Boyd v. Metropolitan Life Insurance

PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

MARY EMMA BOYD; W.P. BOYD, as 

Personal Representative of the

Estate of Emma C. Boyd,

Plaintiffs-Appellants,

v.

METROPOLITAN LIFE INSURANCE

COMPANY,

 No. 10-1702

Defendant-Appellee.

SECRETARY OF LABOR,

Amicus Supporting Appellee.



Appeal from the United States District Court

for the District of South Carolina, at Charleston.

C. Weston Houck, Senior District Judge.

(2:09-cv-03325-CWH)

Argued: January 27, 2011

Decided: March 31, 2011

Before WILKINSON, MOTZ, and DUNCAN,

Circuit Judges.

Affirmed by published opinion. Judge Wilkinson wrote the

opinion, in which Judge Motz and Judge Duncan joined.

2 BOYD v. METROPOLITAN LIFE INSURANCE

COUNSEL

ARGUED: Robert Edward Hoskins, FOSTER LAW FIRM,

LLP, Greenville, South Carolina, for Appellants. Lowell

David Kass, METROPOLITAN LIFE INSURANCE COM-

PANY, New York, New York, for Appellee. Jamila B. Minn-

icks, UNITED STATES DEPARTMENT OF LABOR,

Washington, D.C., for Amicus Supporting Appellee. ON

BRIEF: Elizabeth J. Bondurant, SMITH MOORE LEATH-

ERWOOD LLP, Atlanta, Georgia; William H. Jordan,

SMITH MOORE LEATHERWOOD LLP, Greenville, South

Carolina, for Appellee. M. Patricia Smith, Solicitor of Labor,

Timothy D. Hauser, Associate Solicitor for Plan Benefits

Security, Nathaniel I. Spiller, Counsel for Appellate and Spe-

cial Litigation, UNITED STATES DEPARTMENT OF

LABOR, Washington, D.C., for Amicus Supporting Appellee.

OPINION

WILKINSON, Circuit Judge:

Emma C. Boyd was an employee of Delta Airlines, Inc.

who participated in a life insurance plan administered by Met-

ropolitan Life Insurance Company ("MetLife") and governed

by the Employee Retirement Income Security Act of 1974

("ERISA"), 29 U.S.C. § 1001 et seq. At the time of Emma’s

death in November 2008, the plan documents on file with

MetLife designated Emma’s husband, Robert Alsager, as the

primary beneficiary of the plan. MetLife thus paid the plan

proceeds to Alsager even though he and Emma had separated

and even though he had previously signed a separation agree-

ment in family court waiving any claim to the benefits.

In response, Mary Emma Boyd (Emma’s mother) and W.

P. Boyd (Mary Emma’s son and the personal representative

of Emma’s estate) filed this suit, claiming eligibility for the

BOYD v. METROPOLITAN LIFE INSURANCE 3

benefits on the theory that Alsager had relinquished his right

to receive them. The district court dismissed their suit, con-

cluding that MetLife had fulfilled its statutory duty under

ERISA by awarding benefits to the beneficiary designated in

the documents Emma filed with the plan. We agree. The

Boyds’ arguments are foreclosed by the Supreme Court’s

recent decision in Kennedy v. Plan Administrator for DuPont

Savings & Investment Plan, 129 S. Ct. 865 (2009), and we

therefore affirm the judgment.

I.

The facts of this case are both brief and undisputed. Emma

C. Boyd, a resident of Charleston, South Carolina, worked for

Delta Airlines until her untimely death. As a Delta employee,

she participated in a life insurance plan governed by the

Employee Retirement Income Security Act of 1974

("ERISA"), 29 U.S.C. § 1001 et seq. The plan allowed her to

designate a beneficiary in her application or in her enrollment

form; that person would be first in line to receive the proceeds

of the policy. Moreover, Emma could unilaterally change the

designated beneficiary at any time by sending a signed and

dated written request to MetLife. In the event that Emma

failed to designate a beneficiary or had no surviving benefi-

ciary at the time of her death, the plan made clear that

MetLife would disburse benefits to her estate. The plan did

not specify any procedure for beneficiaries to follow in order

to waive their claims to benefits.

On December 10, 2001, Emma filed a beneficiary designa-

tion form naming her husband, Robert Alsager, as the primary

beneficiary of the plan. Emma also designated her mother,

Mary Emma Boyd, as the contingent beneficiary in the event

that Alsager refused to take the benefits. Roughly six years

later, however, Emma and Alsager separated. In April 2008,

the family court in Charleston, South Carolina entered an

order approving Emma and Alsager’s separation and property

settlement agreement. One provision of that agreement

4 BOYD v. METROPOLITAN LIFE INSURANCE

released Emma’s and Alsager’s claims to the other’s estate or

property:

Each party relinquishes and disclaims all right, claim

or interest whether actual, inchoate or contingent, in

law and in equity that she or he may acquire in the

property or estate of the other, including without

limitation . . . the right to receive proceeds, funds or

property as a beneficiary under any life insurance

policies.

While Emma obtained Alsager’s signature on that agreement,

she never changed the beneficiary designation on file with

MetLife, meaning that Alsager remained the primary benefi-

ciary under the plan.

On November 8, 2008, Emma passed away. Mary Emma

Boyd and her son, W. P. Boyd ("the Boyds"), filed a claim for

the benefits from the life insurance policy. Despite having

signed the settlement agreement, Alsager filed a claim as

well. Relying on the plan documents on file, MetLife deter-

mined that the benefits should be paid to Alsager and denied

the Boyds’ claim. MetLife indicated at oral argument that it

has since paid the benefits to Alsager.

The Boyds then sent a letter to MetLife appealing the

denial of their claim, arguing that Alsager had waived any

right to recover benefits when he signed the property settle-

ment agreement. After MetLife replied with a letter upholding

the denial of benefits, the Boyds filed suit under 29 U.S.C.

§ 1132(a)(1)(B) — which permits an individual to file a civil

action "to recover benefits due to him under the terms of his

plan" or "to enforce his rights under the terms of the plan" —

in district court in December 2009. The court granted

MetLife’s motion to dismiss the Boyds’ suit on June 15,

2010, concluding that MetLife had carried out its statutory

obligations by disbursing benefits in accordance with the ben-

BOYD v. METROPOLITAN LIFE INSURANCE 5

eficiary designation form on file with the plan. This appeal

followed.

II.

Enacted in 1974, ERISA established a "comprehensive and

complex scheme" for regulating private pension plans. Bor-

den, Inc. v. Bakery & Confectionery Union & Indus. Int’l

Pension, 974 F.2d 528, 529 (4th Cir. 1992). In order to protect

plan participants and beneficiaries from fiduciary abuses,

ERISA requires plan administrators to "discharge [their]

duties with respect to a plan solely in the interest of the partic-

ipants and beneficiaries," and to do so "for the exclusive pur-

pose of . . . providing benefits to participants and their

beneficiaries[ ] and . . . defraying reasonable expenses of

administering the plan." 29 U.S.C. § 1104(a)(1). To that end,

plan administrators must act "in accordance with the docu-

ments and instruments governing the plan insofar as such doc-

uments and instruments are consistent with" the other

provisions of ERISA. 29 U.S.C. § 1104(a)(1)(D). Indeed,

Congress identified the need to follow plan documents as a

"core principle[ ]" of the act. See S. Rep. No. 93-127, at 30

(1974), reprinted in 1974 U.S.C.C.A.N. 4838, 4866.

In Kennedy v. Plan Administrator for DuPont Savings &

Investment Plan, 129 S. Ct. 865 (2009), the Supreme Court

construed 29 U.S.C. § 1104(a)(1)(D) as a broad endorsement

of the "plan documents rule," Kennedy, 129 S. Ct. at 877,

under which plan administrators look solely at "the directives

of the plan documents" in determining how to disburse bene-

fits, id. at 875. In other words, a claim for benefits must

"stand[ ] or fall[ ] by ‘the terms of the plan.’" Id. (quoting 29

U.S.C. § 1132(a)(1)(B)). This rule followed the plain text of

the statute, which instructs employers to distribute benefits "in

accordance with the documents and instruments governing the

plan." 29 U.S.C. § 1104(a)(1)(D). It also accorded with the

statute’s purpose, as "ERISA’s statutory scheme ‘is built

around reliance on the face of written plan documents.’" Ken-

6 BOYD v. METROPOLITAN LIFE INSURANCE

nedy, 129 S. Ct. at 875 (quoting Curtiss-Wright Corp. v.

Schoonejongen, 514 U.S. 73, 83 (1995)).

Moreover, as the Court noted, the rule makes good sense.

The plan documents rule provides plan participants with "a

clear set of instructions for making [their] own instructions

clear." Id. It gives employers "clear distribution instructions,

without going into court," id. at 876, and thus permits them

to create "a uniform administrative scheme, [with] a set of

standard procedures to guide processing of claims and dis-

bursement of benefits," id. at 875 (quoting Egelhoff v. Egel-

hoff, 532 U.S. 141, 148 (2001)). And it avoids the

complications, delays, and costs inherent in requiring admin-

istrators to examine external documents in an attempt to piece

together a plan participant’s intent. In short, the plan docu-

ments rule ensures "that beneficiaries get what’s coming

quickly, without the folderol essential under less-certain

rules." Id. at 875-76 (quoting Fox Valley & Vicinity Constr.

Workers Pension Fund v. Brown, 897 F.2d 275, 283 (7th Cir.

1990) (Easterbrook, J., dissenting)).

Kennedy, however, did not just announce the plan docu-

ments rule. It also confirmed the rule’s soundness through

application. In Kennedy, the Court confronted a situation

where Kennedy’s ex-wife was party to a divorce decree

divesting her of any right to proceeds from Kennedy’s retire-

ment or pension plans, but where she remained the designated

beneficiary of one of Kennedy’s pension benefit plans in the

documents on file with the plan. Id. at 868-69. Upon Kenne-

dy’s death, the executrix of his estate claimed that the funds

from that pension plan should be distributed to the estate inso-

far as Kennedy’s ex-wife had waived any claim to benefits

under the divorce decree. Id. at 869. But the Court rejected

that argument, concluding that the plan administrator "was

[not] required to honor [the ex-wife’s] waiver with the conse-

quence of distributing the [plan] balance to the Estate," but

instead was statutorily required to distribute benefits in accor-

dance with the documents on file. Id. at 874-75.

BOYD v. METROPOLITAN LIFE INSURANCE 7

In other words, even though Kennedy’s ex-wife’s waiver

was clear, the Court concluded that it could not trump the plan

documents. In its view, requiring plan administrators to ana-

lyze such waivers would involve them in thorny questions

about "whether a claimed federal common law waiver was

knowing and voluntary, whether its language addressed the

particular benefits at issue, and so forth." Id. at 876. Such an

approach would be time-consuming and ultimately unneces-

sary, given that both the participant and the beneficiary could

head such situations off at the pass: the participant by filing

a change of beneficiary form — "an easy way" to make his

intent pellucid, id. at 877, and the beneficiary by refusing to

take the benefits to avoid further litigation, id. at 872. Finally,

and perhaps most importantly, the Court noted that undermin-

ing the plan documents rule could lead to costly "litigation

like this over the meaning and enforceability of purported

waivers," destroying the administrator’s ability "to get clear

distribution instructions[ ] without going into court." Id. at

876.

Seeing little need to encourage the "factually complex and

subjective determinations" that would arise under a contrary

approach, the Court endorsed the plan documents rule across

the board. Id. at 876; see also Carmona v. Carmona, 603 F.3d

1041, 1060-61 (9th Cir. 2010) (confirming, in the aftermath

of Kennedy, that plan administrators must "‘hew[ ] to the

directives of the plan documents’ rather than ‘examin[e] a

multitude of external documents that might purport to affect

the dispensation of benefits’") (quoting Kennedy, 129 S. Ct.

at 875, 876); In re Radcliffe, 563 F.3d 627, 633 (7th Cir.

2009) ("Under Kennedy, the administrator is obligated to pay

the benefits in conformity with plan documents without resort

to external documents.") There was only one caveat to the

Court’s holding: in footnote 13 of the opinion, the Court

stated that its ruling did not "address a situation in which the

plan documents provide no means for a beneficiary to

renounce an interest in benefits," unlike the plan in Kennedy.

Id. at 877 n.13.

8 BOYD v. METROPOLITAN LIFE INSURANCE

With these principles in mind, we turn to the Boyds’ argu-

ment that Alsager’s waiver of benefits in the separation agree-

ment should prevent him from taking benefits under the

MetLife plan.

III.

A.

At first blush, Kennedy seems rather straightforwardly to

foreclose the Boyds’ claims. As in Kennedy, it is undisputed

that the plan documents on file at the time of Emma’s death

declared Alsager to be the primary beneficiary of the plan, as

Emma never took advantage of her option to designate a new

beneficiary. See Kennedy, 129 S. Ct. at 869. As in Kennedy,

Alsager waived any claim to the benefits as part of his divorce

proceedings. See id. And as in Kennedy, the Boyds’ chief

argument on appeal is that Alsager’s waiver can and should

trump the plan documents on file. See id. at 869-70. Given

these similarities, it is difficult to see why we should not reach

a similar conclusion to the Court’s: that Alsager’s waiver does

not supersede plan documents, and that Metlife acted properly

in disbursing benefits according to the plan documents on file.

The Boyds initially argue that Kennedy is factually distin-

guishable, but their arguments on that score lack merit. First,

the Boyds observe that Alsager actually signed a waiver in the

presence of witnesses, whereas Kennedy’s ex-wife was

merely party to a court decree divesting her of the plan pro-

ceeds. See id. at 869. But this is a distinction without a differ-

ence: nothing in Kennedy turned on whether there were

adequate indicia of Kennedy’s ex-wife’s intent to disclaim,

and nothing about the Court’s holding suggested that the

Court would have reached a different result if Kennedy’s ex-

wife had put pen to paper. See id. at 875-76.

Next, the Boyds contend that Kennedy is not on point

because it involved an ERISA "employee pension benefit

BOYD v. METROPOLITAN LIFE INSURANCE 9

plan" under 29 U.S.C. § 1002(2), whereas this case involves

an ERISA "employee welfare benefit plan" under 29 U.S.C.

§ 1002(1). But as the Boyds themselves observe, this pur-

ported basis of distinction is "not as significant." Appellants’

Br. at 12. Neither Kennedy nor 29 U.S.C. § 1104(a)(1)(D)

provides any basis for concluding that the plan documents

rule only applies to employee pension benefit plans. Indeed,

in deciding to broadly endorse the plan documents rule, Ken-

nedy drew upon case law involving employee welfare benefit

plans — an odd decision if employee welfare benefit plans

and employee pension benefit plans were somehow different.

See Kennedy, 129 S. Ct. at 875 (citing Egelhoff v. Egelhoff,

532 U.S. 141, 148 (2001)).*

B.

The Boyds’ further response is that Kennedy is not control-

ling. As the Boyds point out, the MetLife plan at issue here

— unlike the pension plan at issue in Kennedy, see 129 S. Ct.

at 877 — contains no formal "means for a beneficiary to

renounce an interest in benefits," id. at 877 n.13. On their

view, this case thus falls within the class of situations the

Court "d[id] not address." Id. But that is not all: the Boyds do

not just argue that Kennedy is not controlling — they also

argue that the plan documents rule does not apply in situations

where a plan has no formal mechanism for beneficiaries to

renounce benefits. Thus, the Boyds contend, Alsager’s waiver

in the separation agreement should carry the day.

The chief problem with the Boyds’ argument, however, is

that footnote 13 cannot bear the weight they would place on

it. For starters, it is unclear that the footnote has any relevance

to this case, given that Alsager did not show any interest in

*In the district court, the Boyds relied on Estate of Altobelli v. IBM

Corp., 77 F.3d 78 (4th Cir. 1996). However, Altobelli is inconsistent with

the Kennedy decision. See Kennedy, 129 S. Ct. at 875-76. On appeal, the

Boyds disclaimed reliance on that case. See Appellants’ Br. at 19 n.4.

10 BOYD v. METROPOLITAN LIFE INSURANCE

renouncing the benefits once Emma passed away. It might be

significant that plan documents provide no means for a bene-

ficiary to waive benefits in a scenario where the beneficiary

actually wishes to refuse them: in that situation, strict applica-

tion of the plan documents rule would create the absurd result

of forcing the beneficiary to take benefits that he does not

want. See id. at 872. Here, however, Alsager filed a claim for

benefits, belying any claim that he wanted to refuse them.

Moreover, regardless of whether footnote 13 is pertinent, it

makes little sense to read it as hinging the applicability of the

plan documents rule on whether the plan features formal pro-

cedures for waiver. Before concluding that Kennedy’s ex-

wife’s waiver could not trump the plan documents, the Court

ruled that the ex-wife’s waiver was not null and void under

ERISA’s anti-alienation provision, which prevents a benefi-

ciary from attempting to convey her interest in plan benefits

to another party. See id. at 870-72; see also 29 U.S.C.

§ 1056(d)(1). In concluding that § 1056(d)(1) does not pre-

clude waivers of benefits, the Court discussed at length the

ways in which ERISA drew on the law of spendthrift trusts,

under which the beneficiary "traditionally . . . ha[d] the power

to disclaim prior to accepting" his interest. Kennedy, 129 S.

Ct. at 871-72. As the Court observed, "[a] designated benefi-

ciary of a spendthrift trust is not required to accept or retain

an interest prescribed by the terms of the trust." Id. at 872

(quoting 2 Restatement (Third) of Trusts § 58(1), cmt. c

(2001)). Furthermore, the right to disclaim benefits is not just

grounded in "common law," but also in "[c]ommon sense":

the law "certainly is not so absurd as to force a man to take

an estate against his will," id. (quoting Townson v. Tickell,

106 Eng. Rep. 575, 576-77 (K.B. 1819)).

But if an ERISA plan beneficiary always has the option to

refuse benefits at the moment of distribution — as Kennedy

indicates and as MetLife represented at oral argument — then

the only way a plan really could "provide no means for a ben-

eficiary to renounce an interest in benefits" under footnote 13,

BOYD v. METROPOLITAN LIFE INSURANCE 11

id. at 877 n.13, would be if the plan somehow prevented the

beneficiary from refusing to take the insurance proceeds. As

the Secretary of Labor has aptly noted, "[i]nsofar as, pursuant

to Kennedy, no person can be forced to accept a benefit

against his or her will, a person’s right of refusal to accept

benefits otherwise payable to him or her is self-executing and

requires no express incorporation by a plan in order to make

the refusal permissible." Amicus Br. of Sec’y of Labor at 17-

18. Again, Alsager had every chance to waive his right and

refuse the insurance proceeds. He wished to accept them,

however, and the plan documents required the plan adminis-

trator to respect his wishes.

In short, the Boyds’ arguments do not provide any basis for

this court to depart from the clear and evident thrust of the

Kennedy decision. Nothing in Kennedy authorizes a plan

administrator to disregard a validly executed beneficiary des-

ignation form where the beneficiary has made no effort to dis-

claim his right to benefits. Rather, the Court wished to give

meaning to the plain intent of Congress in 29 U.S.C.

§ 1104(a)(1)(D), see Kennedy, 129 S. Ct. at 875-76; it wished

to provide beneficiaries the prospect of prompt receipt of ben-

efits without the burdens of uncertainty, see id.; and it wished

to relieve plan administrators of the need to divine obscure

participant intentions and of the specter of a lengthy fight in

court, see id. at 875-76.

MetLife represented at oral argument that it may well set

forth formal disclaimer procedures in its plans going forward.

But even where such procedures are absent, the beneficiary

can still make his intent clear by refusing to take benefits.

Moreover, to the extent the plan participant wishes to direct

benefits to a different party, she can simply change the desig-

nation on file. Given the easy availability of these options —

not to mention their simplicity — we see no reason to force

plan administrators to scrutinize waivers extrinsic to plan doc-

uments. That approach would bring about the very same

results that led the Court in Kennedy to adopt the plan docu-

12 BOYD v. METROPOLITAN LIFE INSURANCE

ments rule in the first place: the difficulties of determining

whether a waiver was adequate, knowing, and voluntary; the

delay in the disbursement of benefits caused by increased

uncertainty over how to proceed; and the increased likelihood

of administrators throwing themselves squarely into the center

of contentious family disputes and exposing themselves to

ceaseless litigation. Id. at 875-76. None of these consequences

are we prepared to risk, as we would be doing if we over-

turned the district court.

C.

We need not rest our ruling merely on our interpretation of

Kennedy, for the Eighth Circuit addressed this very issue in

Matschiner v. Hartford Life & Accident Insurance Co., 622

F.3d 885 (8th Cir. 2010). The facts of Matschiner are func-

tionally identical: the plan at issue did not set forth any "for-

mal procedures" for waiver, Matschiner, 622 F.3d at 888, and

the plan documents on file at the time of the participant’s

death named the participant’s ex-husband as a beneficiary of

the plan, even though the ex-husband was party to a divorce

decree relinquishing his interest in the proceeds of his ex-

wife’s life insurance policies, id. at 886, 889.

Faced with these circumstances, the Eighth Circuit had lit-

tle difficulty reaching the same conclusions we reach here:

that "the plan documents, not the divorce decree, are control-

ling," and that footnote 13 only addresses situations where a

plan "preclud[es] a pension benefit plan beneficiary from dis-

claiming an unwanted interest." Id. at 888. And it relied on

similar reasoning: that the Court "did not intend to exempt

from the plan documents rule all welfare benefit plans that do

not contain an express waiver-of-benefits provision." See id.

Moreover, the Secretary of Labor — who possesses consid-

erable enforcement authority with respect to Title I of ERISA,

see, e.g., 29 U.S.C. §§ 1002(13), 1132; Sec’y of Labor v. Fitz-

simmons, 805 F.2d 682, 688-91 (7th Cir. 1986) — agrees with

BOYD v. METROPOLITAN LIFE INSURANCE 13

MetLife. Both in its amicus brief and at oral argument, the

Secretary argued convincingly for affirming the district court

on the grounds that Kennedy, and by extension the "plan doc-

uments rule," required MetLife to distribute benefits exactly

as it did. Amicus Br. of Sec’y of Labor at 8. In the Secretary’s

view, footnote 13 is simply not implicated here because Als-

ager "made no effort to disclaim his right to benefits," id. at

9, and because the footnote only applies in situations where

the plan "affirmatively state[s] that disclaimer is not permitted

under the plan," id. at 17. By contrast, where the plan does not

preclude waiver but merely fails to set forth formal proce-

dures, plan administrators are "not required or expected to

consider ‘a multitude of external documents that might pur-

port to affect the dispensation of benefits.’" Id. at 13 (quoting

Kennedy, 129 S. Ct. at 876).

Both the Eighth Circuit and the Secretary of Labor thus

confirm that the Boyds’ position is not sustainable. If MetLife

had ignored the beneficiary designation form on file and

given dispositive weight to the separation agreement, it would

have contravened the text of 29 U.S.C. § 1104(a)(1)(D), the

terms of the plan, and the core principles animating Kennedy.

None of this means that the separation agreement is irrelevant.

Its interpretation and enforcement, however, are not matters

for the plan administrator, but are between Alsager and the

Boyds.

In sum, we see no need and possess no warrant to unwind

Kennedy and make a puzzle of plan administration, especially

given that Congress has provided an alternative that is simul-

taneously clearer and more sensible. See Kennedy, 129 S. Ct.

at 875-76, Matschiner, 622 F.3d at 887. Inasmuch as MetLife

did what the law required it to do, the case against it must be

dismissed and the judgment of the district court must be

affirmed.

AFFIRMED