Advisory Committee Notes to the 1963 Amendments to Rule
The fundamental question on this motion is the applicability
of various provisions of the ERISA statutory scheme. Congress
enacted ERISA to protect certain employees from abuses in the
administration and investment of private retirement plans and
employee welfare plans. In essence, ERISA establishes minimum
standards for the vesting of benefits, funding of plans,
overseeing fiduciary responsibilities, reporting to the
government and making disclosures to participants. See
generally H.R.Rep. No. 93-533, 93rd Cong.2d Sess., reprinted in
1974 U.S. Code Cong. & Ad. News 4639; see also Donovan v.
Dillingham, 688 F.2d 1367, 1370 (11th Cir. 1982) (en banc).
Yet, the ERISA framework does not include in its protection all
retirement arrangements nor do all provisions of the statute
apply equally to each covered plan.
The next question is what type of plan was established, and
consequently, which provisions of ERISA apply. There is no
dispute among the parties that Article IX(E) is a ...