Lasche v. George W. Lasche Basic Profit Sharing Plan, 96-4277

• Decision Date: 06 May 1997
• Docket Number: No. 96-4277,96-4277
• Citation: 111 F.3d 863
• Parties: 21 Employee Benefits Cas. 1001, Pens. Plan Guide (CCH) P 23933Y, 10 Fla. L. Weekly Fed. C 884 Madeline LASCHE, Plaintiff-Appellee, v. GEORGE W. LASCHE BASIC PROFIT SHARING PLAN, a.k.a. George W. Lasche Keogh Trust, Defendant-Appellant, Theresa Wenisch, Defendant-Third Party Plaintiff-Appellant, Patricia Clements, individually, and as Co-Personal Representatives of the Estate of George W. Lasche and as Successor Plan Administrators of the George W. Lasche Basic Profit Sharing Plan, Defendant-Appellant, Patricia Lasche Clements, as Trustee of the George W. Lasche Trust, Defendant-Third Party Plaintiff-Appellant, Theresa Lasche Wenisch, as Trustee of the George W. Lasche Trust, Defendant-Appellant, Kathryn Lasche Berggren, Third Party Plaintiff, Merrill Lynch, Pierce, Fenner & Smith, Inc., Third Party Defendant-Appellee.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 863

111 F.3d 863

21 Employee Benefits Cas. 1001,

Pens. Plan Guide (CCH) P 23933Y,

10 Fla. L. Weekly Fed. C 884

Madeline LASCHE, Plaintiff-Appellee, v. GEORGE W. LASCHE BASIC PROFIT SHARING PLAN, a.k.a. George W Lasche Keogh Trust, Defendant-Appellant Theresa Wenisch, Defendant-Third Party Plaintiff-Appellant Patricia Clements, individually, and as Co-Personal Representatives of the Estate of George W. Lasche and as Successor Plan Administrators of the George W. Lasche Basic Profit Sharing Plan, Defendant-Appellant Patricia Lasche Clements, as Trustee of the George W. Lasche Trust, Defendant-Third Party Plaintiff-Appellant, Theresa Lasche Wenisch, as Trustee of the George W. Lasche Trust, Defendant-Appellant, Kathryn Lasche Berggren, Third Party Plaintiff, Merrill Lynch, Pierce, Fenner & Smith, Inc., Third Party Defendant-Appellee.

No. 96-4277.

United States Court of Appeals, Eleventh Circuit.

May 6, 1997.

Michael Rothman, Rothman & Tobin, P.A., Miami, FL, for Appellant.

Marshall J. Osoksky, Lewis, Vegosen, Rosenbach, & Silber, P.A., West Palm Beach, FL, for Appellee.

Appeal from the United States District Court for the Southern District of Florida.

Before HATCHETT, Chief Judge, BARKETT, Circuit Judge, and FAY, Senior Circuit Judge.

FAY, Senior Circuit Judge:

In this appeal, we will decide whether a spouse legally waived her rights to her deceased spouse's retirement plan. The district court found that the spouse did not waive her rights to her late husband's retirement plan because the spouse's waiver did not comply with the ERISA requirement that a spouse's consent be "witnessed by a plan representative or a notary public," 29 U.S.C. § 1055(c)(2)(A)(iii), and because the waiver language was too general to be effective. Because the district court was correct in concluding that the waiver failed to comply with the requirements of ERISA, we affirm.

BACKGROUND

George Lasche and appellee Madeline Baker Lasche were married in August of 1985. Prior to being married, George and Madeline entered into a Prenuptial Agreement. Under the terms of the Prenuptial Agreement, both George and Madeline agreed to waive any rights to the other's property. Following their marriage, both George and Madeline executed a First Amendment to Pre-Nuptial Agreement ("Amendment"). In the Amendment, George and Madeline specifically waived any interest to the other's retirement benefit plan and agreed to execute any documentation required to confirm their waiver in the other's retirement benefit plan. ¹

Several years before getting married to Madeline, George adopted a "Keogh" retirement plan. This plan was reformed several times mainly because George transferred his retirement funds to different financial institutions. In 1989, George, for the last time, transferred funds from a Dean Witter & Company retirement plan to Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") and its "Basic Retirement Program."

In connection with the opening of a Merrill Lynch Basic Retirement Program, Merrill Lynch required George to execute a document entitled "Basic Retirement Plan New Participant Form" ("Form"). The Form designated George's three daughters from a previous marriage: Patricia Clements, Theresa Wenisch, and Kathryn Berggren as his beneficiaries. Because George designated his daughters as beneficiaries, instead of his spouse Madeline, Madeline was required to sign part four of the Form, which states:

Spouse's Consent to Beneficiary Designation:

I am the spouse of the participant who made the beneficiary designation on this form and I consent to it. I understand that if someone other than me has been designated beneficiary, my consent means that I give up rights I may have under the Plan and applicable law (other than rights I may later have as the survivor in a joint annuity with the participant) to receive those amounts payable under the Plan by reason of the participant's death to which I would otherwise be entitled if I were the Participant sole beneficiary.

R2-49-Exhibit E-Part 4. Madeline signed part four of the form. Part four also contains a designated space where the signature of an "employer ²" or notary public is needed George died in 1993 before receiving any benefits from the Merrill Lynch retirement plan. After George's death, Madeline requested a distribution of the plan's benefits from the administrators of the plan, George's daughters. The daughters refused. Subsequently, Madeline filed suit against Defendants-Appellants George W. Lasche Basic Profit Sharing Plan a/k/a George W. Lasche Keogh Trust, Theresa Lasche Wenisch, and Patricia Lasche Clements. The gist of Madeline's complaint is that under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1001-1461 (1994), she, as George's surviving spouse, is entitled to receive the benefits of George's retirement plan.

to confirm the consenting spouse's signature. This space was left blank. George signed part five of the form as the Plan's Administrator.

Prior to trial, both sides filed motions for summary judgment. In Madeline's motion, she argued that her waiver was legally defective, while Defendants asserted the opposite; Madeline's waiver was legally valid. After conducting a hearing on the cross-motions, the district court entered an order granting Madeline's motion for summary judgment, consequently denying Defendants' motion. In the order, the district court found as a matter of law that Madeline's waiver "did not meet the ERISA requirement that the consent be 'witnessed by a plan representative or a notary public,' " R3-85-6, and that the waiver language contained in part four of the Form failed to disclose to Madeline which specific rights were being relinquished by the waiver. R3-85-4. In accordance with the ruling, the district court found that Madeline was entitled to George's entire account balance under the retirement plan. ³ 29 U.S.C. § 1055(a) (1994).

Final judgment was entered after Madeline voluntarily dismissed a remaining count which was not resolved by the district court's summary judgment order. Defendants appeal from this final judgment. On appeal, Defendants contend that the district court erred as a matter of law in holding that the waiver and consent executed by Madeline failed to comply with the requirements of ERISA.

STANDARD OF REVIEW

A motion for summary judgment may be granted only if no genuine dispute remains as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). Since the facts of this case are not in dispute, we need only consider whether Madeline was entitled to summary judgment as a matter of law. As with all questions of law, we review the district court's order granting summary judgment under the de novo standard of review. International Union, United Mine Workers v. Jim Walter Resources, 6 F.3d 722, 724 (11th Cir.1993).

ANALYSIS

Because at issue in this appeal is whether Madeline legally waived her rights to George's retirement plan, we will first set forth the ERISA requirements of an effective waiver. To establish an effective waiver of benefits under ERISA requires that:

(i) the spouse of the participant consents in writing to such election, (ii) such election designates a beneficiary (or a form of benefits) which may not be changed without spousal consent (or the consent of the spouse expressly permits designation by the participant without any requirement of further consent by the spouse), and (iii) the spouse's consent acknowledges the effect 29 U.S.C. § 1055(c)(2)(A). Thus, ERISA mandates that a spouse's consent be "witnessed by a plan representative or a notary public." 29 U.S.C. § 1055(c)(2)(A)(iii). In our case, the space provided for an "employer" (see supra note 2) or notary public to sign next to Madeline's signature under the waiver clause was left blank. Applying this undisputed fact to ERISA requirement 29 U.S.C. § 1055(c)(2)(A)(iii), the district court ruled that Madeline's waiver failed as a matter of law. We agree. ⁴

of such election and is witnessed by a plan representative or a notary public....

The statutory language of ERISA requirement 29 U.S.C. § 1055(c)(2)(A)(iii) is unambiguous. Strictly applying this requirement to the facts of our case, the district court was correct in concluding that Madeline's waiver was legally defective. In an attempt to make Madeline's waiver legally valid, Defendants urge us to consider that since Madeline acknowledges signing the waiver, the purpose behind a plan representative or notary public witnessing her signature is served. In support of this argument, Defendants rely on Butler v. Encyclopaedia Britannica, Inc., 843 F.Supp. 387 (N.D.Ill.1994), aff'd in part and rev'd in part, 41 F.3d 285 (7th Cir.1994).

In Butler, a spouse designated her daughter, instead of her husband, as the beneficiary of pension benefits. Because the spouse designated her daughter as the beneficiary, rather than her husband, the husband needed to sign a consent form, which he acknowledged doing. The notary portions of the consent forms were notarized. Following the spouse's death and after the pension plan administrator awarded benefits to the husband, the daughter filed suit.

The husband challenged the designation of the daughter as beneficiary, arguing among other grounds, that his consent to the waiver of benefits is not valid because his signature was not signed in the presence of a notary public. In awarding the daughter...