Rocco v Pension Plan of NY State Teamsters Conference Pension & Retirement Fund

[*1] Rocco v Pension Plan of NY State Teamsters Conference Pension & Retirement Fund 2004 NY Slip Op 51580(U) Decided on December 13, 2004 Supreme Court, Kings County Lewis, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on December 13, 2004
Supreme Court, Kings County

Thomas Rocco and Dorothy Casey, on behalf of themselves and all other active, retired and vested participants and their surviving spouses and estates of the Brewery Fund Pension Plan who were denied benefits under the New York State Teamsters Conference Pension and Retirement Plan from on or about August 12, 1973, Plaintiffs,

against

The Pension Plan of the New York State Teamsters Conference Pension and Retirement Fund, The Board of Trustees of the Pension Plan of the New York State Teamsters Conference Pension and Retirement Fund and all predecessor Trustees who have served as such since 1973, Defendants.



31804/02

Yvonne Lewis, J.

This court has been requested by the captioned plaintiffs to certify the within action as a class action pursuant to CPLR 901 and 902, with the following individuals designated as the members thereof; to wit,"all individuals who are or were participants or beneficiaries of participants in the Brewery Workers Pension Plan (Brewery Plan) as of August 7, 1973 when the agreement to merge the Brewery Fund and the New York State Teamsters Conference Pension and Retirement Fund (Teamsters Fund) was executed, who ceased to be active participants prior to December 1976 and who elected to receive benefits under the terms of the plan of benefits of the Teamsters Fund and who did not receive benefits under the terms of the plan of benefits of the Teamsters Fund." It is asserted by the plaintiffs that class certification is warranted herein since "all members of the putative class are receiving or have received benefits under the terms of the Brewery Plan; however, these benefits are less than the benefits they would have receive[d] under the terms of the merger agreement. . .which they seek to obtain in this case." More to the point, the plaintiffs contend that the agreement to merge the Brewery Plan and the Teamsters Plan, signed by the respective trustees on July 30, 1973 and August 7, 1973, was violated by the absence of contributions on their behalf on or after December 1, 1976.

The subject merger was to become effective thirty days after notification to the parties that the Internal Revenue Service had approved their individual agreements. Accordingly, the parties were each required to forthwith seek that approval and to ". . .execute or cause to be executed any and all documents necessary to implement this Agreement." The Teamsters not only failed to abide by the foregoing terms, but on February 4, 1974 voted not to proceed with the merger, which resulted in the initiation of litigation for the specific performance of said merger. [*2]On April 11, 1975, The Queens County Supreme Court upheld the merger and directed the Teamsters to comply, which they failed to do. Consequently, on April 29, 1976, the Brewery Fund Trustees applied for the IRS approval on behalf of the Teamsters. On September 28, 1976, the IRS issued a letter of approval, and the New York State Supreme Court thereafter, in a supplemental enforcement proceeding, ". . .declared that the Brewery Fund was 'fully integrated' with the Teamsters Fund as of December 1, 1976." Brewery Workers Pension Fund et. al. v. New York State Teamsters Conference Pension and Retirement Fund, et. al., No. 9997/74 (NY Sup. Ct., April 12, 1977). On two subsequent occasions, the Teamsters were held in contempt for refusing to adhere to the terms of the merger, which they purged ". . .by inter alia, accepting the Brewery Fund assets and giving notice to Brewery Fund members. Nevertheless, they ultimately refused to provide higher Teamsters Fund benefits to participants, like Plaintiffs, who were actively employed when the Merger Agreement was executed and who 'but for' Defendants' wrongful conduct, would have been actively employed on the merger's effective date (had the IRS approval been sought as required under the Agreement), but who, due to an intervening plant closing, were no longer employed on December 1, 1976." It is also the plaintiffs' contention that they are entitled to benefits under the merger agreement under state common law claims, and that the "prevention doctrine" would bar the defendant from effectively arguing as to any delay in effective merger date since the defendant was the cause of such delay. The plaintiffs further contend that the requirements for class certification under CPLR 901 fully apply, in that the size of the claimants makes joinder impracticable; there exists questions of law and fact common to the class that predominates any individual concerns; and, the captioned individuals typify the concerns of the other class members, and will adequately represent their interests. In addition, the plaintiffs assert that the defendants' act of suing them as a class in prior litigation for a finding that ". . .the class of former Brewery Fund participants for whom no contributions were made on or after December 1, 1976, were not entitled to receive benefits under the terms of the Teamsters plan," was a tacit admission that a class action is appropriate. In that case, Brewery Delivery Employees Local Union No. 46, IBT, et. al. v. Mosely, et. al., Civ. 80-1476 (E.D.NY), the parties settled on an agreement that the statute of limitations would be tolled for "rights or claims which may be asserted against the Fund by members of Local 46 on whose behalf contributions were made into the Brewery Workers Pension Fund between 1973 and 1976 and who were not given the option to elect to become members of the New York State Teamsters Conference Pension and Retirement Fund." The plaintiffs also note that in prior unrelated litigation involving the Teamsters, Miele v. NYS Teamsters Pension Fund, 81 Civ. 0084, the Teamsters had furnished

". . .a computer print-out of all participants in the Brewery Pension Plan who, following the effective date of the Merger Agreement between the Brewers and Teamsters Pension Funds, were denied benefits under the Teamsters Plan. . . .a total of 1,148 members."

In response to the foregoing, the defendants cross-moved this court for an order, pursuant to CPLR §§501 and 510(3), to transfer the within matter to the New York State Supreme Court in Onondaga County as a more convenient forum. They predicated that request on the fact that

". . .(1) the rules of the Pension Fund mandate that any action brought against it be commenced in the County of Onondaga, (2) the convenience of material witnesses and interest of justice support a change in venue[,] and (3) the Southern District specifically ruled in the previously dismissed federal court action brought by Plaintiffs that the most convenient forum is the County [*3]of Onondaga, to which it transferred the matter. Seitz, et. al. v. New York State Teamsters Conference Pension & Retirement Fund, 953 F. Supp. 100 (S.D.NY 1997)." The defendants also contend that, by its terms, the merger agreement resulted in two entities, the Pension Fund and the Brewery Plan and, that "[t]his meant that, pursuant to the Merger Agreement, only Brewery members who worked and had contributions made on their behalf after December 1, 1976 were eligible to have a portion of their benefits determined under the Pension Fund's Plan. All other Brewery members, like Plaintiff Rocco and Mr. Casey, were eligible for benefits solely under the Brewery Plan." Plaintiff Rocco ". . .ceased being a member of the Brewery Fund on March 26, 1976 and received an Early pension under the Brewery Plan effective June 1, 1984. . . .Mr. Casey retired on a Disability Pension under the brewery Plan effective February 1, 1976. He died on March 9, 1982." The defendants further note that all prior litigation, ". . .some 22 federal and state courts over the last 28 years have also recognized that the effective date of the Brewery Merger was December 1, 1976 and that this is the operative date for determining a Brewery member's eligibility for benefits." In their memorandum of law, the defendants also highlight the fact that the Northern District Court, in the matter of Seitz, et. al. v. New York State Teamsters Conference Pension & Retirement Fund, 97-CV 232, went on to confirm the December 1, 1976 effective merger date (Jan. 7, 2000); determine that it had jurisdiction under ERISA to adjudicate plaintiffs' claims; dismiss plaintiffs' complaint on the merits for failure to state a cause of action upon which relief could be granted under the Federal Rules of Civil Procedure (Aug. 7, 2000); find that plaintiffs were without standing to assert such claims (June 9, 2000) as they were not participants or beneficiaries in the Pension Fund's Plan; and, finally, that plaintiffs failed to plead or argue any pendant claims under New York common law or statute. The defendants reinforce the foregoing by noting that said rulings were upheld by the United States Court of Appeals for the Second Circuit (Seitz, et. al. v. New York State Teamsters Conference Pension & Retirement Fund, 281 F.3d 62 (2nd Cir. 2002) and that the U.S. Supreme Court denied Certiorari. Furthermore, the defendants argue that by virtue of the holdings aforementioned, the plaintiffs are barred from asserting any claims under New York State law by the principles of res judicata since "a final judgment on the merits of an action precludes the parties or their privies from re-litigating issues that were or could have been raised in that action." (Citing Meagher v. Cement and Concrete Workers' Pension Fund, 921 F. Supp. 161, 164 (S.D.NY 1997); Hennessey v. Cement and Concrete Workers, 963 F. Supp, 963 F. Supp. 334, 337 (S.D.NY 1997), and a host of other cases, including Buechel v. Bain, 97 NY2d 295, 740 NYS2d 252 in its reply memorandum of law), and/or collateral estoppel since ". . . an issue of fact or law actually litigated and decided by a court of competent jurisdiction in a prior action may not be re-litigated in a subsequent suit between the same parties or their privies." (Citing, United States v. Alcan Aluminum corp., 990 F.2d 711 (2d Cir. 1993), citing Montana v. United States, 440 U.S. 147, 153 (1979); Remington Rand Corporation v. Amsterdam Rotterdam Bank, 68 F.3d 478 (2d Cir. 1995), etc. The defendants also distinguish the fact that David Seitz, unlike the plaintiffs herein, had been a member of Local 46 who had made contributions to the Pension Fund after December 1, 1976.

With regards to class certification, the defendants point out that CPLR §902 specifically required that the plaintiffs had to have moved therefor within sixty days after the filing of its responsive pleading herein, and that the courts may not extend this period (citing in particular, [*4]O'Hara v. Del Bello, 47 NY2d 363, 418 NYS2d 334). Accordingly, since its answer was filed on September 19, 2002 and the plaintiffs did not make this motion until June 4, 2003, they are barred therefrom. In addition, the defendants note that the tolling of the statute of limitations afforded by the Mosley, infra settlement, by its terms, applied only and specifically from the filing of that action in 1980 until its settlement in 1990, not to the within action which was commenced some twelve years after execution of the settlement agreement.

In their reply, the plaintiffs note that this action was remanded to state court after the date that the defendants assert that the instant motion should have been filed. Consequently, their motion can in no way be viewed as untimely. In addition, the plaintiffs argue that "the 60 day requirement is not a statute of limitations, and a motion for class certification may be granted under appropriate circumstances even if it is brought after the expiration of that period." (Citing, John Bourdeau, Paul Coltoff, Christine M. Gimeno, 3A Carmody-Wait 2d §§19:395, a fourth department case, and some miscellaneous opinions). The plaintiffs then reassert their arguments for class certification, along with pointing out that the defendants have not filed an answer in state court; i.e, in this action. With regards to the request for change of venue, the plaintiffs argue that in Seitz, et. al. v. New York State Teamsters Conference Pension & Retirement Fund, supra, 953 F. Supp. 100 (S.D.NY 1997), "[t]he Eastern District of New York, which encompasses Kings County, was found to be a proper venue after the issue was briefed before Judge Batts in the Southern District of New York;" however, the plaintiffs concede that his opinion was silent vis-a-vis the "purported plan rule requiring venue in the county of Onondaga. . ." In any event, the plaintiffs assert that the trustees exceeded their authority in adopting such a rule as "[t]here is nothing in the Trust Agreement that permits the Trustees to abridge Plaintiffs' rights by adopting a venue provision or to limit or regulate litigation against or by the Fund."

The Defendants, in response to the foregoing, submitted a reply memorandum which essentially reiterated their position against class certification and for a change of venue, save to assert that the plaintiffs had not initially quantified the number of the purported class in its original motion, but only did so in their supplemental affirmation on the basis of archival material, which they were unable to provide via discovery since ". . . Josephine Dontino, the person who allegedly generated the document some 25 years ago, retired from the pension fund, is in her 80's and is incapacitated. This is one of the reasons why this action is also barred by the statute of limitation since said statutes are designed to protect defendants against the elements of time, notably, the loss of evidence and faded memories of witnesses." (Citing Carmody Wait 2d, "Limitation of Actions," §13.2 (1994) (the policy behind the statutes of limitation is to protect defendants from the revival of claims where 'evidence has been lost, memories have faded and witnesses have disappeared')." (Citing Meyers v. Frank, 550 F.2d 726 (2nd Cir.), cet. Denied, 434 U.S. 830 (1977); Vastola v. Maer, 39 NY2d 1019, 387 NYS2d 246 (1976), McCarthy v. Volkswagen of America, 55 NY2d 543; etc.) Insofar as its failure to have submitted an answer is concerned, the defendants argue that their response in the federal matterserved after removal but prior to remand to state courtis sufficient, especially in light of the fact that the plaintiffs had agreed to an extension of time for service of the same. Lastly, with regards to the plaintiff's argument that the trustees exceeded their authority in adopting a venue rule, the defendants argue that ". . .the venue rule was adopted by the Pension Fund's trustees pursuant to ERISA and the Agreement and Declaration of Trust. The right to adopt a venue derives from the Trustees' [*5]'exclusive authority to control and manage the operation and administration of the plan' and fiduciary mandates imposed upon them by ERISA. In this regard, ERISA provides that 'Every employee benefit plan shall be established and maintained pursuant to a written instrument. . .and the fiduciaries. . .shall have the authority to control and manage the operation and administration of the plan. 29 U.S.C. §1102(a)(1)." Finally, the defendants assert that since the venue rule applies to participants as well as applicants of the Plan, it is immaterial that the plaintiffs are not members of the Plan. The fact is that "[t]he plaintiffs here applied for benefits under the Pension Fund's Plan and were denied because they did not have contributions made after December 1, 1976, the 'effective date' of the Brewery Merger as adjudicated by the courts."

CPLR § 901 provides, in pertinent part, that "one or more members of a class may sue or be sued as representative parties on behalf of all if: 1. the class is so numerous that joinder of all members whether otherwise required or permitted, is impracticable; 2. there are questions of law or fact common to the class which predominate over any questions affecting only individual members; 3. the claims or defenses of the representative parties are typical of the claims or defenses of the class; 4. the representative parties will fairly and adequately protect the interests of the class; and, 5. a class action is superior to other available methods for the fair and efficient adjudication of the controversy. CPLR § 902 adds that "within sixty days after the time to serve a responsive pleading has expired for all persons named as defendants in an action brought as a class action, the plaintiff shall move for an order to determine whether it is to be so maintained. An order under this section may be conditional, and may be altered or amended before the decision on the merits on the court's own motion or on motion of the parties. The action may be maintained as a class action only if the court finds that the prerequisites under section 901 have been satisfied. Among the matters which the court shall consider in determining whether the action may proceed as a class action are: 1. The interest of members of the class in individually controlling the prosecution or defense of separate actions; 2. The impracticability or inefficiency of prosecuting or defending separate actions; 3. The extent and nature of any litigation concerning the controversy already commenced by or against members of the class; 4. The desirability or undesirability of concentrating the litigation of the claim in the particular forum; and 5. The difficulties likely to be encountered in the management of a class action."

The controversy presented by the various arguments of the parties is whether the plaintiffs meet the statutory prerequisites and have timely moved for class certification, or whether prior judicial proceedings have resolved that determination and therefore preclude any reexamination thereof on the basis of res judicata and/or collateral estoppel. This court cannot proceed to make that analysis, however, in light of the venue issue herein presented. The law is clearly established that "contractual forum selection clauses are prima facie valid and enforceable." (See McIntosh County Bank, et. al. v. St. Regis Mohawk Tribe, 4 Misc 3d 1017(A), 2004 WL 1878201 (NY Sup.), 2004 NY Slip Op. 50920(U), citing Premium Risk Group, Inc. v. Legion Insurance company, 294 AD2d 345 (2nd Dept., 2002); and Koko Contracting Inc. v. Environmental Asbestos Removal Corp., 272 AD2d 585 (2d Dept., 2000). Although the plaintiffs argue that the trustees did not have the authority to designate Onondaga county as the forum for any fund disputes, they have failed to convincingly demonstrate that agreeing to such a contractual provision is de hors the bounds of permissible and/or legitimate contractual parameters, much less fiduciary action. The fact is that "[i]n order to set aside such a clause, the party seeking to do [*6]so must establish that enforcement of the clause would be unreasonable or unjust, that the venue selection clause is void because of fraud or overreaching or that permitting the matter to proceed to trial in the venue established by the contract would be so difficult and inconvenient to the party challenging the provision [that he or she] would effectively [be] denied his or her day in court. (See McIntosh County Bank, et. al. v. St. Regis Mohawk Tribe, 4 Misc 3d 1017(A), supra, citing Hunt v. Landers, 309 AD2d 900 (2nd Dept., 2003); and Hirschman v. National Textbook Company, 184 AD2d 494 [2d. Dept., 1992]). The McIntosh County Bank, et. al. v. St. Regis Mohawk Tribe, 4 Misc 3d 1017(A), supra, court went on to aptly note that "Agreements are to be interpreted in accordance with their plain meaning."(citing Green field v. Philles Records, Inc., 98 NY2d 562 (2002); Katina, Inc. v. Famiglietti, 306 AD2d 440 [2nd Dept., 2003]). "The court may not make a new agreement for the parties under the guise of interpretation." (Citing Rodolitz v. Neptune Paper Products, Inc., 22 NY2d 383 [1968]. See also, Iacobacci v. McAleavey, 222 AD3d 406 [2d Dept., 1995]). Accordingly, this court sees no other alternative than to have the within matter transferred to the Supreme court of Onondaga County pursuant to the terms of the parties' Merger agreement above discussed.

WHEREFORE, on the basis of the foregoing, the defendants' motion for a change of venue is granted, and the plaintiffs' request for class certification is hereby deferred to the Supreme Court of Onondaga County. In addition, the Kings County Clerk is hereby directed to forthwith transfer the case file to the Onondaga Supreme Court for its deliberations. This constitutes the decision and order of this Court.

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JSC