Krishna v. Colgate Palmolive Co.

• Decision Date: 09 September 1993
• Docket Number: No. 648,D,648
• Citation: 7 F.3d 11
• Parties: , 17 Employee Benefits Cas. 1510, Pens. Plan Guide P 23885F Kumar KRISHNA, Plaintiff-Appellant, v. COLGATE PALMOLIVE COMPANY and The Equitable Group & Health Insurance Company, Defendants, Rochelle S. Kapur, as Administratrix CTA of the Estate of Brij L. Kapur, Counterclaim Defendant-Appellee, and Rochelle S. Kapur, Individually, Nand L. Kapur, and Krishna Lal Kapur, Counterclaim Defendants. ocket 92-7809.
• Court: U.S. Court of Appeals — Second Circuit

Page 11

7 F.3d 11

62 USLW 2196, 17 Employee Benefits Cas. 1510,

Pens. Plan Guide P 23885F

Kumar KRISHNA, Plaintiff-Appellant, v. COLGATE PALMOLIVE COMPANY and The Equitable Group & Health Insurance Company, Defendants Rochelle S. Kapur, as Administratrix CTA of the Estate of Brij L. Kapur, Counterclaim Defendant-Appellee and Rochelle S. Kapur, Individually, Nand L. Kapur, and Krishna Lal Kapur, Counterclaim Defendants.

No. 648, Docket 92-7809.

United States Court of Appeals Second Circuit.

Argued Dec. 3, 1992.

Decided Sept. 9, 1993.

Mark S. Cash, New York City, for plaintiff-appellant.

Joseph Trachtenberg, Blauvelt, NY, for counterclaim defendant-appellee.

Before: LUMBARD, WINTER, and MAHONEY, Circuit Judges.

MAHONEY, Circuit Judge:

Plaintiff-appellant Kumar Krishna appeals from an order entered July 15, 1992 in the United States District Court for the Southern District of New York, Charles S. Haight, Jr., Judge, that denied Krishna's motion for summary judgment seeking to recover funds payable under an insurance policy on the life of decedent Brij L. Kapur ("Brij"), and granted summary judgment in favor of counterclaim defendant-appellee Rochelle S. Kapur ("Rochelle") awarding the proceeds of the policy to Rochelle in her capacity as Administratrix CTA of the Estate of Brij L. Kapur. See Krishna v. Colgate Palmolive Co., No. 90 Civ. 4116 (CSH), 1992 WL 176633 (S.D.N.Y. July 14, 1992).

We reverse and remand.

Background

This action arises out of conflicting claims to proceeds due under a group life insurance policy (the "Policy") issued by The Equitable Life Assurance Society of the United States ¹ to the Colgate Palmolive Company ("Colgate") under which individual life insurance coverage was provided to Brij, an employee of Colgate.

The Policy provides that:

The beneficiary of the employee's insurance for loss of life will be the person(s) named by the employee as shown on the records kept on this policy. An employee may change such beneficiary at any time by giving written notice to the Equitable. Such change will take effect on entry in such records.

If there is a part of the insurance for loss of the employee's life for which there is no named beneficiary living at the death of the employee, that part will be paid in a lump sum to the survivors in the first surviving class of those that follow: the employee's (a) spouse; (b) children; (c) parents; or (d) brothers and sisters. If none survives, that part will be paid in a lump sum to the employee's estate.

....

Insurance records will be kept to show, as to each person insured, all the data the Equitable needs to administer this policy. Such records will be set up and kept by the Equitable; or, if the Policyholder and the Equitable so agree by the Policyholder.

At the time of his death, Brij was insured under the Policy for $71,520.00.

On August 15, 1983, Brij made two separate beneficiary designations. In one, he designated Krishna, Brij's cousin, as sole beneficiary; in the other, he designated both Krishna and Krishna's wife as beneficiaries. ² On August 16, 1985, Brij made a third beneficiary designation naming only Krishna as the beneficiary under the Policy.

On March 25, 1989, Brij executed a codicil (the "Codicil") to his previous will dated June 2, 1982. The Codicil stated:

In order to supersede my Will executed in favour of Kumar Krishna ... I, Brij Lal Kapur ... give and bequeath to my real younger brother Krishen Lal Kapur ... my cash accounts with Colgate Company, New York, N.Y., Provident Bank and two Savings Bank accounts with the Chemical Bank ... Teaneck, N.J. and any other amount both real and personal registered in my name.

The Codicil also bequeathed to Krishen Lal Kapur "all the rest, residue and remainder of [Brij's] property both real and personal, wheresoever and howsoever situate."

Subsequently, in letters to Krishna and Chemical Bank dated September 7, 1989, Brij, through his attorney, revoked a power of attorney previously granted to Krishna and his wife in October 1987 over certain bank accounts maintained by Brij at Chemical Bank, and requested that Krishna return the power of attorney to Brij. The letter to Krishna further advised Krishna that the June 2, 1982 will naming Krishna and his wife as beneficiaries had been "superceded" by a "new will in which you are no longer named as beneficiaries," and requested the return of the prior will, which had been in Krishna's possession. Finally, the letter advised Krishna that Brij would not pursue a prior request for the return of a Persian carpet and a tiger skin that he had previously given to Krishna. On September 15, 1989, the Krishnas returned the power of attorney, the prior will, two keys to Brij's home, and two keys to a bank safety deposit box to Brij's attorney.

On December 21, 1989, Brij executed a new will which revoked all his prior wills and codicils. The new will, like the Codicil, made no specific reference to the Policy, but unlike the Codicil, did not mention "cash accounts with Colgate" or "any other amount ... registered in my name." Rather, the will made ten specific pecuniary bequests to various relatives, and then stated in a residuary clause:

All the rest, residue and remainder of my estate both real and personal of whatsoever kind or nature and wheresoever situate, including any property subject to a power of appointment exercisable by me, I give, devise and bequeath to my sister-in-law, ROCHELLE S. KAPUR, if she shall survive me, in appreciation for the care and comfort which she has provided to me during an illness.... If my said sister-in-law, ROCHELLE S. KAPUR, does not survive me, I give my said residuary estate to my nephew, MUKUL D. KAPUR.

Brij died on December 30, 1989. Thereafter, Krishna delivered proof of Brij's death to Colgate and demanded payment of the insurance due under the Policy. On January 23, 1990, Rochelle was appointed administratrix CTA of Brij's estate. Rochelle thereafter expressed to Colgate an interest in pursuing a claim to the Policy proceeds.

On or about May 29, 1990, Krishna commenced this action in the Supreme Court of the State of New York, County of New York, seeking recovery on the Policy. On June 18, 1990, Colgate and Equicor removed the case to federal court on the basis that Krishna's claims arose under the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001 (1988) et seq. ("ERISA"), because Brij's life insurance coverage was provided as part of an employee welfare benefit plan maintained by Colgate. See Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 67, 107 S.Ct. 1542, 1548, 95 L.Ed.2d 55 (1987); Smith v. Dunham-Bush, Inc., 959 F.2d 6, 10-12 (2d Cir.1992). Colgate and Equicor then filed an answer in which they asserted a counterclaim for interpleader, alleging that Krishna, Rochelle, "and possibly other persons described under the [Policy]" were adverse claimants to the proceeds of Brij's life insurance. Thereafter, pursuant to court order, Equicor deposited the proceeds of Brij's insurance policy with the court. In a memorandum opinion and order filed July 2, 1991, the district court granted the application to interplead Rochelle, individually and in her capacity as administratrix, as well as Brij's brothers, Nand L. Kapur and Krishen Lal Kapur.

Krishna then moved for summary judgment. In a July 14, 1992 memorandum opinion and order, the district court denied that motion, and, sua sponte, granted summary judgment in favor of Rochelle in her representative capacity as administratrix of Brij's estate. See Krishna, 1992 WL 176633, at * 5. The district court concluded that the execution of the Codicil superseding the June 2, 1982 will and the revocation of the power of attorney previously granted to Krishna by Brij "left no doubt that [Brij] intend[ed] no further personal or financial contact with [Krishna]." Id. In addition, the court granted a motion by Colgate and Equicor to be discharged from liability on the Policy, enjoined all the parties to the suit from instituting any action in any court concerning distributions pursuant to the Policy, and denied Colgate and Equicor's application for attorney fees. Id. at * 6-7.

This appeal followed.

Discussion

The comprehensive provisions of ERISA regulate "employee benefit plan[s]," 29 U.S.C. § 1003 (1988), defined to include "employee welfare benefit plan[s]" and "employee pension benefit plan[s]," or both. 29 U.S.C. § 1002(3) (1988). The statute further defines the term "employee welfare benefit plan" to mean:

any plan, fund or program ... established or maintained by an employer ... to the extent that such plan, fund, or program was established or is maintained for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise, ... medical, surgical, or hospital care or benefits, or benefits in the event of sickness, accident, disability, death or unemployment....

Id. § 1002(1) (1988) (emphasis added). In this case, the parties do not dispute that Brij's life insurance coverage is provided as part of an ERISA employee welfare benefit plan maintained by Colgate for the benefit of its employees, although a copy of Colgate's plan is not included in the record on appeal.

Section 514(a) of ERISA provides that the statute "shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan" covered by the statute. 29 U.S.C. § 1144(a) (1988). ³ It follows that "[i]n appropriate circumstances, courts may develop a federal common law under ERISA." Amato v. Western Union Int'l, Inc., 773 F.2d 1402, 1419 (2d Cir.1985) (citing Menhorn v. Firestone Tire & Rubber Co., 738 F.2d 1496, 1499 (9th Cir.1984)), cert. dismissed, 474 U.S. 1113, 106 S.Ct. 1167, 89 L.Ed.2d 288 (1986)). In developing federal common law, furthermore, resort may be had to state law in a proper case. See Royal Indemnity Co. v. United States, 313 U.S. 289, 296-97, 61...