Burns v. Orthotek, Inc. Employees' Pension Plan & Trust
657 F.3d 571
| 7th Cir. | 2011Background
- Dr. Burns created Orthotek, Inc. Employees' Pension Plan and Trust; he died May 11, 2004, leaving Cheryl Burns as spouse and three sons as prior-marriage children beneficiaries.
- Approximately February 24-25, 2003, Dr. Burns signed waiver of survivor annuity, designated his sons as beneficiaries, and Cheryl Burns consented to that designation; the three documents form a single writing.
- ERISA requires spousal consent to waive survivor annuity to be witnessed by a plan representative or notary; Cheryl Burns signed, but the witness status is contested.
- The Plan denied benefits, the district court upheld, relying on substantial-compliance doctrine; Mrs. Burns appealed.
- The Seventh Circuit reviews under arbitrary-and-capricious standard due to plan discretion, with de novo review for ERISA-interpretation issues.
- The court ultimately affirms the Plan's denial, holding the plan reasonably concluded Dr. Burns witnessed Cheryl Burns's consent under the unusual facts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Should substantial compliance apply to ERISA spousal-consent? | Burns argues ERISA requires strict witnessing; substantial-compliance should validate consent. | Orthotek contends ERISA's explicit witness requirement cannot be cured by substantial compliance. | Substantial compliance does not apply to this explicit witness requirement. |
| Was Cheryl Burns's spousal consent witnessed by a plan representative under §1055? | No witness signature; plan representative's witnessing cannot satisfy the requirement. | Dr. Burns, as plan representative, witnessed Cheryl's consent despite timing and placement details. | Yes; under unique facts, Dr. Burns witnessed Cheryl's consent. |
| Is the Plan's denial of benefits upheld under arbitrary-and-capricious review? | If consent invalid, Cheryl should receive survivor benefits. | Plan properly denied benefits based on valid designation and witnessing. | Plan denial upheld as within discretion. |
Key Cases Cited
- Davis v. Combes, 294 F.3d 931 (7th Cir. 2002) (unsigned designation-form can be valid where ERISA silent)
- Butler v. Encyclopaedia Britannica, Inc., 41 F.3d 285 (7th Cir. 1994) (witnessing and attestation; physical presence not always required; regularity presumption)
- Lasche v. George W. Lasche Basic Profit Sharing Plan, 111 F.3d 863 (11th Cir. 1997) (blank witness line implies no witness; form-directed signature places matter)
- Martinez v. United Automobile, 772 F.2d 348 (7th Cir. 1985) (arbitrary-and-capricious review; deferential standard)