Dunlap v. Bellsouth Telecommunications, Inc.

• Decision Date: 16 May 2006
• Docket Number: No. 2:02-CV-00597-WKW-CSC.,2:02-CV-00597-WKW-CSC.
• Citation: 431 F.Supp.2d 1210
• Parties: Marion D. DUNLAP, Plaintiff, v. BELLSOUTH TELECOMUNICATIONS, INC., et al., Defendants.
• Court: U.S. District Court — Middle District of Alabama

431 F.Supp.2d 1210

Marion D. DUNLAP, Plaintiff, v. BELLSOUTH TELECOMUNICATIONS, INC., et al., Defendants.

No. 2:02-CV-00597-WKW-CSC.

United States District Court, M.D. Alabama, Northern Division.

May 16, 2006.

James Myron Smith, Smith & Norman, Prattville, AL, for Plaintiff.

Francis B. Semmes, BellSouth Telecommunications, Inc., Birmingham, AL, James R. Glenister, BellSouth Corporation, Atlanta, GA, Anthony Ryan Smith, Kaye K. Houser, Sirote & Permutt, P.C., Birmingham, AL, for Defendants.

MEMORANDUM OPINION AND ORDER

WATKINS, District Judge.

Marion D. Dunlap ("Marion") brings this action against BellSouth Telecommunications, Inc.¹ ("BellSouth"), as Sponsor and Plan Administrator² of two employee welfare benefit plans in which Curtis Vergil Jarvis ("Curtis"), deceased, participated. She alleges that BellSouth violated the Employee Retirement Security Act of 1974 ("ERISA") when it paid spousal benefits to defendant Donna Lynn Epperson³ ("Donna Lynn"). Marion also brings a claim against Donna Lynn, pursuant to supplemental jurisdiction under 28 U.S.C. § 1367, for recovery of employee benefits paid to Donna Lynn as surviving spouse of Curtis.

This cause is before the Court on Donna Lynn's Motion for Judgment as a Matter of Law or, In the Alternative, Motion to Dismiss (Doc. # 53) ("Donna Lynn's Motion for Judgment"); a Motion for Summary Judgment (Doc. # 65) filed by BellSouth; Donna Lynn's Motion to Strike (Doc. # 58); and BellSouth's Motion to Strike (Doc. # 75). Donna Lynn's Motion to Dismiss is being treated as one for summary judgment, by prior order of the Court (Doc. # 61).

I. FACTS AND PROCEDURAL HISTORY

Curtis was an employee of BellSouth for over thirty-four years. For approximately five years beginning in 1989, Curtis cohabited with Marion in Maplesville, Alabama. At some point in 1994, it appears the relationship deteriorated, and Marion and Curtis began living apart from each other. They never had a licensed or ceremonial marriage, and they never divorced.

On June 1, 1995, Donna Lynn and Curtis were ceremonially married at the Bibb County Courthouse, pursuant to a Certificate of Marriage issued by the Probate Court of Bibb County, Alabama. Donna Lynn and Curtis had two children together, whom Curtis parented until his death on February 13, 1999.

Curtis participated in the BellSouth Pension Plan ("Pension Plan") and the BellSouth Employee Stock Option Plan ("PAYSOP").⁴ The Pension Plan contained the following description of its administration:

BellSouth Corporation is the Plan Administrator and Sponsor of the Plan. As such, it has the authority to interpret and administer the Plan provisions and to exercise discretion necessary or appropriate in the interpretation and administration of the Plan. BellSouth carries out administration under the terms of the Plan documents and trust agreements.

The Plan Administrator has delegated day-to-day responsibility for administering Plan matters for each Participating Company to an Employees' Benefit Committee ("EBC") or such individual(s) as is(are) designated by the EBC or an Employees' Benefit Claim Review Committee ("EBCRC") to administer the Plan with respect to all the Participating Company's employees. Among other things, the EBC or its designee(s), or the EBCRC's designee(s) [e.g., Assistant Secretary(ies)] have the authority to grant and deny initial claims for benefits under the Plan.

An EBCRC, appointed by BellSouth, reviews, on appeal, claims denied by the EBC or its designee(s), or the EBCRC designee(s). The EBCRC determines conclusively for all parties all questions arising in the administration of the Plan, and any such decision is final and not subject to further review.

. . . . .

The Participating Companies fund all contributions to the Trust. They actuarially determine and pay the contributions into an irrevocable trust established exclusively for designated Plan purposes.

(Doc. # 66 Ex. 4.)

The PAYSOP documents provide the following description of its administration BellSouth Corporation shall be the Plan Administrator and Sponsor of the Plan....

BellSouth Corporation shall maintain a separate account for each Participant and maintain separate subaccounts with respect to contributions and income allocations made by BellSouth Corporation income earned thereon for each year the Participant was an Eligible Employee under this Plan and with respect to each year the Participant was a participant in a Qualified ESOP maintained by an Interchange Company where the Participant's Account with respect to such plan has been transferred to this Plan's trust.... BellSouth Corporation shall allocate BellSouth Stock to such accounts in accordance with the Plan.... Allocations made by BellSouth Corporation in good faith shall be final insofar as permitted by applicable law.

. . . . .

BellSouth Corporation shall appoint an Employee Stock Ownership Plan Committee which shall have such powers as may be necessary to enable it to administer the Plan, except for powers vested in BellSouth Corporation and the Trustee.

. . . . .

BellSouth Corporation and the Committee are each a named fiduciary as that term is used in ERISA with respect to the particular duties and responsibilities provided in the Plan to be allocated to it.

(Doc. # 66 Ex. 1.) Thus, BellSouth, the Administrator of the Pension Plan and PAYSOP, retained discretion to interpret and administer the plans.⁵

Upon the death of Curtis, BellSouth undertook to distribute benefits to the surviving spouse. Curtis had listed Donna Lynn as the beneficiary and spouse on several BellSouth documents; the death certificate identified Donna Lynn as the spouse of Curtis; a facially valid marriage certificate between Donna Lynn and Curtis was produced to BellSouth; and Donna Lynn made representations to BellSouth that she was the surviving spouse. Lacking any information or knowledge indicating Donna Lynn was not the surviving spouse, BellSouth awarded all surviving spouse benefits to Donna Lynn. The Pension Plan payment in the amount of $34,321.42 was made on April 29, 1999 and the PAYSOP award of 357.4416 shares was made on May 28, 1999.

On October 25, 2001, over two years after awarding the benefits to Donna Lynn, BellSouth received notice from Marion that she had been adjudged the surviving spouse of Curtis by the Circuit Court of Chilton County, Alabama, and that she therefore was entitled to the Pension Plan and PAYSOP benefits. This turn of events arose out of a state court action initiated by Marion in 1999 against Donna Lynn as administrator of the Curtis' estate. During the trial, that action was settled by consent decree dated July 19, 2001 (the "Consent Decree"), in which Donna Lynn stipulated (1) that she desired to resign her appointment as Personal Representative of the Curtis estate and forego her claim to a surviving spouse's share of the estate; (2) that Marion and Curtis "were married by common law no later than the year 1989 ... and were never divorced";⁶ and (3) that her own marriage and "Certificate of Marriage issued by the Probate Court of Bibb County, Alabama ... are both void because Curtis Vergil Jarvis, Sr., lacked the capacity to contract marriage due to his pre-existing common law marriage" to Marion (Doc. # 53 Ex. G). Thus, the courthouse-marriage between Donna Lynn and Curtis was rendered void by stipulation of the parties in the Consent Decree, over two years after the BellSouth benefits were paid to Donna Lynn. Importantly, it is uncontested that BellSouth did not have knowledge of a challenge to the validity of Donna Lynn's marital status until October 25, 2001, over three months after entry of the Consent Decree and over thirty-one months after the death of Curtis.

Donna Lynn also agreed in the Consent Decree to provide an accounting to Marion as Successor Personal Representative. There was no explicit mention in the Consent Decree of the employee benefits from BellSouth which had been paid to Donna Lynn.⁷ It is uncontroverted, however, that Marion knew her common-law husband's work history with BellSouth, and was made aware of BellSouth's payment and stock award to Donna Lynn by plan documents provided in discovery in the state-court action on May 17, 2000, prior to entry of the Consent Decree. In fact, BellSouth, not a party to the state-court action, produced the plan documents in response to Marion's civil subpoena in that action (Doc. # 53 Ex. G).

Marion initially filed a complaint solely against BellSouth, on April 24, 2002, in the Circuit Court of Chilton County, Alabama. The case was removed to this Court on May 24, 2002. Marion filed an Amended Complaint (Doc. # 10) against BellSouth on June 17, 2002, and a Second Amended Complaint (Doc. # 47) asserting claims against BellSouth and Donna Lynn. on March 18, 2004. Donna Lynn's Motion for Judgment As a Matter of Law or, In the Alternative, Motion to Dismiss (Doc. # 53) was filed on April 14, 2004. The parties were subsequently advised that this Court would treat Donna Lynn's Motion for Judgment as one for summary judgment (Doc. # 61). Thereafter, the parties responded with supplemental responses and affidavits. BellSouth filed a Motion for Summary Judgment (Doc. # 65) on July 16, 2004, which was also fully briefed.

II. JURISDICTION AND VENUE

This Court exercises subject matter jurisdiction over this action pursuant to 28

U.S.C. § 1331, because a federal question is presented under the Employee Retirement Security Act of 1974, 29 U.S.C. § 1101 et seq. ("ERISA"). Jurisdiction over the claim against Donna Lynn is supplemental. See 28 U.S.C. § 1367. The parties do not contest personal jurisdiction or venue, and this Court finds adequate allegations in support of both personal jurisdiction and venue under ERISA.

III. STANDARD OF REVIEW

Under Rule 56(e) of the Federal Rules of Civil Procedure, summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on...