Callegari v. Scottrade, Inc. et al
Filing
57
ORDER & REASONS: ORDERED that the Motion for Partial Dismissal 32 is GRANTED. Plaintiff's claims against Jim S. Jordan are hereby DISMISSED with prejudice. Plaintiff's claims against Ryan Callegari, with the exception of her clarification claim, are also DISMISSED with prejudice. FURTHER ORDERED that Plaintiff's Motion for Summary Judgment 31 as to her clarification of benefits claim is GRANTED. FURTHER ORDERED that Ryan Callegari's Motion for Summary Judgment 40 is DENIED. FURTHER ORDERED that Plaintiff's counsel shall file a proposed Final Judgment for the Court to enter in this case. Signed by Judge Carl Barbier on 8/10/16. (sek)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
DONNA FORTE CALLEGARI
CIVIL ACTION
VERSUS
NO: 16-1750
SCOTTRADE, INC., ET AL.
SECTION: “J” (2)
ORDER AND REASONS
Before the Court are a Motion for Summary Judgment (Rec. Doc.
31) filed by Plaintiff, Donna Callegari (“Plaintiff”), and an
opposition thereto filed by Defendant, Ryan Callegari (“Ryan”)
(Rec. Doc. 43). Ryan Callegari filed a cross-motion for summary
judgment (Rec. Doc. 40), which Plaintiff opposed (Rec. Doc. 50).
Also before the Court is a Motion for Partial Dismissal (Rec. Doc.
32) filed by Defendant, Jim S. Jordan.
Having considered the motions, the parties’ submissions, the
record, and the applicable law, the Court finds, for the reasons
expressed below, that the Motion for Partial Dismissal should be
GRANTED,
Plaintiff’s
Motion
for
Summary
Judgment
should
be
GRANTED, and Ryan’s Motion for Summary Judgment should be DENIED.
PROCEDURAL HISTORY AND BACKGROUND FACTS
This litigation arises under the Employee Retirement Income
Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001, et seq. Plaintiff
1
claims
she
is
the
surviving
spouse
of
Arthur
J.
Callegari
(“Arthur”), a participant in an ERISA employee retirement 401(k)
plan
through
his
employer,
the
Archdiocese
of
New
Orleans.
According to Plaintiff, she and Arthur married on April 10, 2011
and remained married until Arthur’s death on July 23, 2015.
Plaintiff contends that Arthur designed her as his beneficiary on
the 401(k) plan.1 Subsequently, Plaintiff and Arthur entered into
an
agreement,
Property
termed
Regime,”
in
a
“Marriage
order
to
Contract
dissolve
for
the
Separation
legal
system
of
of
community property that commenced upon their marriage. (Rec. Doc.
40-2.) The parties signed the agreement before a notary public on
August 15, 2012. Id. On the following day, the 24th Judicial
District Court for Jefferson Parish approved the consent judgment
agreed upon by the Callegaris. (Rec. Doc. 40-4; Rec. Doc. 40-5.)
Thus,
Plaintiff
and
Arthur
remained
married
but
commenced
a
separate property regime.
According to Plaintiff, she and Arthur quarreled shortly
before his death, and Arthur removed her from the family home.
Thereafter, Arthur changed the beneficiary designation on his
plan,
replacing
Plaintiff
with
his
son
from
a
previous
1
The parties did not provide a copy of the beneficiary designation form naming
Plaintiff as a beneficiary. The parties also did not provide an authenticated
copy of the plan documents.
2
relationship, Ryan Callegari. (Rec. Doc. 40-1.)2 Arthur also listed
his marital status as “single” and noted, “Separate property
agreement in effect.” Id. However, Plaintiff and Arthur never
legally separated or divorced. Before his death, Arthur executed
a last will and testament, naming Ryan as his sole legatee. (Rec.
Doc. 43-5.)
Following Arthur’s death and the opening of probate,
Plaintiff filed suit in this Court, seeking benefits from Arthur’s
401(k) plan pursuant to ERISA. (Rec. Doc. 1.)
Plaintiff
(“Scottrade”),
originally
originally
Voya
filed
suit
Institutional
incorrectly
named
as
against
Trust
Voya
Scottrade,
Company
Financial),
Inc.
(“Voya,”
and
the
Succession of Arthur Callegari, through its independent executor,
Jim S. Jordan. Scottrade is the holder of Arthur’s individual
retirement account (IRA), and Voya is the custodian of the 401(k).
Plaintiff later added Arthur’s son Ryan as a defendant because
Ryan is the named beneficiary to the 401(k). (Rec. Doc. 8.)
Subsequently,
Plaintiff
voluntarily
dismissed
Scottrade
with
prejudice because ERISA did not govern the IRA. (Rec. Doc. 25.)
Finally, Plaintiff dismissed her claim against Voya as it was a
mere stakeholder without its own claim to the 401(k). (Rec. Doc.
2
The parties stipulated to the authenticity of the beneficiary designation
form. (Rec. Doc. 29, at 1-2.)
3
29.) The only remaining defendants are Ryan and Jordan, as the
executor of Arthur’s estate.
On
June
16,
2016,
the
parties
entered
into
an
Agreed
Stipulation Regarding Disputed Funds. (Rec. Doc. 29.) In the
stipulation, Voya agreed to hold the 401(k) death benefits in a
trust and distribute the benefits to the rightful beneficiary as
decided by this Court. Id. at 2-3. Plaintiff filed her motion for
summary judgment to determine the rightful beneficiary on June 28,
2016. (Rec. Doc. 31.) After several continuances, the motion was
set for submission and oral argument on August 10, 2016. Jordan
filed a motion for partial dismissal on July 5, 2016. (Rec. Doc.
32.) Ryan filed his cross-motion for summary judgment, as well as
his opposition to Plaintiff’s motion, on July 19, 2016. (Rec. Doc.
40; Rec. Doc. 43.) Plaintiff opposed Ryan’s motion on August 2.
(Rec. Doc. 50.) Plaintiff did not oppose Jordan’s motion for
partial dismissal. The Court heard oral argument on the motions
for summary judgment on August 10, 2016. Following oral argument,
the Court took the matter under advisement.
PARTIES’ ARGUMENTS
I.
Motion to Dismiss
In his motion, Jordan asserts that Plaintiff failed to state
a viable claim against him because none of her requested relief is
4
available from him. Rather, Jordan argues that Plaintiff must bring
her claims against the employee benefit plan as an entity. These
claims include: (1) recovery of benefits from the 401(k) plan, (2)
clarification of her rights under the 401(k) plan, (3) an award of
attorneys’ fees and costs, (4) civil penalties pursuant to statute,
(5) penalties for arbitrary denial of her claim, (6) penalties for
mental and financial distress, and (7) “all further and other
relief” to which she may be entitled. Jordan contends that the
only viable claim is for clarification of rights. However, Jordan
asserts that the estate is not claiming the 401(k) benefits. The
only other claimant is Ryan, who is a defendant in this case. Thus,
Jordan asks that the Court dismiss all of Plaintiff’s claims
against him, with prejudice. Plaintiff does not oppose Jordan’s
motion.
II.
Motions for Summary Judgment
In their motions for summary judgment, both Plaintiff and
Ryan claim to be the sole beneficiary of Arthur’s 401(k) plan. In
her motion, Plaintiff relies on her status as Arthur’s surviving
spouse to claim the benefits of his plan. Plaintiff argues that
ERISA’s policy is to protect the surviving spouse of a plan
participant. As such, she claims that the spouse is the default
beneficiary of the participant’s benefits. According to Plaintiff,
5
a participant can remove the spouse as a beneficiary only if the
spouse executes a waiver and gives his or her true consent.
Plaintiff claims that the waiver must be made in writing, name a
beneficiary other than the spouse, and must be witnessed by a plan
representative or notary public. However, Plaintiff argues that
Arthur unilaterally changed his beneficiary designation without
her consent.
Plaintiff also references the separate property agreement she
and Arthur signed on August 15, 2012. Plaintiff claims that ERISA
preempts the separation agreement. Further, Plaintiff argues that
the agreement does not comply with the formal requirements for
waiver of a spouse’s beneficiary designation under ERISA. Finally,
Plaintiff asserts that the 401(k) plan documents mandate spousal
consent to designate a beneficiary other than the spouse. For these
reasons, Plaintiff argues that she is entitled to receive benefits
from Arthur’s 401(k) plan.
In his motion and in his opposition to Plaintiff’s motion,
Ryan claims that he is the named beneficiary to the 401(k) account.
According to Ryan, the plan documents require payment of benefits
to the person designated on the beneficiary form, even if facts
outside the plan documents indicate that another person should
receive
the
benefits.
Second,
6
Ryan
argues
that
Plaintiff
relinquished any claim she had to the account when she entered
into the separate property agreement with Arthur. In return for
giving up her rights to the account, Ryan claims that she received
property of equal value in the partition of the couple’s community
property. Ryan argues that such waivers are valid and enforceable
under ERISA and federal common law. Third, Ryan contends that, as
Arthur’s sole legatee, he is entitled to enforce the separate
property
agreement
against
Plaintiff
to
recover
the
401(k)
proceeds and damages from her. Ryan argues that ERISA does not
preempt such post-distribution claims. Finally, Ryan claims that
he is entitled to attorneys’ fees and costs under the terms of the
consent judgment separating Arthur’s and Plaintiff’s community
property.
Plaintiff opposed Ryan’s motion. First, Plaintiff argues that
she did not waive her rights to Arthur’s 401(k) account by signing
the separate property agreement. Plaintiff points out that Ryan
cited cases involving waivers made by former spouses in the context
of divorce proceedings. Plaintiff maintains that ERISA’s waiver
requirements for surviving spouses are higher than the standards
cited by Ryan. According to Plaintiff, ERISA requires prenuptial
agreements, like the separation of property agreement, to contain
a beneficiary designation. Next, Plaintiff reiterates that the
7
policy of ERISA is to protect the participant’s surviving spouse.
Further,
Plaintiff
contends
that
the
separation
of
property
agreement is vague and preempted by ERISA. Plaintiff notes that
Arthur claimed the 401(k) plan as his separate property in the
contract, but he did not claim the contested benefits as his
separate property. Further, Plaintiff argues that ERISA preempts
the contract altogether. Finally, Plaintiff claims that Arthur was
required
to
follow
the
plan
documents
when
designating
a
beneficiary. According to Plaintiff, the plan documents required
her consent to a change in beneficiary designation. Because she
did not consent to the designation change, Plaintiff argues that
she did not waive her right to receive benefits from Arthur’s
401(k) plan.
LEGAL STANDARD
I.
Motion to Dismiss
“Under
Rule
12(b)(6),
a
claim
may
be
dismissed
when
a
plaintiff fails to allege any set of facts in support of his claim
[that] would entitle him to relief.” Taylor v. Books A Million,
Inc., 296 F.3d 376, 378 (5th Cir. 2002) (citing McConathy v. Dr.
Pepper/Seven Up Corp., 131 F.3d 558, 561 (5th Cir. 1998)). The
standard analysis changes when the defendant fails to timely file
a motion under Rule 12(b)(6):
8
A motion made under Rule 12(b)(6) that raises the defense
of failure to state a claim upon which relief may be
granted must be made before the service of a responsive
pleading, but according to Rule 12(h)(2) the defense is
preserved and may be raised as late as trial. Technically
therefore, a post-answer Rule 12(b)(6) motion is
untimely and the cases indicate that some other vehicle,
such as a motion for judgment on the pleadings or for
summary judgment, must be used to challenge the
plaintiff's failure to state a claim for relief.
5b CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE
AND
PROCEDURE §
1357 (3d ed.) (internal citations omitted).
Rule 12 provides that an argument for failure to state a claim
upon which relief can be granted may be raised by a motion under
Rule 12(c). FED. R. CIV. P. 12(h)(2)(B). Rule 12(c) states, “After
the pleadings are closed—but early enough not to delay trial—a
party may move for judgment on the pleadings.” FED. R. CIV. P.
12(c). Jordan’s motion is properly construed as a Rule 12(c) motion
for judgment on the pleadings. The Rule 12(c) standard is identical
to the standard for dismissal for failure to state a claim under
Rule 12(b)(6). Johnson v. Johnson, 385 F.3d 503, 529 (5th Cir.
2004).
Under the Federal Rules of Civil Procedure, a complaint must
contain “a short and plain statement of the claim showing that the
pleader
is
entitled
to
relief.”
FED. R. CIV. P. 8(a)(2).
The
complaint must “give the defendant fair notice of what the claim
is and the grounds upon which it rests.” Dura Pharm., Inc. v.
9
Broudo, 544 U.S. 336, 346 (2005). The allegations “must be simple,
concise, and direct.” FED. R. CIV. P. 8(d)(1). A claim is facially
plausible when the plaintiff pleads facts that allow the court to
“draw the reasonable inference that the defendant is liable for
the misconduct alleged.”
Id. “The plausibility standard is not
akin to a ‘probability requirement,’ but it asks for more than a
sheer possibility that a defendant has acted unlawfully.” Id. A
court must accept all well-pleaded facts as true and must draw all
reasonable inferences in favor of the plaintiff. Lormand v. U.S.
Unwired, Inc., 565 F.3d 228, 232-33 (5th Cir. 2009); Baker v.
Putnal, 75 F.3d 190, 196 (5th Cir. 1996). The court is not,
however, bound to accept as true legal conclusions couched as
factual allegations. Iqbal, 556 U.S. at 678.
II.
Motions for Summary Judgment
Summary judgment is appropriate when “the pleadings, the
discovery and disclosure materials on file, and any affidavits
show that there is no genuine issue as to any material fact and
that the movant is entitled to judgment as a matter of law.”
Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (citing former
Fed. R. Civ. P. 56(c)); Little v. Liquid Air Corp., 37 F.3d 1069,
1075 (5th Cir. 1994). When assessing whether a dispute as to any
material fact exists, the Court considers “all of the evidence in
10
the record but refrains from making credibility determinations or
weighing the evidence.” Delta & Pine Land Co. v. Nationwide
Agribusiness Ins. Co., 530 F.3d 395, 398 (5th Cir. 2008). All
reasonable inferences are drawn in favor of the nonmoving party,
but
a
party
cannot
defeat
summary
judgment
with
conclusory
allegations or unsubstantiated assertions. Little, 37 F.3d at
1075. A court ultimately must be satisfied that “a reasonable jury
could not return a verdict for the nonmoving party.” Delta, 530
F.3d at 399.
If the dispositive issue is one on which the moving party
will bear the burden of proof at trial, the moving party “must
come forward with evidence which would ‘entitle it to a directed
verdict if the evidence went uncontroverted at trial.’” Int’l
Shortstop, Inc. v. Rally’s, Inc., 939 F.2d 1257, 1263-64 (5th Cir.
1991) (citation omitted). The nonmoving party can then defeat the
motion by either countering with sufficient evidence of its own,
or “showing that the moving party’s evidence is so sheer that it
may not persuade the reasonable fact-finder to return a verdict in
favor of the moving party.” Id. at 1265.
If the dispositive issue is one on which the nonmoving party
will bear the burden of proof at trial, the moving party may
satisfy its burden by merely pointing out that the evidence in the
11
record is insufficient with respect to an essential element of the
nonmoving party’s claim. See Celotex, 477 U.S. at 325. The burden
then shifts to the nonmoving party, who must, by submitting or
referring to evidence, set out specific facts showing that a
genuine issue exists. See id. at 324.
The nonmovant may not rest
upon the pleadings, but must identify specific facts that establish
a genuine issue for trial.
See, e.g., id. at 325; Little, 37 F.3d
at 1075.
DISCUSSION
Congress enacted ERISA to provide federal standards for the
establishment and maintenance of employee pension and benefit
plans. Williams v. Wright, 927 F.2d 1540, 1543 (11th Cir. 1991).
ERISA applies to any employee benefit plan if it is established or
maintained by an employer engaged in commerce or activity affecting
commerce. Memorial Hosp. Sys. v. Northbrook Life Ins. Co., 904
F.2d 236, 240 (5th Cir. 1990) (citing 29 U.S.C. § 1003(a)). ERISA
regulates two distinct types of employee benefit plans: “employee
welfare benefit plans” (welfare plans)
and “employee pension
benefit plans” (pension plans). Memorial Hosp. Sys., 904 F.2d at
240; see 29 U.S.C. § 1002(3). In this case, the parties do not
dispute that the 401(k) plan is an employee pension benefit plan
12
subject to ERISA. With this in mind, the Court will now discuss
each pending motion.
I.
Motion to Dismiss
Jordan
argues
that
Plaintiff’s
claims
must
be
dismissed
pursuant to Rule 12(b)(6), with the exception of her request for
clarification. Plaintiff did not oppose Jordan’s motion. For the
reasons stated below, the Court believes the motion has merit and
should be granted.
In her amended complaint, Plaintiff requested the following
relief:
1. A judgment awarding Plaintiff all owed and determined
benefits under the retirement plans held by the
Defendants.
2. A declaration clarifying Plaintiff’s rights under the
terms of the ERISA retirement plans held by Defendants,
including
an
order
for
payment/distribution
to
Plaintiff.
3. An award of award of attorney fees and costs pursuant
to 29 USC §1132(g).
4. Any and all appropriate civil penalties under 29 U.S.C
§ 1132(c)(1).
5. All other penalties for arbitrary denial of
Plaintiff’s claim.
6. All penalties for mental and financial distress
caused to Plaintiff.
7. All further and other relief, which Plaintiff may
justly be entitled to[.]
(Rec. Doc. 14, at 3.) The only remaining defendants are Jordan, as
the executor of Arthur’s , and Ryan, as a competing beneficiary.
However, “ERISA permits suits to recover benefits only against the
13
Plan as an entity.” Lee v. Burkhart, 991 F.2d 1004, 1009 (2d Cir.
1993) (quoting Gelardi v. Pertec Computer Corp., 761 F.2d 1323
(9th Cir.1985)); Roig v. Ltd. Long Term Disability Program, No.
CIV.A.99-2460, 2000 WL 1146522, at *8-9 (E.D. La. Aug. 4, 2000),
aff'd in part sub nom. Roig v. Ltd. Long Term Disability Program,
275 F.3d 45 (5th Cir. 2001). The Third Citcuit also permits a
plaintiff to sue an entity other than a plan if that entity is a
fiduciary
with
“sufficient
discretionary
authority
and
responsibility in the administration of the plan.” See Roig, 2000
WL 1146522, at *9. In this case, Plaintiff neither sued the 401(k)
plan as an entity nor a fiduciary with authority and responsibility
in the plan’s administration. Thus, Plaintiff’s claim for recovery
of benefits must be dismissed for failure to state a claim.
Further, the remedies arising under ERISA are exclusive.
Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 56 (1987). Plaintiff
requested civil penalties pursuant to Section 1132(c)(1). However,
that
section
only
authorizes
penalties
against
a
plan
administrator. Likewise, the relief requested in paragraphs 3, 5,
6, and 7 depends on Plaintiff’s claim for recovery of benefits.
Such relief is only available from the plan itself. None of the
requested relief is available from Jordan. Therefore, Plaintiff’s
claims
against
Jordan
will
be
14
dismissed
with
prejudice.
Plaintiff’s only viable claim is the request for clarification of
plan benefits as against Ryan Callegari, which is the subject of
the cross-motions for summary judgment.
II.
Motions for Summary Judgment
Plaintiff claims that she is entitled to recover benefits
from Arthur’s 401(k) plan because of her status as a surviving
spouse. On the other hand, Ryan contends that Plaintiff waived her
rights to Arthur’s plan when she agreed to partition the couple’s
community property. Even if the Court finds Plaintiff is the proper
beneficiary, Ryan argues that he is entitled to enforce the consent
judgment against Plaintiff and collect the plan benefits from her.
ERISA espouses a strong policy of protecting a surviving
spouse’s interest in plan benefits. Lester v. Reagan Equip. Co.
Profit Sharing Plan & Emple. Sav. Plan, No. 91–2946, 1992 WL
211611, at *5 (E.D. La. Aug. 19, 1992). “Clearly, Congress intended
to protect spouses' interests in a participant's benefits.” Rice
v. Rochester Laborers' Annuity Fund, 888 F. Supp. 494, 498 (W.D.
N.Y. 1995). To that end, ERISA creates a surviving spouse annuity
“in the case of a vested participant who dies before the annuity
starting
date
1055(a)(2).
and
During
who
has
the
a
surviving
applicable
15
spouse.”
election
29
U.S.C.
period,
§
the
participant’s spouse may waive the surviving spouse annuity. 29
U.S.C. § 1055(c)(1)(A)(i).
However,
due
to
ERISA’s
strong
interest
in
protecting
surviving spouses, a waiver is “invalid unless it satisfies the
rigorous rules in [Section] 1055(c).” Lester, 1992 WL 211611, at
*5; see also Rice, 888 F. Supp. at 498. A spouse’s waiver is only
valid if:
(i) the spouse of the participant consents in writing to
such election, (ii) such election designates a
beneficiary (or a form of benefits) which may not be
changed without spousal consent (or the consent of the
spouse expressly permits designations by the participant
without any requirement of further consent by the
spouse), and (iii) the spouse's consent acknowledges the
effect of such election and is witnessed by a plan
representative or a notary public . . . .
29 U.S.C. § 1055(c)(2)(A). A participant’s spouse may waive an
interest
in
a
surviving
spouse
annuity
in
a
prenuptial
or
antenuptial agreement, as long as the agreement satisfies the
requirements of section 1055(c). Hurwitz v. Sher, 982 F.2d 778,
780-81 (2d Cir. 1992); see also Howard v. Branham & Baker Coal
Co., 968 F.2d 1214 (6th Cir. 1992); Nellis v. Boeing Co., No. 911011-K, 1992 WL 122773, at *5 (D. Kan. May 8, 1992).
ERISA’s protection of surviving spouses does not extend to
former spouses. Unlike a current spouse, a former spouse can waive
beneficiary status in a divorce decree or agreement, as long as
16
the waiver is “explicit, voluntary[,] and made in good faith.”
Manning v. Hayes, 212 F.3d 866, 871 (5th Cir. 2000) (citing Clift
v. Clift, 210 F.3d 268, 271 (5th Cir. 2000); Brandon v. Travelers
Ins. Co., 18 F.3d 1321, 1326-27 (5th Cir. 1994)). In this case,
Ryan argues that the separation of property agreement has the same
effect as a divorce decree. Therefore, Ryan argues that Plaintiff’s
waiver only needed to meet the lower standard required of a
divorced spouse. The true issue is whether Plaintiff waived her
right to the surviving spouse annuity by entering into a separate
property agreement. Plaintiff argues that any purported waiver
must be judged by the section 1055(c) surviving spouse standard.
Plaintiff is correct.
“In order to determine which party is entitled to receive
benefits under the Plan, we must first consider the statutory
language of ERISA.” Hurwitz, 982 F.2d at 780-81 (citing Pilot Life
Ins. Co., 481 U.S. at 57). The express statutory language of ERISA
protects the surviving spouse of a plan beneficiary. ERISA does
not distinguish between surviving spouses who have partitioned
community property and surviving spouses who have not. Moreover,
the Fifth Circuit has explicitly stated that the divorced spouse
standard does not change “the express provisions of ERISA ensuring
special protection to surviving spouses in the context of pension
17
benefits.” Manning, 212 F.3d at 873. Because Plaintiff is the
surviving spouse of a plan participant, the Court must determine
whether she waived her right to receive benefits.
The separate property agreement and consent judgment do not
constitute a waiver of Plaintiff’s right to benefits. While the
agreement is in writing and was witnessed by a notary public, it
falls
short
in
several
ways.
First,
the
agreement
does
not
designate an alternative beneficiary. Further, Plaintiff did not
explicitly
agree
to
allow
Arthur
to
designate
a
different
beneficiary without her consent. The consent judgment similarly
fails to designate an alternative beneficiary. Second, Plaintiff
did not “acknowledge[] the effect of such election.” The agreement
merely stated that the 401(k) plan was Arthur’s separate property.3
3
In relevant part, the agreement states:
APPEARERS agree that all of the property, rights and credits of all
kind and character owned by ARTHUR J. CALLEGARI and all income,
revenues, fruits and assets which may be received by him during the
marriage are and shall remain his separate property . . . .
APPEARERS understand and agree that ARTHUR J. CALLEGARI reserves,
individually, the entire separate administration and control of his
respective estate, including all property and assets of all kinds,
and reserves the free enjoyment of all of his income, revenue and
fruits from all sources . . . .
(Rec. Doc. 40-3, at 1-2.)
Further, Arthur claimed the property listed in
Exhibit A as his separate property. Id. at 3. Plaintiff acknowledged that the
property listed in Exhibit A was Arthur’s separate property. Exhibit A included
“ING, Archdiocese of New Orleans 401K Plan.” Id. at 6.
18
The consent judgment did the same.4 The agreement does not indicate
that Plaintiff acknowledged that she would be waiving her right to
receive benefits from Arthur’s plan. Neither the agreement nor the
consent judgment listed the benefits from Arthur’s plan as his
separate property. Arthur claimed the plan itself as his separate
property, but he did not mention the benefits. Finally, Plaintiff
did not sign the form designating Ryan as Arthur’s beneficiary.
Therefore, Plaintiff did not validly waive her right to receive
benefits
from
the
plan
as
the
surviving
spouse
of
a
plan
participant.
Ryan argues that he may bring a claim against Plaintiff to
enforce the separate property agreement and recover the benefits
from the plan from her. He is incorrect. While the Supreme Court
has endorsed the validity of such a claim, Ryan is not entitled to
4
In relevant part, the consent judgment states:
IT IS FURTHER ORDERED, ADJUDGED AND DECREED that ARTHUR J. CALLEGARI
takes as his full share of all of the property, movable and
immovable, presently belonging to the community of acquets and
gains, the property described in “Exhibit B” . . . . DONNA F.
CALLEGARI does transfer, convey, and deliver unto ARTHUR J.
CALLEGARI the entirety of her interest in and to all of the
properties hereinabove allotted to him and, particularly, all
movable and immovable property described in the aforesaid Exhibit
“B”. [sic].
(Rec. Doc. 40-5, at 2.) Exihibt B included “[a]ny and all interest in ING
Archdiscese of New Orleans 401K plan.” Id. at 10.
19
bring such an action according to the facts of his case. See
Kennedy v. Plan Adm’r for DuPont Sav. & Inv. Plan, 555 U.S. 285,
300 n.10 (2009). Kennedy is inapplicable for two reasons. First,
unlike Plaintiff in this case, the beneficiary in Kennedy executed
a valid waiver. See id. In Kennedy, the participant named his
spouse as his primary beneficiary to his savings and investment
plan (SIP). Id. at 289. The couple later divorced, and the former
spouse agreed to be “divested of all right, title, interest, and
claim in and to . . . [a]ny and all sums . . . the proceeds [from],
and any other rights related to any . . . retirement plan, pension
plan or like benefit” derived from her ex-husband’s employment.
Id. (alterations in original). The participant executed a new
beneficiary
designation
form
naming
his
daughter
as
his
beneficiary, but he never executed any documents removing his exwife as a beneficiary, as required by the plan administrator. Id.
at 288-89. The participant later died, and the plan administrator
paid the benefits to the ex-wife. The daughter, on behalf of her
father’s estate, filed suit, arguing that the ex-wife waived her
right to receive benefits in the divorce decree.
The Supreme Court found that the plan administrator was
required to pay the benefits to the ex-wife. Id. at 299-300.
However, in a footnote, the Court noted that the divorce decree
20
waiver was not null. Id. at 300 n.10. The Court did not “express
any view as to whether the Estate could have brought an action in
state or federal court against [the ex-wife] to obtain the benefits
after they were distributed.” Id. Following the Kennedy decision,
other courts have endorsed the viability of a separate action to
enforce a valid waiver and collect benefits from the ERISAauthorized beneficiary. See, e.g., Andochick v. Byrd, 709 F.3d
296, 301 (4th Cir. 2013). Thus, even when ERISA requires the
payment of benefits to the surviving spouse, another person can
enforce the spouse’s valid waiver of the right to receive benefits.
In this case, Ryan’s argument is premised on the notion that
Plaintiff validly waived her right to receive benefits from the
plan. However, as discussed above, Plaintiff did not execute a
valid ERISA waiver. Thus, no valid waiver exists under federal
law.
Second,
Plaintiff
also
did
not
execute
a
valid
waiver
according to state law. Kennedy is inapposite because it involved
a
valid
state-law
post-divorce
agreement.
However,
this
case
involves a separation of property agreement that is preempted by
ERISA. Thus, the waiver is invalid under Louisiana state law.
Ordinarily,
spouses
in
community
property
states,
including
Louisiana, have an interest in income earned by their spouses. La.
21
Civ. Code art. 2338. When a spouse pays into an employer-sponsored
pension plan, he does so using money he would otherwise receive as
income. Thus, according to Louisiana community property laws, the
participant’s spouse would have a community property interest in
the pension plan. However, the Supreme Court has held that ERISA
preempts state community property laws. Boggs v. Boggs, 520 U.S.
833, 841 (1997).
Because ERISA preempts Louisiana community property laws,
Plaintiff had no community property interest in Arthur’s 401(k)
plan. The 401(k) plan always was Arthur’s separate property.
Therefore, Arthur’s attempt to claim the plan as his separate
property in the separation of property agreement is without effect.
In Kennedy, the former spouse validly waived her right to receive
benefits from her ex-husband’s plan. In this case, Arthur claimed
his 401(k) as his separate property, even though it was already
his separate property. Not only was Plaintiff’s alleged waiver
invalid, but also the separate property agreement had no effect
because Plaintiff did not have a community property interest in
the 401(k) plan. Thus, her waiver of her community property
interest in Arthur’s plan is invalid. Ryan is not entitled to
enforce the separate property agreement and collect benefits from
Plaintiff.
22
Finally, the Court will address Ryan’s contention that the
Court
must
order
distribution
in
accordance
with
the
plan
documents. Ryan argues that the plan fiduciaries are forbidden
from looking beyond the beneficiary designation. As his father’s
designated beneficiary, Ryan claims that plan fiduciaries may only
distribute benefits to him. However, the beneficiary designation
form is invalid on its face. Arthur stated that he was unmarried,
when he was in fact still married to Plaintiff. Further, Plaintiff
did
not
sign
the
spousal
consent
section
authorizing
the
designation of Ryan as the primary beneficiary. Courts have looked
beyond the beneficiary designation in similar cases to determine
that the surviving spouse is the true beneficiary. See Howard v.
Branham & Baker Coal Co., No. 91-5913, 1992 WL 154571, at *2 (6th
Cir. 1992) (unpublished) (designation of daughter invalid when
surviving spouse never consented to the designation); c.f. Rice,
888 F. Supp. at 496-97 (payment of benefits to husband improper
when wife did not consent and husband forged wife’s signature on
the application). Ryan cannot rely on his status as a designated
beneficiary when the designation was made without the requisite
spousal consent.
The Court acknowledges that awarding benefits to someone
other than the decedent’s intended beneficiary seems inequitable.
23
However, the Court must follow the law as set forth in ERISA, which
specifically provides that “[a]ny disposition of the plan benefits
must comply not only with the wishes of the decedent, but [also]
with those of the spouse . . . .” Nellis, 1992 WL 122773, at *5.
As
recognized
requirements
by
for
the
Sixth
surviving
Circuit,
spouses
ERISA’s
“represent[]
strict
a
waiver
simple
and
effective safeguard against fraud” and “reduce[] the likelihood
that the plan trustee or administrators will have to make costly—
and perhaps inconclusive—inquiries into the subjective state of
mind of deceased plan participants.” Howard, 1992 WL 154571, at
*4. For these reasons, the Court finds that Plaintiff is the proper
beneficiary of Arthur’s 401(k) plan, notwithstanding Arthur’s
attempt to designate Ryan as his beneficiary.
CONCLUSION
Accordingly,
IT IS HEREBY ORDERED that the Motion for Partial Dismissal is
GRANTED. Plaintiff’s claims against Jim S. Jordan are hereby
DISMISSED
with
prejudice.
Plaintiff’s
claims
against
Ryan
Callegari, with the exception of her clarification claim, are also
DISMISSED with prejudice.
IT IS FURTHER ORDERED that Plaintiff’s Motion for Summary
Judgment as to her clarification of benefits claim is GRANTED.
24
IT IS FURTHER ORDERED that Ryan Callegari’s Motion for Summary
Judgment is DENIED.
IT IS FURTHER ORDERED that Plaintiff’s counsel shall file a
proposed Final Judgment for the Court to enter in this case.
New Orleans, Louisiana, this 10th day of August, 2016
CARL J. BARBIER
UNITED STATES DISTRICT COURT
25
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