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

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

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.