In re Estate of Sauers
32 A.3d 1241
| Pa. | 2011Background
- Decedent maintained a $40,000 ERISA-governed life insurance policy with Ex-Spouse as primary beneficiary and Ian Rehn as contingent beneficiary.
- Decedent divorced Ex-Spouse in 2002; policy designations remained unchanged at death in 2006.
- Administrator filed in York County Orphans’ Court in 2007 seeking distribution of policy proceeds to Contingent Beneficiary under 20 Pa.C.S. § 6111.2.
- Ex-Spouse objected, arguing ERISA preempts § 6111.2 and that the policy is an ERISA plan issue; Administrator contested jurisdiction and capacity to sue.
- Orphans’ Court denied objections; Superior Court en banc affirmed Administrator’s capacity and rejected § 6111.2 as saving the statute from preemption; this Court granted allowance to address capacity and preemption.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Administrator had capacity to sue in the Orphans’ Court on Contingent Beneficiary’s behalf | Sauers argues Administrator validly represents Contingent Beneficiary. | Ex-Spouse contends Administrator lacks authority since the matter concerns non-estate assets and does not implicate estate administration. | Administrator had capacity to sue. |
| Whether ERISA preempts 20 Pa.C.S. § 6111.2 in directing payment of ERISA plan proceeds to contingent beneficiaries | Sauers contends § 6111.2 is preempted as it governs ERISA plan distributions contrary to plan documents. | Ex-Spouse maintains § 6111.2 is a state-law redesignation that does not implicate ERISA uniformity or administration. | ERISA preempts § 6111.2 in its entirety. |
| Whether the prior restraint clause in § 6111.2 salvages the statute from preemption | Sauers argues the prior restraint clause protects plan administrators from liability, preserving § 6111.2. | Ex-Spouse argues the clause does not remove ERISA’s preemption concerns and the statute is still incompatible with ERISA. | Clause does not preserve § 6111.2 from preemption; statute impermissibly relates to ERISA. |
Key Cases Cited
- Egelhoff v. Egelhoff, 532 U.S. 141 (U.S. Supreme Court 2001) (preemption applies when state law binds plan administrators to beneficiary status contrary to plan documents)
- Fort Halifax Packing Co. v. Coyne, 482 U.S. 1 (U.S. Supreme Court 1987) (uniform administration of ERISA plans; preemption depends on ongoing nature of benefits and need for administrative scheme)
- Henderson’s Estate, 149 A.2d 892 (Pa. 1959) (life insurance assets as decedent’s personal property subject to administration)
- In re Shahan, 631 A.2d 1298 (Pa. Super. Ct. 1993) (estate administration authority over insurance proceeds related to decedent’s property)
- In re Estate of Sauers, 971 A.2d 1265 (Pa. Super. 2009) (en banc: ERISA preemption analysis and § 6111.2 implications)