Laborers' Pension Fund v. Miscevic

• Decision Date: 29 January 2018
• Docket Number: No. 17-2022,17-2022
• Citation: 880 F.3d 927
• Parties: LABORERS' PENSION FUND and James S. Jorgensen, Administrator of the Fund, Interpleader Plaintiffs, v. Anka V. MISCEVIC, Interpleader Defendant-Cross/Plaintiff-Appellant, v. Estate of M.M., and Snezana J. Kaplarevic, Guardian of the Estate, Cross/Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

880 F.3d 927

LABORERS' PENSION FUND and James S. Jorgensen, Administrator of the Fund, Interpleader Plaintiffs,

v.Anka V. MISCEVIC, Interpleader Defendant-Cross/Plaintiff-Appellant,

v.Estate of M.M., and Snezana J. Kaplarevic, Guardian of the Estate, Cross/Defendants-Appellees.

No. 17-2022

United States Court of Appeals, Seventh Circuit.

Argued January 9, 2018

Decided January 29, 2018

Jeremy M. Barr, Attorney, Dowd, Bloch, Bennett, Cervone, Auerbach & Yokich, Chicago, IL, for Plaintiffs.

Mark D. DeBofsky, Attorney, DeBofsky, Sherman & Casciari, P.C., Chicago, IL, for Plaintiff–Appellant.

Josh M. Friedman, Attorney, Chicago, IL, for Defendants–Appellees.

Before Flaum, Kanne, and Rovner, Circuit Judges.

Flaum, Circuit Judge.

In January 2014, Anka Miscevic ("Anka") killed her husband, Zeljko Miscevic ("Zeljko"). At a state criminal proceeding, the court determined that Anka intended to kill Zeljko without legal justification. However, the court also determined that Anka was insane at the time of the killing and found her not guilty of first degree murder by reason of insanity. Following the criminal trial, the Laborers' Pension Fund (the "Fund") brought an interpleader action to determine the proper beneficiary of Zeljko’s pension benefits. Anka claimed she was entitled to a Surviving Spouse Pension. The Estate of M.M. (Anka and Zeljko’s child) argued that Anka was barred from recovering from the Fund by the Illinois slayer statute. After both parties filed motions seeking a judgment on the pleadings, the district court ruled in favor of the Estate of M.M. It determined that the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1001 – 1461, did not preempt the Illinois slayer statute, and that the statute barred even those found not guilty by reason of insanity from recovering from the deceased. We affirm.

I. Background

The factual background is undisputed. On January 9, 2014, Anka killed her husband Zeljko at their home. The State of Illinois charged Anka with first degree murder. At the criminal trial, the parties stipulated to the details: Anka stabbed Zeljko with a large kitchen knife while he was asleep; Anka struck Zeljko in the head with a baseball bat in order to prevent him from calling the police; and Anka told the police that she loved Zeljko but killed him because "she feared that he intended to kill her and her family." Anka has a history of serious mental illness, including paranoid delusions, and has received mental health treatment. Anka and Zeljko had one living child, thirteen-year-old M.M.

At trial, Judge Liam Brennan of the Circuit Court of DuPage County determined that the state established each element of first degree murder beyond a reasonable doubt. Specifically, he found that "Anka Miscevic intended to kill Zeljko Miscevic without legal justification." Judge Brennan also determined, however, that Anka established by clear and convincing evidence that she was insane at the time of the offense. Therefore, Judge Brennan found Anka not guilty by reason of insanity.

Prior to his death, Zeljko worked as a union laborer and earned a vested pension benefit from the Fund, to be paid to Zeljko upon his retirement as monthly annuity for his life. According to the Fund’s governing documents, when a married participant dies before the benefit commences, the participant’s spouse receives a Surviving Spouse Pension, a monthly annuity payable for the spouse’s life. Where the deceased does not have a surviving spouse, the individual’s minor child receives a Minor Child Benefit, a monthly benefit payable until the child reaches the age of twenty-one. After Zeljko’s death, both Anka and the Estate of M.M. sought to recover Zeljko’s pension benefits. The Fund and its administrator filed an interpleader action to determine the proper beneficiary.

Neither the Fund’s documents nor ERISA address whether a claimant who killed the Fund participant can receive a benefit. However, a section of the Illinois Probate Act of 1975, known as the "slayer statute," provides that "[a] person who intentionally and unjustifiably causes the death of another shall not receive any property, benefit, or other interest by reason of the death." 755 Ill. Comp. Stat. 5/2-6. A determination of whether the statute applies "may be made by any court of competent jurisdiction separate and apart from any criminal proceeding arising from the death." Id. In such a situation, "[t]he property, benefit, or other interest shall pass as if the person causing the death died before the decedent." Id.

Both Anka and the Estate of M.M. moved for judgment on the pleadings. The Estate of M.M. argued that the Illinois slayer statute barred Anka from recovery. Anka claimed that ERISA preempts the slayer statute, or alternatively, that the statute does not apply because she was found not guilty of Zeljko’s murder by reason of insanity. On March 24, 2017, the district court granted the Estate of M.M.’s motion for judgment on the pleadings, concluding that ERISA does not preempt the Illinois slayer statute and that the slayer statute barred Anka from receiving benefits from the Fund. This appeal followed.

II. Discussion

"We review de novo the district court’s order granting judgment on the pleadings." Int'l Union of Operating Eng'rs Local 139 v. Schimel , 863 F.3d 674, 677 (7th Cir. 2017). Likewise, we review de novo a district court’s preemption ruling. Kolbe & Kolbe Health & Welfare Benefit Plan v. Med. Coll. of Wis., Inc. , 657 F.3d 496, 504 (7th Cir. 2011).

A. ERISA Preemption

ERISA’s preemption clause states that ERISA "shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan" described by ERISA. 29 U.S.C. § 1144(a). The key to determining whether the preemption clause applies is the interpretation of the words "relate to." Kolbe , 657 F.3d at 504. "A law ‘relates to’ an employee benefit plan if it has a connection with or reference to such a plan." Id . Therefore, ERISA "preempts a state law claim if the claim requires the court to interpret or apply the terms of an employee benefit plan." Id. (quoting Collins v. Ralston Purina Co. , 147 F.3d 592, 595 (7th Cir. 1998) ).

While ERISA is expansive, it does not preempt a state law claim "merely because it requires a cursory examination of ERISA plan provisions." Id. (quoting Trs. of AFTRA Health Fund v. Biondi , 303 F.3d 765, 780 (7th Cir. 2002) ). Indeed, "[s]ome state actions may affect employee benefit plans in too tenuous, remote, or peripheral a manner to warrant a finding that the law ‘relates to’ the plan." Shaw v. Delta Air Lines, Inc. , 463 U.S. 85, 100 n.21, 103 S.Ct. 2890, 77 L.Ed.2d 490 (1983). And where the state law is "a traditional area of state regulation," the party seeking preemption must overcome " ‘the starting presumption that Congress does not intend to supplant state law.’ " Biondi , 303 F.3d at 775 (quoting De Buono v. NYSA-ILA Med. & Clinical Servs. Fund , 520 U.S. 806, 814, 117 S.Ct. 1747, 138 L.Ed.2d 21 (1997) ). In short:

[T]o determine whether a state law has the forbidden connection [to ERISA], we look both to the objectives of the ERISA statute as a guide to the scope of the state law that Congress understood would survive, as well as to the nature of the effect of the state law on ERISA plans.

Egelhoff v. Egelhoff , 532 U.S. 141, 147, 121 S.Ct. 1322, 149 L.Ed.2d 264 (2001) (internal quotation marks omitted) (quoting Cal. Div. of Labor Standards Enf't v. Dillingham Constr., N.A., Inc. , 519 U.S. 316, 325, 117 S.Ct. 832, 136 L.Ed.2d 791 (1997) ); see also Kolbe , 657 F.3d at 504 ("The question whether a certain state action is preempted by federal law is one of congressional intent." (quoting Ingersoll–Rand Co. v. McClendon , 498 U.S. 133, 137–38, 111 S.Ct. 478, 112 L.Ed.2d 474 (1990) )).

In Egelhoff , the Supreme Court held that ERISA preempted a Washington statute which provided that a dissolved or invalidated marriage would revoke earlier beneficiary designations to the former spouse.¹

532 U.S. at 144–152, 121 S.Ct. 1322. First, the Court held that "[t]he statute [bound] ERISA plan administrators to a particular choice of rules for determining beneficiary status," noting that "[t]he administrators [were required to] pay benefits to the beneficiaries chosen by state law, rather than to those identified in the plan documents." Id. at 147, 121 S.Ct. 1322. Second, the Court determined that the statute "govern[ed] the payment of benefits, a central matter of plan administration." Id. at 148, 121 S.Ct. 1322. Finally, the Court stressed that the statute "interfere[d] with nationally uniform plan administration" because "[u]niformity is impossible ... if plans are subject to different legal obligations in different States."² Id . In sum, the Court concluded that the Washington statute "directly conflict[ed] with ERISA’s requirements that plans be administered, and benefits be paid, in accordance with plan documents," and therefore, "impose[d] ‘precisely the burden that ERISA preemption was intended to avoid.’ " Id. at 150, 121 S.Ct. 1322 (quoting Fort Halifax Packing Co., Inc. v. Coyne , 482 U.S. 1, 10, 107 S.Ct. 2211, 96 L.Ed.2d 1 (1987) ).

Anka argues that the Court’s opinion in Egelhoff "compels a conclusion that [the Illinois slayer statute] is preempted." She maintains that based on Egelhoff , "the only logical conclusion that may be drawn with respect to [the Illinois slayer statute] is that it is preempted pursuant to [ERISA] as a law that ‘relates to’ employee benefit plans." We disagree.

Critically, the Court in Egelhoff commented that slayer statutes present a different question than the Washington statute at issue in that case. The Court acknowledged that, "[i]n the ERISA context, ... ‘slayer’ statutes could revoke the beneficiary status of someone who murdered a plan participant." Id. at 152, 121 S.Ct. 1322. Nevertheless, the Court stressed "that the principle underlying the statutes—which have been adopted by nearly...