Carmona v. Carmona

Decision Date17 September 2008
Docket Number06-15938.,No. 06-15581,06-15581
PartiesJanis CARMONA, Plaintiff, v. Judy CARMONA; Hilton Hotels Corporation, Retirement Plan, Defendants, v. Nevada Resort Association International Alliance of Theatrical and State Employees Local 720 Pension Trust (I.A.T.S.E. Trustees), Cross-claimant-Appellant, v. Judy Carmona, Successor representative of Lupe N. Carmona deceased, Cross-defendant-Appellee. Janis Carmona, a.k.a. Janis Kester, Plaintiff-Appellant, v. Judy Carmona, Successor Representative of Lupe N. Carmona Deceased; Hilton Hotels Corporation, Retirement Plan, Defendants-Appellees.
CourtU.S. Court of Appeals — Ninth Circuit

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William E. Freedman (argued), William E. Freedman, Chartered, Las Vegas, NV, for plaintiff/appellant Janis Carmona.

Marshal S. Willick (argued), Willick Law Group, Las Vegas, NV, for defendant/cross-defendant/appellee Judy Carmona.

Adam S. Segal (argued), Jessica C. Espinoza, Schreck Brignone, PC, Las Vegas, NV, for cross-claimant/appellant Nevada Resort Association International Alliance of Theatrical Stage Employees Local 720.

Sheri Ann F. Forbes (argued), Thomas F. Kummer, Kummer Kaempfer Bonner Renshaw & Ferrario, Las Vegas, NV, for defendant/appellee Hilton Hotels Corporation, Retirement Plan.

Before: HAWKINS, SIDNEY R. THOMAS, and RICHARD R. CLIFTON, Circuit Judges.

ORDER AMENDING OPINION AND DENYING REHEARING AND AMENDED OPINION

ORDER

This court's opinion, filed September 17, 2008, is amended as follows:

1. At pages 13098 (2 times), 13099, 13102, 13113 (3 times including 2 times within note 13) of the slip opinion (544 F.3d at 998 (2 times), 1000, 1007 (3 times including 2 times within note 13)), replace with (without hyphen) to conform to the usage in Kennedy v. Plan Administrator for DuPont Savings & Investment Plan, ___ U.S. ___, 129 S.Ct. 865, 172 L.Ed.2d 662 (2009).

2. On page 13090 of the slip opinion (544 F.3d at 993), replace with .

3. On page 13097 of the slip opinion (544 F.3d at 998), following Id.

> add:

Kennedy v. Plan Administrator for DuPont Savings & Investment Plan,

___ U.S. ___, 129 S.Ct. 865, 875, 876, 172 L.Ed.2d 662 (2009).>

4. Move the following language appearing on page 13100 of the slip opinion (544 F.3d at 999) to page 13099 of the slip opinion (544 F.3d at 998), between and qualified>:

5. On page 13099 of the slip opinion (544 F.3d at 998), following Hamilton, 433 F.3d at 1096 (citing 29 U.S.C. § 1056(d)(3)(B)(i)(I)) (internal quotation marks omitted).>, add a new footnote 6 (and renumber subsequent footnotes):

To be sure, a party can waive an entitlement to an interest without expressing that waiver in the form of a QDRO, as the Supreme Court recently held. Although the Fifth Circuit had held a waiver by a divorcing spouse expressed in a divorce decree ineffective under ERISA's antialienation provision because it was not expressed in a QDRO, the Court held that such a waiver of rights could be effective nonetheless. Kennedy, 129 S.Ct. at 870-74. That ability to alter the entitlement to benefits outside of a QDRO is limited to a waiver of rights, however. It does not permit an assignment of interest to anyone else or an identification of an alternate payee; that still requires a QDRO to be effective under ERISA. Id. at 873.

6. On page 13100 of the slip opinion (544 F.3d at 1000), replace with 7. On page 13107 of the slip opinion (544 F.3d at 1003), in the citation to McGowan v. NJR Serv. Corp. replace with .

8. On pages 13110-11 of the slip opinion (544 F.3d at 1005-06), replace the five paragraphs that begin with also argues that Janis waived her right> and end before the heading C. The Constructive Trust> with the following two paragraphs:

Judy also argues that Janis waived her right to the surviving spouse benefits by the property settlement when the state court entered its divorce decree. As the Supreme Court made clear in Kennedy, ERISA's antialienation provision does not prohibit a surviving spouse beneficiary from waiving his or her interest in plan benefits, but such a waiver must also conform to plan procedures and instruments. Indeed, the Court concluded that the plan administrator in that case was not, under the terms of the plan, required to honor the waiver of benefits contained in the divorce decree and that the continued payment of benefits to the prior spouse was proper. See Kennedy, 129 S.Ct. at 874-78. Under the so-called "plan documents rule," plan administrators must "hew to the directives of the plan documents" rather than "examining a multitude of external documents that might purport to affect the dispensation of benefits" and becoming "drawn into litigation like this over the meaning and enforceability of purported waivers." Id. at 876, 877 (internal quotation marks omitted).
Both the IATSE plan documents and ERISA's statutory scheme allow for the waiver of surviving spouse benefits with both spouses' written consent during the benefits election period prior to the participant's retirement. 29 U.S.C. § 1055(c)(3). That procedure was not followed here. Judy has identified nothing in the IATSE plan documents which require the plan administrator to redirect surviving spouse benefits to Judy, who was not, at the time of retirement and vesting, either a present or former spouse. Even if it is assumed that Janis had the authority to disclaim benefits, there is nothing that provides for them to be assigned instead to Judy.

9. On page 13114 of the slip opinion (544 F.3d at 1007), following the sentence , add a new footnote 15:

In Kennedy, the Court explicitly declined to express a view on whether an action could have been brought to obtain benefits from the former spouse after they had been distributed to her. 129 S.Ct. at 875 n. 10.

The opinion, as amended, will thus appear as attached.

With the opinion as amended, the petition for rehearing en banc, filed October 2, 2008, is DENIED. If any party wishes to file a new petition for rehearing and/or petition for rehearing en banc, it may do so within 14 days from the date of this order.

OPINION

CLIFTON, Circuit Judge:

This case requires us to once again navigate the complex statutory scheme set out in the Employee Retirement Income Security Act of 1974 ("ERISA"), 88 Stat. 832, as amended, 29 U.S.C. § 1001 et seq., and to answer an open question in this Circuit: whether or not a participant to an ERISA regulated Qualified Joint and Survivor Annuity ("QJSA") plan may change the surviving spouse beneficiary after the participant has retired and the annuity has become payable.

The conflict here arises between the final two wives of Lupe Carmona, a participant in two ERISA regulated pension plans, the Hilton Hotels Pension Plan ("Hilton") and the Nevada Resort Association International Alliance of Theatrical Stage Employees Local Pension Trust ("IATSE"). Janis Carmona, Lupe's eighth wife and his spouse at the time of his retirement, appeals the district court's dismissal of her complaint for lack of jurisdiction against Hilton and Judy Carmona, Lupe's ninth wife and his spouse at the time of his death.1 IATSE, Lupe's second pension plan provider, appeals the district court's grant of summary judgment in favor of Judy on its cross-claim. On the merits, both IATSE and Janis argue that Janis, as Lupe's spouse at the time of his retirement, is the rightful surviving spouse beneficiary for the purposes of Lupe's retirement plan because her interest in surviving spouse benefits irrevocably vested at the time of Lupe's retirement.

Joining the Fourth Circuit, as well as a number of other jurisdictions, we hold that QJSA surviving spouse benefits irrevocably vest in the participant's spouse at the time of the annuity start date—in this case the participant's retirement2 — and may not be reassigned to a subsequent spouse. Applying that conclusion to the judgment entered by the district court in this case, we affirm in part and reverse in part.

I. Background

The essential facts of this case are undisputed. Lupe Carmona married his eighth wife,3 Janis Carmona (nee Kester), in 1988. While they were married, Lupe designated Janis as his survivor beneficiary under two pension plans which provided QJSA benefits, Hilton and IATSE. Under the terms of these plans, Janis would receive a portion of Lupe's monthly pension benefits upon his death if she survived him. After naming Janis as the survivor beneficiary of both plans, Lupe retired and began collecting pension benefits under the plans in 1992. Then, in 1994, Lupe and Janis began divorce proceedings.

Prior to entry of the formal divorce decree, Lupe inquired into whether he could remove Janis as the named survivor beneficiary. The two plan administrators each refused to change the designated survivor spouse beneficiary and indicated that the designation was irrevocable upon Lupe's retirement. Nonetheless, in its 1997 divorce decree, the Nevada family court, perhaps without taking into account either the nature of the QJSA survivor annuities or the terms of the plans, granted Lupe both the IATSE and Hilton pensions as his sole and separate property. The family court awarded Janis her own pension plan as her sole and separate property as well. Because there was a difference between the value of the pension awarded to Janis and the value of the pensions awarded to Lupe, the court also ordered that Lupe pay Janis $1500 "as and for an equalization of the values of the marital portion of the pensions divided."

In 1997, after his divorce from Janis had been finalized, Lupe married Judy Carmona (nee Walkington), his ninth and final spouse. He petitioned the family court for a Qualified Domestic Relations Order ("QDRO") revoking Janis's designation as the survivor beneficiary of the IATSE and Hilton pensions and substituting Judy, his new wife. Lupe died in 1999. Judy...

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