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DETROIT AREA INDUSTRIES - UAW RETIREMENT PLAN

In re Disability Applications of
WILLIE JACKSON, JEREMIAH WALKER,
and ALBERT BARBEE.
________________________________________/

DECISION OF THE IMPARTIAL CHARIMAN


May 4, 1984
After a Meeting of the Board of Administration
Held April 19, 1984

Union Board Members Present: Employer Board Members Present:

Edward M. Angeluski Robert R. Dow


Joseph S. Halapi William E. Bray
Robert L. Lent
Background

The claimants, Willie Jackson, Jeremiah Walker and Albert Barbee, are

former employees of Wessels Company which withdrew from the Plan and

placed all its employees on permanent layoff as of September 30, 1979. In a

lengthy Resolution dated December 14, 1979, the Board of Administration set

December 31, 1979 as the date the Plan should be deemed terminated with

respect to Wessels' employees and the date as of which Wessels' portion of Plan

assets should be segregated. Very serious issues regarding Wessels' withdrawal

were not resolved until February 9, 1982. In the interim, benefit application

forms were not given out to Wessels' participants but the current disability

claimants somehow managed to obtain forms and filed them about November

16-17, 1981. The Plan's administrative agent transmitted the claimants' files to

M. Colton Hutchins, M.D., Plan physician, under cover letter of December 16,

1981, in which the administrative agent indicated that the claimants must have

been disabled since December of 1979 in order to qualify for benefits.

Initially, all of the medical evidence presented was unsatisfactory either

because it did not establish Permanent and Total Disability within the meaning

of the Plan or because the date of PTD was not established. Numerous requests

for additional information were made by the Plan's administrative agent, which

went unanswered. In the Spring of 1983, claimants Jackson and Walker retained

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an attorney to press their claims.1 By letter dated April 10, 1983, Plan counsel

corresponded with these claimants' attorney. No response was received to Plan

counsel's letter, except for a medical opinion on Willie Jackson transmitted June

15, 1983. During the pendency of the applications, the Board began paying

Albert Barbee early retirement benefits, since he already was over 60.

At a meeting held April 19, 1984, the Board considered the applications

of Messers. Jackson, Walker and Barbee for disability pensions but deadlocked

over their disposition. In order to break the deadlock, the parties selected an

Impartial Chairman pursuant to Article X, §1. The Impartial Chairman gave

immediate oral decisions in each case so that the claimants could be notified at

once, but the Board requested a formal written opinion.

I. Application of Willie Jackson

The pertinent documents in the Jackson file are the following, in


chronological order:

J1. 6/3/80 Workmen's Compensation Agreement to Redeem Liability


indicating injuries 2/78, 9/79, 9/21/79 and last day worked 10/21/79.

J2. 6/5/80 Workmen's Compensation Redemption Order indicating injuries


2/78, 9/79, 9/21/79 and last day worked 10/21/79.

J3. 4/27/81 Letter from F. Barry Abrams, D.O., Jackson's doctor, opining
PTD but setting no date.

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The same attorney also represented Vernon McDuell, S.S. No. [xxx-xx-xxxx], whose case is not before the
Impartial Chairman.

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J4. 7/7/81 Social Security disability award indicating period of disability
began 1/31/80.

J5. 11/17/81 Application for disability pension stating last day worked
9/21/79 and giving termination date of 1/1/80 and disability as reason for
termination.

J6. 4/5/82 Medical evaluation by Dr. Abrams setting PTD as of 1/31/80.

J7. 4/19/82 Letter to administrative agent from Plan physician opining PTD
but setting no date.

J8. 8/16/82 Letter to administrative agent from Plan physician determining


PTD as of 1/31/80.

J9. 6/14/83 Letter from Dr. Abrams opining PTD as of 9/21/79.

J10. 7/25/83 Letter to Plan counsel from Plan physician reads in pertinent
part:

"All of the information, from which a decision is being made, is the


opinion of this applicant's personal physician The information given by
his physician is quite general and is not specific nor is it objective. As
such, this is a problem. According to Mr. Jackson's physician, he was and
has been disabled since December 1979 although in one area he states
that it has been since March 1980. In order to completely evaluate this
problem, this man should be seen for a careful examination, particularly
with pulmonary function studies. This would give us a better idea, on an
objective basis, as to his degree of disability. Without this, we have to
rely on the rather generalized statement by his own physician."

Mr. Jackson suffers from progressively degenerative diseases, most

notably emphysema and other pulmonary disorders, heart trouble and diabetes.

There is no serious dispute over whether he is Permanently and Totally

Disabled within the meaning of the Plan, only over when he became PTD. The

Social Security Administration, in an award made July 7, 1981, dated his

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disability from January 31, 1980, as did Jackson's own physician on the Plan's

medical evaluation form which Dr. Abrams signed April 19, 1982 (J6). After

Jackson retained an attorney, Dr. Abrams revised his opinion and dated

Jackson's disability back to September 21, 1979, the date which Jackson

claimed in his application was his last day worked.

Although the procurement of a revised doctor's report, by an attorney, for

the specific purpose of obtaining disability benefits, engenders a natural

skepticism, in Mr. Jackson's case, this skepticism is tempered by the fact that the

doctor's original date, as well as Social Security's,2 was so close to the cutoff

date of December 31, 1979 set by the Board and its administrative agent. In

dealing with progressive diseases, it is impossible to set an exact date by which

a participant became PTD with any degree of certainty. In Mr. Jackson's case,

the uncertainty is compounded by the failure to distribute applications in a

timely fashion when Wessels withdrew. On balance, it seems quite likely that

Mr. Jackson was PTD at the time Wessels withdrew (note injuries as early as

1978 in Jl-2) and most probably by the December 1979 date set by the Board

and its administrative agent. Mr. Jackson's application should, therefore, be

granted.

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The rules and procedures which Social Security applied for eligibility are not before the Impartial Chairman,
although it was suggested that S.S. at the time did not attempt to determine the very earliest date by which a person
became medically disabled, only the earliest date by which he became eligible for benefits.

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II. Application of Jeremiah Walker

The pertinent documents from the Walker file are the following, in

chronological order:

W1. 11/6/80 Workmen's Compensation Agreement to Redeem Liability


indicating injuries 2/15/79, 2/16/79 and last day worked 10/21/79.

W2. 11/10/80 Workmen's Compensation Redemption Order indicating


injuries 2/15/79, 2/16/79 and last day worked 10/21/79.

W3. 12/17/80 Notice of Commencement of Compensation Payments


indicating Workmen's Comp payments began 3/2/79.

W4. 10/13/81 Social Security disability award indicating period of disability


began 3/31/80.

W5. 11/16/81 Disability application stating last day worked 9/79.

W6. Undated (probably 4/82) medical evaluation by A. Mehendale, M.D.,


Walker's doctor, opining PTD but vague about date.

W7. 4/7/82 Letter to administrative agent from Plan physician saying can't
determine PTD.

W8. 7/25/83 Letter to Plan counsel from Plan physician reads in pertinent
part:

"I indicated in my letter of April 7, 1982 that I did not have sufficient
information concerning this man to determine the degree of disability."

Walker's case is much weaker than Jackson's for two reasons. First, the

Plan physician does not accept Walker's proof of PTD (W7-8); second, no

medical report clearly dates Walker's PTD prior to Wessels' withdrawal (S.S.

puts disability at 3/31/80 in W4 and Walker's own doctor attaches no specific

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date in W6). Either is sufficient ground for denying Mr. Walker's application. If

he is not PTD within the meaning of the Plan, then certainly he is not entitled to

a disability pension. Even if he is PTD, unless his PTD began before Wessels

withdrew, he is not eligible for a disability pension. This latter point requires

some discussion.

An employer's withdrawal from the Plan is governed by Article XIII,

§§2, 4 and 5. Withdrawal constitutes a termination of the Plan with respect to

the employees of the withdrawing employer (§2). Upon withdrawal, the assets

allocable to the participants of that employer are to be segregated (§4). The

value of a participant's benefits is to be determined by the Credited Service

which he earned prior to termination (§5). In particular:

"[N]o affected Participant shall have any recourse toward satisfaction of


such nonforfeitable rights to benefits other than from *** the portion ***
[of the assets of the Trust Fund] segregated in accordance with Section 4
*** or the Pension Benefit Guaranty Corporation." Article XIII, §5.

When these three sections are read together, it is clear that when an

employer withdraws from the Plan, the benefits to which its participants are

entitled become fixed. If this were not the case, the actuary could not determine

the correct amount of assets to set aside. The participants' segregated account

could be bankrupted by open-ended disability claims. For this reason, benefits

are held to be fixed at withdrawal and unaffected by events subsequent thereto,

such as disabilities which occur after termination.

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The foregoing interpretation of the Plan document is consistent with the

treatment of disability claims by the PBGC. Under Regulations 29 CFR §2613.7

(a), the PBGC insures disability benefits only in those cases in which total and

permanent disability began before termination. Thus Mr. Walker (and, of

course, each of the other disability claimants) must prove that his PTD predates

Wessels' withdrawal.

The evidence on this point is not persuasive, even if one accepts the

opinion of Walker's doctor that he is PTD (recall that the Plan physician did

not). Dr. Mehendale's undated report probably was prepared in early April of

1982 because on April 2, 1982 the administrative agent wrote Walker urging

that he have a medical report completed and on April 7, 1982 the Plan physician

wrote the administrative agent after receiving the report. Dr. Mehendale says

only that Walker has been disabled "for the last 2-3 yrs." The 3-year figure

would, of course, predate Walker's disability to Wessels' withdrawal but in order

to find for Mr. Walker, one not only would have to give him the benefit of the

doubt about the date of PTD but one also would have to dismiss the Plan

physician's doubts about PTD at all. Walker is asking too much indulgence. The

burden is on him to establish PTD prior to Wessels' withdrawal and he has not

carried that burden. Thus, his application for a disability pension is denied.

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III. Application of Albert Barbee

The pertinent documents in the Barbee file are the following, in

chronological order:

B1. 10/10/80 Workmen's Compensation Agreement to Redeem Liability


indicating injuries 1967-70 and last day worked 9/23/79.

B2. 10/10/80 Workmen's Compensation Redemption Order indicating


injuries 1967-70 and last day worked 9/23/79.

B3. 11/17/81 Disability application stating last day worked 9/21/79 and date
terminated 1/80 and giving disability as reason for termination.

B4. 3/9/82 Administrative agent's note re phone call with Plan physician
saying insufficient evidence on which to make a determination.

As the Plan physician indicated, there is a paucity of evidence on which

to make a determination regarding Mr. Barbee's application. Despite many

letters and phone calls by the administrative agent, Mr. Barbee has failed to

provide proof of PTD. His application, therefore, must be denied.

However, some Board members have suggested that Mr. Barbee is

seriously ill, having had one or both legs amputated. If Mr. Barbee wishes to

appeal the denial of his application for a disability pension, he should be

examined by a physician at Plan expense pursuant to Article V, §2(c).

Inasmuch as Mr. Barbee has attained early retirement age, he is receiving

early retirement benefits.

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_________________________
E. Frank Cornelius, J.D., Ph.D,
Dated: May 4, 1984 Impartial Chairman

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