Opposition Brief — Hendon v. E. I. du Pont de Nemours & Co.

| Supreme Court, U.S.

3 eee ge

. OCT 14 1998

No. 98-289

-4 CLERK

In The

Supreme Court of the United States

October Term, 1998

e

KATHERINE M. HENDON, Administrator of the

Estate of Martha Mayberry, Deceased,

Petitioner,

v.

E.I. DU PONT DE NEMOURS AND COMPANY

and JAKE FULLER,

t

Respondents.

¢

On Petition For Writ Of Certiorari

To The United States Court Of Appeals

For The Sixth Circuit

+

BRIEF IN OPPOSITION

¢

CLARENCE E. WALKER

Counsel of Record

99 Walnut Street,

Suite 200

Chattanooga, TN 37403-1133

423 /266-7647

Counsel for Respondent Fuller

October, 1998

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964

OR CALL COLLECT (402) 342-2831

TABLE OF CONTENTS

Page

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TABLE-OF AUTINORITINS ...... «26. <6<00-005060056: ii

sravenemer OF THE CASE... <2. 205005000....55. 1

THE PETITION FOR WRIT OF CERTIORARI

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TABLE OF AUTHORITIES

CASES

Bower v. Bower, 637 S.W.2d 456 (Tenn. 1982)......

Matthews v. Lawrence, 703 S.W. 2d 156 (Tenn. App.

POUNDS 5.4 008 0.05 ts 0d o5 OA 4 We ee ee

McMillan v. Parrott, 913 F.2d 310 (6th Cir. 1990)..

Metropolitan Life Insurance Co. v. Marsh, 119 F.3d

SED BO Ga Re Bin ss bss he a ee oe

Metropolitan Life Insurance Co. v. Pressley, 82 F.3d

ee Re. | rs em en oe

Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 107 S.Ct.

ph eg Pe ener me

Teachers Insurance & Anniuty Association v. Harris,

TOP B.A. 2 Fed Cream. TIED) oo occ cs ciscvca sven

Whitworth Bros. Storage Co. v. Central States SE and

SW Pension Fund, 794 F.2d 221 (6th Cir.), cert

denied, 479 U.S. 1007, 107 S.Ct. 645, 93 L.Ed.2d

TOL (EOP. 3 5.0 dante kc dpenei nso 63408 ck Ea eew

STATUTES

29 TIS Bee Os ir ktkict sae seca

29 US.C. §1056(d)(SXB) and (C) ..... 5.6.0

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STATEMENT OF THE CASE

Before her death on July 17, 1994, Martha Mayberry

(hereinafter, “Mayberry”) was an employee of E. I.

DuPont de Nemours and Company (hereinafter

“DuPont”). [App. 2a-3a] As an employee of DuPont, she

participated in three benefit plans governed by the

Employee Retirement Income Security Act (hereinafter,

“ERISA”), 29 U.S.C. §§1001 et seq. The three ERISA bene-

fit plans included DuPont Group Life Insurance Plan,

DuPont Savings Plan, and a TRASOP Stock Plan. [App.

21-31]. Under the ERISA Provisions, Ms. Mayberry was

required to name a beneficiary who would receive the

benefits under the plan in the event of her death. As a

plan participant, Ms. Mayberry retained the right to

freely change her beneficiary any time prior to her death.

Ms. Mayberry designated her husband, Jake Fuller (here-

inafter, “Fuller”), a defendant/respondent in this matter.

On June 6, 1994, Ms. Mayberry and Mr. Fuller

divorced. The Marital Dissolution Agreement (hereinaf-

ter, “MDA”) entered between Ms. Mayberry and Mr.

Fuller and incorporated into the Final Divorce Decree

made division of the marital property. Appropriately, the

parties considered and treated the DuPont pension ar.d

retirement benefits, as well as the DuPont Stock and

Thrift Plan and SIP plan as marital property. Ms.

| Mayberry was awarded all of her DuPont pension and

retirement benefits, her DuPont Stock and Thrift Plan,

and SIP Plan. Consequently, the agreement divested Mr.

Fuller of all rights, title and interest in Ms. Mayberry’s

property. [App. 12a-13a]. No provision was included to

identify an alternate payee in either the MDA or the Final

Decree. Following the divorce Ms. Mayberry did not

remove Mr. Fuller as the designated beneficiary from the

plan documents. [App. 20a].

Forty-one days following the divorce, Ms. Mayberry

died intestate. The petitioner Hendon, was appointed the

administratrix of the estate. [App. 20a].

The defendant DuPont, upon Ms. Mayberry’s death,

in accordance with the designation of beneficiary form on

file, appropriately determined and distributed the plan

benefits to the named beneficiary, Mr. Fuller. [App. 24a].

As a result of DuPont distributing the benefits to Mr.

Fuller, the Petitioner filed a civil action against Mr. Fuller

and DuPont alleging state law claims of breach of con-

tract and conversion. [App. 18a-19a]. This civil action was

removed from the Chancery Court of Hamilton County,

Tennessee to the United States District Court for the

Eastern District of Tennessee. [App. 19a].

Each of the defendants moved to dismiss the action.

The District Court treating the motions to dismiss as

motions for summary judgment granted the motions and

dismissed the civil action against the respondents on

August 13, 1996. [App. 26a]. The district court held that

the Petitioner’s cause of action was governed and pre-

empted by ERISA and the plan documents controlled.

[App. 23a-25a]. The court additionally found that the

MDA did not change the beneficiary status of Mr. Fuller

under the benefits plan. [App. 24a]. Petitioner appealed

to the United States Court of Appeals for the Sixth Cir-

cuit.

The Sixth Circuit affirmed the decision of the lower

court finding no error. [App. 29a, 40a]. The Sixth Circuit

held that ERISA preempted the state law claims and

>

further required the plan administrator to follow the

beneficiary designation according to the plan documents.

[App. 40a]. Petitioner filed her Petition for Writ of Cer-

tiorari.

¢

THE PETITION FOR WRIT OF CERTIORARI

SHOULD BE DENIED

The Petitioner is relying heavily on the argument

there is a split of authority among the circuits as to

whether the language of ERISA or federal common law

provides the rule of law to determine whether the plan

documents or a properly worded divorce decree should

govern the disposition of the plan benefits upon the

death of the plan participant. The Petitioner has dis-

tanced herself from her original argument that the affect

of her state law claims on the employee benefit plans

were “too tenuous, remote or peripheral” to warrant that

the state law claims “relate to” the plan and thus pre-

empted by ERISA.

The Sixth Circuit has consistently found that ERISA

supplies its own rule of law and there is no need to look

further than to the language of ERISA. However, the

Sixth Circuit recognizes that other courts of appeals have

held under federal common law a decedent’s ex-spouse

may waive his rights as a beneficiary of the decedent’s

insurance plan; if, the divorce decree specifically divested

the spouse of the rights in question.

In Metropolitan Life Insurance Co. v. Pressley, 82 F.3d

126 (6th Cir. 1996), the Sixth Circuit acknowledged it took

a different view than its sister circuits and held that

4

ERISA supplies the rule of law. 82 F.3d 126, 130 (6th Cir.

1996). The Sixth Circuit resolved that Congress intended

ERISA plans be uniform in their interpretation and sim-

ple in their application. McMillan v. Parrott, 913 F.2d 310,

312 (6th Cir. 1990). Therefore, the Sixth Circuit has consis-

tently construed ERISA according to its statutory lan-

guage. See, Metropolitan Life Insurance Co. v. Pressley, 82

F.2d 126 (6th Cir. 1996); Metropolitan Life Insurance Co. v.

Marsh, 119 F.3d 415 (6th Cir. 1997); McMillan v. Parrott,

913 F.2d 310 (6th Cir. 1990).

If the statutory language failed to provide guidance,

then the court would look to the federal common law for

an answer, which if not clear, may then draw guidance

from analogous state law. Id. at 311, citing Pilot Life Ins.

Co. v. Dedeaux, 481 U.S. 41, 45, 107 S.Ct. 1549, 1551, 95

L.Ed.2d 39 (1987); Whitworth Bros. Storage Co. v. Central

States SE and SW Pension Fund, 794 F.2d 221, 234-235 (6th

Cir.), cert. denied, 479 U.S. 1007, 107 S.Ct. 645, 93 L.Ed.2d

701 (1986). The Sixth Circuit does not find the need to

take the analysis a step further by looking to federal

common law or analogous state law.

Rather than muddy the waters, the Sixth Circuit

strictly follows the language of ERISA and 29 U.S.C.

§1104(a)(1)(D) requiring the “plan administrator dis-

charge his duties in accordance with the documents and

instruments governing the plan. . . ” McMillan, at 311;

Marsh, 119 F.3d at 420; Pressley, 82 F.2d at 130. Even if the

Sixth Circuit were to find that language of ERISA failed

to provide the answer to whether the documents within

an ERiSA plan controlled, or a Final Divorce Decree

controlled, the designation of the beneficiary of ERISA

benefits, it would have to look to federal common law.

Finding no clear answer in federal common law the court

would then look to the analogous state law. Analogous

state law does not support the petitioner’s position.

The Supreme Court of Tennessee has had occasion to

determine whether the designation of beneficiary docu-

ments control or the final divorce decree. The Tennessee

Supreme court has held that the designation of benefici-

ary documents control. Bower v. Bower, 637 S.W.2d 456

(Tenn. 1982); See also, Teachers Insurance & Annuity Asso-

ciation v. Harris, 709 S.W. 2d 592 (Tenn. 1985); Matthews v.

Lawrence, 703 S.W. 2d 156 (Tenn. App. 1985).

Respondent DuPont correctly and eloquently dis-

cusses that the decisions of the lower courts in this matter

does not expand any difference of approach to this ques-

tion by the court of appeals. The alleged balance among

the circuits has not changed, thus the issue does not

warrant resolution by this Court. This brief adopts the

conclusion of the Respondent DuPont and will not bela-

bor the issue further.

Finally, the Petitioner attempts to raise the issue that

the MDA substantially complies with ERISA and thereby

qualifies as a qualified domestic relations order (QDRO).

First, the petitioner did not raise the issue until she

petitioned for rehearing before the Sixth Circuit. The

Sixth Circuit did not entertain this issue and this Court

should not entertain the issue as a basis for review.

However, even if the issue had been timely raised,

the MDA and Final Divorce Decree do not qualify as a

QDRO. Under ERISA, 29 U.S.C. §1056(d)(3)(B) and (C), a

qualified domestic relations order must create or recog-

nize the existence of an alternate payee’s right to, or

assigns to an alternate payee the right to, receive all or a

portion of the benefits payable with respect to a partici-

pant under a plan. Furthermore, a QDRO is required to

clearly specify the name and last known mailing address

of the alternate payee to meet the requirements of ERISA.

The MDA nor the Final Divorce Decree meet these

requirements and does not qualify as a QDRO.

+

CONCLUSION

For the reasons stated, the petition for a writ of

certiorari should be denied.

Respectfully submitted,

CLARENCE E. WALKER

99 Walnut, Suite 200

Chattanooga, Tennessee 37403

423/266-7647

Counsel for Respondent Fuller