Lillian Yanks Rehmar v. Bernard L. Smith

Lillian Rehmar (Lillian) brought this action against two pension fund trustees to recover a survivor’s benefit allegedly due her under a collectively-bargained pension plan. The district judge applied principles developed by California courts in interpreting insurance contracts and gave judgment to Lillian for $18,800 plus interest and costs. The trustees appealed claiming that the state law of commercial insurance contracts should not have been applied. We reverse and remand.

I. Facts

Sam Rehmar (Sam), a radio operator on merchant ships, worked under the terms of a collective bargaining agreement between the shipowners and his union, the American Radio Association (Union). The agreement provides welfare and pension benefits for Union members. The agreement also prescribes eligibility rules. The benefits are funded by employer contributions to trust funds which are jointly administered by representatives of the Union and the employers in equal numbers pursuant to § 302(c)(5) of the National Labor Relations Act (Act), 29 U.S.C. § 186 (c)(5).

Sam lived with Lillian for many years although they never obtained a marriage license or participated in a wedding ceremony. In 1969 Sam…