S. Elec. Ret. Fund v. Gruel, Case No. 3:18-cv-0585
Decision Date | 11 July 2019 |
Docket Number | Case No. 3:18-cv-0585 |
Parties | SOUTHERN ELECTRICAL RETIREMENT FUND v. CHRISTINA GRUEL and CAMRYN ELIZABENTH LAWHORNE |
Court | U.S. District Court — Middle District of Tennessee |
Pending are various dispositive motions, all of which seek a determination by declaratory judgment as to the proper beneficiary of the pre-retirement death benefits of Donald Lawhorne, Jr. The cross motions were referred to the undersigned Magistrate Judge for report and recommendation. See Order at Docket No. 32. For the reasons stated below, the undersigned respectfully recommends that the motion for judgment on the pleadings of Christiana Gruel (Docket No. 15) be DENIED; the motion of Southern Electrical Retirement Fund (the "Fund") for judgment on the record (Docket No. 18) be GRANTED; and, the motion of Camryn Elizabeth Lawhorne for judgment on the administrative record and/or on the pleadings (Docket No. 24) be GRANTED. Further recommendation is made that judgment be entered declaring the pre-retirement death benefits of decedent Donald Lawhorne, Jr. payable to Camryn Elizabeth Lawhorne and directing payment.
This is an interpleader action brought by the plaintiff, Southern Electrical Retirement Fund (the "Fund"), under Section 1332(a)(3) of the Employee Retirement Income Security Act, 29 U.S.C. §§ 1001, et seq. ("ERISA"), for a determination of which defendant, Christiana Gruel or Camyrn Elizabeth Lawhorne, is entitled to pre-retirement death benefits owing because of the death of plan participant, Donald Lawhorne, Jr. The Fund also seeks a declaratory judgment under Rule 57.
The facts are largely undisputed.3 Donald Lawhorne, Jr. was a participant in the Southern Electrical Retirement Fund. (Docket No. 1 ¶ 6.) The governing documents are an Amended and Restated Agreement and Declaration of Trust Creating Southern Electrical Retirement Fund (AR at 1-47) and an amended and restated Plan of Benefits (effective January 1, 2015) (AR at 48-96).
Section 4.6 of the Plan directs:
In the event of the death of an Employee who has not yet commenced receipt of a Normal, Early or Disability Retirement benefit, his surviving spouse, if any, shall be eligible to receive a "Pre-Retirement Death" benefit. In the event the Employee is not survived by a spouse, his beneficiary, as designated in accordance with Section 6.2 hereof, shall be eligible to receive such benefit. Such benefit shall become payable immediately upon the death of the Employee, but contingent upon receipt of written application therefor as prescribed by the Trustees.
AR at 65. Section 6.2 of the Plan, which governs designation of beneficiaries, provides (in pertinent part) as follows:
Each Employee or former Employee may designate a primary beneficiary or beneficiaries and a contingent beneficiary or beneficiaries to receive any benefit that may become payable under this Plan by reason of the Employee's death, but only when such payment is not otherwise payable to the Participant's surviving spouse in accordance with the provisions of Sections 5.1 and 5.2 hereof. Such designation shall be made upon forms furnished by the Trustees, and may at any time and from time to time be changed or revoked without notice to the beneficiary or beneficiaries and shall not be effective unless and until filed with the Trustees. If any Employee or former Employee shall fail to designate a beneficiary or beneficiaries, or if all those so designated predecease him, then the Employee shall be deemed to have designated the following as his beneficiaries and contingent beneficiaries with priority in the order named: (i) his or her widow or widower, as the case may be; (ii) his children and children of deceased children, per stirpes; (iii) his parents; (iv) his brothers and sisters and nieces and nephews who are children of deceased brothers and sisters, per stirpes; and (v) his estate.
In February of 2015, Lawhorne executed a Designation of Beneficiary Form, which listed as the primary beneficiary "Christy Bender-Christina [sic]" with a relationship description of "Girlfriend" and a designated contingent beneficiary of "Camryn Lawhorne" with a relationship description of "Daughter". (AR at 97.) No change in beneficiary designation was made by Lawhorne prior to his death on January 10, 2018.
According to the Indiana death certificate, Lawhorne died on that date from a sudden traumatic brain injury caused by a self-inflicted gunshot. (AR 98.) At the time of his death, Lawhorne was at his then "girlfriend's residence." (Id.) There is no dispute that: (i) the residence where Lawhorne died was not the residence of Christiana Gruel; (ii) at the time of his death,Lawhorne and Ms. Gruel were no longer in a romantic relationship; and, (iii) at the time of Lawhorne's death, Ms. Gruel was married to someone else.
Following Lawhorne's death, Ms. Gruel made a claim for death benefits under his pension plan. (AR 99.) On the claim form, Ms. Gruel refers to herself as "Christina M. Gruel" and describes her relationship to Lawhorne as "Ex-Girlfriend." (Id.) Lawhorne's family contested payment of the benefits to Ms. Gruel. (AR 100.) By correspondence dated April 4, 2018, the plan administrator notified Ms. Gruel on behalf of the Fund that her application for benefits was denied on the following basis:
AR 101-102. Ms. Gruel timely elected to appeal the plan administrator's determination. (AR 103-104.) The Fund's Investment Review Committee of the Board of Trustees (the "IRC") considered the appeal in a June 1, 2018 meeting and took the following action:
After careful consideration of the letters, emails, and a thorough discussion of the situation, the committee discussion of the situation, the committee determined to affirm the construction and interpretation of the plan, and any facts relevant to construction and interpretation of the plan as had been made by the administrative staff as when the administrative staff initially denied the person's claim. However, the committee determined not to grant or deny the person's appeal, but rather, instructed that a declaratory action be filed to obtain a judicial determination about whether the person making the appeal or the participant's daughter was entitled to the death benefit.
AR 113-114.
The Fund commenced the instant action, which seeks relief under Section 1332(a)(3), as well as under Rule 22 and Rule 57. Ms. Gruel filed a motion for judgment on the pleadings and an accompanying memorandum of law (Docket Nos. 18-19), in which she argues that the Fund's plan administrator is required to distribute the benefit proceeds to her as the designated beneficiary. Ms. Gruel also argues, in response to the motion for judgment on the record filed by the Fund (Docket Nos. 18-20), that the Fund's determination that she is not entitled to benefits is arbitrary and capricious because it is contrary to the plan documents. See Docket Nos. 28-29. She furtherasserts that the Fund's determination should not be considered in this interpleader action. See Docket No. 29 at 2-4.
In its motion for judgment on the record, the Fund opposes Ms. Gruel's requested relief. See Docket Nos. 18-20. The Fund contends that the decision of the IRC "was the result of a deliberate, principled reasoning process, and is supported by material evidence." Docket No. 19 at 7. As a result, the Fund maintains that it acted properly and within its discretionary authority in affirming the administrative staff's determination that Ms. Gruel does not qualify for the death benefits. See also Docket...
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