*3 1, 1978, On December Acting the Fund Ad- GIBBONS, Before GARTH and HIGGIN- ministrator, Trustees, on behalf of BOTHAM, Judges. Circuit wrote to advising Mr. Wolf him that his application ap- OPINION OF THE COURT however, proved; Mr. Wolf had died on HIGGINBOTHAM, Jr., A. LEON Circuit 22, November 1978. Because Mr. Wolf’s Judge. disability pension application contained this This case involves the National Shopmen signed Spouse’s Waiver of Op- 50% Pension Pension Fund’s of a district court tion, the Fund advised Mrs. Wolf that she granting plaintiff order Dorothy G. was entitled to no pension benefits follow- Wolf’s claim to pension benefits as the des- ing Instead, the death of her husband. ignated of her beneficiary deceased hus- Mrs. Wolf was entitled only to receive an band. This claim was denied the Trus- amount covering period between the tees of the Pension Fund. Because we be- submission of the application and lieve that the Pension Fund’s denial was its approval by Board of Trustees. This arbitrary capricious, we will affirm the amount was a month for the al- $304.00 district court order granting those benefits. passed ready August, September, months of
October and November of 1978 for a total $1,216.00. I. husband, 21,
Plaintiff’s deceased William September G. On Mrs. Wolf filed Wolf, was employed by Lehigh Fund, against Shopmen’s Structural suit the Pension Union”), presented the evidence did figure and Rich- because (“Local Local Union enable them to do so. President, not Gehringer, ard H. the Union’s Mrs. Wolf al- Pennsylvania Court. State de- plaintiff appealed arbitrators’ Gehringer, that Mr. leged complaint her court. In a to the district sound cision Fund, of the Pension acting agent as an scope limited mindful of its of re- opinion process properly failed to negligently determination, Fund’s view of Pension her form executed in favor district court found of Mrs. husband. Mrs. Wolf did contend Fund; the Pension Wolf and was independently the Pension Fund itself with the arbitrators agreed district court in its Mr. or bad faith the waiver executed Wolf was guilty negligence also The district court found in On ineffective. handling application. October Gehringer. Mr. Be- favor of union and was removed the United the suit the district court cause record before for the Dis- District Court Eastern States *4 it was able to determine the complete, was of The Pennsylvania. trict defendants award plaintiff’s against amount of dollar granted summary moved for and were Pension The defendant Pension Fund. judgment Mrs. Wolf had not ex- because now from the order of the appeals Fund failing remedies by hausted internal union liable to finding district court Mrs. Wolf. of request hearing to under Section 7.04 F.Supp. Plan. 512 first, claims that plain- The Pension Fund jurisdiction claim within the of tiff’s is not Fund Mrs. returned to Pension plaintiff the federal courts because failed to pursu- to internal union remedies exhaust second, remedies and exhaust internal union ant to 7.04. The Trustees con- Section by plaintiff’s that the waiver executed hus- Mrs. Wolf’s of appeal sidered the merits of was effective. band pension denial of bene- the Pension Fund’s therefore, unpersuasive; fits it denied II. opinion. her claim in an undated over this jurisdiction type Federal of and been denied the addi- Having sought 502(a), is 29 claim based on Section U.S.C. pension tional Pension Fund benefits 1132(a) (1976), pro the civil enforcement § ap- Plan’s internal union pursuant to the Retirement Employee vision of the Income procedure, again instituted peals plaintiff 29 (“ERISA”), Act of 1974 Security U.S.C. an action in federal district As be- court. 502(a) pro (1976). 1001-1381 Section §§ fore, what she had de- sought she been vides, that pertinent part, to she nied —the which brought (1) by civil be may action “[a] — entitled, if would have been the Pension to beneficiary (B) or recover participant — Fund considered Mr. Wolf’s waiver had not under terms of benefits due [her] spouse’s option effective. rights under plan, to enforce [her] [her] terms or to plan, clarify of the court, rules of the [her] Pursuant to the benefits under the terms rights future dispute and, on arbitrators considered this ” plan.... entered an November arbitration plaintiff, only award in favor of the but However, 1132(a)(1)(B). 29 U.S.C. § The against the Pension Fund. Local Un- generally courts have enter- federal Gehringer plain- ion and Richard defeated where the party tained such an action tiff’s claim them. The'arbitrators has failed exhaust bringing the action signed on two page found that the waiver Kross v. administrative remedies. See Inc., elimi- application Co., ineffective to 701 1238 Western Electric F.2d nate a Local payment plaintiff (7th Cir.1983); Challenger of 50% v. Union Bridge, the amount Mr. Wolf have received 1 of the Structur- No. International Workers, had he to execute the waiver. Iron 619 F.2d not elected al and Ornamental Bernard, held, however, v. 618 (7th Cir.1980); also Amato arbitrators (9th Cir.1980). at they precise were unable to arrive F.2d 559 Indeed, 502(a) plain- require the district court dismissed does not ERISA tiff’s exhaustion; initial action because she had failed it re- theory either issue or remedies, exhaust internal union specifical- only claim exhaustion. quires U.S.C. ly, ap- Section 7.04 of the Plan’s internal case, 1132(a). The Pension cites Fund no § peals procedure provides pertinent which nor are we aware of case which holds part: that a district court cannot decide a claim A Participant whose for bene- relying theory on different from denied, fits under this Plan has presented to the Trustees of a Pension whole part, or in is to be with provided All Fund. of the cases with which we are adequate notice in forth writing setting familiar concern themselves with denial, the specific reasons for such and whether the internal union remedies have shall have the the deci- appeal juris- finding been exhausted before federal sion, by request written filed with the appropriate. diction days receipt Trustees within 180 after case, were presented the Trustees such notice. con- shall be claim to the bene- plaintiff’s sidered and decided the Trustees. The fits to which her husband would have been decision shall be communicated to the but finding entitled for the Pension Fund’s days receipt claimant within 90 after Spouse’s the “Waiver of 50% Pension all pertinent evidence. Option” was effective. had an They oppor- Appendix (“App.”) plaintiff at 44a. The tunity to consider this claim fully and re- defect, however, cured this by appealing to *5 dispute. solve this Plaintiff’s claim has the Pension to pursuant Fund Section 7.04 consistent this throughout been case. She of the Plan. In she appeal requested should not be denied our consideration of the Board of Trustees to correct the claimed error having approved of Mr. Wolf’s this claim appli- simply because she relies on an cation disability pension. for a That re- theory alternate the waiver executed —that quest was denied. It was after Mrs. her by by inop- husband was its own terms Wolf had been the by denied Pension Fund erative, and therefore she is entitled to 50% the additional sought benefits she that she her pension of husband’s benefits from the initiated the second action before the dis- time of his death to the time of her death. trict court. recognized theory arbitrators first this during the
Although hearing defendant concedes that arbitration in Novem- Mrs. Wolf “did to the ultimately appeal ber, They relied on it in their deci- pursuant procedure,” Trustees to this it They recognized sion. that if Mr. Wolf contends that “plaintiff never raised employee Lehigh pri- Structural Steel during issue her appeal concerning the va death, or to his as the defendant Pension lidity of the waiver executed her hus argued Fund throughout proceedings band of spouse option.” 50% Brief for below, spousal option the waiver of the 50% Appellant Thus, at 18. defendant concludes was ineffective. The district court also plaintiff should not be permitted proceed finding plaintiff based its favor of on on the alternative theory 50% theory. waiver was ineffective because it would jurisdictional We believe our inquiry strip from opportunity the Trustees “the should not be focused the theory on on resolve disputes concerning a participant’s which the>district court plaintiff’s decided rights pension benefits.” Id. at 18-19. Instead, claim. inquiry focus of our disagree We with the defendant Pension plaintiff must be whether exhausted Fund’s argument and conclusion. Because her internal union remedies. In this case plaintiff, 7.04, pursuant to section sub she did exhaust the only internal union appeal mitted the to the Board of Trustees her; gave who remedies available to Mrs. Wolf upon acted appeal, and denied her we conclude that she the Trustees to decide opportunity exhausted her internal union remedies. pension whether her claim to benefits was
187 age decided with fi- shall be assumed that he has attained meritorious. The Trustees There- purpose calculating her lacked merit. 55 for the nality that claim fore, 502(a), plain- Disability under 29 amount of the Pension. The U.S.C. Section this final deci- tiff has the shall re- payable actuarially be benefit Having decided sion to the federal courts. the amount under a provided duced to we turn now to jurisdiction that we have whereby Husband-and-Wife Pension 50% claim. plaintiff’s the merits monthly such amount will be contin- death, ued, Qualified after his to the Sur-
III.
viving Spouse, unless another
form of
scope of review of a decision
provi-
benefit is elected under the
narrow;
of a
fund is
the trustees
of Article 6.
sions
of whether
“is limited to a determination
added).
(emphasis
provi-
at 35a
This
App.
and ca
arbitrary
the trustees’ actions were
alter-
clearly requires
sion
the election of an
Rosen v. Hotel and Restaurant
pricious.”
provided in Article 6 before
native scheme
Union,
& Bartenders
637 F.2d
Employees
the waiver of the Husband-Wife Pension
denied,
898,
592,
(3d Cir.),
454
596
cert.
U.S.
is effective.
scheme under
(1981). As the
102
tion 3.09 the Plan in terms of the speaks There is still another reason not
“effective of his Pension.” Disability date Second, considering operative Id. at 3.12 waiver at 35a. Section entitled Recovery by Disability “Effect of Pen- time Mr. Wolf’s death. 5.09 of sioner,” states that the Rules and Regulations of the Pension a Disability provides: Pensioner loses entitle- Plan
[i]f ment to his Security Disability Social Payable Benefit In Lieu of Husband-and- prior age 65, Benefit to attainment of Wife Pension Form. In those instances such fact reported writing shall be where the Husband-and-Wife Pension is the Board of Trustees within 21 days of effective, Participant signs not or the the date he receives notice from So- indicating election form his desire to Security cial Administration of such loss. Pension, waive the Husband-and-Wife he furnished, If such written notice is not he upon shall be entitled retirement to re- will, upon retirement, his subsequent provided ceive the be eligible for benefits for a period of six life, that, the remainder of his if except following months the date of his retire- the Participant receiving dies before ment. ... monthly payments, his benefit will con- Id. Reading at 35a-36a. Sections 3.09 and paid tinue to be designated his Benefi- 3.12 together, undeniably it is clear that the until ciary a total of 60 have payments distinguishes Plan between the effective paid to the Participant and his Ben- date of and the effec- However, eficiary. if an optional form of tive date of retirement. pension has become effective in accord- Even recognized the defendants that a payment ance with Article after disability pensioner may receive disability pensioner’s will death be made in pension as an active employee, but an active accordance with optional form. If employee may not also receive a retirement pensioner was receiving disability Therefore, benefit. person dis- receiving pension, guarantee 60-month shall not ability benefits need not be considered a apply. recipient Thus, of retirement benefits. *7 App. at 42a. (emphasis added). noted, district court that Fund ac- “[t]he knowledges that William G. Wolf never The district analysis court’s focuses on retired.” Id. at 74a. In its plain- answer to the last sentence of Section 5.09. It com- complaint, tiff’s the Fund indicated that pares the effect of Mr. Wolf’s election of a “William G. Wolf was an of Le- employee disability pension with the effect of his high prior Structural Steel to his death in having elected an early pension. retirement November, 1978.” Defendants’ Answer to The election of a disability pension offers Complaint, Id. at 20a. no protection to the widow pursuant premature Section 5.09 for the death of her
Consequently, it was not rational for the i.e., husband before 60 months of benefits Trustees to conclude that Mr. Wolf effec- have been received. election of an tively waived the spousal option 50% where the early pension waiver retirement and the effective takes effect at retirement and the spouse’s defendants execution of the waiver of a admitted that Mr. Wolf was still an employee pension protect at the time of his death. the widow under Sec- Individuals receiving retirement tion 5.09 in the event premature (as husband’s status as an active guaranteeing that due her by of her husband death retired) employee at the time be made.1 distinct from minimum of 60 payments death, his and had that of interpretation to protect intended 5.09 was thus the Plan been available for consideration spousal option exercising retiree the 50% Trustees, might the we by and attention of at payment least by guaranteeing have a different case before us. very retiree his payments to the and Yet, is expressly spouse. protection this by that greater importance Of even is pensioner to a such as applicable disability exhaus- condoning a relaxation internal evidence of Mr. Wolf. This is additional requirements, by and permitting tion the distinction between bypass proce- claimant as Mrs. Wolf to such pension contemplated by and retirement the to avoid resolution designed dispute dures Pension Fund. hold that Mr. Wolf To courtroom, encouraging the we will be spousal his option waived under the claimants in similar contexts to do other precluded terms that an alternative form of when we desperately same. In an era are for his wife and that excluded him provision seeking resolving alternative out forms of protection wife and his from the 60-month unwise disputes, appears improvident it and arbitrary capri- is not and guarantee ignore very to me to mechanism cious, unacceptable also and unjust but resolving in this dispute expressly case agree result. We therefore the dis- by agreement. For this provided for “waiver does not be- trict court reason, I respectfully dissent. participant while a is receiv- operative come he ing disability benefits before retires.” I 75a. App. at disputed. this case facts of are not IV. application his for dis- Mr. Wolf executed reasons', above we will For the affirm ability pension benefits on July court in favor of Doro- order it thereafter Richard and was filed Mr. Shopmen Wolf National Pen- thy G. Union. Gehringer, President the Local and with the di- sion Fund the amount Fund Wolf’s The Pension office received rections in that order. contained on June application disability for a responded office to Wolf That
GARTH, Judge, dissenting: Circuit his acknowledging receipt day, same Wolf obtain requesting and The district court in this case resolved the of his required verification forward reaching at decid- controversy issue disability Security from the status Social raised Mrs. Wolf ing question never Administration. Trustees. By before the Pension Fund so doing, usurped the Trustees’ to in- September 12, 1978, Fund On the Pension in the first in- terpret plan Mr. Gehringer, letter from received a Unfortunately, majority here stance. President, enclosing requested Union Thus, to approach. endorsed that same has Award Certificate. Two Security Social yet of the Fund have this date Trustees wrote to days later, the Fund Administrator or have them the presented to consider acknowledge receipt Mr. has issue of waiver that now been very his ap in connection with award certificate *8 Wolf’s dispositive of Mrs. claims. deemed disability pension. his On De plication for 1978, 1, the Fund Mrs. Wolf claimed before the Trus- cember Administrator Had his applica the Wolf letter that the waiver of 50% husband- notified Mr. tees 1, August had effective approved the tion been inoperative was under option wife However, No- Mr. Wolf had died on the 1978. regulations and Pension Plan terms By signing receive the waiver the waiver Mr. Wolf would effective execution of enables 1. The monthly having recipient his bene- on the date of retirement avoid effective the actuarially $197.60. instead of $304.80 it otherwise would be. benefit fit reduced as were made thwarted her husband’s intended Payments 1978. for vember November, through court August the months of selection. The denied defend- district Wolf had elected to only, since Mr. summary judgment ants’ motion for with- option provision1 and spouse waive the 50% opinion, out and the matter was submitted provide for the the Plan did not otherwise according to arbitration to local court rules. surviving spouse the payment An arbitration award entered on November upon the pensioner’s disability 22, 1982, Mrs. Wolf the against found for death. Fund, Pension for the Local and Union and Gehringer against Mr. Mrs. Wolf. Both suit in the Pennsylva- Mrs. Wolf brought appealed. Mrs. Wolf and the Fund On De- nia Pleas 1979. Court Common She 22, 1982, district had intended to cember the court entered alleged that her husband pension (with early judgment select an retirement in accordance with the arbitra- option), but Mr. guaranteed 60-month Geh- tion award: the district court issued President, ringer, negligent- the had Union Opinion entering judgment and Order pension applica- her husband’s ly completed Fund, against Mrs. Wolf the and in favor of she negligence, charged, tion. His was in the Local Mr. Gehringer against Union and applying for a and in Mrs. Wolf. The court district found that option. 50% That waiving spouse court negligent Mr. Gehringer was with re- by the action was removed defendants to gard filing (App. the Eastern District district court for 71a), Mrs. thereby rejecting Wolf’s main the district Pennsylvania, where court However, claim. court went on to con- summary judgment judge granted theory sider an alternative first raised ground that Mrs. defendants on the Wolf arbitrators, Mrs. Wolf before the that under had the fund’s internal failed exhaust Plan, purported the terms of the Mr. Wolf’s appeals procedure and internal union waiver of the option 50% husband-wife to her.2 Wolf v. remedies also available See concluded, ineffective. The court “after Fund, Pension Shopmen National Regulations careful review of the Rules and (E.D.Pa.1981). F.Supp. 1183-84 of the Fund the other and evidence in this Mrs. filed an appeal Wolf thereafter with operative case that the waiver was not Although Trustees of the Fund. plaintiff is entitled to a recovery albeit requisite filing period for 180-day appeals 74a). (App. reduced.” expired, had the Trustees nevertheless agreed appeal to consider her on the merits. II Mrs. the same repeated argument she provides had The Pension Plan pen- made before the court —that “[a] Mr. made an Gehringer writing had error com- sion must be for in applied filed Mr. pleting the form for Wolf—and she with the Trustees in advance of its effective 7.01; made arguments. no other Trustees App. date.” 43a. The Plan finding denied her based on their appeal provides further that “Mr. Wolf deliberate and calcu- made Participant application for ben- whose [a] lated for a apply Disability pen- decision to denied, efits under this Plan has been sion husband-wife pension and to waive the is to part, provided whole or in be option.” App.l4a. adequate writing setting notice in forth 23, 1982, denial, specific Mrs. Wolf reasons for such On June commenced defendants, again this action shall have the the deci- sion, arguing Gehringer’s request that Mr. error written filed with the had spouse option procedures 1. The waiver of the resulted Some of the available to Mrs. disability proceed greater under Section during Wolf were to 7.04 of the in a Wolfs Article XIX or Pension Plan or under Article paid than have lifetime had the XXI International Constitution spousal option been selected. Shopmen Pension Union. See Wolf v. National Fund, (E.D.Pa.1981). F.Supp. *9 1183 512
191 crucial, failure present after of Her to substantive days receipt within 180 Trustees issue) (the con- waiver to Trus- appeal argument such The shall be notice. by tees, decided Trustees. appropriate sidered and who constitute the admin- to the decision shall be communicated with charged interpreting the body istrative days receipt 90 after claimant within is, the first agreement in instance disputed [Emphasis evidence. pertinent all added] opinion, in fatal to her here. my Thus, 7.04; Plan 44a. App. Section Thus, I the district would reverse court’s itself an internal clearly provides procedure so that the judgment and remand Pension for of denials handling appeals pension with the Fund Trustees could deal “waiver” first instance. The case law in the so, By in the instance. I doing issue first regard appeals with is clear: where to such unnecessary find it to address district appeals an provides proce- fund Plan, court’s which interpretation dispute concerning dure in of a the event Plan, view, my subject is to initial inter- participant’s rights, internal Fund, by Pension with pretation defer- exhausted an procedure by ag- must be given interpretation by ence to that us. an insti- grieved before action is participant However, majority having undertaken for an improper tuted the fund task, I out that the point this should conclu- Wolf v. Nation- denial of benefits. is majority sion that reaches no Fund, Shopmen F.Supp. al Pension 512 note, means or even I for probable. certain 1182,1183-84 (E.D.Pa.1981). See also Chal- instance, that 3.08 of the pro- section Plan 1, lenger Bridge, Int’l v. Local Structural & who is Participant perma- vides “[a] Workers, 645, 619 Ornamental Iron F.2d 647 and shall be nently totally disabled entitled (7th Bernard, Cir.1980); Amato v. 618 F.2d ” retire on Pension if Disability to certain 559, Cir.1980); (9th 566-68 Scheider v. U.S. here—are conditions—not at issue satisfied (W.D. Corp., F.Supp. Steel 486 212-13 added). (emphasis language, contrary This Pa.1980); Co., v. Warner & Swasey Lucas construction, see majority’s Maj.Op. to the (E.D.Pa.1979). 1074-75 F.Supp. 16, leads that a at to the conclusion disabili- Cf. of America v. United Steelworkers claimant is indeed a retired claimant. ty Refining Co., Smelting American & majority effort of the read strained Cir.1981)(failure (3d losing F.2d support the Plan otherwise finds little labor party raise issue before arbitrator 5.03(b)3 either this section or in sections or precludes party raising from such issue 7.05(a)4, upon Trustees which the have re- proceeding in a to vacate the subsequent lied. award). arbitrator’s however, I previously, As stated would ease, Mrs. Wolf never this raised to reach Mrs. Wolf’s not the merits of waiver argument Trustees based on any interpreta- argument simple at this time for the reason itself, tion of the Plan it is yet the Trustees existing that she has failed to exhaust who are charged interpreting and ad- remedies appeals pro- available internal as Therefore, although that Plan. ministering giving Plan very Mrs. vided rise to technically availed herself of ex- alone I isting procedures dispute. as to her On this basis appeals internal claim, judgment reverse the court’s negligence she did ex- properly respectfully haust as to her remand. I her remedies waiver claim. therefore dissent. 5.03(b) benefits, Participant may subject provi- “A states: ceive reject (or payments the Husband-and-Wife Pension re- Benefit sions this Plan. shall be previous rejection) voke a at time before payable commencing day with the first pension.” the Effective Date of his following which month the month in the Par- ticipant has fulfilled all the conditions 7.05(a) 4. Section states: benefits, including filing entitlement eligible Participant A is bene- who receive application. day first is is Such what fits and makes under this Plan meant the “Effective Date” of Partici- accordance with the rules of this Pension pension. pant’s upon Plan entitled re- shall be retirement *10 FOR REHEARING PETITION SUR
IN BANC SEITZ, and ALDI- Judge, Chief
Before GIBBONS, HUNTER, ADAMS,
SERT, HIGGINBOTHAM, GARTH,
WEIS, SLO BECKER, Judges.
VITER and Circuit rehearing filed NA- petition for FUND, PENSION
TIONAL SHOPMEN having in the above-entitled case
appellant judges partici- who
been submitted all in the decisionof this and to
pated Court judges
other available circuit in the circuit service, judge no who regular active in the asked for having
concurred decision and a of the circuit
rehearing, majority
judges regular of the circuit in active ser- for having rehearing by
vice not voted banc, is petition rehearing
Court in
denied.
Judge grant petition Garth for the reasons offered in his
rehearing
dissent, particular the issue of exhaustion remedies. administrative America, Appellee,
UNITED STATES
v.
$55,518.05IN U.S. CURRENCY. Gary
Appeal of GOLDEN.
No. 83-5257. of Appeals,
United States Court
Third Circuit.
Argued Oct. 1983.
Decided Feb.