Widow’s bid for “preretirement spouse pension” barred by prior court win

 

The widow of a pension fund participant who died soon after winning his lawsuit for retirement benefits could not thereafter claim that her husband had in fact not retired before his death, which would have entitled her to a “preretirement surviving spouse pension” under the plan, the U.S. Court of Appeals in New Orleans (CA-5) has ruled. Under the principles of judicial estoppel the widow could not challenge the outcome of the earlier proceeding.

Background

When the participant took early retirement in 2006, he and his wife agreed to accept a “Single-Life Pension with 5-Years Certain Payments.” The participant would receive benefits for life, but the wife would be entitled to additional benefits only to the extent the participant died before receiving 60 total monthly payments.

The fund’s trustees subsequently suspended the participant’s benefits pending the outcome of litigation over whether the participant had engaged in “disqualified employment” under the terms of the plan. The participant won the dispute in district court, but died while the trustees’ appeal was pending.

Next, the widow asked the trustees for a “preretirement surviving spouse pension,” which is available under the plan if an otherwise qualified participant “dies before his Effective Date of Benefits.” The trustees sought a declaratory judgment from the district court that the widow was not entitled to the preretirement pension, while the widow filed a counterclaim for benefits under ERISA §502(a)(1)(B).

Note: The appellate court agreed that the lower court had subject matter jurisdiction over the trustees’ declaratory judgment action and the trustees had standing to bring the claim. That said, it questioned whether the trustees, as ERISA fiduciaries, could bring a declaratory judgment action against an ERISA beneficiary relating to benefits. Thus, it decided the merits of the appeal based upon the widow’s counterclaim for benefits.

Judicial estoppel

The district court did not abuse its discretion when it concluded the widow was judicially estopped from challenging the earlier decision. Having been substituted for her husband in the prior litigation as executrix of his estate, she accepted benefits under his retirement pension, which had an Effective Date of Benefits of January 1, 2006, prior to his death. Thus, she was ineligible for the “preretirement surviving spouse pension.” Instead, the fund only owed the widow $36,722 in remaining benefits under her husband’s retirement pension.

Source: Board of Trustees of the Plumbers and Pipefitters National Pension Fund v. Fralick (CA-5).

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