The opinion of the court was delivered by: LOWE
MARY JOHNSON LOWE, U.S.D.J.
Before the Court are the cross-motions for summary judgment of Plaintiff Accursio DeVito and Defendants Pension Plan of Local 819 I.B.T. Pension Fund (the "Plan") and Board of Trustees of the Pension Plan of Local 819 I.B.T. Pension Fund ("Board of Trustees"). For the reasons stated below, the Court grants Plaintiff's motion in part and denies Plaintiff's motion in part, and grants Defendants' motion in part and denies Defendants' motion in part.
Plaintiff brings this action under the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq., ("ERISA") and the Labor-Management Relations Act, 29 U.S.C. § 141 et seq. ("Taft-Hartley Act"). Plaintiff seeks declaratory and injunctive relief for Defendants' alleged violations of ERISA and the Taft-Hartley Act (e.g., implementation of a "non-ratable" social security benefit offset formula under the Plan). Plaintiff alleges: (1) Defendants' amendment of the Plan violated ERISA § 204(b)(1)(c), 29 U.S.C. § 1054(b)(1)(c), and C.F.R. 1.411(b)-1(b)(3), by including a "non-ratable" social security offset; (2) Defendants breached their fiduciary duties in violation of ERISA § 404, 29 U.S.C. § 1104, by including the offset provision in the Plan amendment; (3) Defendants violated Section 302(c)(5) of the Taft-Hartley Act, 29 U.S.C. § 186(c)(5), by including a provision in the Plan not for the exclusive benefit of plan participants and beneficiaries; and (4) Defendants violated ERISA § 203(a), 29 U.S.C. § 1053(a), by paying Plaintiff an insufficient rate of interest on retroactive pension payments.
A. Plaintiff's Employment and Pension Benefits
Former Plaintiff Jennie DeVito ("Ms. DeVito")
was born on July 30, 1916. Complaint P 9; Amended Answer P 2. From October 7, 1968 to November 6, 1981, over thirteen years, Ms. DeVito worked, without interruption, at Karpel Curtain Corp. in New York City. Complaint P 9; Amended Answer P 2. Throughout Plaintiff's employment at Karpel Curtain Corp., her employer made pension contributions to the Plan on her behalf. Complaint P 9; Amended Answer P 2.
The Board of Trustees is responsible for funding, administering and creating the provisions of the Plan. Complaint P 8; Amended Answer P 2. Although the Board of Trustees administers the Plan, Third-Party Defendant Connecticut General Life Insurance Company ("CIGNA") performs the actual calculation of the pension benefits payable to retirees, including Plaintiff. Complaint P 18; Amended Answer P 8.
On November 13, 1981, Plaintiff applied to receive a pension from the Plan. Complaint P 10; Amended Answer P 2. In late February 1982, Plaintiff received a pension check from the Plan in the amount of $ 90.66. Complaint P 11; Amended Answer P 2. This check covered the months of December 1981 through February 1982, representing a monthly amount of $ 30.22. Complaint P 11; Amended Answer P 2. Plaintiff continued to receive monthly pension checks from the Plan in the amount of $ 30.22 until December 1987. Complaint P 11; Amended Answer P 2.
By letter dated January 5, 1988, Plaintiff's counsel, Edgar Pauk ("Pauk"), requested that the "Plan Administrator" verify the amount of Plaintiff's pension. Complaint P 19; Amended Answer P 8. The Plan Administrator referred Plaintiff's request to CIGNA. Complaint P 19; Amended Answer P 8. Pauk and CIGNA subsequently engaged in a series of correspondence concerning Plaintiff's pension. Complaint P 19; Amended Answer P 8. In a letter dated March 9, 1989, Pauk expressed to CIGNA his belief that the Plan's "social security offset" violated ERISA. Complaint P 19; Amended Answer P 8. By letter dated April 6, 1989, CIGNA, on Defendant's behalf, confirmed its calculation of Plaintiff's pension. Complaint P 21; Amended Answer P 10. By letter dated May 9, 1989, Pauk appealed CIGNA's calculation of Plaintiff's pension to the Board of Trustees. Complaint P 21; Amended Answer P 10. By letter dated May 9, 1989, Perry Scalza ("Scalza"), a Plan Administrator, returned Plaintiff's appeal letter to Pauk without explanation. Complaint P 21; Amended Answer P 10. Scalza also enclosed copies of Plaintiff's pension application and the worksheets CIGNA used to calculate Plaintiff's pension. Complaint P 21; Amended Answer P 10. Pauk reviewed CIGNA's calculation of Plaintiff's pension and, using CIGNA's formula, calculated her pension at $ 41.30 rather than $ 30.22 and notified CIGNA of the recalculation. Complaint P 22; Amended Answer P 10.
By letter dated June 20, 1989, Pauk requested that Scalza inform him of the status of Plaintiff's appeal and explain why her appeal letter was returned. Complaint P 23; Amended Answer P 10. By letter dated June 21, 1989, Scalza informed Pauk that Plaintiff's appeal was being reviewed by CIGNA. Complaint P 23; Amended Answer P 10. In July 1989, CIGNA sent Plaintiff an "adjustment check" in the amount of $ 1,019.36, which represented the amount of purported "underpayment" of her pension since 1981 as per Pauk's recalculation. Complaint P 24; Amended Answer P 10. This amount did not include interest. Complaint P 24; Amended Answer P 10.
The Board of Trustees established the Plan on January 14, 1966. Complaint P 7; Amended Answer P 2. ERISA first applied to the Plan on October 1, 1976, when the Plan was amended in an effort to bring it into compliance with the statute. Complaint P 7; Pl.'s 3(g) Statement P 15; Defs.' 3(g) Statement, Part II P 1. The Plan is funded with contributions from employers who have collective bargaining agreements with Local 819 of the International Brotherhood of Teamsters. Complaint P 7; Amended Answer P 2. Section 4.2 of the Plan provides a "Basic Formula" for calculating the monthly amount of an employee's pension. Complaint P 13; Amended Answer P 4. Under the Basic Formula, a pensioner's monthly pension equals the greater of: (1) [1/12) x (.45 x (Final Earnings)) x (years of participation / 20] - [Pensioner's Social Security Benefit]; or (2) $ 2.00 x (the Participant's full years of Credited Service up to a maximum of 20 years). Complaint P 13; Seide Aff. Ex. F at 21-22 (copy of the Plan). The Plan defines "Final Earnings" as "the average of the Participant's annual earnings received from his Employer . . . during the latest five year period immediately preceding the Participant's Retirement Date or date of Termination of Employment, whichever first occurs." Complaint P 14; Seide Aff. Ex. F at 5-6. The Plan defines "Social Security Benefit" as "the monthly Primary Insurance Amount which a Participant is eligible to receive under the provisions of the federal Social Security Act . . . ." Id. at 6-7. The Plan defines "Credited Service" as the "period of employment used in calculating the Participant's pension . . . ." Id. at 8. Plaintiff's Final Earnings are $ 8,574.50, Pl.'s Rule 3(g) Statement P 5, and her Social Security Benefit is $ 135.68, id. P 8.
A party is entitled to summary judgment when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). Furthermore, the Federal Rules of Civil Procedure "mandate the entry of summary judgment, after adequate discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). To defeat a motion for summary judgment, the non-moving party "must do more than simply show that there is some metaphysical doubt as to the material facts . . . ." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 89 L. Ed. 2d 538, 106 S. Ct. 1348 (1986) (citation omitted). Rather, the opposing party must produce "concrete evidence from which a reasonable juror could return a verdict in [its] favor . . . ." Dister v. Continental Group, Inc., 859 F.2d 1108, 1114 (2d Cir. 1988) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986)).
"'When faced with cross-motions for summary judgment, a district court is not required to grant judgment as a matter of law for one side or the other.'" Heublein, Inc. v. United States, 996 F.2d 1455, 1461 (2d Cir. 1993) (quoting Schwabenbauer v. Board of Educ. of Olean, 667 F.2d 305, 313 (2d Cir. 1981)). "'Rather, the court must evaluate each party's motion on its own merits, taking care in each instance to draw all reasonable inferences against the party whose motion is under consideration.'" Id. (quoting Schwabenbauer, 667 F.2d at 314).
Plaintiff argues that the Plan's Basic Formula violates ERISA because it "backloads" a participant's pension benefits, i.e., under the Basic Formula, participants do not accrue substantial pension benefits until the latter years of their participation in the Plan. Plaintiff thus seeks that the Court reform the Basic Formula to bring it into compliance with ERISA.
In their cross-motion for summary judgment, Defendants raise two affirmative defenses. First, Defendants argue that the Court must dismiss this action as untimely because (1) New York's six-year statute of limitations under either CPLR § 213(1) or § 213(2) applies to this ERISA action, and (2) the statute of limitations began to accrue once the Plan was amended in 1976 and, therefore, Plaintiff's ability to sue expired in 1982, well before she commenced this action in 1990. Second, Defendants argue that the Court lacks jurisdiction to "reform" the Plan under either ERISA or the Taft-Hartley Act. Alternatively, Defendant contends that the Plan does not violate ERISA.
II. Defendants' Statute of Limitations Claim
Defendants argue that Plaintiff's ERISA claims must fail because the statute of limitations has expired. Defendants raised this defense in the first Answer; however, the Amended Answer does not interpose this defense. Plaintiff argues that Defendants' failure to raise the defense in their Amended Answer constitutes a waiver. See Pl.'s Reply Mem. at 20. Generally, failure to plead an affirmative defense (e.g., statute of limitations) constitutes a waiver of the defense. Fed. R. Civ. P. 8(c). Nevertheless, numerous courts have held that "'absent prejudice to the plaintiff, a defendant may raise an affirmative defense in a motion for summary judgment for the first time.'" Steinberg v. Columbia Pictures Indus., Inc., 663 F. Supp. 706, 715 (S.D.N.Y. 1987) (citations omitted); see, e.g., Rivera v. Anaya, 726 F.2d 564, 566 (9th Cir. 1984) (permitting party to raise statute of limitations defense in summary judgment motion for first time); Grant v. Preferred Research, Inc., 885 F.2d 795, 797-98 (11th Cir. 1989) (same); G.D. v. Westmoreland School District, 783 F. Supp. 1532, 1534 (D.N.H. 1992) (same); see generally Moore, Owen, Thomas & Co. v. Coffey, 992 F.2d 1439, 1445 (6th Cir. 1993); Lucas v. United States, 807 F.2d 414, 417-18 (5th Cir. 1986); Healy Tibbitts Constr. Co. v. Ins. Co. of N. Am., 679 F.2d 803, 804 (9th Cir. 1982); United States v Krieger, 773 F. Supp. 580, 583 (S.D.N.Y. 1991); MCI Telecommunications Corp. v. Ameri-Tel, Inc., 881 F. Supp. 1149, 1158 n.21 (N.D. Ill. 1995); Boston Hides & Furs, Ltd. v. Sumitomo Bank, Ltd., 870 F. Supp. 1153, 1161 n.6 (D. Mass. 1994). Because Plaintiff has not demonstrated that it would be prejudiced if the Court considered Defendants' statute of limitations argument, the Court will not deem Defendants' failure to plead the statute of limitations defense as fatal to relying on the defense on summary judgment.
Defendants argue that this action is untimely because: (1) a six-year statute of limitations governs Plaintiff's ERISA claims; (2) the statute of limitations began to run when the Plan was amended on October 1, 1976; (3) Plaintiff's time to file suit expired in 1982; and (4) Plaintiff brought this action on August 14, 1990, nearly eight years after the deadline to file the action. Defs.' Opp. Mem. at 11-17. In this case, Plaintiff brings claims of strict statutory violations by the Plan under ERISA and alleges that the trustees violated their fiduciary duties to the Plan. The statute of limitations for ERISA claims, as discussed below, depends upon the nature of the claims brought. Defendants, however, do not distinguish between the nature of Plaintiff's claims in their statute of limitations argument, but merely contend that all of the claims are untimely because the limitations period accrued on the date the Plan was amended. Because the accrual of the limitations period varies with the nature of the specific claims presented in an action, the Court addresses the timeliness of each of Plaintiff's claims individually.
Counts One and Four of the Complaint are brought under 29 U.S.C. § 1132 ("Section 1132"), ERISA's civil enforcement provision governing non-fiduciary duty claims.
ERISA does not prescribe a limitations period for Section 1132 actions. Miles v. New York State Teamsters Conference Pension and Retirement Fund Employee Pension Benefit Plan, 698 F.2d 593, 598 (2d Cir. 1983), cert. denied, 464 U.S. 829, 78 L. Ed. 2d 108, 104 S. Ct. 105 (1983). In the absence of a statutorily prescribed limitations period, the controlling limitations period is that of the most analogous state limitations statute. Id. (citing Board of Regents v. Tomanio, 446 U.S. 478, 483-84, 64 L. Ed. 2d 440, 100 S. Ct. 1790 (1980)). The parties concede, see Defs.' Mem. at 14; Pl.'s Reply Mem. at 15-16, and the Court agrees, that the six-year statute of limitations set forth in Section 213 of New York Civil Practice Law and ...