BorgWarner Inc. v. Mariano
| Decision Date | 01 February 2021 |
| Docket Number | No. CV-20-00321-PHX-SMB,CV-20-00321-PHX-SMB |
| Parties | BorgWarner Incorporated, Plaintiff, v. Eleanor C Mariano, et al., Defendants. |
| Court | U.S. District Court — District of Arizona |
Pending before the Court is Defendant/crossdefendant, Eleanor C. Mariano's ("Ms. Mariano") motion for summary judgement against Defendant/crossclaimant Mark Weber ("Mr. Weber") (Doc. 48.). Also pending before the Court is Ms. Mariano's motion for summary judgement against Defendant/crossclaimant Weber Living Trust ("WLT"). (Doc. 49.) Mr. Weber filed a response, (Doc. 59), and WLT did the same. (Doc. 56.) Ms. Mariano filed separate replies to both Mr. Weber's response, (Doc. 61), and WLT's response. (Doc. 62.) Oral argument on both motions was held on January 22, 2021. Having considered the parties' motions, the facts of the record, and relevant caselaw, the Court renders to following decision.
The undisputed facts of the case are as follows: Ms. Mariano married John Weber ("the Decedent") on June 5, 2010. The couple remained married until the Decedent's death on July 1, 2019. Ms. Mariano and the Decedent each had two children from prior marriages. Defendant Mr. Weber is one of Decedent's prior children. At the time of the marriage, the Decedent was employed at Remy International Inc., and a participant in the Delco Remy International Executive retirement plan ("the Plan"). The Plan provides quarterly payments to members following the end of their employment with one payment every quarter for the ten years following termination of the employment relationship.
The Plan allows members such as the decedent to designate a beneficiary. In the Plan, "beneficiary" is a defined term "mean[ing] one or more individuals designated on the applicable form by the [p]articipant to receive a death benefit under the plan." (Doc. 50-1 at 8.) Upon the death of a Plan participant, the remainder of any payments yet due under the plan are payable to the beneficiary designated. The Plan terms also specify what will occur if no beneficiary is designated, saying:
[t]he Participant may designate primary and contingent Beneficiaries to receive any Vested Supplemental Retirement Benefit available under the Plan, in the event of the Participant's death. If no Beneficiary is designated, any applicable Supplemental Retirement Benefit shall be distributed to (i) the Participant's spouse, then living, however, if not living, to (ii) the Participant's children, to be divided equally, however, if none are living, then to (iii) the Participant's estate....
(Id. at 16.)
The Decedent stepped down from his position at Remy International Inc. on February 28, 2013 and began receiving scheduled payments under the Plan. On November 10, 2015 Remy International Inc. was acquired by Plaintiff BorgWarner Inc., who continued to make the payments owed to the Decedent. At the time of his death, the Decedent was still owed $4,062,647.33 under the Plan terms. On February 11, 2020, BorgWarner Inc. filed an interpleader action with this Court under 29 U.S.C. § 1132(e)(1) and 28 U.S.C. § 1331 and Rule 22, Fed. R. Civ. P., seeking to determine who is the proper beneficiary of the Decedent's remaining benefits under the Plan. The interpleader Defendants, Ms. Mariano, Mr. Weber, and WLT, all agree the above quoted plan terms control distribution of the remaining benefits. However, each party disputes who is the rightful recipient of the benefits under the Plan terms.
Ms. Mariano alleges that under the Plan terms she is entitled to receive the remaining benefits as the Decedent's surviving spouse. Mr. Weber argues the terms of Ms. Mariano's prenuptial agreement with the Decedent prevent her from receiving the benefits, and as such, the benefits rightfully pass to he and his sister. WLT contends the provisions allocating funds to Decedent's surviving spouse or child are not applicable because Decedent designated WLT as Plan beneficiary. By the Plan terms, such a designation would take priority over the surviving spouse and child.
The Decedent first created WLT on December 16, 2006 and amended the trust twice prior to his death--once in 2013 and once in 2016. (Doc. 50-1 at 53.) In the Decedent's last will and testament, WLT is listed as the recipient of his residual estate. (Doc. 57-1 at 3.) WLT alleges the Decedent declared on multiple occasions that he intended any remaining benefits under the Plan to be given the WLT and distributed under the trust terms. In support of this, WLT has produced an affidavit from the Decedent's lawyer and corporate counsel. (Doc. 57-2 at 3-4.) That affidavit states that the Decedent on multiple occasions in 2006, 2010, and 2016, informed his lawyer that he intended for WLT to receive the benefits under the Plan and intended the plan benefits to be distributed according to the trust terms. (Id.) Thus, WLT has alleged a claim in this action, asserting it is the proper recipient of the Plan benefits as the named beneficiary. (Doc. 44.)
Ms. Mariano has filed a motion for summary judgement against WLT's claim. (Doc. 49.) Ms. Mariano argues that the Plan itself is governed by Indiana law which requires a deceased to do "everything in his power" to designate a beneficiary. (Id. at 2.) Ms. Mariano further argues that WLT has failed to produce any evidence that Decedent signed a beneficiary form or otherwise informed BorgWarner Inc. that WLT was his plan beneficiary. (Id. at 6.) WLT acknowledges that BorgWarner Inc. states in its original complaint that it has not located a signed beneficiary form for the Decedent. However, WLT argues this is not dispositive because BorgWarner Inc.'s complaint was an unsworn pleading. Further, WLT notes that BorgWarner Inc.'s dismissal from thisaction was contingent upon its agreement to answer discovery from the remaining parties regarding the designation of a Plan beneficiary. (Id.; Doc. 40 at 3.) That discovery has not yet been completed. WLT also contends that regardless of the uncompleted discovery, it has sufficient evidence to defeat a summary judgement motion due to its proffered affidavit signed by the Decedent's former attorney. (Doc. 57-2.)
Mr. Weber also argues that the Decedent signed no beneficiary form. However, Mr. Weber argues that Ms. Mariano is also not eligible to receive the Plan benefits because she agreed to waive her right under her prenuptial agreement.
The prenuptial agreement entered into by Ms. Mariano and the Decedent prior to their marriage contains several provisions relating to the separate nature of the couple's property. Both Ms. Mariano and Mr. Weber agree that under the terms of the prenuptial agreement the Plan was retained by the Decedent as his separate property during his lifetime in the sense that it was under his exclusive control. (Docs. 50 at 3; 59 at 5.) However, Ms. Mariano and Mr. Weber disagree about the correct effect to be given to other terms of the prenuptial agreement.
The disputed provisions of the premarital agreement include Section VII of the agreement, (Doc. 60-1 at 10-12), which states in pertinent part:
Notwithstanding Internal Revenue Code Section 401(a) (11) or 417, as amended, and ERISA Section 205, as amended, to the contrary, the parties intend and agree that any retirement, pension, or profit sharing benefits, all account balances and additions thereto and all future contributions thereto, shall continue after the marriage of the parties to constitute the separate property of Husband and be subject to his beneficiary designation. In accordance with such intention and understanding, Wife agrees that after the parties' marriage she shall at the proper time execute a consent of spouse waiver of Qualified Joint and Survivor Annuity and Qualified Preretirement Survivor Annuity, in accordance with the requirements for such consent set forth in IRC 417 and ERISA 205 described above, or as such requirements may hereafter be amended. In the event Wife fails or refuses for any reason to properly execute such lull, sufficient and valid consent for any or all of the qualified plans covered hereby. Husband, his estate, and/or any affected designated beneficiary of his, as intended third party beneficiaries to thisAgreement, may file an action for specific performance, sue for damages or bring any other allowable legal action for breach hereunder by Wife.
Also disputed is the correct construction of Sections XII, XIV, and XVII of the prenuptial agreement. Section XII, (Doc. 60-1 at 17), is entitled "Gifts" and states:
Notwithstanding the provisions of this Agreement, either party may in writing transfer, convey, devise or bequeath any property to the other. Neither party intends by this Agreement to limit or restrict in any way the right to receive any such conveyance, device or bequest from the other. A written inter vivo transfer or conveyance of property between the parties shall be deemed a gift between spouses unless clearly indicated to the contrary in a writing executed by both parties.
Section XIV, (Id. at 18), is entitled "Estate plan" and states in pertinent part:
Notwithstanding the provisions of this Agreement, either party shall have the right to transfer or convey to the other any property or interest therein which may be lawfully transferred during his or her lifetime by Will or otherwise upon death and neither party intends by this Agreement to limit or restrict in any way the right or power to receive any such transfer or conveyance from the other, but this provision shall not be construed as a promise or representation that any such additional gift, bequest or devise shall be made by either party...
Finally, Section XVII is entitled "Additional Documents" and states in pertinent part that:
Husband and Wife agree to do all such things and take all such actions, and to make, execute and deliver such other documents and instruments as shall be...
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