Gannon v. NYSA-ILA Pension Trust Fund & Plan

12-2965-cv
Gannon v. NYSA-ILA Pension Trust Fund & Plan

UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY
ORDER FILED ON OR AFTER JANUARY 1, 2007 IS PERMITTED AND IS GOVERNED BY FEDERAL
RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN
CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE
EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION
"SUMMARY ORDER"). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY
PARTY NOT REPRESENTED BY COUNSEL.

At a stated term of the United States Court of Appeals
for the Second Circuit, held at the Thurgood Marshall United
States Courthouse, 40 Foley Square, in the City of New York, on
the 17th day of April, two thousand thirteen.

PRESENT: JOHN M. WALKER, JR.,
DENNY CHIN,
Circuit Judges,
JANE A. RESTANI,
Judge.*

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SUSAN H. GANNON, in her individual capacity
as Plan beneficiary and on behalf of all
others similarly situated, SUSAN H. GANNON,
as Executor of the Estate of Richard
Gannon,
Plaintiff-Appellant,

-v- 12-2965-cv

NYSA-ILA PENSION TRUST FUND AND PLAN,
FRANK M. MCDONOUGH, personally and in his
capacity as a Member of the Board of
Trustees of the NYSA-ILA Pension Trust
Fund and Plan, ANTHONY PETRIZZO,
personally and in his capacity as a
Member of the Board of Trustees of the
NYSA-ILA Pension Trust Fund and Plan,

*
The Honorable Jane A. Restani, of the United States
Court of International Trade, sitting by designation.
MAURICE C. BYAN, personally and in his
capacity as a Member of the Board of
Trustees of the NYSA-ILA Pension Trust
Fund and Plan, JOSEPH CURTO, personally
and in his capacity as a Member of the
Board of Trustees of the NYSA-ILA Pension
Trust Fund and Plan, JOHN BOWERS,
personally and in his capacity as a
Member of the Board of Trustees of the
NYSA-ILA Pension Trust Fund and Plan,
ALBERT CERNADAS, personally and in his
capacity as a Member of the Board of
Trustees of the NYSA-ILA Pension Trust
Fund and Plan, STEPHEN KNOTT, personally
and in his capacity as a Member of the
Board of Trustees of the NYSA-ILA Pension
Trust Fund and Plan,
Defendants-Appellees.**

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FOR PLAINTIFF-APPELLANT: EDGAR PAUK, Brooklyn, New York
(Robert Bach, New York, New York,
on the brief).

FOR DEFENDANTS-APPELLEES: JAMES R. CAMPBELL (Donato Caruso,
on the brief), The Lambos Firm,
LLP, Tarrytown, New York, and
Kevin J. Marrinan and John P.
Sheridan, Marrinan & Mazzola
Mardon, P.C., New York, New York,
on the brief.

Appeal from the United States District Court for the

Southern District of New York (Forrest, J.).

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,

ADJUDGED, AND DECREED that the judgment of the district court is

AFFIRMED.

**
The Clerk of the Court is directed to amend the
official caption to conform to the above.
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 Plaintiff-appellant Susan H. Gannon1 appeals from the

judgment entered June 27, 2012, pursuant to the district court's

June 25, 2012 memorandum and order dismissing appellant's first

cause of action under § 502(a)(1)(B) of the Employee Retirement

Income Security Act of 1974 ("ERISA"), but awarding damages on

her second cause of action under ERISA § 502(a)(1)(A),

(c)(1)(B). See 29 U.S.C. § 1132(a)(1), (c)(1)(B). Defendants-

appellees NYSA-ILA Pension Trust Fund and Plan and its Board of

Trustees (collectively, the "Fund") have not appealed the award

of damages and thus the only issue before us is the dismissal of

appellant's first cause of action. We assume the parties'

familiarity with the facts, procedural history, and

specification of issues for review.

This case involves the interpretation of the following

provisions of the 2002 NYSA-ILA Pension Plan (the "Plan").

Article III, section 1 provides two ways for an employee to

become eligible for a "Service Retirement Pension": by

completing twenty-five consecutive years of service (the

"consecutive 25 provision"), or by completing twenty-five years

of service over a thirty-five year period with the final five

years being consecutive (the "25 out of 35 provision").

1
Mrs. Gannon was substituted as party plaintiff for her
late husband Richard Gannon.
Meanwhile, section 4 sets out two break-in-service rules

applicable to all pension benefits. One rule, applicable prior

to January 1, 1976, caused a Plan participant to forfeit for

both vesting and accrual purposes any unvested years earned

prior to a break-in-service lasting more than two years (the

"three-year rule" or the "pre-ERISA break-in-service

provision"). The second rule, effective on January 1, 1976,

caused a participant to forfeit unvested pre-break years of

service only if he experienced a break-in-service equal to his

total years of prior service (the "parity rule" or "post-ERISA

break-in-service provision"). Following lengthy litigation in

McDonald v. Pension Plan of the NYSA-ILA Pension Trust Fund, No.

99 Civ. 9054, 2004 WL 2050166 (S.D.N.Y. Aug. 6, 2004)

(hereinafter "McDonald IV"), aff'd, 450 F.3d 91 (2d Cir. 2006)

(per curiam) (hereinafter "McDonald VI"), the Fund amended the

pre-ERISA break-in-service provision so that, prior to 1976, the

three-year rule applied only for vesting purposes and the parity

rule applied for accrual purposes, unless the three-year rule

provided a greater benefit.

Here, Richard Gannon was eligible for a pension under

the consecutive 25 provision because he worked thirty-one

consecutive years from 1979 to 2009. Pursuant to the parity

rule, however, the five years he worked from 1969 to 1973 were
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excluded from his accrued benefit because he had a five-year

break-in-service from 1974 to 1978. Appellant argues that the

Fund should have applied the 25 out of 35 provision for accrual

purposes instead of the consecutive 25 provision, because under

McDonald, the 25 out of 35 provision trumped all break-in-

service rules.

Reviewing the district court's preclusion analysis de

novo, see Bank of N.Y. v. First Millennium, Inc., 607 F.3d 905,

919 (2d Cir. 2010), we agree with the district court that

McDonald did not require the Fund to adopt Gannon's proposed

interpretation of the 25 out of 35 provision. Therefore, we

affirm for substantially the reasons set out in its thorough and

well-reasoned thirty-page opinion. We add the following only to

address appellant's arguments that certain aspects of the

district court's reasoning were erroneous.

First, appellant argues that the district court erred

in applying a deferential standard of review. Because the Plan

grants the Board of Trustees "sole and absolute discretionary

authority" to interpret the Plan, Plan art. IX, § 19, the

district court should ordinarily review the Fund's

interpretations of the Plan under an arbitrary and capricious

standard of review. See Novella v. Westchester Cnty., 661 F.3d

128, 140 (2d Cir. 2011). Appellant argues that this standard
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should not apply because the Fund never actually offered an

"interpretation" of the 25 out of 35 provision. In its motion

to stay in the district court, the Fund represented that it had

never considered appellant's proposed interpretation because

appellant had never presented it during the administrative

review. In any event, the Fund, by excluding Richard Gannon's

pre-break service years pursuant to the parity rule, implicitly

applied an interpretation of the Plan that rejected appellant's

construction of the 25 out of 35 provision. Because the Fund's

interpretation is reasonable and not arbitrary or capricious,

the district court properly afforded it deference.

Second, appellant argues that granting summary

judgment was improper without permitting discovery into the

consistency of the Fund's interpretation. Appellant agreed

below, however, that the facts were undisputed and that the case

turned on a single legal question: the proper interpretation of

the Plan.2 The district court need only consider "evidence of

how the Plan language has been interpreted by the Plan

2
Moreover, appellant did not allege in the complaint
that the Fund interpreted the 25 out of 35 provision
inconsistently. To the contrary, the claim was pled as a
putative class action, alleging that the way the Fund applied
the parity rule to Richard Gannon was typical of the way it
applied the rule to "no less than 100" similarly situated
workers. Class Action Compl. ¶ 53(a), Gannon v. NYSA-ILA
Pension Trust Fund & Plan, No. 09 Civ. 10368, 2012 WL 2505600
(S.D.N.Y. June 25, 2012), ECF No. 1.
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administrators in the past" if "the Plan language is not, by

itself, clear and unambiguous." I.V. Servs. of Am., Inc. v.

Trs. of Am. Consulting Eng'rs Council Ins. Trust Fund, 136 F.3d

114, 120 (2d Cir. 1998). We agree with the district court that

the Plan clearly and unambiguously provides that the break-in-

service rules "apply for purposes of all pension benefits."

Plan art. III, § 4(a) (emphasis added). Thus, the district

court could grant summary judgment without considering evidence

of the consistency of the Fund's interpretation. Cf. Gallo v.

Madera, 136 F.3d 326, 330-31 (2d Cir. 1998) (concluding that an

interpretation contrary to the Plan's clear language was

arbitrary and capricious despite evidence that the trustees'

consistently interpreted the Plan in that manner).

We have considered appellant's remaining arguments and

find them to be without merit. Accordingly, we AFFIRM the

judgment of the district court.

FOR THE COURT:
Catherine O'Hagan Wolfe, Clerk

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