Bank of Am. Pension Plan v. McMath

• Decision Date: 13 March 2000
• Docket Number: No. 98-16543,98-16543
• Parties: (9th Cir. 2000) BANK OF AMERICA PENSION PLAN, an employee benefit plan; BANK OF AMERICA 401(K) INVESTMENT PLAN, an employee benefit plan, Plaintiffs, v. ALEXANDER S. MCMATH, an individual, Defendant-Appellee, v. ALVA M. MONTGOMERY, an individual; PATSY PATTERSON, an individual; and THE ESTATE OF CLARENCE C. MONTGOMERY, Defendants-Appellants
• Court: U.S. Court of Appeals — Ninth Circuit

Page 821

206 F.3d 821 (9th Cir. 2000)

BANK OF AMERICA PENSION PLAN, an employee benefit plan; BANK OF AMERICA 401(K) INVESTMENT PLAN, an employee benefit plan, Plaintiffs, v. ALEXANDER S. MCMATH, an individual, Defendant-Appellee, v. ALVA M. MONTGOMERY, an individual; PATSY PATTERSON, an individual; and THE ESTATE OF CLARENCE C. MONTGOMERY, Defendants-Appellants.

No. 98-16543

UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

Argued and Submitted December 9, 1999

Filed March 13, 2000

[Copyrighted Material Omitted]

COUNSEL: Douglas A. Applegate, Seiler Epstein & Applegate, San Francisco, California, for the defendants-appellants.

John F. Henning, San Francisco, California, for the defendant-appellee.

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

Before: Joseph T. Sneed, Harry Pregerson, and William A. Fletcher, Circuit Judges.

Opinion by Judge Sneed; Concurrence by Judge Sneed

SNEED, Circuit Judge:

This case arises from an interpleader action brought by the Bank America 401(k) Plan ("401(k) Plan") and the Bank America Pension Plan ("Pension Plan," collectively, the "Plans") to resolve the proper beneficiaries of the benefits under the Plans. Defendants in the interpleader action, Alva M. Montgomery and Patsy Patterson (collectively, "Appellants"), appeal the summary judgment of the United States District Court for the Northern District of California, in favor of the co-defendant Alexander S. McMath ("Mr. McMath"). Appellants argue that summary judgment was improper against them because there were genuine issues of material fact and because the district court applied the incorrect law. We agree that the district court did err in that it should have applied California law rather than federal common law. Under California law, Mr. Montgomery did not substantially comply with the 401(k) Plan's beneficiary designation requirements. We therefore reverse the decision of the district court.

I. BACKGROUND

Clarence C. Montgomery ("Mr. Montgomery") worked at Bank of America from approximately 1990 until his death in November 1996. This present dispute is over the proceeds to the 401(k) Plan that Mr. Montgomery accumulated while working for Bank of America.¹ In 1990, Mr. Montgomery submitted a beneficiary designation form for the 401(k) Plan designating three primary beneficiaries: Alva Montgomery (his mother), Clarence H. Montgomery (his father), and Patsy Patterson (his sister). In March 1996, an unsigned beneficiary form was submitted for the 401(k) Plan, naming Mr. McMath as the primary beneficiary and Alva Montgomery as the contingent beneficiary. The 401(k) Plan accepted the form but failed to notice that it had not been signed.

After Mr. Montgomery's death in 1996, the 401(k) Plan realized the omission and informed both Mr. McMath and Appellants. Mr. McMath and Appellants subsequently attempted but were unable to reach an agreement on a division of the proceeds of the 401(k) Plan. In March 1997, both asserted claims to the 401(k) Plan. In April 1997, the 401(k) Plan claims administrator determined that the unsigned beneficiary form was valid, and that Mr. McMath was entitled to the 401(k) Plan benefit. Appellants appealed pursuant to the 401(k) Plan appeal procedures and in August 1997, the 401(k) Plan's Administrative Committee upheld the decision of the claim's administrator and denied the appeal.

The Plans filed an interpleader action under the Employee Retirement Income Security Act of 1974 (ERISA) and Federal Rule of Civil Procedure 22 to resolve the parties's respective positions in the dispute. In February 1998, the district court discharged the Plans from the action and released them from all liability to the claimants. Thereafter, Mr. McMath and Appellants filed cross motions for summary judgment and on July 22, 1998, the district court found that there were no genuine issues of material fact and ruled in favor of Mr. McMath.

The district court's ruling was based on the following findings: (1) Mr. Montgomery contacted the plan and requested the change of beneficiary form; (2) Mr. Montgomery then filled out the form and returned it, neglecting only to sign it; (3) Mr. Montgomery was deprived of the opportunity to sign the form because the plan's Service Center failed to return it to him for completion, in contravention of its standard policy to do so upon the receipt of unsigned forms; instead, (4) the Service Center filed the unsigned form as an effective change of beneficiary; and (5) the 401(k) Plan's fiduciary had discretion to determine eligibility for benefits and it exercised its discretion reasonably. In determining that the fiduciary had not abused its discretion, the district court found that: (1) ERISA preempted the state doctrine of substantial compliance; (2) a federal common law doctrine of substantial compliance applied; and (3) under the federal common law doctrine of substantial compliance Mr. Montgomery effectively designated Mr. McMath as his beneficiary.

We reverse and remand for further proceedings in accordance with this opinion.

II. JURISDICTION

The district court had jurisdiction of this interpleader complaint under section 502 of the ERISA. See 29 U.S.C. S1132. We have jurisdiction pursuant to 28 U.S.C. S1291.

III. DISCUSSION

A. STANDARD OF REVIEW

We review a grant of summary judgment de novo. See Balint v. Carson City, 180 F.3d 1047, 1050 (9th Cir. 1999) (en banc). In doing so, we "must determine, viewing the evidence in the light most favorable to the nonmoving party, whether there are any genuine issues of material fact and whether the district court correctly applied the relevant substantive law." Id.

B. GENUINE ISSUES OF MATERIAL FACT

Viewing the evidence in the light most favorable to the nonmoving party, we must determine, first, whether there are any genuine issues of material fact. Appellants have raised three factual issues at various times during these proceedings: they contend (1) that Mr. Montgomery did not complete the form (i.e., the portion of the form that was filled out was not in Mr. Montgomery's handwriting); (2) that Mr. Montgomery did not submit the form (i.e., even if he did fill out the form it was not he who mailed it to the Bank of America); and, alternatively, (3) that Mr. Montgomery completed and submitted the form to appease Mr. McMath but intentionally omitted his signature from the form because he did not intend to accomplish the change in beneficiary. We address each contention in turn.

1. Did Mr. Montgomery Complete the Form?

Appellants dispute the identity of the person who completed the unsigned beneficiary form. They argue that the handwriting is not Mr. Montgomery's and suggest that it is instead Mr. McMath's.² However, Appellants never raised this issue at the district court level. Further, the parties agreed in the Joint Case Management Statement that:

Most facts are not in dispute. Defendants Alva Montgomery and Patsy Patterson dispute whether the deceased submitted the unsigned beneficiary forms. Defendants Alva Montgomery and Patsy Patterson also dispute whether the deceased had the capacity or intent to make beneficiary designation changes.

(emphasis added). Moreover, Appellants asserted in their Opening Brief that the only factual issue in dispute was who submitted the form. Only in their reply brief do they attempt to introduce doubt as to who completed the form. Finally, the district court specifically asked counsel during the summary judgment hearing if there was a genuine issue as to who completed the form and counsel said there was not:

Judge: So I'm looking upon that and I'm accepting the fact that that is actually in Mr. Montgomery's handwriting. I think now is the time to come in with some evidence to the contrary, and I don't see any evidence to the contrary.

So, you're not suggesting, are you, that the genuine issue of material fact is whether or not [the form] is in Mr. Montgomery's handwriting?

Counsel: That would be correct . . . .

* * * * *

Counsel: We have a form that was preprinted. We have a form that he filled out. We have a form that requires that he sign and date the form. But it was not signed or dated.

(Transcript of Summary Judgment Hearing at 12, 21, Clerks Record Folder 2) (emphasis added).

The parties cannot raise new issues on appeal to secure a reversal of the lower court's summary judgment determination. See USA Petroleum Co. v. Atlantic Richfield Co., 13 F.3d 1276, 1284 (9th Cir. 1994) (citations omitted). We therefore find that Appellants have waived the issue of whether or not Mr. Montgomery completed the form.

2. Did Mr. Montgomery Return the Form to Bank of America?

Appellants argue that there is a factual dispute about who submitted the unsigned, undated beneficiary designation form to Bank of America listing Mr. McMath as Mr. Montgomery's primary beneficiary. Appellants argue that the absence of any evidence on this issue indicates that it was not Mr. Montgomery who returned the unsigned and undated form.

However, "it is a general rule that a party cannot revisit theories that it raises but abandons at summary judgment." USA Petroleum, 13 F.3d at 1284. While it is true that Appellants initially raised the issue of who submitted the form in the district court, they effectively abandoned it at summary judgment. The district court judge asked at least five times during the summary judgment hearing what the genuine issues of material fact were. Appellants failed to raise the issue when given the opportunity and in fact conceded it. Appellants instead pursued the theory that Mr. Montgomery submitted the form but intentionally did not sign the form:

Counsel: I think the fact that Mr. Alexander (sic) read the form and prepared some of it but didn't sign it is -it's pretty significant, I think, to show that maybe his intent wasn't to make an actual change. Maybe there was some sort of discussion with Mr. McMath that he wanted...