United States District Court, D. Massachusetts
EARL T. SYDNEY & SYDNEY SHEET METAL, INC., Plaintiffs,
SHEET M WORKERS' PENSION FUND, Defendant.
ORDER ON CROSS-MOTIONS FOR SUMMARY JUDGMENT (DOCS.
Sorokin United States District Judge
years, Defendant Sheet M Workers' National Pension Fund
(“Fund”), a multiemployer pension plan, sent
Plaintiff Earl T. Sydney statements showing that he was
accruing pension credits, presumably based on contributions
that his company, Sydney Sheet Metal, Inc.
(“SSM”), made to the Fund. Under the plan's
provisions, however, the statements were wrong, and Mr.
Sydney was not accruing those credits. The Fund only informed
Mr. Sydney of its error after he suffered a stroke and
requested his pension. Plaintiffs ask the Court to order the
Fund to give Mr. Sydney the credits that he was told he was
accruing or, in the alternative, to return money that SSM
contributed to the Fund. The Court sympathizes with
Plaintiffs' situation, but there is no remedy available
under the Employee Retirement Income Security Act (ERISA), 29
U.S.C. § 1001 et seq., or under federal common
law. Thus, the Court ALLOWS Defendant's Motion for
Summary Judgment (Doc. 52) and DENIES Plaintiffs' Motion
for Summary Judgment (Doc. 54).
STATEMENT OF FACTS
Plaintiffs' Union Membership and the Union's
in 1983, Mr. Sydney worked for one or more employers who were
parties to collective bargaining agreements (CBAs) with Sheet
M Workers Local Union 17 (“Local 17”), which is
part of the Sheet M Workers' International Association.
Doc. 50 at 38. On June 1, 2001, however, Mr. Sydney formed
and incorporated his own company, SSM. Id. at 3, 38.
September 1, 2001, December 24, 2002, and April 7, 2003, Mr.
Sydney, on behalf of SSM, signed CBAs with Local 17.
Id. at 39. Under those CBAs, Mr. Sydney was
considered an “Owner-Member, ” as he owned SSM
and was a member of Local 17. Id. Mr. Sydney was an
Owner-Member of Local 17 from September 1, 2001, until June
2014. Id. at 2, 39.
CBA stated that “[c]ontributions on behalf of
Owner/Members shall be made to the [Fund] for all hours for
which the Owner/Member is paid or entitled to payment.”
Id. at 40 (quoting AR at 570).
CBA further stated:
Contributions to all funds [including the Fund] shall be made
by or on behalf of any person who is an Owner-Member . . . on
the basis of 40 hours per week, payable monthly, plus actual
hours in excess of forty (40). If such contributions are not
timely paid by or on behalf of the Owner-Member, he shall be
terminated from all participation in the funds . . . .
Id. at 39-40; see also Doc. 21-2 at 25.
The Fund's Former Registration Requirement
January 1, 2002, contributing employers to the Fund which
employed Owner-Members needed to file a Registration
Statement with the Fund to ensure that the Owner-Members
received pension credit for hours worked. See AR at
586. Effective January 1, 2002, however, Owner-Members no
longer needed to file Registration Statements to receive
pension credit. Id.
August 5, 2002, the Fund informed SSM that although the
company reported hours worked by an Owner-Member (i.e., Mr.
Sydney) before January 1, 2002, it had not filed a
Registration Statement, so Mr. Sydney was at risk of losing
pension credit for hours he worked before January 1, 2002.
Id. The Fund “strongly urged” SSM to
file a Registration Statement. Id.
about December 30, 2002, SSM filed an Owner-Member
Registration Statement with the Fund. Doc. 50 at 5. Mr.
Sydney later told the Fund that the only reason he became an
Owner-Member was to actively participate in the Fund's
retirement plan. Id.
13, 2003, the Fund issued a letter approving Mr. Sydney's
Owner-Member Registration Statement retroactively to August
1, 2001. Id. Thus, Mr. Sydney received pension
credit for hours he worked from August 1, 2001, until January
1, 2002, when the Fund no longer required Owner-Members to
file a Registration Statement in order to participate in the
Fund. The Fund's letter stated: “Effective January
1, 2002 contributions for all Owner/Members are due in
accordance to your collective bargaining agreement with
[Local 17].” AR at 584.
The Fund's Contribution Requirements
January 1, 2002, Section 1.13(d) of the Fund's Plan
If a Contributing Employer [i.e., SSM] employing an
Owner-Member fails to make contributions to the [Fund] with
respect to any Covered Employee,  including the Owner-Member,
the Owner-Member shall cease to be a Covered Employee [i.e.,
will cease to receive pension credits] as of the first day of
the month that follows the due date of the unpaid
contribution. In such case, the Owner-Member shall become a
Covered Employee again when the Contributing Employer resumes
making timely contributions to the [Fund] on behalf of all
its Covered Employees, including the Owner-Member; provided,
however, that the Owner-Member shall not be in Covered
Employment for the one-year period commencing on the date of
Doc. 50 at 47-48.
August 5, 2002, letter to SSM, the Fund summarized Section
1.13(d), stating: “You should . . . be aware that if
your company becomes delinquent [in making contributions to
the Fund], your Owner/Members will not receive Pension Credit
until the delinquency is resolved and until 12 months of
timely contributions have been made on behalf of all Covered
Employees, including the Owner/Members.” Id.
at 52 (citing AR at 587). According to the Fund's
Director of Operations, Debbie Elkins, the purpose of Section
1.13(d) was to prevent Owner-Members from being “able
to benefit from their companies' participation in the
[Fund] if their companies were not making contributions on
time, . . . which impaired the [Fund's] funded
status.” Id. at ¶ 2008, the Fund included
a description of Section 1.13(d) in its Summary Plan
Description. Id. at 14; AR at 7.
July 2010 through August 2014, the Fund sent multiple
delinquency notices to SSM; those notices summarized Section
1.13(d)'s consequences for Owner-Members of delinquent
Contributing Employers. See AR at 594-643.
2013, Section 1.13(d) was amended to state:
If a Contributing Employer employing an Owner-Member fails to
make contributions to the [Fund] with respect to any Covered
Employee, including the Owner-Member, the
Owner-Member shall cease to be a Covered Employee as of the
first day of the month that follows the due date of the
unpaid contribution. With respect to any delinquency
identified by the [Fund] after May 1, 2013, the preceding
sentence shall apply only if the Contributing Employer
knowingly failed to make contributions to the [Fund] with
respect to any Covered Employee. In such case, the
Owner-Member shall become a Covered Employee again when the
Contributing Employer resumes making timely contributions to
the [Fund] on behalf of all its Covered Employees, including
the Owner-Member; provided, however, that the Owner-Member
shall not be in Covered Employment for the one-year period
commencing on the date of such resumption.
AR at 482-83 (italics in original to show amendment); see
also id. at 657. This amendment “was intended to
take account of situations where a Contributing Employer made
an honest mistake.” Id. at 483.
SSM's Delinquency and the Fund's Collection
February 2006 to January 2011, SSM failed to make timely
contributions to the Fund and failed to cure by making a full
continuous year of timely contributions. AR at 8, 43. In
2011, the Fund filed suit against SSM to collect delinquent
contributions, a “substantial portion” of which
related to contributions on behalf of Mr. Sydney. Doc. 50 at
9. On November 9, 2011, Mr. Sydney, in his capacity as
Owner/President of SSM, signed a settlement agreement with
the Fund, in which he agreed to contribute to the Fund. Doc.
21-1 at 4. Plaintiffs allege, without citation to any
supporting evidence, that Mr. Sydney signed the settlement
agreement before the Fund informed him or SSM that
contributions made on his behalf since April 30, 2006, and as
part of the settlement agreement “would not inure to
[his] benefit.” Doc. 50 at 26-27.
March 13, 2014, the Fund filed an Amended Complaint against
SSM to collect delinquent contributions, a “substantial
portion” of which related to contributions on behalf of
Mr. Sydney as an Owner-Member and Covered Employee.
Id. at 9; Doc. 27 at 10. On July 17, 2014, Mr.
Sydney, on behalf of SSM, signed another settlement
agreement, covering collection of delinquent contributions
from July 1, 2011, through May 31, 2014. Doc. 50 at 30.
Section 12 of the settlement agreement stated:
Notwithstanding anything to the contrary contained herein,
nothing in this [agreement] shall modify, amend, or alter any
provision of any document governing the payment of benefits
by the [Fund], including, but not limited to, any provision
pertaining to or governing: Covered Employment (including,
but not limited to, any rules pertaining to an
Owner-Member's status as a Covered Employee), the accrual
of benefits or crediting of service, participation in the
Plan as a Contributing Employer or a Participant, credited
service, and eligibility for benefits.
Id. Plaintiffs allege that the language in Section
12 “was not in earlier versions of the settlement
agreements prepared by the [Fund] and signed by ...