This mаtter comes before the Court on the defendant’s Motion for Summary Judgment. The issue before the Court is are the claims asserted by Gloria D. Griffin and James J. Griffin, III, to their father’s employer provided group life insurance policy and 401(k) plan based on a separation agreement with their father and the children’s mother preеmpted by the Employee Retirement Income Security Act of 1974 (ERISA)?
Facts
This action involves a claim by Gloria D. Griffin and James J. Griffin, III, to an employer provided group life insurance policy and a 401(k) available to decedent David L. Griffin, their father. It is undisputed that the proceeds at issue are a Metropolitan Life Insurance Policy Benefit worth $392,422.43 and a Dominion Salaried Savings Plan worth $354,126.73. The benefits are available through an ERISA-governed retirement plan of Dominion Virginia Power. Both policies name the decedent’s widow, Kimberly Cowser-Griffin, as the beneficiary of the plans. The decedent’s children seek to enforce the terms of a propеrty settlement agreement and impose a constructive trust over the assets should they win their claim.
The plan documents on the pension and 401(k) and welfare benefits in the form of a life insurance policy specifically state that, “[a]s provided for under the Employee Retirement Income Security Act of 1974 (ERISA), [plan participants] have certain rights relative to [their] participation in Dominion’s Benefit Plans.” In a divorce situation, the plan administrator should pay benefits to someone other than the named beneficiary “only in response to a Qualified Domestic Relations Order (QDRO),” which was not filed with the Dominion Plan Administrator. Thus, the plaintiffs will succeed on summary judgment only if the ERISA-protected funds become subject to state law’s imposition of a constructive trust once the funds have been disbursed to Ms. Cowser-Griffin.
Discussion
A plaintiff’s claim can survive a mоtion for summary judgment only if there is a genuine dispute of material facts. Jackson v. Hartig,
Summary judgment is proper because the claims asserted by Gloria D. Griffin and James J. Griffin, III, to their father’s employer provided group life insurance policy and 401(k) plan based on a separation agreement with their father and the children’s mother are preempted by ERISA. The Employee Retirement Income Security Act of 1974 (ERISA) states that an employee benefit plan must “specify the basis on which payments are made to and from the plan.” 29 U.S.C. § 1102(b)(4) (2012). Thе fiduciary under the plan must discharge his duties “in accordance with the documents and instruments governing the plan.” 29 U.S.C § 1104(a)(1)(D) (2012).
ERISA has a specific preemption provision that states that ERISA supersedes “any and all state laws insofar as they may now or hereafter relate to any employee benefit plan” that is covered by ERISA. 29 U.S.C. § 1144(a) (2012). For the purpose of that provision, the term “state law” encompasses “all laws, decisions, rules, regulations, or other State action having the effect of law, of any State.” 29 U.S.C. § 1144(c)(1) (2012). The provision speсifically excludes its application to qualified domestic relations orders (QDRO). 29 U.S.C. § 1144(b)(7) (2012). This preemption provision is worded broadly and is “clearly expansive.” Egelhoffv. Egelhoff
In Egelhoff, an employee of the Boeing Company had both a life insurance policy and a pension plan governed by ERISA, with his wife listed as the beneficiary. Id. at 144. The couple divorced prior to the death of Mr. Egelhoff, and the beneficiary of the policies was never changed. Id. Mr. Egelhoff’s children from a previous marriage sued for the proceeds of the plans as his lawful heirs under the intestacy statute because of a Washington state statute providing that the designation of a spouse as beneficiary is revoked automatically upon divorce. Id. at 143.
The Supreme Court in Egelhoffstated that one of ERISA’s principal goals is to enable employers “to establish a uniform administrative scheme, which provides a set of standard prоcedures to guide processing of claims and disbursement of benefits.” Egelhoff v. Egelhoff,
As a threshold matter, the plaintiffs in the instant case concede that the policies are both governed by ERISA and that their claims to enforce a private party contract and impose a constructive trust over the benefits paid are “state law” claims. Thus, for preemption to apply, the state law claims must “relate to” the ERISA-governed plans.
The plaintiffs’ state law claim for imposing a constructive trust over the plan benefits covered by ERISA based upon a property settlement agreement “relates to” the ERISA employee benefit plan. See 29 U.S.C. § 1144(a) (2012). In Metropolitan Life Ins. Co. v. Pettit,
The Court of Appeals for the Fourth Circuit asked whether ERISA preempted the enforcement of a property settlement agreement against life insurance proceeds paid through an ERISA-governed plan. Metropolitan Life Ins. Co. v. Pettit,
Plaintiffs argue that, because the court found that ERISA preempted the claim, it did not decide whether the court could enforce a constructive trust against the proceeds; but Pettit never distinguished between predistribution and post-distribution of funds. The threshold question of the court addresses “life insurance benefits” generally, not pre-distribution funds and post-distribution funds. This distinction also thwarts ERISA’s broad preemption and would increase litigation costs post-distribution of benefits.
Furthermore, a recеnt federal case in Wisconsin amplifies this notion. See Reliastar Life Ins. Co. v. Keddell, No. 09-C01195 (E.D. Wis. Jan. 12, 2011) (slip op.). The decedent in Reliastar had entered into a marital settlement agreement with his ex-wife after his divorce that stated he would name their children as his life insurance beneficiaries. The beneficiary named on the policy after the divorce was the decedent’s then-girlfriend, and the children sought to impose a constructive trust on the benefits. The court ruled that ERISA preempted the children’s state law claims because “state law claims cannot be used to circumvent the terms of an insurance policy governed by ERISA. It could be argued that imposing a constructive trust would not disturb ERISA bеcause the terms of the ERISA-governed plan will be fulfilled.” Id. However, this reasoning abrogates ERISA’s broad preemption provision and, therefore, “a constructive trust would violate
The plaintiffs’ assertion that there is a distinсtion under ERISA between the ability to reach benefits before they have been distributed to the beneficiary, as opposed to after their disbursement, frustrates the objectives of ERISA. The plaintiffs assert that the benefits paid to the beneficiary meet the goals and objectives of ERISA, and thus the imposition of a constructive trust at that point is permissible. However, the Supreme Court has held that ERISA protects plan participants and beneficiaries. Boggs v. Boggs,
Other courts have ruled that ERISA preemption applies to constructive trust claims regardless of whether the benefits have been disbursed. In the persuasive case Barnett v. Barnett,
The plaintiffs next argue that a claim to assert a constructive trust does not “relate to” ERISA’s anti-alienation provision and it does not thwart ERISA’s goals. The Virginia Supreme Court decided that death benefits governed by federal law are not subject to state law claims under the Federal Employees’ Group Life Insurance Act (FEGLIA). Maretta v. Hillman,
The United States Supreme Court in Ridgway held that the Servicemen’s Group Life Insurance Act of 1965 (SGLIA) preempted a constructive trust imposed upon the policy proceeds by a state-court decree. Ridgway,
FEGLIA, SGLIA, and ERISA are structured similarly, and the reasoning in Maretta and Ridgway are applicable to ERISA. FEGLIA contains an “order of precedence” that directs to whom the benefits under the policy are paid. 5 U.S.C. § 8705(a) (2012). Additionally, FEGLIA has a preemption provision, 5 U.S.C. § 8709(d)(1) (2012). SGLIA also has an order of precedence provision setting forth the statutory order of precedence for beneficiaries, 38 U.S.C. § 1970(a) (2012), and an anti-alienation provision prohibiting “attachment, levy, or seizure” from creditors’ claims before or aftеr distribution, 38 U.S.C. § 1970(g) (2012). ERISA, like FEGLIA and SGLIA, requires the plan administrator to pay the benefits to the designated beneficiary and, like FEGLIA, expressly preempts “all State laws” that “relate to” an ERISA plan, 29 U.S.C. § 1104(a)(1)(D) (2012), 29 U.S.C. § 1144(a) (2012). ERISA also has a provision prohibiting assignment or alienation, not unlike SGLIA’s anti-alienation provision, 29 U.S.C. § 1056(d)(1) (2012).
The plaintiffs argue, however, that the Ridgway analysis preempting the constructive trust claim looked to the anti-attachment statute under SGLIA and not the order of precedence provision analogous to ERISA’s provision requiring the plan administrator to follow the plan documents. The anti-attachment statute prohibits payments against “attachment, levy, or seizure,” 38 U.S.C. § 770(g) (2012). Therefore, the imposition of a constructive trust would constitute a “seizure” of the funds and is preempted by the statute. Ridgway v. Ridgway,
Although Maretta was based on FEGLIA and not ERISA, the Virginia Supreme Court rejected the argument that Ridgway is distinguishable because the United States Supreme Court depended on SGLIA’s anti-attachment provision in preempting the constructive trust claim. The Maretta court specifically stated that “[sjtate courts distinguishing Ridgway also fail to acknowledge what is apparent from a plain reading of the decision, i.e., that its holding based on SGLIA’s anti-attachment provision was a separate, independent basis for the result.” Maretta v. Hillman, 283
Additionally, ERISA provides a method for a former spouse or child to secure an interest in plan benefits. See Metropolitan Life Ins. Co. v. Pettit,
Conclusion
Because a claim for the imposition of a constructive trust “relates to” the plan benefits designated to defendant, Kimberly Cowser-Griffin, under ERISA, the plaintiffs’ claim is preempted. Since there is no genuine dispute of material fact, the plaintiffs cannot survive summary judgment, and summary judgment must, therefore, be entered in favor of the defendant.