Carmona v. Carmona

• Citation: 544 F.3d 988
• Decision Date: 17 September 2008
• Docket Number: No. 06-15938.,No. 06-15581.,06-15581.,06-15938.
• Parties: Janis 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.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

544 F.3d 988

Janis 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.

No. 06-15581.

No. 06-15938.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted March 11, 2008.

Filed September 17, 2008.

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 & State 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.

Appeal from the United States District Court for the District of Nevada; Kent J. Dawson, District Judge, Presiding. D.C. No. CV-04-01310-KJD/RJJ.

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

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 and State 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 the nature of the QJSA survivor annuities, 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 survived him, as did Janis. The day after Lupe's death, the family court concluded that Janis had waived her right to Lupe's pension plan benefits by the divorce decree's allocation of property and that Janis would be unjustly enriched if she remained the survivor beneficiary. To avoid an inequitable result, the court ordered the plan administrators to change the survivor beneficiary from Janis to Judy. Alternatively, if the plans refused or were unable to change the beneficiary, the family court ordered the funds Janis received to be placed in a constructive trust with Judy as the beneficiary.

Janis appealed the family court's decision to the Nevada Supreme Court. In 2003, that court affirmed the family court order and concluded that ERISA did not preempt either the family court's order to change the beneficiaries or the constructive trust placed on the plan proceeds.⁴ Janis sought review of the decision by the United States Supreme Court, but the Court denied certiorari.

In 2004, after the Nevada Supreme Court decision, the family court issued another order requiring Janis to deposit the survivor benefit funds into a constructive trust. At the same time, the family court also entered two orders, each labeled as a "Qualified Domestic Relations Order," directing the two plans to pay survivor benefits either to Judy or to the constructive trust. Janis attempted to remove the case to federal court but the federal district court remanded the action back to the family court, concluding that Janis had failed to timely file for removal and, in any event, that the Rooker-Feldman doctrine required the court to dismiss the suit for lack of jurisdiction.

This appeal originates from the most recent federal suit filed by Janis against Judy, Hilton, and IATSE. Janis brought suit under 29 U.S.C. § 1132(a)(3) seeking "to enjoin any act or practice which violates any provision [of ERISA] or the terms of the plan." In response to Janis's suit, IATSE Trustees filed a cross-claim against Judy seeking declaratory relief.

The district court concluded that the Rooker-Feldman doctrine barred Janis's suit against Judy and Hilton. The court also concluded that neither Rooker-Feldman nor res judicata barred IATSE's claim because it was not a party to the prior suits and was not in privity with Janis. On the merits, the district court concluded that ERISA does not preclude a state court from issuing a QDRO substituting an alternate payee for a surviving spouse after a plan participant's retirement. IATSE appeals the district court's denial of summary judgment and subsequent dismissal of its complaint against Judy. Janis appeals the district court's decision that it lacked subject matter jurisdiction over Janis's claims against Hilton and Judy. We consider both appeals together because they arise from the same factual background.

II. Discussion

We review an application of the Rooker-Feldman doctrine de novo. Noel v. Hall, 341 F.3d 1148, 1154 (9th Cir.2003). The interpretation of ERISA, including whether ERISA preempts state law, is a question of law which we also review de novo. Metropolitan Life Ins. Co. v. Parker, 436 F.3d 1109, 1113 (9th Cir.2006); Cleghorn v. Blue Shield of California, 408 F.3d 1222, 1225 (9th Cir.2005).

A. The Rooker-Feldman Doctrine and Preclusion

We first consider whether any preclusion doctrine prevents Janis from bringing her claims against Judy and Hilton, or IATSE from bringing its declaratory judgment action. We agree with the district court and conclude that the district court lacked jurisdiction, under the Rooker-Feldman doctrine, to adjudicate Janis's claims against Judy and Hilton, but that IATSE is not precluded from asserting its cross-claim here.

The Rooker-Feldman doctrine takes its name from two Supreme Court cases: Rooker v. Fidelity Trust Co., 263 U.S. 413, 44 S.Ct. 149, 68 L.Ed. 362 (1923), and District of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 103 S.Ct. 1303, 75 L.Ed.2d 206 (1983). It stands for the relatively straightforward principle that federal district courts do not have jurisdiction to hear de facto appeals from state court judgments. Noel, 341 F.3d at 1155. The jurisdictional prohibition arises from a negative inference drawn from 28 U.S.C. § 1257 which grants jurisdiction to review state court decisions in the United States Supreme Court. Kougasian v. TMSL, Inc., 359 F.3d 1136, 1139 (9th Cir.2004) (citation omitted). Because it grants jurisdiction to the Supreme Court, section 1257 impliedly prohibits lower federal courts from reviewing state court decisions. Id.

Stated simply, the Rooker-Feldman doctrine bars suits "brought by state-court losers complaining of injuries caused by...