47 F.4th 679
8th Cir.2022Background
- Sally Hogen and Clifford Hogen divorced in 2002; their marital termination agreement (MTA) awarded Sally “all of the parties’ right, title, and interest in and to the Honeywell 401(k).”
- In 2008 Sally tried to change beneficiaries, listing three siblings as 33 1/3% each; Honeywell rejected the form because the plan required whole-percentage allocations and notified Sally. Honeywell’s records continued to show Clifford as sole beneficiary.
- Sally died in 2019 with nearly $600,000 in the 401(k). Honeywell paid benefits to Clifford. Robert Gelschus, personal representative of Sally’s estate, sued Honeywell (ERISA breach of fiduciary duty) and Clifford (breach of contract, unjust enrichment, conversion, civil theft, among others).
- The district court granted summary judgment to Honeywell (applying the ERISA plan-documents rule) and to Clifford (finding lack of standing and no factual dispute that the MTA did not waive Clifford’s beneficiary interest).
- On appeal the Eighth Circuit affirmed summary judgment for Honeywell but reversed summary judgment for Clifford as to breach of contract and unjust enrichment, holding the estate has standing as a third-party beneficiary or assignee and that material factual disputes exist about the MTA’s scope.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Honeywell breached ERISA fiduciary duties by rejecting Sally’s defective beneficiary form and paying Clifford | Honeywell should have recognized substantial compliance or otherwise honored Sally’s intent to remove Clifford | Honeywell followed express plan procedures; plan-documents rule required rejecting defective form and paying the recorded beneficiary | Affirmed for Honeywell — administrator acted in accordance with plan documents; no abuse of discretion |
| Whether ERISA preempts post-distribution suits against benefit recipients | Estate: ERISA does not preempt an action against the recipient after distribution | Clifford: ERISA preempts claims to recover distributed benefits | Not preempted — consistent with circuit precedent; estate may sue recipient post-distribution |
| Whether the estate has standing to sue Clifford for breach of contract | Estate: Has standing as personal representative and as assignee/third-party beneficiary of siblings’ attempted designations | Clifford: No standing because the alleged injury (acceptance of funds) occurred after Sally’s death | Estate has third-party beneficiary/assignee standing; district court’s standing dismissal reversed |
| Whether the MTA unambiguously waived Clifford’s beneficiary interest (summary judgment issue) | Estate: MTA’s grant of “all right, title, and interest in and to the Honeywell 401(k)” divested Clifford of beneficiary rights | Clifford: MTA ambiguous; alleged pre-signing verbal agreement preserved his beneficiary designation | Ambiguity and extrinsic evidence create genuine factual disputes; summary judgment for Clifford on contract claim reversed |
| Whether unjust enrichment can proceed if contract claim fails | Estate: Alternative equitable remedy if contract does not bar recovery | Clifford: Unjust enrichment barred if contract enforceable | Remanded: unjust enrichment may proceed if jury finds no contractual waiver; if contract found, unjust enrichment is barred |
| Whether conversion and civil theft claims survive | Estate: Acceptance of benefits violated revocation-on-divorce and constitutes wrongful taking | Clifford: Claims are contractual, not tortious; no independent tort | Affirmed dismissal for Clifford — no independent tort established for conversion or civil theft |
Key Cases Cited
- Kennedy v. Plan Adm'r for DuPont Sav. & Inv. Plan, 555 U.S. 285 (2009) (ERISA requires administrators to follow plan documents and limits post-payment inquiry into intent)
- Matschiner v. Hartford Life & Acc. Ins. Co., 622 F.3d 885 (8th Cir. 2010) (applying Kennedy and upholding administrator who paid the only valid designation on file)
- Est. of Kensinger v. URL Pharma, Inc., 674 F.3d 131 (3d Cir. 2012) (post-distribution suits against recipients are not preempted by ERISA)
- Andochick v. Byrd, 709 F.3d 296 (4th Cir. 2013) (same; permitting estate suits against recipients after distribution)
- Brown v. Agin, 109 N.W.2d 147 (Minn. 1961) (equitable relief may reassign benefits consistent with decedent’s intent despite technical noncompliance)