Kroschinsky v. Trustees of Steamship Trade Ass'n/International Longshoremen's Ass'n Pension Trust Fund-Benefits Trust Fund

Citations: 790 F. Supp. 559; 1992 U.S. Dist. LEXIS 6518; 1992 WL 87936Docket: Civ. No. JFM-91-1928

Court: District Court, D. Maryland; February 10, 1992; Federal District Court

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Richard A. Kroschinsky, Jr. has initiated a lawsuit under the Employee Retirement Income Security Act (ERISA) against the Steamship Trade Association of Baltimore/International Longshoremen’s Association Pension Trust Fund and the Benefits Trust Fund, seeking $12,000 in benefits linked to a work-related knee injury. Kroschinsky alleges that the Benefits Fund officials improperly denied him credit for vacation and holiday hours earned during his disability, resulting in a loss of benefits status. He has been employed as a longshoreman since 1974 and has contributed to both the Benefits Fund and the Pension Fund. Following his injury on November 30, 1983, Kroschinsky became temporarily disabled, affecting his credit hours for the 1983-84 contract year. To maintain Group A status, which offers broader benefits, he needed 1100 hours of credit; however, he received only 1087 hours—13 hours short—due to his injury. Although he received credit at a flat rate of 22 hours per week during his disability, his total for the year fell short because of his limited work hours prior to the injury. The court notes that the Pension Fund is not a proper defendant in this case, as it is a separate entity that provides retirement income, while Kroschinsky is only claiming benefits from the Benefits Fund, which covers medical and disability benefits.

Defendants argue that Kroschinsky's claim is barred by the statute of limitations. Key points include: Kroschinsky was informed of his coverage change from Group A to Group B shortly after December 10, 1984, and had 60 days to appeal. He filed his appeal on or around April 25, 1988, which the trustees denied on June 24, 1988, with notification sent on July 8, 1988, and received on July 11, 1988. Kroschinsky filed his lawsuit on July 10, 1991. Maryland law imposes a three-year limitation period for contract actions, including those for wrongful denial of benefits under ERISA. The limitations period typically starts after the plaintiff has exhausted all internal remedies and received the final denial notice. A key issue is whether "notification" occurs upon sending or receipt; however, Kroschinsky's appeal was deemed untimely, as it was filed over three years after he was first informed of the denial. Allowing an untimely appeal to toll the limitations period would encourage stale claims.

Although Kroschinsky's claim is ruled time-barred, the court also addresses the merits. In ERISA benefit actions, the standard of judicial review hinges on whether plan administrators have discretion in eligibility and interpretation of provisions. The Benefits Fund's Trust Agreement grants trustees extensive powers to interpret the agreement and determine eligibility, entitling their decisions to a deferential standard of review. Kroschinsky contends he lost Group A eligibility due to the Fund's wrongful denial of credit for vacation and holiday hours during his disability. While the Summary Plan Description suggests he should receive credit for hours worked, further analysis is required to assess the validity of his claim.

The Summary Plan Description outlines a specific method for calculating credit during disability periods, granting employees receiving Group A benefits at the time of injury or sickness a credit of 22 hours per week, capped at 1100 hours per contract year, while on Worker’s Compensation for temporary total disability. It explicitly excludes vacation or holiday credit. The trustees’ interpretation of the plan, denying Kroschinsky vacation or holiday credit, aligns with the plan's literal terms and does not constitute an abuse of discretion.

Kroschinsky argues that the trustees’ interpretation conflicts with the Trust Agreement, which requires that rules for administering the Plan be consistent with the Collective Bargaining Agreement (CBA). He points to a formula in the CBA for calculating vacation pay during disability, claiming the lack of vacation credit contradicts this formula. However, the argument confuses two separate issues: the entitlement to vacation pay under the CBA and eligibility for benefits under the Benefits Plan, as the CBA does not stipulate that vacation pay influences benefit eligibility.

Kroschinsky also contends that the eligibility requirements contradict a Department of Labor regulation, referencing a law firm’s letter interpreting 29 C.F.R. 2530.200b-2. This regulation requires that hours without duties—such as vacation and illness—be counted for pension plan vesting and accrual under ERISA. However, these regulations apply only to pension plans, not welfare benefit plans like the Benefits Fund, which is exempt from such requirements. Thus, the letter is irrelevant to Kroschinsky's benefits eligibility.

Lastly, Kroschinsky claims the Benefits Fund officials acted contrary to past practice by not awarding vacation credit, citing previous instances where he received 40 hours of vacation pay during the 1982-83 contract year. He presents various documents as evidence, but these pertain to pension benefits, not the Benefits Fund. The Benefits Fund administrator’s uncontradicted affidavit asserts that it has never allowed vacation or holiday credit. Kroschinsky's unsupported allegations do not suffice to challenge the summary judgment.

Summary judgment is granted in favor of the defendants, as Kroschinsky's claim against the Pension Fund is based solely on the shared letterhead of two funds, which does not substantiate piercing the corporate veil. The letterhead indicates that the funds are separate entities. Although there is an argument that trustees waived the untimeliness of Kroschinsky's appeal by addressing it on the merits, creating a waiver exception would be against public interest and complicate legal standards regarding untimely appeals. Defendants provided excerpts from the Summary Plan Description, which, under 29 U.S.C. § 1022(b), is required to be distributed to employees; this document would govern any conflicts with the actual Benefits Plan. ERISA defines "employee welfare benefit plan" as one providing benefits such as medical or disability, while a "pension plan" pertains to retirement income. The Benefits Fund qualifies as a welfare plan, not a pension plan. Even if the two funds were considered a single entity, Kroschinsky would not benefit from ERISA's pension plan participation standards, as hybrid plans are exempt from these standards for non-pension benefits. Kroschinsky's arguments regarding regulations on vacation hours are futile since, while vacation hours count as "hours of service," the plan limits credit to 501 hours for continuous periods without duties—well below the 1294 hours he is credited with for the 1982-83 contract year. Additionally, discrepancies in credited hours further indicate that Kroschinsky's documentation does not pertain to his eligibility under the Benefits Fund.