By: Daily Record Staff//November 9, 2011
By: Daily Record Staff//November 9, 2011//
U.S. Court of Appeals for the Second Circuit
Pension Plan Interpretation — Class Certification
Novella v. Westchester County, et al.
Judges Walker, Sack and Koeltl
Background: The plaintiff, a retired carpenter, became injured on the job just prior to his retirement. He applied for a disability pension, but discovered that his benefits were calculated using two different rates over the course of his career. The lower rate used for the years between 1962 and 1981, resulted in a lower monthly pension payment for the plaintiff. The plaintiff brought a class action alleging multiple violations of the Employee Retirement Income Security Act. The district court granted summary judgment for the plaintiff, finding that the defendants had erred in calculating his disability benefits. Upon class certification, the court only certified a narrower class of disability pensioners as the statute of limitations for absent class members’ claims did not accrue until each class member affirmatively challenged the defendants’ two-rate class benefit calculation and was rebuffed. The court then granted summary judgment to the plaintiff. Both parties appealed.
Ruling: The Second Circuit held that the defendants’ use of two rates in calculation disability pensions was not supported in the language of the fund’s controlling documents. The Second Circuit, however, found that the district court had erred in identifying the time at which a claim for miscalculation of benefits accrues. The court determined that accrual ought to be calculated from the time when the pensioner knew or should have known that his benefits were miscalculated. The court vacated the class certification, the judgment in favor of the class, and remanded the case for further proceedings.
Edgar Pauk for the plaintiff-appellee-cross-appellant; John H. Byington III, of Archer, Byington, Glennon & Levine LLP for the defendants-appellants-cross-appellees