Ablamis v. Roper, 89-15352

Citation937 F.2d 1450
Decision Date03 July 1991
Docket NumberNo. 89-15352,89-15352
Parties, 13 Employee Benefits Ca 2545 Duane ABLAMIS, Trustee of the RBJ Auto Parts Distributors, Inc. Profit Sharing Trust and the A & M Motor Supply, Inc. Profit Sharing Trust, Plaintiff-Appellee, v. Gay M. ROPER, Executor of the Estate of Glee Ann Ablamis, Defendant-Appellant.
CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)

Arthur H. Bredenbeck, Keith P. Bartel, Kevin F. Kouba, Carr, McClellan, Ingersoll, Thompson & Horn, Burlingame, Cal., Robert E. Temmerman, Jr., Campbell, Cal., for defendant-appellant.

Harry J. Kaplan, David K. Pansius, San Jose, Cal., for plaintiff-appellee.

Appeal from the United States District Court for the Northern District of California.

Before LIVELY, * FLETCHER and REINHARDT, Circuit Judges.

REINHARDT, Circuit Judge:

We are asked to decide here whether a wife who dies while her husband is still living may leave half his current or future pension benefits to a third party in her will. We hold that an employee whose pension interests are covered by ERISA may not be so divested of his entitlement.

In the case before us, Gay M. Roper, executrix of the estate of Glee Ann Ablamis (Executrix), appeals the decision of the district court granting summary judgment to Duane Ablamis, trustee for the RBJ Auto Parts Distributors, Inc. Profit Sharing Trust ("RBJ") and the A & M Motor Supply, Inc. Profit Sharing Trust ("A & M") (Trustee). These trusts are part of the retirement plans maintained by the two companies. The district court found, inter alia, that the Employee Retirement Income Security Act of 1974, 88 Stat. 829, as amended (ERISA), 29 U.S.C. sections 1001 et seq., preempts any state community property law which arguably provides a predeceasing nonemployee spouse with a testamentary interest in a fully vested surviving employee spouse's pension benefits. We affirm.


Glee Ablamis (Ms. Ablamis) and Roger Ablamis (Mr. Ablamis) were married on August 6, 1972. Their marriage continued until Ms. Ablamis's death on February 1, 1988.

Mr. Ablamis became a participant in the A & M retirement plan on July 1, 1968 and a participant in the RBJ retirement plan on August 1, 1973. Both plans are employee benefit profit sharing plans subject to the provisions of ERISA. Mr. Ablamis's interest in both plans was 100% vested at the time of Ms. Ablamis's death.

In 1987, Ms. Ablamis executed a will. The will left the majority of her estate to two trusts: one for her children of a previous marriage, and the other for the maintenance of her spouse, with a remainder to her children. Ms. Ablamis devised "all property subject to [her] testamentary power including [her] one-half ( 1/2) community property interest in all community assets and any separate property assets [she] may have."

The trustee of the retirement plans brought this action in federal district court because Ms. Ablamis's estate claimed a community property interest in Mr. Ablamis's vested rights in both plans. The parties filed cross-motions for summary judgment. 1 While the trustee sought a declaratory judgment that Ms. Ablamis's estate is not entitled to any interest in Mr. Ablamis's pension benefits, the executrix of Ms. Ablamis's estate sought a declaratory judgment that the estate is entitled to a one-half community property interest.

The district court granted summary judgment in favor of the trustee, finding that (1) California's community property laws do not allow a nonparticipant spouse to bequeath her interest in a participant spouse's retirement plan; and (2) the Retirement Equity Act of 1984 preempts any state law which arguably grants a nonparticipant spouse such an interest. 2 The executrix of Ms. Ablamis's estate appeals the district court's judgment. We need consider only the preemption question to resolve this dispute.

A. Statutory Background

Prior to the enactment of ERISA, many persons who had worked all their lives with the expectation of receiving income during their retirement years found themselves deprived of their pensions because of the absence of minimum standards protecting pension plan funds. Congress enacted ERISA to provide such protection and thus ensure "the continued well-being and security of millions of employees and their dependents" who rely upon retirement plans. H.R.Conf.Rep. No. 93-1280, at 7 (1974), U.S.Code Cong. & Admin.News 1974, p. 4639. Although ERISA consistently referred to either "employees and their beneficiaries" or "employees and their dependents" in its policy declaration, see 29 U.S.C. section 1001(a) (1982), the statute failed to delineate clearly a spouse's interest in an employee's pension benefits. The statutory confusion often left women who worked in the home and contributed significantly to the family's financial security without the ability to obtain any pension benefits upon their husbands' death or upon divorce. Accordingly, Congress passed the Retirement Equity Act of 1984 (REA), Pub.Law 98-397, 98 Stat. 1426, to afford better protection to women "dependent on ... [their] husband[s'] earnings and at the mercy of death or divorce." Pension Equity For Women: Hearings on H.R. 2100 Before the Subcomm. on Labor-Management Relations of the Committee on Education and Labor, 98th Cong., 1st Sess. 26 (1983) (statement of Hon. Geraldine Ferraro). In other words, REA amended ERISA in an effort primarily to safeguard the financial security of widows and divorcees. See Mackey v. Lanier Collections Agency & Service, 486 U.S. 825, 108 S.Ct. 2182, 2189-90, 100 L.Ed.2d 836 (1988) (stating that "the primary focus of [the qualified domestic relations exception] 3 was removing section 206(d)(1)'s anti-garnishment protection from pension plan benefits when spouses sought enforcement of domestic support orders ..."); Gabrielson v. Montgomery Ward & Co., 785 F.2d 762, 765 (9th Cir.1986) (asserting that Congress amended section 1055 "to enlarge rights of surviving spouses to receive benefits."); Heisler v. Jeep Corporation-UAW Retirement Income Plan, 807 F.2d 505, 509 (6th Cir.1986) (concluding that the REA sought to rectify certain inequities "by providing for 'automatic survivor benefits to the spouses of vested participants.' ") (quoting S.Rep. No. 575, 98th Cong., 2d Sess. 12, reprinted in 1984 U.S.Code Cong. & Ad.News 2547, 2558).

The REA specifically afforded protection to widows (and widowers) 4 by requiring pension plans to provide automatic survivor benefits. 29 U.S.C. section 1055. 5 Once a participant becomes vested under the plan--that is, has earned a nonforfeitable right to any portion of his accrued benefit--his spouse is assured of receiving a survivor's annuity if her husband predeceases her; the plan administrator must pay the surviving spouse, on the participant's death, at least 50% of the participant's benefit. 6 The survivor annuity may be waived only if the waiver is in writing and signed by the participant and the participant's spouse. 29 U.S.C. Sec. 1055(c)(1) On the death of the surviving spouse the survivor annuity terminates. It cannot be bequeathed. Moreover, with one extremely important but limited exception which we will discuss shortly, a spouse cannot receive any pension benefits directly until after the death of the plan participant; during the participant's lifetime the REA requires the plan administrator to pay the entire pension benefit to the former employee.

To secure the financial well-being of employees and their dependents, ERISA contains a spendthrift provision. That provision states that the "benefits provided under the [retirement] plan may not be assigned or alienated." 29 U.S.C. section 1056(d). In Guidry v. Sheet Metal Workers National Pension Fund, 493 U.S. 365, 110 S.Ct. 680, 107 L.Ed.2d 782 (1990), the United States Supreme Court asserted that any exceptions to the anti-alienation provision must be expressly mandated by Congress. 7 Guidry concluded that ERISA's prohibition on the assignment or alienation of pension benefits "reflects a considered congressional policy choice, a decision to safeguard a stream of income for pensioners (and their dependents ...), even if that decision prevents others from securing relief for the wrongs done them. If exceptions to this policy are to be made, it is for Congress to undertake that task." Id. 108 S.Ct. at 687 (footnote omitted). Thus, in the absence of an exception--and Congress has made none regarding survivor annuities--a surviving spouse may not alienate her own survivor's benefits during her lifetime, let alone a portion of her husband's benefits during his. Congress did make one important exception, however. As we have noted, Congress was also concerned with the inequities that might be suffered by women who are the economic victims of divorce or separation. To protect their interests, the REA creates an express statutory exception to the prohibition on assignment and alienation in the case of distributions made pursuant to certain state court orders: ERISA's spendthrift provisions are not applicable to a "qualified domestic relations order" (QDRO). A court may divide spousal rights in pension benefits through the mechanism of a QDRO and award the non-employee spouse her appropriate share of those benefits--but only if the domestic relations order is a "qualified" one as defined in the REA.

Under REA, a QDRO is any judgment, decree, or order made pursuant to a state domestic relations law (including community property law) which (1) "creates or recognizes 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 participant under a plan," and (2) "relates to the provision of child support, alimony payments, or marital property rights to a spouse, former spouse, child, or other dependent of a participant." 29 U.S.C. section 1056(d)(3)(B). Only "qualified"...

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