Reed Estate v. Reed
293 Mich. App. 168
| Mich. Ct. App. | 2011Background
- Reed challenges enforcement of the divorce judgment's pension benefits waiver requiring her to turn over retirement proceeds to decedent's estate; the court affirms enforcement.
- Parties were married in 2002; cohabitation ceased in 2003; divorce complaint filed 2007; Reed was served but did not answer or appear, and a default divorce judgment was entered on November 5, 2007.
- Divorce judgment awarded each party their own pension plans/IRAs and directed that life-insurance benefits be paid to minor children; preemptive beneficiary designation changes were acknowledged.
- Decedent died in 2009 without changing the beneficiary, and Reed, as designated beneficiary, obtained about $150,000 from the plan administrator; the estate later sought to enforce the divorce judgment and recover funds.
- Lower court did not challenge the plan administrator's distribution under ERISA, but focused on whether the waiver provision was valid; trial court ordered Reed to return funds.
- Court ultimately concludes Reed's waiver is valid and enforceable, the default judgment is conclusive, and Reed must return all funds to the decedent's estate.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the waiver valid and enforceable under Michigan law despite ERISA preemption | Reed argues ERISA preempts state-law enforcement of the waiver | Estate contends waiver is valid under state law and ERISA does not preempt | Waiver valid and enforceable under Michigan law |
| Does the default judgment affect enforceability of the waiver | Reed contends default defeats enforcement of the waiver | Estate argues default judgments are fully binding and enforceable | Default judgment does not defeat enforceability; waiver remains valid |
| Was there an implied waiver by Reed’s conduct | Reed argues silence cannot constitute a waiver | Estate argues conduct showed intent to waive the right | Waiver established by conduct; explicit language not required |
| Does ERISA preemption shield Reed from returning funds after distribution | ERISA preempts state-law enforcement of the waiver | ERISA does not govern post-distribution waiver enforcement under state law | ERISA preemption not the controlling issue; waiver analysis governs |
| Should Reed return the distributed funds to the estate | N/A | N/A | Reed must return funds in conformance with the waiver |
Key Cases Cited
- Sweebe v. Sweebe, 474 Mich 151 (2006) (default judgment enforceability and finality principles cited)
- Alan Custom Homes, Inc. v. Krol, 256 Mich App 505 (2003) (equitable considerations and finality in judgments)
- Wengel v. Wengel, 270 Mich App 86 (2006) (principles related to waiver and estoppel in divorce context)
- Walters v. Snyder, 239 Mich App 453 (2000) (waiver and enforcement principles in Michigan cases)
- Kalamazoo Oil Co. v. Boerman, 242 Mich App 75 (2000) (establishes lines on finality and enforceability of judgments)
- Rose v. Rose, 289 Mich App 45 (2010) (enforcement of judgments and related rights)