Detroit Diesel Corp. v. Lane-Smith
| Decision Date | 17 February 1999 |
| Docket Number | Civil No. 98-40029. |
| Citation | 39 F.Supp.2d 852 |
| Parties | DETROIT DIESEL CORPORATION, the Detroit Diesel Corporation Hourly-Rate Employees Pension Plan, the Detroit Diesel Corporation Health Care Program for Hourly Employees, and the Detroit Diesel Corporation Personal Savings Plan for Hourly-Rate Employees, Plaintiffs, v. Patricia LANE-SMITH, Juanita Michelle Spivey, John L. Smith, Jr., Debra Valentine, and All other Claimants, Defendants. |
| Court | U.S. District Court — Eastern District of Michigan |
Jay B. Knoll, Honigman, Miller, Detroit, MI, for Detroit Diesel Corporation.
Gregory V. Murray, William E. Altman, Vercruysse, Metz & Road, Bingham Farms, MI, for Detroit Diesel Corporation Hourly Employee Pension Plan, Detroit Diesel Corporation Health Care Program For Hourly Employees.
Warren J. Widmayer, Ferguson & Widmayer, Ann Arbor, MI, for Patricia Lane Smith.
Richard J. Gianino, Plunkett & Cooney, Petoskey, MI, for Juanita Michelle Spivey.
Presently before the Court are two cross motions for summary judgment, each submitted by a defendant in the above-entitled case. This is an action for interpleader and declaratory relief brought pursuant to the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1001, et seq. The sole issue presented for consideration is which of two competing parties is entitled to benefits payable to the beneficiary of John L. Smith, Sr. On November 30, 1998, defendant/counter-plaintiff Patricia Lane-Smith (hereinafter "defendant Lane-Smith") filed a motion for summary judgment. On the same date, defendant Juanita Michelle Spivey filed her own motion for summary judgment. Defendant Lane-Smith responded to Spivey's motion on December 9, 1998. On December 22, 1998, plaintiffs/counter-defendants Detroit Diesel Corporation, the Detroit Diesel Corporation Hourly-Rate Employees Pension Plan, the Detroit Diesel Corporation Health Care Program For Hourly Employees, and the Detroit Diesel Corporation Personal Savings Plan for Hourly-Rate Employees (hereinafter "DDC benefit plans") responded to both motions for summary judgment by submitting a single brief addressing the arguments of both defendants. Lastly, on December 29, 1998, defendant Lane-Smith filed a reply to plaintiffs' response. Oral argument was heard on January 27, 1999.
For the reasons set forth below, the Court will grant defendant/counter-plaintiff Patricia Lane-Smith's motion for summary judgment and deny defendant Juanita Michelle Spivey's motion for summary judgment.
On January 15, 1998, plaintiffs filed a complaint for interpleader and declaratory relief, seeking to determine to whom benefits should be paid under the DDC benefit plans. On April 27, 1998, defendant/counter-plaintiff Lane-Smith filed an answer and counterclaim, seeking benefits allegedly due to her, as well as decedent John L. Smith's final paycheck, interest, and attorney's fees. On May 21, 1998, plaintiffs responded to Lane-Smith's counterclaim and asserted a number of affirmative defenses.
On June 22, 1998, defendant Lane-Smith filed her first motion for summary judgment. In an order issued on July 28, 1998, this Court denied defendant's motion for summary judgment without prejudice. The Court held that the motion was premature due to the fact that at that time the other claimants had not filed answers, nor had they had an opportunity to respond to defendant's arguments set forth in her initial motion for summary judgment. The Court further held that Lane-Smith would be allowed to file another motion for summary judgment once all defendants were provided an opportunity to respond. As stated above, such a motion was filed on November 30, 1998. On the same date, defendant Juanita Michelle Spivey also filed a motion for summary judgment.
Other potential claimants specifically designated as defendants in the instant action included decedent's son, John L. Smith, Jr. and decedent's daughter, Debra Valentine. Neither of these potential claimants responded to plaintiffs' complaint. As a consequence, a clerk's entry of default was entered as to John L. Smith, Jr. on August 5, 1998. On the same date, a clerk's entry of default was entered as to Debra Valentine. Pursuant to this Court's June 11, 1998 order allowing substituted service, plaintiffs caused to be published a notice to all unknown claimants and Juanita Michelle Spivey in the Detroit Legal News on June 26, July 3, and July 10, 1998. Since only Lane-Smith and Spivey have responded, their claims are the only claims which will be considered by this Court.
The DDC benefit plans provide benefits to the surviving spouse of a deceased participant. Additionally, the Detroit Diesel Corporation Personal Savings Plan for Hourly-Rate Employees specifically provides that the surviving spouse is to be the beneficiary of a married participant, unless the participant expressly designates a beneficiary other than the spouse and the spouse consents in writing.
John L. Smith, Sr. was an hourly employee of the Detroit Diesel Corporation (DDC) and was a participant in the DDC benefit plans enumerated above. Smith died on November 11, 1996. At the time of his death, DDC had no record that Smith was married. Smith had designated his son, John Smith, Jr., as his sole beneficiary with respect to the DDC Personal Savings Plan. See Exh. A to Plaintiffs' Brief in Opposition to Defendants' Cross Motions. Although John Smith, Jr. is designated as beneficiary of his father's 401(k) account of the DDC Personal Savings Plan, no spousal consent form permitting his designation as beneficiary is on file.
Upon the death of John L. Smith, Sr., DDC received competing claims for benefits payable under the DDC benefit plans. In all, four individuals asserted claims to the proceeds. First, John Smith, Jr. submitted a claim to recover proceeds of the decedent's savings plan.1 The next claimant to contact DDC was a woman currently residing in California, Patricia Lane-Smith, who claimed that she was the legal spouse of decedent. Approximately two weeks later, Juanita Michelle Spivey contacted DDC and also claimed to be the legal spouse of John L. Smith, Sr. Lastly, Debra Valentine contacted DDC, asserting that she was decedent's daughter and entitled to the proceeds via a holographic will by which decedent is purported to have devised all of his assets in equal shares to Valentine and John Smith, Jr., her brother. See Exh. E to Plaintiffs' Brief in Opposition to Defendants' Cross Motions. As previously discussed, neither child's claim to the benefits are under consideration.
According to defendant Lane-Smith, she and decedent were involved in a relationship from 1964 to 1968. See Affidavit of Patricia Lane-Smith (hereinafter "Lane-Smith Affidavit") attached as Exh. 1 to Defendant/Counter-Plaintiff's Brief in Support. This relationship allegedly resulted in two sons being born to Lane-Smith. See id. ¶ 1. Between 1968 and 1988, Lane-Smith and decedent were purportedly in intermittent contact with one another. See id. ¶ 2. Throughout this time, according to the affidavit testimony of Lane-Smith, she raised the couple's two sons without any regular assistance from the decedent.
On September 3, 1988, Patricia Lane-Smith and decedent were lawfully married in the County of Solano, State of California. This marriage is evidenced by County of Solano Certificate of Registry of Marriage Number 869, attached as Exhibit 3 to De fendant/Counter-Plaintiff's Brief in Support. According to Lane-Smith, she and decedent lived together in Detroit, Michigan for a period of time following their marriage, but because Lane-Smith was unable to find work in the area, she returned to California in late 1988. See Lane-Smith Affidavit ¶ 6. Decedent continued to reside in the Detroit area until his death in 1996. See id. ¶ 7.
According to Lane-Smith, from 1988 until his death, she and decedent were in "frequent physical, written, and telephone contact ." See id. ¶ 9. In late 1991 or early 1992, Lane-Smith allegedly became aware of a rumored marriage between decedent and defendant Juanita Michelle Spivey. See id. ¶ 8. The purported marriage was alleged to have occurred on September 18, 1991 in the County of Lucas, State of Ohio. See Exh. 4 to Defendant/Counter-Plaintiff's Brief in Support. According to deposition testimony of Lane-Smith, decedent denied his purported marriage with Spivey when confronted by Lane-Smith. See Lane-Smith Deposition, p. 18. According to Lane-Smith, the original marriage between herself and the decedent was never dissolved and neither party ever sought to dissolve the union. See Lane-Smith Affidavit ¶ 5.
The parties are in agreement that Lane-Smith never signed a form consenting to a change in beneficiary. Moreover, Lane-Smith testifies that she was never asked to sign such a form. See Affidavit 10 & 11. On November 25, 1996, Lane-Smith completed a distribution due to death or qualified domestic relations request form for the DDC Hourly Employee Savings Plan. According to Lane Smith, plaintiffs never informed her of the plan provisions affecting her claim nor did they request any additional information from her. See Lane-Smith Affidavit ¶ 17. In addition, plaintiffs allegedly never informed Lane-Smith of any administrative remedies available to her. See id. ¶ 18.
On November 18, 1997, the Metropolitan Life Insurance Company (MetLife) declared Lane-Smith to be the "eligible...
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Uaw Local 540 v. Baretz, 97-76334.
...of making the beneficiary whole because he has been denied the use of money which was his." Id.; see also Detroit Diesel Corp. v. Lane-Smith, 39 F.Supp.2d 852, 863-64 (E.D.Mich.1999). The Court warns that "[r]elieving defendants from the payment of prejudgment interest would create an incen......
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Uaw Local 540 v. Baretz
...of making the beneficiary whole because he has been denied the use of money which was his." Id.; see also Detroit Diesel Corp. v. Lane-Smith, 39 F.Supp.2d 852, 863-64 (E.D.Mich.1999). The Court warns that "[r]elieving defendants from the payment of prejudgment interest would create an incen......
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...the offers and formed a contractual bond. This further militates in favor of applying Michigan law. See Detroit Diesel Corp. v. Lane-Smith, 39 F.Supp.2d 852, 858 (E.D.Mich.1999) (reasoning that the validity of a marriage contract is determined by the "law of the place where the contract is ......