Board of Trustees of the Indiana State Council of Plasterers & Cement Masons Pension Fund et al v. Kinkade

Filing 25

MEMORANDUM AND ORDER: IT IS HEREBY ORDERED that Defendant Ashlee Steffenss Motion for Summary Judgment (ECF No. 22 ) is GRANTED. An appropriate Judgment will accompany this Memorandum and Order. Signed by District Judge Jean C. Hamilton on 10/22/12. (TRC)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION

BOARD OF TRUSTEES OF THE INDIANA
STATE COUNCIL OF PLASTERERS &
CEMENT MASONS PENSION FUND,

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Plaintiff(s),
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vs.
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ASHLEE STEFFENS, KENDRA D.
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STEFFENS, and BRIAN KINKADE in his
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capacity as Interim Director of the MISSOURI )
DEPARTMENT OF SOCIAL SERVICES,
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Defendant(s).
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Case No. 4:12CV513 JCH

MEMORANDUM AND ORDER
This matter is before the Court on Defendant Ashlee Steffens’s Motion for Summary
Judgment (“Motion for Summary Judgment”), filed on August 9, 2012. (ECF No. 22). No response
has been filed to the Motion for Summary Judgment, and the time for filing a response has passed.
See Local Rule 7-4.01(B) (“A party opposing a motion for summary judgment...shall file a
memorandum and any appropriate documentary evidence twenty-one (21) days after being served
with the motion.”).
BACKGROUND
Plaintiff Board of Trustees of the Indiana State Council of Plasterers & Cement Masons
Pension Fund (“Plaintiff” or “Trustees”) is a fiduciary of the Indiana State Council of Plasterers &
Cement Masons Pension Fund (“Fund”) under 29 U.S.C. § 1002(21)(A). (Complaint, ECF No. 1,
¶ 3). The Fund has been established pursuant to a Trust Agreement entered into between
participating employers and participating unions and is administered by Plaintiff pursuant to the terms
and provisions of the Trust Agreement establishing the Fund. (Id., ¶ 4). The Fund is a defined

contribution plan in which participants have account balances in specific amounts. (Id., ¶ 9). Upon
the death of a participant who has not yet retired, the participant’s surviving spouse shall receive the
participant’s account balance. (Id., ¶ 10). The surviving spouse may elect to receive the account
balance as a qualified pre-retirement survivor annuity or an optional benefit in the form of a lump-sum
payment of the entire account balance. (Id.).
Specifically, the Fund is governed by the Restatement of the Indiana State Council of
Plasterers and Cement Masons Pension Fund Pension Plan (“the Plan”), which provides the following
definitions:
ARTICLE I - DEFINITIONS
...
SECTION 13 - SPOUSE:
The term “Spouse” shall mean the Participant’s legal wife or husband at the time a
pre-retirement Death Benefit is first payable or at the time the Participant commences
receiving a retirement benefit. The term “Spouse” shall also mean a former Spouse
to the extent provided under a Qualified Domestic Relations Order as described in
Section 414(p) of the Code.
...
SECTION 27 - FIDUCIARY
The term “Fiduciary” shall mean a person, firm or corporation who:
A.

Exercises any discretionary authority or discretionary control
respecting management of this Plan or exercises any authority or
control respecting management or disposition of its assets; or

...
C.

Has any discretionary authority or discretionary responsibility in the
administration of this Plan.

(Pension Plan, ECF No. 22-4, pp. 6, 9-10).
The Plan also provides the following benefits:
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ARTICLE VI - DEATH BENEFITS
SECTION I - DEATH BENEFITS:
...[I]f a Participant dies on or before the Earliest Retirement Age, the Participant’s
Surviving Spouse (if any) will receive the same benefit that would be payable if the
Participant had (1) Separated from service on the date of death, (2) Survived to the
Earliest Retirement Age, (3) Retired with an immediate Qualified Joint and Survivor
Annuity at the Earliest Retirement Age, and (4) Died on the day after the Earliest
Retirement Age....
A Surviving Spouse who is entitled to receive a Joint and Survivor Benefit may elect,
after the death of the Participant, to receive in lieu of such monthly payments, a lumpsum equal to the total of the Participant’s vested Account Balance.
(Id., p. 19).
Finally, the Plan contains the following additional provisions:
ARTICLE VII - ADMINISTRATION OF THE PLAN
SECTION 1 - RESPONSIBILITY FOR ADMINISTRATION:
The Pension Plan shall be administered by the Trustees, who are Fiduciaries under this
Plan, in accordance with the powers granted to them by the Trust Agreement....
...
SECTION 11 - QUALIFIED DOMESTIC RELATIONS ORDERS:
The Trustees will make arrangements to comply with orders under state law that are
“Qualified Domestic Relations Orders” that direct benefits to be paid to a third party.
However, the Plan is not required to comply with such an order unless it meets the
statutory standards for a Qualified Domestic Relations Order....
...
(Id., pp. 21, 27).
Benjamin K. Steffens (“Steffens”) was a participant in the Fund at the time of his death on
February 15, 2012. (Complaint, ¶ 8; Certification of Death, ECF No. 22-1). At the time of his death,
Steffens had not yet retired. (Complaint, ¶ 8). Defendant Ashlee Steffens was married to Steffens

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on the date of his death and is entitled to either the qualified pre-retirement survivor annuity or
optional benefit. (Id., ¶ 11; Marriage License, ECF No. 22-2).
On March 12, 2012,1 Defendant Brian Kinkade entered a Domestic Relations Order (“Order”)
in Case No. 01176155 requiring that Defendant Kendra Steffens receive the sum of $38,544.62 as
her share of Steffens’s pension benefit in satisfaction of back child support obligations owed by
Steffens. (Complaint, ¶ 13; Order to Withhold, ECF No. 1-1, p. 1). According to Plaintiff, the Fund
received a copy of the Order on or shortly after March 9, 2012.2 (Complaint, ¶ 14). On March 14,
2012, Plaintiff sent a letter to Defendant Kendra Steffens stating that the Order did not constitute a
Qualified Domestic Relations Order (“QDRO”) under the Employee Retirement Income Security Act
(“ERISA”) and the Internal Revenue Code, as the Order provided for a type or form of benefit not
permitted under the Plan. (Id., ¶ 15).
Specifically, the letter to Defendant Kendra Steffens, which was addressed to her attorney,
Allen E. Moss, Jr., stated as follows:
The Order does not constitute a Qualified Domestic Relations Order under ERISA
and the Internal Revenue Code because it provides a type or form of benefit not
permitted under the Plan in violation of Section 206(d)(3)(D)(i) of ERISA, 29 U.S.C.
§ 1056(d)(3)(D)(i) and Internal Revenue Code Section 414(p)(3)(A), 26 U.S.C. §
414 (p)(3)(A)....This conclusion is initially based upon the fact that Benjamin Steffens
died on February 15, 2012, at least two weeks prior to the entry of the Domestic
Relations Order....
The Annuity Starting Date for a single sum payment of a spousal benefit, of the type
contemplated in the Domestic Relations Order, is defined by Section 205(h)(2)(A)(ii)
of ERISA, 29 U.S.C. § 1055(H)(1)(A)(ii), as “the first day on which all events have
occurred which entitle the participant to such benefit.” (Treas. Reg. § 1.401(a), Q &
A 10(b)(5) makes clear that the Annuity Starting Date for a death benefit paid in a

1

The Court notes that the Complaint asserts this occurred on March 12, 2011, but assumes
Plaintiff meant to state this occurred on March 12, 2012.
2

The Court notes this date precedes the entry of the Order.
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single sum is the date of the Participant’s death, January 4, 2012,3 as that is the date
on which all events occurred which would entitle an appropriate “surviving spouse”
to payment of a death benefit under the Plan.
In June 2010 the Department of Labor provided pension plans with regulatory
guidance concerning cases, like this one, where a Qualified Domestic Relations Order
is entered after either a Participant’s death or the Annuity Starting Date for benefits
paid under a Plan. Final Rule Relating to Time and Order of Issuance of Domestic
Relations Orders, 75 Fed. Reg. 32846 (June 10, 2010) (copy enclosed). The
Department of Labor recognized that there were cases in which a domestic relations
order could allocate benefits after the Annuity Starting Date without violating ERISA
Section 206(d)(3)(D)(i) and others where it could not. See Department of Labor
Regulation § 2530.206(d)(1), § 2530.206(d)(2), Example (3). In promulgating the
Rule, the Department of Labor specifically made the following observation:
With regard to the principle, expressed above, that a domestic
relations order issued after the annuity starting date does not violate
the requirements of section 206(d)(3)(D)(i) merely because the order
requires the allocation of some or all of the participant’s determined
monthly benefit payment to an alternate payee, the Department, based
on its review of sections 206 and 205 of ERISA, the case law, and
other relevant guidance, is of the view that such principle does not
apply to a domestic relations order that is received after the annuity
starting date and that requires an allocation to an alternate payee of
some or all of the death benefit that, under the form of benefit in
effect, is payable to another beneficiary. An example of this is a plan’s
receipt of a domestic relations order after the annuity starting date of
a QJSA that assigns to the participant’s former spouse a shared
payment of the participant’s current spouse’s survivor benefits under
the QJSA.
75 Fed. Reg. 32848 (June 10, 2010).
At the time of his death Benjamin Steffens was married to a spouse, Ashlee Miller,
who qualified as a surviving spouse under the Plan and who had a right to the same
Optional Benefit as is sought to be allocated to Kendra Steffens under the Domestic
Relations Order. The Annuity Starting Date for that benefit was also Mr. Steffens’
date of death, February 15, 2012, prior to the date of entry and the Fund’s receipt of
his Domestic Relations Order. The Fund construes the Department of Labor’s
regulatory guidance to require it to determine that this Domestic Relations Order is
not a Qualified Domestic Relations Order because it assigns to the Alternate Payee,
the Participant’s former spouse, after the Annuity Starting Date, a survivor benefit

3

The Court assumes the letter meant to note February 15, 2012, as the date of Steffens’s

death.
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payable to the Participant’s current spouse under the terms of the Plan and, thus,
violates ERISA Section 206(d)(3)(D)(i) and IRS Section 414(p)(3)(A) by providing
a type or form of benefit not permitted under the Plan. The death benefit payable to
the Alternate Payee under the Domestic Relations Order could not be paid under the
Plan because it would require use of the same funds the Pension Fund is required to
utilize to pay the death benefit to the Participant’s current spouse and, thus, is not a
type or form of benefit permitted under the Plan.
The Pension Fund recognizes that this case involves two competing claims for the
same plan benefit which the Pension Fund cannot simultaneously recognize without
providing double payment. Therefore, the Fund will file an interpleader action that
will issue a binding determination upon the Pension Fund regarding the proper
disposition fo the Fund’s assets in this matter. No payment of any benefits will be
made to either Ashlee Miller or Kendra Steffens until the Court determines the
appropriate party to receive the survivor benefit in the interpleader action.
...
(Letter to Allen E. Moss, Jr., from Donald D. Schwartz, ECF No. 1-2, pp. 1-3) (citation omitted).
Plaintiff filed its Complaint for Interpleader and Declaratory Relief in this Court on March 19,
2012, on the basis of subject-matter jurisdiction under 29 U.S.C. § 1132(a)(3). Plaintiff seeks a ruling
on interpleader and a declaration of the legal obligations of the Fund with respect to the competing
claims of Defendants Ashlee Steffens and Kendra Steffens to the Plan benefits payable after the death
of Benjamin Steffans. Defendant Brian Kinkade was dismissed from this action on April 13, 2012.
Defendant Kendra Steffens has failed to file an Answer in this action or otherwise respond to
Plaintiff’s Complaint. As indicated above, Defendant Ashlee Steffens filed the present Motion for
Summary Judgment on August 9, 2012.
STANDARD
The Court may grant a motion for summary judgment if “the pleadings, depositions, answers
to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of
law.” FED. R. CIV. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The substantive

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law determines which facts are critical and which are irrelevant. Only disputes over facts that might
affect the outcome will properly preclude summary judgment. Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 248 (1986). Summary judgment is not proper if the evidence is such that a reasonable jury
could return a verdict for the nonmoving party. Id.
A moving party always bears the burden of informing the Court of the basis of its motion.
Celotex, 477 U.S. at 323. Once the moving party discharges this burden, the nonmoving party must
set forth specific facts demonstrating that there is a dispute as to a genuine issue of material fact, not
the “mere existence of some alleged factual dispute.” FED. R. CIV. P. 56(e); Anderson, 477 U.S. at
247. The nonmoving party may not rest upon mere allegations or denials of its pleadings. Anderson,
477 U.S. at 256.
In passing on a motion for summary judgment, the Court must view the facts in the light most
favorable to the nonmoving party, and all justifiable inferences are to be drawn in its favor. Anderson,
477 U.S. at 255. The Court’s function is not to weigh the evidence but to determine whether there
is a genuine issue for trial. Id. at 249.
DISCUSSION
Defendant Ashlee Steffens argues that she is entitled to the full amount of benefits available
under the Plan since the Plan did not provide for payment to Defendant Kendra Steffens. Thus,
Defendant Ashlee Steffens appears to agree with Plaintiff’s reasoning as expressed in the March 14,
2012, letter to Defendant Kendra Steffens’s attorney.
“Where an ERISA plan gives the administrator discretionary power to...make eligibility
determinations, the administrator’s decision is reviewed for an abuse of discretion.” Trs. of
Electricians’ Salary Deferral Plan v. Wright, 688 F.3d 922, 926 (8th Cir. 2012) (quoting Hankins v.
Standard Ins. Co., 677 F.3d 830, 834 (8th Cir. 2012)). “The trustees’ choice to file an interpleader

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action does not preclude its eligibility determination from being afforded an abuse of discretion
review.” Id. (citing Alliant Techsystems, Inc. v. Marks, 465 F.3d 864, 868 (8th Cir. 2006)). The
Plan provides that Plaintiff Board of Trustees, as a fiduciary, “[e]xercises...discretionary authority or
discretionary control respecting management of this Plan...or control respecting management or
disposition of its assets” as well as “discretionary authority or discretionary responsibility in the
administration of this Plan.” (Pension Plan, p. 10). Therefore, the Plan gave Plaintiff discretionary
power to make eligibility determinations, and Plaintiff’s decision is reviewed for an abuse of
discretion.
Upon consideration, the Court cannot say Plaintiff abused its discretion by finding that the
Order entered in favor of Defendant Kendra Steffens was not a QDRO and that Defendant Kendra
Steffens was not entitled to any benefits under the Plan. Plaintiff noted in its letter to Defendant
Kendra Steffens’s attorney that a regulatory guideline promulgated by the Department of Labor
specifically states that a domestic relations order received after the annuity starting date assigning to
a participant’s former spouse a shared payment of the participant’s current spouse’s survivor benefits
under a pension plan is not a QDRO. The letter and the guideline note that ERISA provisions, cases,
and “relevant guidance” are in agreement with this proposition. See Boggs v. Boggs, 520 U.S. 833
(1997); Hopkins v. AT & T Global Info. Solutions Co., 105 F.3d 153 (4th Cir. 1997); Rivers v.
Central & S.W. Corp., 186 F.3d 681 (5th Cir. 1999); Carmona v. Carmona, 548 F. 3d 988 (9th Cir.
2008); 26 C.F.R. § 1.401(a)-20 Q&A-25(b)(3); and 29 C.F.R. § 4022.8(d). The terms of the Plan
provide that only a surviving spouse and a former spouse, to the extent the former spouse is seeking
to enforce a QDRO, may receive death benefits. (See Pension Plan, pp. 6, 19). Thus, Plaintiff found
that the Order seeks a type or form of benefit not permitted by the terms of Plan.

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An administrator’s decision will be considered reasonable if “a reasonable person could have
reached a similar decision, given the evidence before him, not that a reasonable person would have
reached that decision.”4 Phillips–Foster v. UNUM Life Ins. Co. of America, 302 F.3d 785, 794 (8th
Cir. 2002) (quoting Donaho, 74 F.3d at 899 (abrogated on other grounds)). The administrator’s
decision need not be the only sensible one so long as the decision provides a reasoned explanation,
based on the evidence, in support of a particular outcome. Id.
In light of the foregoing, the Court finds Plaintiff offered a “reasonable explanation for its
decision.” Fletcher-Merrit v. NorAm Energy Corp., 250 F.3d 1174, 1180 (8th Cir. 2001). Even if
another reasonable interpretation exists, the Plaintiff’s decision to deny benefits to Defendant Kendra
Steffens was not arbitrary and capricious, and this Court “may not simply substitute its opinion for
that of the plan administrator.” Id.; see also Rittenhouse v. UnitedHealth Group Long Term
Disability Ins. Plan, 476 F.3d 626, 632 (8th Cir. 2007) (internal quotations and citation omitted)
(“[The Plan’s] decision is supported by substantial evidence, i.e., such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion.”). Defendant Ashlee Steffens’s
Motion for Summary Judgment must therefore be granted.
CONCLUSION
Accordingly,
IT IS HEREBY ORDERED that Defendant Ashlee Steffens’s Motion for Summary
Judgment (ECF No. 22) is GRANTED.

An appropriate Judgment will accompany this

Memorandum and Order.

4

“Abuse of discretion,” “arbitrary and capricious,” and “reasonable” are synonymous in the
context of reviewing a denial of benefits under ERISA. West v. Aetna Life Ins. Co., 171
F.Supp.2d 856, 866 n.2 (N.D. Iowa 2001) (citing Donaho v. FMC Corp., 74 F.3d 894, 898–900
(8th Cir. 1996)).
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Dated this 22nd day of October, 2012.

/s/Jean C. Hamilton
UNITED STATES DISTRICT JUDGE

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