Van Den Broek v. Tang

• Decision Date: 05 March 2014
• Docket Number: CL-2013-0012884
• Court: Circuit Court of Virginia
• Parties: Re: Susan Van Den Broek v. Monica Tang, as Administrator of the Estate of Daniel Deely, and Individually

Re: Susan Van Den Broek v. Monica Tang, as Administrator of the Estate of Daniel Deely, and Individually

CL-2013-0012884

NINETEENTH JUDICIAL CIRCUIT OF VIRGINIA COUNTY OF FAIRFAX CITY OF FAIRFAX

March 5, 2014

IN THE CIRCUIT COURT OF FAIRFAX COUNTY

SUSAN VAN DEN BROEK, Plaintiff,

v.

MONICA TANG, as Administrator of the Estate of Daniel Deely, and Individually, Defendant.

ERRATUM

The Court hereby modifies its attached Letter Opinion issued on March 5, 2014 as follows:

In the address block, the address of Plaintiff's counsel should be listed as follows:

Mr. George O. Peterson, Esq.

Ms. Miriam Epstein, Esq.

Peterson Saylor, PLC

10555 Main Street, Suite 320

Fairfax, Virginia 22030

Counsel for Plaintiff Susan Van Den Broek

SO ORDERED, this 12th day of March, 2014.

[Redacted]

Judge Randy I. Bellows

ENDORSEMENT OF THIS ORDER BY COUNSEL OF RECORD FOR THE PARTIES IS WAIVED

IN THE DISCRETION OF THE COURT PURSUANT TO RULE 1:13 OF THE SUPREME COURT OF

VIRGINIA.

OPINION LETTER

DENNIS J. SMITH, CHIEF JUDGE JANE MARUM ROUSH JONATHAN C. THACHER R. TERRENCE NEY RANDY I. BELLOWS CHARLES J. MAXFIELD BRUCE D. WHITE ROBERT J. SMITH DAVID S. SCHELL JAN L. BRODIE LORRAINE NORDLUND BRETT A. KASSABIAN MICHAEL F. DEVINE JOHN M. TRAN JUDGES

BARNARD F. JENNINGS THOMAS A. FORTKORT RICHARD J. JAMBORSKY JACK B. STEVENS J. HOWE BROWN F. BRUCE BACH M. LANGHORNE KEITH ARTHUR B. VIEREGG KATHLEEN H. MACKAY ROBERT W. WOOLDRIDGE, JR. MICHAEL P. McWEENY GAYLORD L. FINCH, JR. STANLEY P. KLEIN LESLIE M. ALDEN MARCUS D. WILLIAMS RETIRED JUDGES

Mr. George O. Peterson, Esq.

Peterson Saylor, PLC

10555 Main Street, Suite 320

Fairfax, Virginia 22030

Counsel for Plaintiff Susan Van Den Broek

Mr. Karl W. Pilger, Esq.

Boring & Pilger, P.C.

307 Maple Avenue West, Suite D

Vienna, Virginia 22180-4307

Counsel for Defendant Monica Tang

Dear Counsel:

Before the Court is the Plaintiff's Motion for Summary Judgment. On February 21, 2014, the parties presented their arguments and the Court took the matter under advisement. After considering the oral arguments and briefs of both parties, and for the reasons discussed below, the Court grants the Plaintiff's motion and finds that federal law preempts the Defendant's counterclaims.

INTRODUCTION

The purpose of this letter opinion is to address an issue that has not been explicitly resolved by controlling precedent. That issue is whether federal law preempts a breach of contract claim against a properly designated beneficiary of Thrift Savings Plan ("TSP") death benefits under the Federal Employee's Retirement System Act of 1986 ("FERSA") when that beneficiary allegedly waived her rights to the decedent's TSP benefits in a property settlement agreement ("PSA"), but nevertheless receives the decedent's TSP benefits. Although controlling case law does not specifically address a post-receipt breach of contract case premised on a voluntary waiver of federal TSP death benefits, the cases that deal with similar statutory provisions and similar factual scenarios apply with equal force in this case, and compel this Court to find—on two independent grounds—that the Defendant's counterclaims should be dismissed as preempted by federal law.

I. FACTS AND PROCEEDINGS

The relevant facts are not in dispute. On June 24, 1991, Daniel Deely ("Mr. Deely") designated Plaintiff Susan Van Den Broek, his wife at the time, as the beneficiary of his TSP benefits under FERSA, 5 U.S.C. § 8401, et seq. The beneficiary form executed on this date is the only valid beneficiary form on file with Mr. Deely's employer. On December 4, 1995, the Circuit Court of Fairfax County entered a Final Decree of Divorce in the divorce of Plaintiff and Mr. Deely. The divorce decree affirmed, ratified, and incorporated a PSA entered into by the parties on June 16, 1994. The PSA included the following language, relevant to the issues in this case:

Paragraph 3(d): All Other Personal Property: Except as herein provided to the contrary, each party shall have as his/her sole and separate property all items of personal property, whether tangible or intangible, now titled in the name of or in the possession of each party. Henceforth each of the parties shall own, have and enjoy, independently of any claim or right of the other, all items of personal property of every kind, now or hereafter owned or held by him or her, with full power to dispose of the same as fully and effectually, in all respects and for all purposes, as if he or she were unmarried.

Paragraph 6: Pension and Retirement Benefits. Within thirty (30) days of the date of this agreement or as soon thereafter as is reasonably possible, the Husband agrees to execute and submit to the Thrift Savings Plan a Retirement Benefits Court Order, the terms of which shall direct that Ten Thousand Dollars ($10,000.00) from the Husband's Thrift Savings Plan shall be transferred to the Wife's IRA, together with earnings thereon from the date of execution of this Agreement until such funds are actually disbursed to the Wife's IRA. Except as stated above, each party waives any and all claim or right that either may now, or hereafter, have to share in the other's pension or profit sharing or retirement benefits to which he or she may be entitled by reason of the other's past or presentemployment or any such benefits to which he or she may be entitled by reason of any future employment.

Paragraph 11: Mutual Releases. . . . The Wife does hereby forever relinquish and release to the Husband all right, title and interest which she now has or ever may have in and to the real, personal and mixed property of the Husband, all right of dower. . . all right, title and interest which she now has or ever may have in and to the property or estate of the Husband at his death, all right and interest to take against his will or under the intestate laws, and each and every other right, title and interest she now has or ever may have against the Husband, his heirs, executors, administrators and assigns, excepting only every right that is given her in and by this Agreement.

On June 28, 2000, following his divorce from Plaintiff, Mr. Deely executed a new designation of beneficiary form for his TSP benefits. The designation named Defendant Monica Tang, Mr. Deely's widow, as his beneficiary. However, the designation was improperly executed because Defendant was both a witness to the form and the named beneficiary, and the form specifically states that a witness cannot receive payment as a beneficiary.

Following Mr. Deely's death in February 2013, TSP contacted Plaintiff and advised her that she may be a beneficiary of Mr. Deely's TSP account. The parties agree that Plaintiff is the validly designated beneficiary of the TSP benefits, and will receive, or has already received, Mr. Deely's TSP benefits, valued at $250,000. On May 21, 2013, TSP informed Plaintiff that the claim was on hold because the beneficiary form was being challenged. This communication was followed by a demand letter from Defendant's attorney, asserting that Plaintiff waived all rights to the TSP benefits in the PSA and demanding that Plaintiff execute a written waiver of the funds.

On August 13, 2013, the Plaintiff, Susan Van Den Broek, filed a Complaint for Declaratory Judgment to determine her rights to the TSP benefits. The Complaint asserted that the language in the PSA did not constitute a waiver of the TSP benefits and, regardless, that Plaintiff was still the rightful owner of the TSP benefits because federal law preempted any pre-or post-receipt claim against the benefits. Based on the language in the PSA between Mr. Deely and Plaintiff, cited above, Defendant Tang countersued for breach of contract on September 23, 2013, claiming the Plaintiff had breached the PSA by retaining, or planning to receive and retain, the TSP benefits.

On November 8, 2013, this Court heard Plaintiff's first Demurrer to the Defendant's Counterclaim. On that date, the Court declined to consider Plaintiff's federal preemption defense to the Counterclaim as it determined that issue was not appropriate for resolution in a demurrer. The Court sustained the Plaintiff's Demurrer as to two of the three counts of the counterclaim because Defendant had failed to assert that Plaintiff would receive or had received the TSP benefits. Defendant filed an Amended Counterclaim on November 22, 2013 that corrected this omission. Plaintiff then filed a Demurrer to the Amended Counterclaim and a Motion for Summary Judgment raising the federal preemption question. The Court consolidatedthe Demurrer and Motion for Summary Judgment and heard argument on February 21, 2014. On that day, the Court held that the Plaintiff's Demurrer to the Amended Counterclaim was overruled because Defendant had fixed the defects in her Counterclaim and the federal preemption defense was not appropriate for a demurrer. The Court took the Plaintiff's Motion for Summary Judgment under advisement.

II. ANALYSIS

Summary judgment is appropriate in a case where there are no material facts genuinely in dispute and the matter concerns a pure question of law. See Va. Sup. Ct. R. 3:20; see also Carwile v. Richmond Newspapers, Inc., 196 Va. 1, 5 (1954). This case is ripe for summary judgment because the relevant facts—that Plaintiff is the validly designated beneficiary of the TSP benefits and has, or will, receive those benefits—are not in dispute, and the matter presents a pure question of law, i.e., whether the Defendant's counterclaims based on an alleged waiver in the PSA are preempted by federal law.

This letter opinion finds two independent bases for federal preemption of a post-receipt claim on TSP benefits under FERSA—TSP's statutory order of precedence provision, 5 U.S.C. § 8401, and FERSA's anti-attachment provision, 5 U.S.C. § 8470. However, because there is no binding precedent that discusses these provisions in FERSA, the Court must look to similar provisions in the Federal Employees' Group Life Insurance ("FEGLIA" or "FEGLI"), 5 U.S.C. § 8701, et seq., the ...