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Angelastro v. IUE AFL-CIO Pension Fund

November 30, 1998

MARGARET ANGELASTRO,
PLAINTIFF,
V.
IUE AFL-CIO PENSION FUND AND BOARD OF TRUSTEES OF IUE AFL-CIO PENSION FUND,
DEFENDANTS.



The opinion of the court was delivered by: Jerome B. Simandle U.S. District Judge

HONORABLE JEROME B. SIMANDLE

OPINION

SIMANDLE, District Judge

Plaintiff, Margaret Angelastro, a widow, seeks judicial review of the denial of a 100% disability pension claim arising from her late husband's employment under defendants' employee benefit plan under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1132(a). Defendants IUE AFL-CIO Pension Fund ("the Fund") and the Board of Trustees of the IUE AFL-CIO Pension Fund ("the Board") have moved to dismiss her Complaint for lack of subject matter jurisdiction for failure to exhaust administrative remedies and/or for failure to state a claim upon which relief can be granted, pursuant to Federal Rules of Civil Procedure 12(b)(1) and (6). This motion requires the court to address the circumstances under which an ERISA employee benefit plan may be found to have waived its requirements for timely administrative appeals of benefit denials when the plan has addressed such appeals on the merits and where it has failed to advise the claimant of appeal rights. For the reasons set forth below, the court denies defendants' motion to dismiss for lack of subject matter jurisdiction, finding that Mrs. Angelastro's Complaint is not barred for failure to exhaust administrative appeal remedies, but grants defendants' motion to dismiss for failure to state a claim upon which relief can be granted and should be dismissed, because on the merits Mrs. Angelastro's Complaint seeks pension benefits that are not available under the applicable plan.

BACKGROUND

Margaret Angelastro's late husband, Nicholas Angelastro, was a participant in the IUE AFL-CIO Pension Plan ("the Plan") who passed away on September 11, 1990. Several months before his death, knowing that he did not have long to live, Mr. Angelastro and his wife attempted to put his financial affairs in order.

To that end, Mr. Angelastro attempted to apply for a disability pension under § 5.04 of the Plan, which provides in pertinent part:

Section 5.04 - Disability Retirement Pension

(a) Eligibility

A Participant shall be eligible to receive a Disability Retirement Pension commencing on the date of entitlement to a Social Security Disability Pension . . . . (Lichten Aff., Ex. B at pg. 29.)

Mr. Angelastro intended to elect the 100% joint and survivor option under § 6.02 of the Plan, which would have enabled Mrs. Angelastro to continue to receive 100% of the disability pension benefit payable to Mr. Angelastro during his lifetime after Mr. Angelastro's death.

Mrs. Angelastro claims that Plan administrators refused to provide her husband with a disability pension application when he requested one, insisting that Mr. Angelastro could not apply for a disability pension until the Social Security Administration ruled on his pending application for Social Security disability benefits. Mrs. Angelastro concedes that § 5.04 "requires that Social Security disability benefits begin before an application for disability retirement can be approved," but argues that "[n]othing in the Plan Document barred applying for a disability retirement pension while awaiting the award of Social Security disability benefits." (Plaintiff's Mem. at pg. 3.)

Unfortunately, Mr. Angelastro passed away before the Social Security Administration ruled on his application for Social Security disability benefits. Shortly thereafter, Mrs. Angelastro contacted the Fund regarding her eligibility for pension benefits. *fn1 On September 24, 1990, the Fund responded with a letter setting forth a calculation of the Spouse's Pre-Retirement Survivor's Benefit to which the Fund determined Mrs. Angelastro was entitled under § 5.07(b) of the Plan, which permits a surviving spouse of a participant who, like Mr. Angelastro, was eligible for early retirement to collect 50% of the amount that would have been payable to the participant if he had retired under the Early Retirement Pension provision of § 5.02 of the Plan the day before he died and elected a 50% joint and survivor option. (Crandall Aff. at ¶¶ 3-4; Plaintiff's Mem., Ex. 1.)

On or about October 3, 1990, Mrs. Angelastro submitted an "Application for Survivor Annuitant's Pension Benefits Under the 50% Joint and Survivor Option." (Lichten Reply Aff., Ex. A.) In a letter dated October 22, 1990, the Fund advised Mrs. Angelastro that her application had been approved and enclosed her first monthly benefit check. (Lichten Reply Aff., Ex. B; Crandall Aff. at ¶ 5.) The $221.46 Spouse's Pre-Retirement Survivor's Benefit Mrs. Angelastro has received every month since October 1990, pursuant to § 5.07 of the Plan, is significantly smaller than the 100% joint and survivor payment she would have received under § 6.02(a) of the Plan if Plan administrators had eventually accepted and approved Mr. Angelastro's application for a disability pension under § 5.04 of the Plan.

In a letter to the Board dated September 4, 1991, *fn2 Mrs. Angelastro appealed the Fund's determination that she was entitled only to a 50% Pre-Retirement Survivor Pension instead of a 100% joint and survivor benefit. In a letter dated October 4, 1991, the Board acknowledged receipt of Mrs. Angelastro's appeal and expressed its belief that her application for benefits "was processed in accordance with the Plan's provision in effect," but noted that it had "decided to postpone a decision pending a feasibility study of the Pre-Retirement Survivor benefit to be performed by the Fund's actuary." (Complaint at ¶ 16 and Ex. A.) In a letter dated July 27, 1992, the Board confirmed its denial of Mrs. Angelastro's appeal. (Complaint at ¶ 17 and Ex. B.)

More than five years passed. On December 8, 1997, Mrs. Angelastro filed suit against the Fund and the Board under § 502(a)(1)(B) of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1132(a)(1)(B), in the Superior Court, Chancery Division, Camden County. Defendants removed the case to this court. Mrs. Angelastro alleges that the defendants "frustrated" and "interfered with" her husband's ability to elect a 100% joint and survivor option before his death by "refusing to provide the requested forms." (Complaint at ¶¶ 8-9, 13.) Mrs. Angelastro further alleges that the defendants "have acted in disregard of the provision of [the Plan], and/or arbitrarily and capriciously in their interpretation and implementation of the provisions of [the Plan]." (Id. at ¶ 19.) Mrs. Angelastro seeks a declaration that her husband elected the 100% joint and survivor option before his death and that she is entitled ...


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