Clift v. Connecticut General Life
| Decision Date | 03 May 2000 |
| Docket Number | 9841601,5 |
| Parties | KATHY CLIFT, ETC; ET AL Defendants KATHY CLIFT, Kathy Clift as guardian of John Ryan Clift and Jennifer Lee Clift Defendant - Cross Claimant - Appellee v. PAMELA SUE CLIFT, now known as Pamela Sue Page Defendant - Cross Defendant - Appellant v. CONNECTICUT GENERAL LIFE INSURANCE COMPANY InterpleaderIN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT |
| Court | U.S. Court of Appeals — Fifth Circuit |
Appeal from the United States District Court
for the Eastern District of Texas
Before KING, Chief Judge, and REAVLEY and STEWART, Circuit Judges.
Defendant-Cross Defendant-Appellant Pamela Sue Clift, now known as Pamela Sue Page, appeals from the district court's grant of summary judgment in favor of Defendant-Cross Claimant-Appellee Kathy Clift. We affirm.
Prior to his death in July of 1997, Phillip Clift ("Phillip") was twice married and twice divorced. He and his first wife, Appellee Kathy Clift ("Kathy"), had two children, Jennifer Lee and John Ryan. Phillip and Kathy divorced, and Phillip married his second wife, Appellant Pamela Sue Page, ("Pamela"), in 1995. They divorced shortly before he died. Upon his death, Phillip held a life insurance policy through his employer in which he designated Pamela as the sole beneficiary.
When it came time for the life insurance proceeds to be paid out, Pamela claimed that she was entitled to them in light of Phillip's designation of her as beneficiary. Kathy, as guardian of her and Phillip's two children, claimed that when Phillip and Pamela divorced, Pamela waived her right to the life insurance proceeds. Under the terms of the policy, therefore, the children were entitled to the proceeds. Connecticut General Life Insurance Company, the provider of the policy in question, was uncertain to whom it should pay benefits, and this action ensued.
Very little is disputed in this case. The parties agree that before their divorce, Phillip named Pamela as the beneficiary of the proceeds from his life insurance policy. They agree that the policy in question was offered by Phillip's employer through an employee benefit plan that is subject to and governed by the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001, et seq., and that therefore the policy itself is subject to ERISA. They agree that Phillip and Pamela divorced, and that their Texas divorce decree provided, "[Phillip] is awarded the following as [his] sole and separate property, and [Pamela] is hereby divested of all right, title, interest, and claim in and to such property: . . . Any and all policies of life insurance (including cash value) insuring the life of [Phillip]." Record at 138-39. They agree that Pamela consented to the terms of the divorce voluntarily and that the settlement between Phillip and Pamela was made in good faith. Finally, theyagree that if Pamela has waived her right to the insurance proceeds, the children are entitled to them. The only question in the case is whether Pamela waived her right to the proceeds from Phillip's life insurance policy in their divorce decree.
Pamela and Kathy filed competing motions for summary judgment in the district court. The district court entered a judgment granting Kathy's motion and denying Pamela's, from which judgment Pamela timely appeals.
We review the granting of summary judgment de novo, applying the same criteria used by the district court in the first instance. See Norman v. Apache Corp., 19 F.3d 1017, 1021 (5th Cir. 1994); Conkling v. Turner, 18 F.3d 1285, 1295 (5th Cir. 1994). Summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c); see Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986). We must view all evidence in the light most favorable to the party opposing the motion and draw all reasonable inferences in that party's favor. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). We construe an unambiguous divorce decree de novo. See Webb Carter Constr. Co. v. Louisiana Central Bank, 922 F.2d 1197, 1199 (5th Cir. 1991).
In Brandon v. Travelers Ins. Co., 18 F.3d 1321 (5th Cir. 1994), we were confronted with a situation very similar to the one before us now. Richard Brandon had designated his wife, Wanda, as the primary beneficiary of the proceeds of a life insurance policy he held through his employer. The policy was governed by ERISA. The couple later divorced, and Richard subsequently died without changing beneficiaries. The couple's divorce decree provided, in part:
Petitioner [Richard] is awarded the following as Petitioner's sole and separate property, and Respondent [Wanda] is divested of all rights, title, interest, and claim in and to such property ... (8) Any and all sums, whether matured or unmatured, accrued or unaccrued, vested or otherwise, together with all increases thereof, the proceeds therefrom, and any other rights relating to any profit-sharing plan, retirement plan, pension plan, employee stock option plan, employee savings plan, accrued unpaid bonuses, or other benefit program existing by reason of Petitioner's past, present, or future employment.
Id. at 1323. We were asked to decide whether Wanda had waived her right to the proceeds from the life insurance policy in the divorce decree or whether the beneficiary designation controlled. We first ruled that the anti-alienation provisions of ERISA do not prevent waiver of a beneficiary interest in a life insurance policy governed by ERISA. See id. at 1324. This left us with the question of whether the language of the divorce decree before us in that case constituted an effective waiver of Wanda's beneficiary interest in the policy insuring Richard's life. We determined that the question was governed by federal common law rather than state law, but we looked to analogous state law for guidance. See id. at 1326. Our analysis in that case was informed by cases from two sister circuits. We briefly review those cases here, as we did in Brandon.
In Lyman Lumber Co. v. Hill, 877 F.2d 692 (8th Cir. 1989), Jeffrey Hill designated his wife, Colleen, as primary beneficiary under his employer's profit-sharing plan. The Hills were later divorced, and Jeffrey died without changing the primary beneficiary designation. The Hills' divorce decree stated that Jeffrey "'shall have as his own, free of any interest of [Colleen], his interest in the profit-sharing plan of his employer . . . .'" Id. at 693 (alteration in original). The Court of Appeals for the Eighth Circuit held that because the divorce decree did not "specifically refer to and modify the beneficiary interest" in the profit-sharing plan, it did not revoke Colleen's interest, and she was entitled to the distribution. See id. at 694. The court reached that result even though the divorce decree "gave Jeffrey his entire interest in the Plan free of any interest of Colleen." Id. at 693.
Shortly after the decision in Lyman Lumber, the Court of Appeals for the Seventh Circuit, sitting en banc, was presented with a similar case. Fox Valley & Vicinity Constr. Workers Pension Fund v. Brown, 897 F.2d 275 (7th Cir. 1989) (en banc), concerned lump-sum death benefits provided for in a pension plan governed by ERISA. James Brown named his wife, Laurine, as beneficiary under the plan. James and Laurine divorced and agreed to a court-approved property settlement that provided that "[t]he parties each waive any interest or claim in and to any retirement, pension, profit-sharing and/or annuity plans resulting from the employment of the other party." Id. at 277. James died without changing the beneficiary on his pension plan.
The court, in fashioning federal common law, looked to Illinois law...
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