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Scott J. Donovan v. United Association Plumbers & Steamfitters Local No. 22 Pension Fund

March 24, 2011

SCOTT J. DONOVAN, PLAINTIFF,
v.
UNITED ASSOCIATION PLUMBERS & STEAMFITTERS LOCAL NO. 22 PENSION FUND, DEFENDANT.



The opinion of the court was delivered by: David G. Larimer United States District Judge Rochester, New York

DECISION AND ORDER

Plaintiff Scott Donovan ("Donovan") filed this action against United Association of Plumbers & Steamfitters Local No. 22 Pension Fund ("defendant" or the "Fund"), the Plan Administrator of the Local 22 Pension Plan (the "Local 22 Plan"), in which Donovan was a Participant. Donovan alleges that defendant wrongfully denied him disability retirement pension benefits, in violation of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1132(a)(1).

Defendant now moves for summary judgment (Dkt. #12), arguing that Donovan cannot satisfy his burden to show that its decision to deny him disability retirement pension benefits from the Local 22 Plan was arbitrary and capricious. For the reasons that follow, that motion is granted .

I. Standard of Review

Where, as here, the terms of an ERISA Plan give its Administrator the sole and absolute authority to interpret the Plan and determine claimants' eligibility for benefits, the Administrator's determinations are subject to a deferential standard of review, which requires only that the Administrator's decision was not arbitrary or capricious. See Pagan v. Nynex Pension Plan, 52 F.3d 438, 441 (2d Cir. 1995); Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989); Darling v. DuPont deNemours & Co., 952 F.Supp. 162, 163 (W.D.N.Y. 1997). Under this standard, this Court may only overturn the final decision of the Administrator to deny benefits if it was "without reason, unsupported by substantial evidence or erroneous as a matter of law." Darling, 952 F.Supp. 162 at 165 (quoting Pagan, 52 F.3d 438 at 442). The reviewing court's ultimate focus is "whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment." Jordan v. Retirement Committee of Rensselaer Polytechnic Inst., 46 F.3d 1264, 1271 (2d Cir. 1995). When a Plan Administrator makes a determination based upon evidence in the record before it, ERISA mandates only that the Plan procedures afford a reasonable opportunity for a full and fair review. See 29 U.S.C. § 1133(2).

Plaintiff argues that the defendant is not entitled to this standard of review because it allegedly operates as both the payer and administrator of benefits and is therefore locked in a conflict of interest. Defendant avers, and Donovan does not dispute, that the Fund is a not-for-profit, jointly administered trust, for which there exist no "profits," but rather savings which inure to the benefit of the Fund's beneficiaries and participants. Accordingly, I find that there is no conflict of interest posed by the Fund's dual roles as payer and administrator, and that its determinations are entitled to the more lenient standard of review. Moreover, even if this Court were to review the Fund's determination de novo, I would reach the same conclusion as that reached by the defendant: that plaintiff's uncorrected Break in Service deprived him of his status as a Plan Participant, years before he applied for disability retirement benefits, and that the plaintiff's application was therefore properly denied.

II. Plaintiff's History as a Plan Participant

Plaintiff began his employment as a plumber with the United Association of Plumbers & Steamfitters, Local 129 in approximately 1976, and continued until he became disabled in or around January 1989. At that point, Donovan applied for and was awarded disability retirement benefits from Local 129. Donovan's disability benefits continued to be paid until 1993, when his disability abated and he returned to work with Local 129, and continued there from 1993 through 1997.

Local 129 thereafter merged with two other local unions to form Local 22. In or around 1997, Donovan was temporarily transferred from Local 22 to perform work for Local 13. Pursuant to a reciprocity agreement between the Locals, Donovan continued to earn service credits toward his Local 129/Local 22 pension plan while working for Local 13. In or around 1998, Donovan ended his membership with Local 22 altogether and became a permanent member of Local 13, where he continued to work until he became disabled again in 2006. Donovan is presently receiving disability retirement benefits through Local 13.

On or about March 29, 2006, Donovan applied for disability retirement benefits through Local 22. The defendant denied that application, stating that Donovan was ineligible for disability retirement benefits under the Local 22 Plan, because, inter alia, he was, no longer a Participant in the Plan. This action followed.

The Court has considered the evidence of record. Based upon that evidence, I find that the defendant's determination is reasonable and supported by substantial evidence of record, and was neither arbitrary nor capricious.

III. Plaintiff's Claims

The Local 129 Plan provides that:

A Participant who is receiving pension benefits under this Plan may become re-employed after ...


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