Overby v. National Association of Letter Carriers ( 2009 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
)
HALLINE OVERBY, et al. )
)
Plaintiffs, )
)
v. ) Civil Action No. 06-1356 (RMC)
)
NATIONAL ASSOCIATION OF )
LETTER CARRIERS, et al. )
)
Defendants. )
)
MEMORANDUM OPINION
This is an action arising under the Employee Retirement Income Security Act of 1974
(“ERISA”), 29 U.S.C. § 1001 et seq. Halline Overby was a letter carrier with the United States
Postal Service and then an officer of the National Association of Letter Carriers (“NALC”) until his
retirement in February 1991. He and his wife Pauline sue NALC, the NALC Annuity Trust Fund
(“ATF” or “Fund”), and the Fund’s trustees because the Fund has denied that Mrs. Overby is eligible
for a survivor’s benefit upon Mr. Overby’s death. The Overbys married four months after Mr.
Overby retired and have now been married for over 17 years. The Fund insists, however, that the
rule for eligibility – which used to be that a spouse had to be married to an annuitant for at least one
year before the annuitant’s death – was changed in 1985 to require that a spouse be married to an
annuitant before retirement to be eligible for a survivor’s benefit. The Court finds that the Fund’s
trustees never properly amended the ATF to drop a survivor’s benefit for a spouse married to an
annuitant for at least one year at the time of the annuitant’s death, that such a benefit accrued to the
Overbys, and that Mrs. Overby is entitled to a survivor benefit upon Mr. Overby’s death.
I. FINDINGS OF FACT
The Court held a three-day bench trial in this case on June 11, 12, and 16, 2008.1
From the entirety of the record, including the demeanor and credibility of the live witnesses and the
credibility of witnesses otherwise presented, the Court makes the following findings of fact.
1. NALC is a national labor union which represents city delivery carriers employed by the
United States Postal Service. NALC sponsors a retirement plan called the ATF. The ATF
covers NALC’s national officers, national business agents, certain branch officers,
headquarters employees, and employees of NALC’s Health Plan, but not postal carriers.
Pls.’ Ex. 27 at P 130. At the end of 2004, the Fund had approximately 581 active
participants and 376 annuitants. Joint Pretrial Statement [Dkt. # 24] at 1-2.
2. The President of NALC serves as Plan Administrator for the ATF. Pls.’ Ex. 56 at P 424;
Pls.’ Ex. 57 at P 74. The Board of Trustees of NALC has oversight responsibilities for the
union, the ATF, the NALC Health Benefit Program, and the NALC Life Insurance Program.
Pls.’ Ex. 55 at 41. There are three trustees on the Board of Trustees, who are elected by
union members. The union also is governed by a 28-member Executive Council, consisting
of the three trustees, national officers and national business agents. Pls.’ Ex. 55 at 42.
3. It is undisputed that the plan document which governs the ATF allows the Board of Trustees
to adopt amendments to the plan but any proposed amendment must first be evaluated by the
ATF’s actuaries and, after adoption by the Board of Trustees, must then be approved by the
NALC Executive Council. Pls.’ Ex. 1 at P 92.
1
Citations to testimony at the evidentiary hearing are to the transcript of June 11, 12, and
16, 2008, and are cited as “Tr. I,” “Tr. II,” or “Tr. III” respectively, followed by a page number.
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A. The Survivor Annuity Provided by the ATF
1. One of the benefits offered by the ATF is a benefit to a surviving spouse equal to 60% of the
participant’s accrued benefit. Pls.’ Ex. 1 at P 87.
2. The parties agree that under the ATF in effect at least until May 15, 1985, the surviving
spouse was the “one to whom the Annuitant was married for at least one year immediately
preceding the Annuitant’s death, or is the parent of issue by such marriage.” Pls.’ Ex. 1 at
P 87. This is termed the “one-year-at-death” rule.
3. Although they dispute the legality of the change, the parties do not dispute that at some time
between 1985 and 1989, the ATF was changed to provide for different eligibility
requirements. Article V, Section 1(b) of the Fund now states:
Upon death of an Annuitant, the surviving spouse (if any) is
eligible for an Annuity of 60% of the Annuity being paid to
the Annuitant at the time of death, provided that the spouse
is one to whom the Annuitant was married for at least the
year immediately preceding and ending on the Annuitant’s
annuity commencement date, or is the parent of issue by
such marriage. Notwithstanding the foregoing, if the
Annuitant and the spouse were married within the year
before the annuity commencement date and were married
for at least one year ending on or before the Annuitant’s
death, that spouse shall be paid the Survivor Annuity as if
the spouse and the Annuitant had been married for the year
ending on the annuity commencement date.
Pls.’ Ex. 16 at NALC 34. This provision is termed the “marriage-at-commencement” rule.
4. Since the Overbys married four months after Mr. Overby commenced receiving an ATF
annuity, Mrs. Overby would be eligible for a survivor’s benefit only under the “one-year-at-
death” rule, which the Defendants insist has not been in effect since 1985.
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B. The Overbys and the Denial of Survivor Benefits to Mrs. Overby
1. Halline Overby was born in 1920 and became a letter carrier in 1960. Tr. I, 14-15. He was
elected president of his local union in 1969 and was elected to NALC’s Board of Trustees
in 1978. Tr. I, 16-17. Mr. Overby served as a trustee until 1981 and was Chairman of the
Board of Trustees in his final year. Joint Pretrial Statement at 33 (Stipulations), ¶ 1.
2. In April 1981, Mr. Overby was appointed Assistant Secretary-Treasurer of NALC, was
elected to that office in 1982, and continued in that capacity until 1990. Tr. I, 19-20. As a
national officer, Mr. Overby worked at NALC headquarters in Washington, D.C., from 1982
until 1990. Tr. I, 20. First as a trustee and then as a national officer, Mr. Overby served on
the NALC Executive Council from 1978 to 1990. Tr. I, 48. First as a trustee and then as a
national officer, Mr. Overby was a participant in the ATF from 1978 until his retirement. Tr.
I, 18-19.
3. The Overbys met in 1980 and began to live together in 1982. Tr. I, 84-85. Mrs. Overby
began working for the NALC Health Plan in October 1982 and remains in that position to
this day; as such, she is a participant in the ATF. Tr. I, 84. The Overbys were married on
May 30, 1991, almost four months after Mr. Overby’s retirement. Tr. I, 85-86.
4. On May 1,1986, Mr. Overby suffered a stroke. Tr. I, 85. Although he achieved a substantial
recovery through therapy, he continued to have problems with speech and mobility. Tr. I,
22-23. As a result, Mr. Overby did not seek re-election to his position as Assistant Secretary
Treasurer in 1990 and his term of office ended in December of that year. Tr. I, 23, 86.
5. As an ATF annuitant, Mr. Overby receives a monthly benefit of $2,936. Pls.’ Ex. 20.
Payment of this benefit commenced on February 1, 1991, when he was age 70 1/2. Pls.’ Ex.
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20. As of December 1980, when the annuity for his surviving spouse was calculated, it
would be $1,762 per month. Pls.’ Ex. 20 at P 26.
6. Before he left Los Angeles in 1981, Mr. Overby had separated from his first wife, Lucille
Overby. Tr. I, 20-21. Both parties to that first marriage initiated divorce proceedings in
1990, Mr. Overby in Virginia and Lucille Overby in California. Defs.’ Exs. 105a & 107.
The Virginia divorce became final in August 1990. Defs.’ Ex. 105e. Under a property
settlement signed on January 6, 1992, each party to the first marriage retained all employee
benefits, including retention by Mr. Overby of his ATF annuity benefits, although Lucille
Overby received a portion of Mr. Overby’s retirement and survivor benefits from the Postal
Service/Civil Service Retirement System. Ex. 107b; Tr. I, 27-29. The parties have stipulated
that when Mr. Overby was working out his property settlement with Lucille Overby in 1991,
his understanding of the survivor annuity rule under the ATF was that the “one-year-at-
death” rule was still in effect. Tr. I, 30-32; Tr. II, 120-121.
7. Mr. Overby became ill again in the late 1990s and Mrs. Overby became concerned for her
own financial stability. Tr. I, 90-91. She spoke to NALC President Bill Young in both 1998
and 2002 about checking the documents to ensure that the change in beneficiaries from
Lucille Overby to her had been recorded. Tr. I, 90-91.
8. In February 2003, Mrs. Overby inquired about the life insurance beneficiary designation
again while at the NALC accounting office. Misunderstanding the question, a senior
accountant responded that Mrs. Overby was not eligible to receive an ATF survivor’s benefit.
Tr. I, 91. This advice was confirmed by telephone the next day and was based on the fact
that the Overbys were not married when Mr. Overby began receiving his annuity payments.
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Tr. I, 91-92.
9. When Mrs. Overby called the office of union president Bill Young, she was assured by his
assistant that Mrs. Overby was eligible for the survivor annuity. Tr. I, 92. However, by letter
dated February 7, 2003, to Mr. Overby, Mr. Young stated that Mrs. Overby is not eligible for
the survivor annuity benefit because their marriage “occurred after you commenced your
retirement.” Pls.’ Ex. 30 at NALC 111. The letter included a memorandum from Richard
LaFollette, assistant administrator of the ATF, citing the “marriage-at-commencement” rule
and advising that “[t]he most important aspect of this rule is that the annuitant must be
married on the day the annuity commences,” and that Mrs. Overby was ineligible under the
rule because she married Mr. Overby “at least three months after his commencement date.”
Pls.’ Ex. 30 at NALC 112. Mr. Young further advised that he would check with legal
counsel “to determine if there is any flexibility in this regulation” and would call “once [he]
receive[d] that legal advice.” Pls.’ Ex. 30 at NALC 111.
10. Mr. Young then met with the Overbys and said that he had not even known that the
“marriage-at-commencement” rule existed until the Overbys called him. Tr. I, 44, 94.
11. Mr. Young had replaced Vincent Sombrotto as NALC’s president and ATF plan
administrator in December 2002. Tr. III, 7-8. Mr. Overby next contacted Mr. Sombrotto to
inquire about the change in rules. Tr. I, 44-45. Mr. Overby reports that Mr. Sombrotto said
that he had adopted the amendment in his capacity as plan administrator. Tr. I, 44-46. At
his deposition, Mr. Sombrotto denied the statement and stated that “the executive council
decided” to make the change. Pls.’ Ex. 52 (Sombrotto Dep.) at 44-45.
12. By letter dated March 29, 2003, Mr. Overby requested a review of the denial of survivor’s
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benefits to Mrs. Overby. Pls.’ Ex. 31.
13. The Board of Trustees denied Mr. Overby’s appeal at a meeting on April 23, 2003. Pls.’ Ex.
32. As Mr. Young advised Mr. Overby by letter dated May 7, 2003, “[b]ecause you were
married to your current spouse after your annuity commencement date, your current spouse
is not entitled to survivor benefits under the Plan.” Pls.’ Ex. 33 at P 6.
14. Thereafter, Mr. Overby contacted former trustees from the relevant time, i.e., George Davis,
James Souza, and James Worsham, and five former members of the Executive Council, i.e.,
John Marco, Lawrence Hutchins, Robert Buntz, Paul C. Davis, and Eugene McNulty. Pls.’
Ex. 34. Each of them subsequently wrote to Mr. Overby affirming that they had no
recollection of an amendment to the surviving spouse rule presented to the trustees at an ATF
meeting on April 19, 1985, as asserted by the Fund, or a vote by the Executive Council on
any such amendment on May 15-16, 1985. Pls.’ Ex. 34.
15. Through counsel, on February 8, 2006, Mr. Overby requested reconsideration of the denial
of benefits to Mrs. Overby, based on these letters. Pls.’ Ex. 65. The record is barren of
evidence that the plan administrator or current trustees ever investigated further. President
Young testified that he never saw the letters until after depositions in this case in May and
June of 2007. Tr. III, 50-51, 70-71.
16. This lawsuit was filed in August 2006.
C. The Adoption of a Changed ATF Survivor Benefit
1. Article IX, Section 1 of the ATF – entitled “Authority to Amend” – provides:
The provisions of the Plan may be amended at any time by the Board
of Trustees provided that the Trustees shall submit such proposed
amendments to the Fund’s Actuary for an evaluation and estimate of
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its cost, and adoption of amendments by the Trustees shall be subject
to the approval of the Executive Council of the NALC.
Pls.’ Ex. 1 at P 92.
2. Article IX, Section 2 of the ATF – entitled “Prohibited Amendments” – provides:
No amendment shall be adopted that operates to reduce the vested
rights of any Participant, former Participant, or Annuitant.
Pls.’ Ex. 1 at P 92.
3. Defendants assert that the Board of Trustees “adopted” a change to the ATF survivor benefit
at their meeting on April 19, 1985. The minutes of that meeting indicate that the trustees
were advised that a change was “required” by the Retirement Equity Act (“REA”) to
maintain the plan’s qualified status. Pls.’ Ex. 8 at P 325.
4. Ms. Jani Rachelson served as outside counsel to the ATF in 1985. Tr. II , 96-97. As counsel,
she attended the April 19, 1985 trustees’ meeting and took notes. Tr. II, 102-03. Ms.
Rachelson testified that the REA only required the addition of a survivor’s annuity for a
spouse married at the time of retirement and did not require a plan to subtract eligibility
based on the one-year-at-death rule. Tr. II, 122-25. Ms. Rachelson further testified that she
did not recall any consideration of whether elimination of the one-year-at-death rule would
violate the protection of accrued benefits afforded by ERISA. Tr. II, 154-155, 157. Nor
could she recall any consideration of the ATF’s provision prohibiting amendments “that
operate[] to reduce the vested rights of any Participant, former Participant, or Annuitant.”
Tr. II, 154; Pls.’ Ex. 1 at P 92.
5. Ms. Rachelson testified that she could not recall whether an actuarial evaluation of the
proposed amendment to the survivor annuity rule occurred before the April 19, 1985 trustees’
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meeting. Tr. II, 153. She further testified that she did not talk to any actuary about the
proposed amendment. Tr. II, 130.
6. Ms. Rachelson testified that the proposed amendment to the survivor annuity rule was not
drafted until after the April 19, 1985 trustees’ meeting and that a draft of the proposed
amendment was not distributed to the trustees at that meeting. Tr. II, 112, 150.
7. James Souza, a trustee who attended the April 19, 1985 trustees’ meeting, testified that the
proposed amendment to the survivor annuity rule “unequivocally” was “never voted on and
was never approved.” Tr. I, 127.
8. The amendment to the survivor annuity rule was not mentioned in two letters from Ms.
Rachelson drafted shortly after the April 19, 1985 trustees’ meeting advising ATF’s actuaries
and the union’s president, respectively, of the amendments adopted at that meeting. Pls.’ Ex.
5 (May 8, 1985 letter to the Wyatt Company) (“enclosing a draft of the three amendments
adopted at the [April 19, 1985 trustees’] meeting . . .”); Pls.’ Ex. 6 (May 13, 1985 letter to
NALC President Sombrotto) (“enclosing a set of the amendments to the Annuity Trust Fund
which were adopted at the [April 19, 1985] Trustees’ meeting . . .”). Ms. Rachelson could
not explain why the amendment to the survivor annuity rule was not included in those letters.
Tr. II, 143, 145-46.
9. The NALC Executive Council met on May 14-16, 1985 in Washington, D.C. Pls.’ Ex. 10.
The minutes of that meeting provide that “[t]he Council unanimously approved a set of
amendments to the NALC Annunity Trust Fund.” Pls.’ Ex. 10 at NALC 680. Defendants
assert that the Executive Council “approved” the proposed amendment to the survivor
annuity rule at that meeting.
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10. John Marco, a member of the Executive Council in 1985, testified that there was “never” a
discussion about “any reduction” in survivor’s benefits at that Executive Council meeting
and “had there been such a proposal, I would have voted against it.” Tr. II, 18-19.
11. James Edgemon, a member of the Executive Council in 1985, testified that the Executive
Council “[a]bsolutely [did] not” review the proposed amendment to the survivor annuity rule
at the May 14-16, 1985 meeting. Tr. I, 162.
12. Lawrence Hutchins, also a member of the Executive Council in 1985, testified that he did
not recall voting to amend the survivor annuity rule at that Executive Council meeting and
that “any resolution of this magnitude that would [a]ffect some of the individuals there, there
were some who were in the process of being divorced, some who had been divorced, they
would have had a keen interest in it.” Tr. II, 44.
13. Vincent Sombrotto, then-NALC President and Chairman of the Executive Council, testified
at a deposition that the proposed amendment was approved by the Executive Council. Pls.’
Ex. 52 at 73.
II. LEGAL STANDARDS
“An individual who is a potential beneficiary, regardless of whether he or she
becomes an actual beneficiary, has standing to bring an ERISA suit.” Muller v. First Unum Life Ins.
Co., 23 F. Supp. 2d 231, 234 (N.D.N.Y. 1998). Thus, Plaintiffs have standing despite the fact that
Mr. Overby, the Annuitant, is not deceased.
The parties disagree as to which of two standards of review under ERISA should be
applied by the Court. Plaintiffs argue that the standard of review should be de novo. Defendants
argue that the standard of review should be abuse of discretion. The Court finds that the precise
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standard of review need not be determined because the trustees’ failure to comply with the Fund’s
formal amendment procedure is unlawful under either standard of review. See Wagener v. SBC
Pension Benefit Plan-Non Bargained Program, 407 F.3d 395, 403 (D.C. Cir. 2005) (declining to
decide which standard of review to apply to a committee’s employee benefit plan interpretation that
“fails whether we apply de novo review or a deferential standard of review”). “[E]ven under a
deferential standard of review, Plan fiduciaries cannot claim deference for an interpretation of the
Plan . . . that contradicts the Plan’s plain language.” Id. at 405.
III. ANALYSIS
ERISA Section 402(b)(3) requires that every employee benefit plan “provide a
procedure for amending such plan, and for identifying the persons who have authority to amend the
plan.” 29 U.S.C. § 1102(b)(3). “[T]he literal terms of § 402(b)(3) are ultimately indifferent to the
level of detail in an amendment procedure, or in an identification procedure for that matter.”
Curtiss-Wright Corp. v. Schoonejongen, 514 U.S. 73, 80 (1995). “The provision requires only that
there be an amendment procedure, which here there is.” Id. (emphasis in original). “A ‘procedure,’
as that term is commonly understood, is a ‘particular way’ of doing something, or a ‘manner of
proceeding.’” Id. (citations omitted). “Requiring every plan to have a coherent amendment
procedure serves several laudable goals[,]” including “increas[ing] the likelihood that proposed plan
amendments, which are fairly serious events, are recognized as such and given the special
consideration they deserve.” Id. at 82.
ERISA “follows standard trust law principles in dictating only that whatever level of
specificity a company ultimately chooses, in an amendment procedure or elsewhere, it is bound to
that level.” Id. at 85. “An employer may, of course, retain the unfettered right to alter its promises,
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but to do so it must follow the formal procedures set forth in the plan.” Inter-Modal Rail Employees
Ass’n v. Atchison, Topeka & Santa Fe Ry. Co., 520 U.S. 510, 515-16 (1997). Accordingly, a
proposed amendment not done in accordance with a plan’s amendment procedure is ineffective and
does not amend a plan. See id. at 516 (“the ‘cognizable claim [under ERISA] is that the company
did not [amend its welfare benefit plan] in a permissible manner’”) (quoting Curtiss-Wright Corp.,
514 U.S. at 78) (alterations in original); see also Depenbrock v. Cigna Corp., 389 F.3d 78, 82 (3d
Cir. 2004) (“an amendment is ineffective if it is inconsistent with the governing instruments”); Shaw
v. Conn. Gen. Life Ins. Co., 353 F.3d 1276, 1283 (11th Cir. 2003) (“Having created a particular
procedure, it seems evident to us that the parties . . . must follow that procedure in order to create
enforceable amendments”); Coleman v. Nationwide Life Ins. Co., 969 F.2d 54, 58-59 (4th Cir. 1992)
(“any modification to a plan must be implemented in conformity with the formal amendment
procedures[;] informal written modifications to a plan . . . are of no effect”); Miller v. Coastal Corp.,
978 F.2d 622, 624 (10th Cir. 1992) (“An employee benefit plan cannot be modified . . . by informal
communications, regardless of whether those communications are oral or written, [because] ERISA
requires all modifications to an employee benefit plan to . . . conform to the formal amendment
procedures”) (citations omitted).
The ATF’s formal amendment procedure provides for three conjunctive conditions
precedent to a valid amendment:
(1) The trustees must first submit the proposed amendment to the Fund’s actuaries
“for an evaluation and estimate of its cost;”
(2) The trustees must then “adopt” the proposed amendment; and
(3) NALC’s Executive Council must then “approve” the proposed amendment.
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Pls.’ Ex. 1 at P 92. The proposed amendment was to substitute the “marriage-at-commencement”
rule required by the REA for the “one-year-at-death” rule, so that the former rule would replace and
supersede the latter rule. Thus, in order to have legal effect, the proposed substitution of rules must
have been (1) submitted to the Fund’s actuaries “for an evaluation and estimate of its cost,” (2)
“adopted” by the trustees, and (3) “approved” by the Executive Council.
There is no evidence in the record that the trustees ever submitted the proposed
substitution of rules to the Fund’s actuaries before they assertedly “adopted” it, as the first step of
the ATF’s amendment procedure requires. The entirety of the relevant portion of the minutes of the
April 19, 1985 trustees’ meeting, at which Defendants assert the proposed amendment was
“adopted,” state as follows:
It was noted that Article V, Section 1(b) of the Plan currently
provides that the spouse’s survivor annuity is payable upon the
Annuitant’s death to the spouse at the time of death, while under REA
the annuity must be payable to the spouse who was married to the
Annuitant for the year prior to the annuity starting date. If the
marriage took place within the year before the annuity starting date,
however, REA provides for payment to that spouse, provided the
spouse and the Annuitant were married at least one year before the
Annuitant’s death. Accordingly, a motion was approved amending
the Plan to delete the current one year before death rule and to replace
it with the REA one year before annuity commencement rule, subject
to the exception noted above for marriages within that year.
Pls.’ Ex. 8 at P 325, ¶ 7.a. The minutes make no reference to an actuarial evaluation or estimation
occurring at that meeting with respect to the proposed substitution of rules. The omission of such
an actuarial evaluation and estimation is telling when juxtaposed against the next subparagraph of
those same minutes, in which it is recorded that before the trustees adopted a survivor’s benefit for
spouses of terminated vested employees, as the REA also purportedly required, “[t]he Actuaries
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advised that the cost of providing the maximum survivor benefit to the terminated vested Employee,
i.e. 60% commencing immediately, is estimated at .1% of payroll.” Id. at P 326, ¶ 7.b. It also is
telling that the minutes of the December 5, 1985 trustees’ meeting specifically mention that the
Fund’s actuaries undertook an actuarial evaluation at that meeting, though not of the “marriage-at-
commencement” rule. See Pls.’ Ex. 12 at NALC 701, ¶ 6. Given that when these actuarial
evaluations occurred at trustees’ meetings they were reflected in the minutes, the omission of any
reference in the minutes to an actuarial evaluation with respect to the “marriage-at-commencement”
rule is strong evidence that one never occurred. This is especially so considering that Defendants
rely on those same minutes as evidence that the trustees “adopted” the proposed amendment. See
Defs.’ Proposed Findings of Fact ¶ 17.
That no actuarial evaluation or estimation ever occurred with respect to the
“marriage-at-commencement” rule prior to its asserted “adoption” is further established by the
testimony adduced at trial. Ms. Rachelson, outside counsel to the Fund at the time and the person
who prepared the minutes of the April 19, 1985 trustees’ meeting, testified that “[t]he minutes
accurately reflect what happened” and that she did not “know how we would determine what
happened any other way.” Tr. II, 162. She further testified that the actuaries were “absolutely”
present at the April 19, 1985 trustees’ meeting and that they “absolutely” participated in that
meeting. Tr. II, 164. However, when asked about whether the actuaries had been consulted about
the proposed addition of the “marriage-at-commencement” rule, she testified that she had not “talked
to any actuary about this subject” (Tr. II, 130) and that she had “no current recollection” about
whether the proposed amendment was submitted to the Fund’s actuaries. Tr. II,153. Her notes of
the April 19, 1985 trustees’ meeting, like the minutes of that meeting, reflect that the “marriage-at-
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commencement rule” was discussed but omit any reference to an actuarial evaluation or estimation
having occurred with respect to that rule. See Pls.’ Ex. 4 at NALC 634.
Defendants have not pointed to, and the Court cannot find, any evidence in the record
showing that the proposed amendment was submitted to the Fund’s actuaries for an evaluation and
estimation prior to its purported “adoption” by the trustees. Instead, Defendants argue that (1) the
trustees cured any procedural deficiencies by subsequently ratifying the minutes of the April 19,
1985 trustees’ meeting, and (2) Plaintiffs are estopped from claiming that procedural deficiencies
nullified the proposed amendment because Mr. Overby assertedly voted to adopt it as a member of
NALC’s Executive Council in 1985.2 Both arguments miss the mark, however, because neither the
Board of Trustees’ asserted “adoption” nor the Executive Council’s asserted “approval” could cure
the absence of an actuarial evaluation and estimation. It is axiomatic that a deficiency can only be
cured by the person(s) who have the power to cure, and here those persons were the actuaries.
Accordingly, the Court finds that Defendants failed to comply with at least the first
step of the ATF’s amendment procedure, and concludes that the ATF was never legally amended to
substitute the “marriage-at-commencement” rule for the “one-year-at-death” rule. Therefore, the
Court need not decide whether the proposed amendment was properly “adopted” by the trustees and
“approved” by NALC’s Executive Council, nor whether it violates any other provision of ERISA.
2
Defendants waived an estoppel defense by failing to plead it. Estoppel is an affirmative
defense that “must [be] affirmatively state[d].” Fed. R. Civ. P. 8(c)(1). Defendants failed to
affirmatively state estoppel in their Answer. See Dkt. # 3. “[F]ailure to plead an affirmative
defense generally waives the defense.” Camalier & Buckley-Madison, Inc. v. Madison Hotel,
Inc., 513 F.2d 407, 420 n.92 (D.C. Cir. 1975).
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IV. CONCLUSION
For the foregoing reasons, judgment is entered in favor of Plaintiffs. A memorializing
Order accompanies this Memorandum Opinion.
DATE: February 27, 2009 /s/
ROSEMARY M. COLLYER
United States District Judge
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