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Perkins v. Valley Clerk Trust

argued submitted san francisco california: August 11, 1993.


Appeal from the United States District Court for the Eastern District of California. D.C. No. CV-90-01370-EJG. Edward J. Garcia, District Judge, Presiding

Before: Sneed, Poole and Trott, Circuit Judges.


Appellants Roger and Stephanie Perkins appeal the district court's grant of summary judgment in favor of the Valley Clerks Health and Welfare Trust Fund ("Trust Fund"). The Perkinses had filed a suit under the Employee Retirement and Income Security Act (ERISA), 29 U.S.C. § 1001 et. seq., disputing the Trust Fund's determination their son Joey was not entitled to death benefits at the time of his death in September 1986. At that time Joey was employed by Safeway Stores, Inc. in Truckee, California. The Trust Fund determined Joey had not worked sixty-four hours during his first month of employment in June 1986, and thus did not become eligible for the Trust Fund's medical and death benefits until October 1, 1986, three weeks after his death. We affirm the district court's grant of summary judgment.



As an initial matter, we must address appellee's argument that we should affirm the district court's grant of summary judgment on the grounds the Perkinses failed to exhaust their administrative remedies before filing this suit. The benefit plan provisions require a notice of death claim be filed within ninety days of the covered death. The plan also requires proof of death, e.g., a death certificate, be provided to the Trustees. Once a claim is finally denied, the plan provisions require that a request for review of a claim be filed within sixty days of receipt of the denial notice. Appellees maintain the Perkinses failed to fulfill these requirements and thus their ERISA claim is barred by a failure to exhaust administrative requirements. Amato v. Bernard, 618 F.2d 559, 566-68 (9th Cir. 1980).

We decline to apply the exhaustion requirement for several reasons. Although this matter was argued by appellees before the district court, the court did not specifically rule on this matter. However, the court did examine the merits of the Perkins' claims and ruled against them in summary judgment. Although the court did not formally decide the exhaustion issue, its examination of the merits of this case leads us to conclude the court, for whatever reason, chose not to apply the exhaustion requirement to bar appellants' claims. The court may have tacitly decided this issue in the Perkins' favor or the court may have been merely exercising its discretionary authority to waive the exhaustion requirement. Horan v. Kaiser Steel Retirement Plan, 947 F.2d 1412, 1416 (9th Cir. 1991). In any event, this issue is not properly before this court, as appellees did not appeal from this aspect of the district court's decision, nor is there enough information in the record for this court to decide that issue sua sponte. Because we affirm the district court's grant of summary judgment on the other grounds articulated by the district court, we need not grapple with this issue.



Appellants first contend the district court erred in granting the Trust Fund's motion for summary judgment. We review de novo the district court's grant of summary judgment. Schneider v. TRW, Inc., 938 F.2d 986, 989 (9th Cir. 1991). We must determine, viewing the evidence in the light most favorable to the nonmoving party, whether there are any genuine issues of material fact and whether the district court correctly applied the substantive law. Id. "A party opposing a summary judgment motion must produce specific facts showing that there remains a genuine factual issue for trial and evidence 'significantly probative' as to any [material] fact claimed to be disputed." Steckl v. Motorola, Inc., 703 F.2d 392, 393 (9th Cir. 1983) (quotations omitted).

We generally review de novo a challenge to a denial of benefits under an ERISA plan. Jones v. Laborers Health & Welfare Trust Fund, 906 F.2d 480, 481 (9th Cir. 1990). However, we review such a denial for an abuse of discretion where "'the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan.'" Id. (quoting Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989)). We have reviewed the provisions of the Trust Agreement in this case and find that its provisions are nearly identical to the provisions of the plan reviewed by this court in Jones, in which the court found the language of the trust indicated discretionary authority and thus mandated discretionary review. Also, because the Board of Trustees of the Trust Fund consists of both management and union employees, there is no conflict of interest to justify less deferential review. Jones, 906 F.2d at 481. Therefore, we agree with the district court's application of the abuse of discretion standard.

The issue in this case is not, as appellants argue, whether there is any disputed issue of material fact that Joey Perkins worked the requisite sixty-four hours in June to become eligible for life insurance benefits on September 1, 1986. The issue instead is whether the Trust Fund abused its discretion in denying the appellants' death benefits in this case. "'Trustees abuse their discretion if they render decisions without any explanation, or construe provisions of the plan in a way that clearly conflicts with the plain language of the plan.'" Eley v. Boeing Co., 945 F.2d 276, 279 (9th Cir. 1991) (quoting Johnson v. Trustees of the Western Conf. of Teamsters Pension Trust Fund, 879 F.2d 651, 654 (9th Cir. 1989)). In order to constitute an abuse of discretion, the factual findings made by the Trust Fund in support of its decision must be clearly erroneous. Jones, 906 F.2d at 482.

Because Joey had been employed by Safeway for less than twelve months, he was covered by the eligibility provisions applicable to "new employees." These eligibility requirements for medical and death benefits under the Trust Fund read in relevant part:

After a new employee has been employed for one (1) month (of sixty-four (64) or more hours) the employee thereafter becomes eligible for benefits on the first day of the second month following any month in which the employee has worked sixty-four (64) or more hours. New employees are defined as employees who have not ...

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