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December 15, 1960

Andrew SZUCH, Plaintiff,
John L. LEWIS, Josephine Roche, & Henry G. Schmidt; Trustees of the United Mine Workers of America Welfare and Retirement Fund, Defendants

The opinion of the court was delivered by: TAMM

Andrew Szuch brings this action to require payment to him of a pension from a trust fund set up by the National Bituminous Coal Wage Agreement of 1950 and administered by defendant trustees. Plaintiff alleges, and defendants deny, that plaintiff meets the requirements for such pension as set up by the trustees in their Resolution Number 10. (Plaintiff's complaint alleges that he is qualified under trustees' Resolution No. 20, which varies somewhat from Resolution No. 10, which plaintiff introduced as his Exhibit one and which he now appears to rely upon. Resolution No. 20 is applicable to the 1947 Coal Wage Agreement trust fund.)

Plaintiff was injured in a mining accident in February, 1941 and remained on workmen's compensation until February, 1949. To qualify for a pension, plaintiff must have, according to the terms of Resolution No. 10, 'retired by permanently ceasing work in the Bituminous Coal Industry after May 28, 1946 and have been employed for a period of at least one year in the Bituminous Coal Industry immediately preceding his retirement.' Plaintiff contends that his status as an employee of the C. A. Hughes Co., in whose mine he was injured, was not altered by his receipt of workmen's disability compensation and that such status, therefore, continues until February, 1949.

 Plaintiff made application for a pension on October 24, 1950. It was denied on March 14, 1951, and suit was filed February 11, 1959.

 The first question presented is whether plaintiff's action is barred by the statute of limitations or by laches.

 '* * * and no action the limitation of which is not otherwise specially prescribed in this section shall be brought after three years from the time when the right to maintain such action shall have accrued.' Title 12, § 201, D.C.Code.

 The question of the applicability of this section is not affected by the question of whether plaintiff's cause of action arose when he became eligible for a pension, or when the trustees refused the pension, since his action was filed more than three years after each event. In considering laches or the statute of limitations, the nature of the right plaintiff seeks to enforce is important.

 The nature of the rights of would-be pensioners under the United Mine Workers' pension fund has been interpreted in two different manners by this Court, i.e., as a contractual right and as an equitable right as beneficiary of a trust. The right was held to be contractual in Hobbs v. Lewis et al., D.C.1958, 159 F.Supp. 282, 287, (Pine, J.). In this case, the Court felt that the one seeking a pension does so as a third-party beneficiary to the Coal Wage Agreement and that when he meets the requirements set up by the trustees, he has a contractual right to a pension. The Court further held that the action of the trustees in denying a plaintiff's eligibility was reviewable by the Court even in the absence of fraud or bad faith. Following this view, the Court said:

 'It thus becomes unnecessary to discuss the defense of the statute of limitations, also raised as a defense because the payment of a pension is a continuing obligation and no back payments before institution of suit are included in the findings herein, for the reasons stated.'

 In Kennet v. United Mine Workers, D.C.1960, 183 F.Supp. 315, (Holtzoff, J.), the Court adopted the contractual view. The Court there, feeling that the right to a pension when the eligibility requirements are met is part of the compensation of a coal worker, stated that the employee has a right to enforce the contract as a third-party beneficiary. In this case, the question of the statute of limitations was not raised, but the area of judicial review was held to be 'erroneous decisions of the trustees as to questions of law and to a limited extent as to questions of fact.' The Court would also review to determine if substantial evidence supported the decisions of the trustees and to determine that the acts of the trustees were not arbitrary or capricious.

 Van Horn v. Lewis, D.C.1948, 79 F.Supp. 541, (Goldsborough, J.) contains dicta that the trust fund set up under the 1947 Coal Wage Agreement was a charitable trust. This view was followed in Ruth v. Lewis, D.C.1958, 166 F.Supp. 346 (Youngdahl, J.). The Court in this case held the plaintiff to be in the position of the beneficiary of a noncharitable trust and not the holder of a contractual right. The Court's function was held to be to determine if the trust was operated within the terms of the agreement, if the benefits were properly distributed in order to protect beneficiaries from arbitrary and capricious action, and to insure the proper administration of the fund by the trustees.

 The United States Court of Appeals for the District of Columbia has not considered this question, but in Lewis v. Benedict Coal Corp., 6 Cir., 1958, 259 F.2d 346, the Court held the pension trust to be similar in some respects to charitable trusts. It was held that as in a true charitable trust the actual beneficiaries of the fund are not ascertainable. Present employees, who are potential beneficiaries, may have a present 'interest' such as to enforce compliance with statutory requirements for the administration of the fund, but the Coal Wage Agreement did not contemplate vesting an employee with a present interest in the trust's res.

 This Court adopts the view of Judge Youngdahl in Ruth v. Lewis, supra, and of the Court of Appeals of the Sixth Circuit. The language of the Coal Wage Agreement clearly sets out the establishment of a trust fund for the payment of pensions and other benefits, with discretion in the trustees to establish the detailed basis for payment from the fund.

 'Trustees shall have full authority, within the terms and provisions of the Labor Management Relations Act * * * with respect to questions of coverage and eligibility, * * *' National Bituminous Coal Wage Agreement of 1950.

 As in a charitable trust, this trust has a fund set up for the benefit of a specific group of beneficiaries -- not all of whom will benefit. The trustees in exercise of their discretion established requirements which raise the individual beneficiary from the unascertained group. The trustees may change these requirements and must interpret them. Resolution No. 40 is an example of such action. It is difficult to see how a basis for a contractual right can be found prior to the time a pension is awarded. The third-party beneficiary theory is applicable to labor contracts, but it seems that the only contractual rights to be enforced here are that the trustees should administer this fund for the stated purposes and within the bounds of proper fiduciary discretion. The requirements established by the trustees have undoubtedly left many persons who were employed in the coal industry when this contract was negotiated and signed without any conceivable basis for claiming a pension, yet it would be difficult to find that any of them had a contractually-based right to seek a pension. The same ...

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