United States District Court, S.D. New York
August 16, 2005.
CALOGERA CANDELA, Plaintiff,
MASON TENDERS' DISTRICT COUNCIL WELFARE FUND and TRUSTEES OF THE MASON TENDERS' DISTRICT COUNCIL WELFARE FUND, Defendants.
The opinion of the court was delivered by: LORETTA PRESKA, District Judge
MEMORANDUM AND ORDER
Plaintiff Calogera Candela ("Plaintiff") and Defendants Mason
Tenders' District Council Welfare Fund and Trustees of the Mason
Tenders' District Council Welfare Fund (collectively,
"Defendants") have filed cross-motions for summary judgment on
the issue of whether Defendants' refusal to grant Plaintiff
retiree medical benefits from the Welfare Fund was appropriate.
Because Defendants' denial of said benefits was neither arbitrary
nor capricious, Plaintiff's motion for summary judgment is
denied, and Defendants' motion for summary judgment is granted.
The Mason Tenders' District Council of Greater New York and
Long Island is an umbrella organization for six affiliated local
unions and is the sponsor of several ERISA-governed employee
benefit plans, including the Mason Tenders' District Council
Welfare Fund (the "Welfare Fund"). The Welfare Fund provides medical benefits to collectively-bargained employees in the
construction industry. The Welfare Fund's medical benefits plan
(the "Plan") is administered by the Trustees of the Mason
Tenders' District Council Welfare Fund (the "Trustees").
According to the terms of the Plan:
The Board of Trustees . . . has the exclusive right,
power, and authority, in its sole and absolute
discretion, to administer, apply and interpret the
Plan. . . . Without limiting the generality of the
foregoing, the Board of Trustees . . . shall have the
sole and absolute discretionary authority to: Take
all actions and make all decisions with respect to
the eligibility for, and the amount of, benefits
payable under the Fund. . . .
(Affidavit of John Virga, sworn to on September 22, 2004, Ex. A
In order for active employees to be eligible for medical
benefits from the Plan they are required to work for at least 400
hours from May through October to obtain medical benefits
coverage for the following January through June. Similarly,
employees must work at least 400 hours from November through
April to obtain coverage for the following July through December.
In addition, in order for active employees to receive retirement
benefits under the Plan they must receive a pension from the
Mason Tenders' District Council, and: (1) be a pensioner under
the Pension Fund and have twenty or more years of credited
services under the Pension Fund, or (2) have been "eligible for
[medical] benefits from the Welfare Fund as an active employee during at least two of the five calendar years immediately before
his retirement date." Id. at 8.
Plaintiff worked for employers making contributions to the
Welfare Fund from 1984 through 1991 and from June 1998 until
August 6, 1999. Plaintiff does not assert that he has twenty or
more years of service under the Pension Fund. Plaintiff does,
however, assert that he is eligible for benefits under the "at
least two of the five calendar years immediately before his
retirement" provision because he was eligible for benefits for
all of 1999 and for six months of 2000. Plaintiff was credited
with working 692 hours from May 1998 though October 1999, 528
hours from November 1999 through April 1999, and 706.5 hours from
May 1999 through October 2000, entitling him to medical benefits
from January of 2000 to June of 2001. Plaintiff was injured on
the job on August 6, 1999 and subsequently retired. Plaintiff
began receiving a disability pension effective February 1, 2000.
However, Plaintiff was denied retiree medical benefits in a
letter dated May 8, 2002 because the Trustees determined he did
not meet the eligibility requirements of an active employee
during two of the five years immediately before his retirement
date. Plaintiff appealed the Trustees' decision in a letter dated
June 25, 2002, disputing the finding of the Trustees and
asserting he was an active employee during calendar years 1999
and 2000. In a letter dated October 10, 2002, the Trustees denied Plaintiff's appeal because he was not covered under four
of the requisite six month eligibility periods (viz., May
through October of 1998, November through April of 1998-99, May
through October of 1999 and November through April of 1999-2000).
Plaintiff disputes the Trustees' interpretation of the
eligibility requirements that "during at least two of the five
calendar years" means four six-month periods comprising two full
Plaintiff filed the present Complaint on January 22, 2004. The
parties currently cross-move for summary judgment. Plaintiff
argues: (1) that Defendants wrongfully denied his claim for
retiree medical benefits because he was eligible for coverage in
both 1999 and 2000 as the requirement mandates only coverage
"during" two of the five years and not for two full years; and
(2) that Defendants' interpretation of the Plan was misleading
and failed to inform Plaintiff of his rights and responsibilities
under the Plan.*fn1 Defendants argue that: (1) under the
arbitrary or capricious standard the denial of Plaintiffs
benefits should be upheld as the Trustees' interpretation was
reasonable; and (2) there was no breach of fiduciary duty as
Defendants are under no obligation to provide Plaintiff with a
precise, pre-decisional interpretation of the Plan.
Because Defendants' denial of Plaintiff's benefits was not
arbitrary or capricious and because Defendants met their
fiduciary duties towards Plaintiff, Defendants' motion is
granted, and Plaintiff's motion is denied.
The parties agree that Defendants' denial of medical benefits
is reviewable under the arbitrary or capricious standard laid out
in Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115
(1989). This standard applies when a benefit plan confers upon
the administrator discretionary authority to determine
eligibility. Id. An administrator's interpretation of a
benefits plan will be upheld unless his decision is arbitrary or
capricious. See Pagan v. NYNEX Pension Plan, 52 F.3d 438, 441
(2d Cir. 1995); Murphy v. International Business Machines
Corp., 23 F.3d 719, 721 (2d Cir. 1994), cert. denied,
513 U.S. 876 (1994). A court may "overturn a decision to deny benefits
only if it was `without reason, unsupported by substantial
evidence or erroneous as a matter of law.'" Pagan,
52 F.3d at 442 (quoting Abnathya v. Hoffman-LaRoche, Inc. 2 F.3d 40, 45
(3d Cir. 1993). Thus, Plaintiff must do more than argue that the
denial of benefits was the wrong decision; he must show that the
denial of benefits was unreasonable. Plaintiff has not met this
As to Plaintiff's first claim, Plaintiff's sole argument regarding the denial of medical benefits concerns the Trustees'
interpretation of the word "during" in the Plan's eligibility
requirement. This requirement states that in order to receive
retirement benefits a plan participant must "remain a union
member, and . . . [be] eligible for benefits from the Welfare
Fund as an active employee during at least two of the five
calendar years immediately before your retirement date. . . ."
(Affirmation of Calogero Candela, sworn to on November 3, 2004,
Ex. 3 at 1.)
The Trustees have interpreted "during at least two of the five
calendar years" to mean two full years or four complete half-year
disability periods. This is by no means an unreasonable
interpretation. Plaintiff essentially argues that the Trustees
ought to replace the phrase "during at least two years" with the
language "part of two" years. Plaintiff's interpretation,
however, would make the plan requirement even more ambiguous.
Plaintiff's version could be interpreted as meaning any part of
two years one year and a day, one year and six months, one year
and 364 days. Moreover, merely showing that one possible
interpretation can be replaced with another is not sufficient to
overturn a plan administrator's interpretation under the
arbitrary or capricious standard. See, e.g., Jordan v.
Retirement Committee of Rensselear Polytechnic Institute,
46 F.3d 1264, 1272 (2d Cir. 1995) ("as between two reasonable interpretations of the same provision the arbitrary or capricious
standard requires the court to uphold the administrator's
interpretation"). Accordingly, the Trustees' decision to deny
benefits to Plaintiff was not arbitrary or capricious, and
judgment on that claim is granted to Defendants. Judgment is also
granted to the Trustees on Plaintiff's claim that Defendants
denied him retirement benefits.
Plaintiff's remaining claim is that the Trustees'
interpretation itself is misleading and fails to inform
participants of their rights and responsibilities. However,
Defendants cannot be compelled to provide participants a
predecisional ruling on an application for benefits, as Plaintiff
suggests here. Such a requirement would render meaningless the
deferential arbitrary and capricious standard that is given to
the Trustees' interpretation of the Plan. See, Morse v.
Stanley, 732 F.2d 1139, 1147 (2d Cir. 1984) ("Were we to require
the Trustees to spell out the circumstances in which accelerated
distribution [of benefits] would be granted or denied, we would
read out of the plan the discretionary powers expressly granted
to the Trustees to act as varying circumstances arise").
Accordingly, judgment is granted for the Trustees and against
Plaintiff on Plaintiff's claim that Defendants failed in their
fiduciary responsibilities. III. Conclusion
For these reasons, Plaintiff's motion for summary judgment is
denied, and Defendant's motion for summary judgment is granted.
The Clerk of the Court shall mark this action closed and all
pending motions denied as moot.