Compliance December 20, 2004

Court: Attorney Awards for ERISA Case Not Merited

December 20, 2004 (PLANSPONSOR.com) - After a long legal battle, a pensioner is not entitled to attorney's fees from his fight to determine a correct date of inclusion in a pension plan, a federal court has ruled.

Reported by

Kip McDaniel

>US Magistrate Judge Ronald Ellis of the US District Court for the Southern District of New York ruled that although Alfred Perreca successfully convinced a jury that the original date of employment for pension service credit purposes was well before January 1, 1965, Ellis also found that this was not sufficient to award Perreca attorney’s fees.

>Perreca, who started as a truck driver for Sternberger Motor Corp. in 1959, was later promoted and included in the company’s pension plan for nonunion employees. Perreca says that this was in 1963, while the company and claims that this was in 1965 or 1966. Perreca also alleges that the company’s plan trustee, Michael Gluck, had told him that his service credits under the company’s plan would be dated back to 1959.

>Perreca retired at the age of 54 in 1984, and was told he would receive benefits at the 1959 rate starting when he was 65. Once this time came, he requested a lump-sum distribution. The company denied such a claim, and calculated Perreca’s benefits from 1966.

>Perreca took the company to court, where a summary judgment in favor of the company and Gluck was announced. The court ruled that an oral agreement with Gluck was not binding, and that the request for a lump-sum distribution was untimely. On appeal, the US 2nd Circuit Court of Appeals vacated a portion of the lower court’s ruling, finding that there was evidence that Perreca had been promoted in 1963. The court also requested that a lower court rule on whether credit should be given retroactive to 1959.

>Back in the lower court, a jury found that Perreca was promoted earlier than 1965 or 1966, but that he should not be credited with service back to 1959. Perreca then requested that he be awarded attorney’s fees since he was technically the prevailing party by having his benefits recalculated from the 1963 date. Ellis, however, denied such a request, asserting that the company did not act in bad faith. He also stated that the award would not deter other fiduciaries from performing similar acts.

>The case was Perreca v. Gluck, S.D.N.Y., No. 99 Civ. 1779.