CWS Client Prevails on Appeal to Second Circuit of Decision Upholding Benefit Denial Based On Fraud

December 26, 2018

On December 26, 2018, the United States Court of Appeals for the Second Circuit affirmed a district court’s dismissal of a business owner’s lawsuit against CWS clients, the Teamsters Local 282 Trust Funds, seeking benefits for which the owner failed to qualify due to his fraudulent behavior.  During an earlier lawsuit, the business owner admitted that he had paid employees in cash to avoid reporting their work hours to the Funds.  The Funds’ trustees also learned that the owner had remitted contributions on behalf of himself for work in employment covered by the collective bargaining agreement that he had not actually performed.  Based on this information, the trustees banned the owner from receiving health coverage and disregarded hours he had reported in an attempt to qualify for pension benefits.  The district court, applying de novo review, agreed with the trustees’ decisions, noting that the health plan’s fraud provision allowed for the ban and that the owner had failed to produce documents showing that he had performed work required to qualify for pension benefits.  The Second Circuit filed a Summary Order affirming the district court’s decision on December 26, 2018.  CWS attorney Tzvi N. Mackson represented the Funds in this matter.  The district court decision can be found here and the Second Circuit Order can be found here.