Date: 08-15-2022

Case Style:

Walter Dean and Dean Wollenzien v. National Production Workers Union Severance Trust Plan, et al.

Case Number: 21-1872

Judge: Jackson-Akiwumi

Court: United States Court of Appeals for the Seventh Circuit on appeal from the Northern District of Illinois (Cook County)

Plaintiff's Attorney:

Defendant's Attorney:

Description: Chicago, Illinois labor lawyers represented Plaintiffs who sued Defendants on Employee Retirement Income Security Act of 1974 (ERISA) violation theories.

Walter Dean and Dean Wollenzien sued their former pension plans, the plans’
trustees, and the plans’ administrator for various claims un-
der the Employee Retirement Income Security Act of 1974—
more commonly known as ERISA. The district court dis-
missed the suit, and plaintiffs now appeal.

* * *

Plaintiffs are employees of Parsec, Inc. Until 2017, the Na-
tional Production Workers Union, Local 707, represented
them. As members of the NPWU, plaintiffs participated in the
NPWU’s Severance Trust Plan (the “Severance Plan”) and its
401(k) Retirement Plan (the “401(k) Plan,” together “the
Plans”). These plans are multiemployer defined-contribution
plans, where each participant has their own account and is
entitled solely to the contributions to that account and any in-
vestment gains minus expenses. Parsec contributed to the
Severance Plan until 2012 and then to the 401(k) Plan from
2012 until 2017.
In 2016, the Severance Plan settled a lawsuit with the De-
partment of Labor related to mismanagement of its assets and
certain loans. The settlement agreement required the Sever-
ance Plan to pay back the loans and approved the current ad-
ministrators of the Severance Plan. The agreement also ap-
proved the Severance Plan’s use of its third-party accounting
firm, Jeffrey W. Krol & Associates.
In 2017, Parsec employees voted to decertify the NPWU
and elect Teamsters Local 179 as their new bargaining repre-
sentative. Before the election, the Teamsters told Parsec em-
ployees that their retirement accounts would roll over to the
Teamsters’ plan. But NPWU trustees and fiduciaries told
No. 21-1872 3
them otherwise: If employees switched to the Teamsters, their
retirement accounts would become inactive but remain under
NPWU control. After the election, Parsec—which was the
only employer currently contributing to the NPWU’s 401(k)
Plan—stopped contributing to it and began contributing to
the Teamsters’ plan. And as the plan’s trustees had warned,
the Parsec employees’ accounts became inactive but remained
under the plan’s control.
Plaintiffs, meanwhile, reviewed the Plans’ annual disclo-
sures and discovered what they believed to be excessive ex-
penses, including accounting fees paid to Krol & Associates,
undisclosed payments to NPWU officers and their relatives,
and high salaries for at least one trustee, Vincent Senese, and
the plan administrator, James Meltreger.
Plaintiffs requested copies of various documents from the
Plans, which they were entitled to under §§ 102, 104, and 105
of ERISA. The Plans responded two months later but did not
provide some of the requested documents, including a “sum-
mary plan description” for the 401(k) Plan, which simply did
not exist.
In June 2018, plaintiffs sent a letter requesting that the
Plans roll over their accounts to the Teamsters’ plan. The
Plans refused and directed plaintiffs to file a claim for distri-
bution of benefits. Two months later, plaintiffs sent a second
letter asking for a rollover, which the Plans answered the
same way. Finally, in October 2018, plaintiffs submitted a
third letter, which they cast as a “formal” rollover claim,
where they requested a rollover or, in the alternative, plan
documents like the settlement agreement with the Depart-
ment of Labor. Plaintiffs supplemented that letter in February
2019. Defendants never responded.
4 No. 21-1872
Plaintiffs then filed a putative class action against the
Plans, the Board of Trustees and the five individuals on it, in-
cluding Senese, and the plan administrator, Meltreger. Plain-
tiffs sought the rollover of their accounts to the Teamsters’
plan under § 502(a)(1)(B) and § 502(a)(3) of ERISA. They fur-
ther alleged that defendants had breached their fiduciary du-
ties or otherwise violated ERISA by not amending the Plans
to allow rollover, by failing to disclose conflicts of interests
with NPWU employees on their payroll, and by paying exces-
sive expenses and salaries. Finally, plaintiffs alleged that Mel-
treger had failed to timely provide information to which they
were entitled.
The district court dismissed the suit for failure to state a
claim because the Plans terms did not require rollover and the
allegations failed to show that the trustees breached their fi-
duciary duties. Originally, the district court dismissed the
breach of fiduciary duties claims for excessive administrative
fees and the claims for the untimely provision of information
without prejudice and gave plaintiffs leave to amend. Plain-
tiffs chose to stand on their allegations and did not file an
amended complaint, so the district court converted its dismis-
sal of all counts to dismissal with prejudice. This appeal fol-
lowed.

See: http://media.ca7.uscourts.gov/cgi-bin/rssExec.pl?Submit=Display&Path=Y2022/D08-15/C:21-1872:J:Jackson-Akiwumi:aut:T:fnOp:N:2918272:S:0

Outcome: For the reasons stated above, we A FFIRM in part and
VACATE in part the district court’s decision and R EMAND for
further proceedings. We vacate the district court’s dismissal
of plaintiffs’ claim that the Severance Plan paid unreasonable
salaries to trustee Vincent Senese and plan administrator
James Meltreger, as well as the court’s dismissal of plaintiff’s
claim that Meltreger failed to furnish certain requested infor-
mation. We affirm the district court’s dismissal of the remain-
ing claims.

Plaintiff's Experts:

Defendant's Experts:

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