Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_04-cv-04968/USCOURTS-cand-5_04-cv-04968-5/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 29:1132 E.R.I.S.A.: Employee Benefits

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Case No. C 04-04968 JF

ORDER (1) GRANTING MOTION FOR SUMMARY JUDGMENT OF SEAORIA SIGNARS LEMA, AND (2)

DENYING CROSS-MOTION FOR SUMMARY JUDGMENT OF DAVID THOMAS LEMA, GABRIELLE LYN

LEMA, PAUL PHILLIP LEMA, PAULA SARAH LEMA, AND TOMICA ANN PARHAM-LEMA

(JFLC1)

**E-filed on 2/2/06**

NOT FOR CITATION

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

SUN MICROSYSTEMS, INC., et al.,

 Plaintiffs,

 v.

SEAORIA SIGNARS LEMA, et al.,

 Defendants.

Case Number C 04-04968 JF

ORDER (1) GRANTING MOTION

FOR SUMMARY JUDGMENT OF

SEAORIA SIGNARS LEMA, AND (2)

DENYING CROSS-MOTION FOR

SUMMARY JUDGMENT OF DAVID

THOMAS LEMA, GABRIELLE LYN

LEMA, PAUL PHILLIP LEMA,

PAULA SARAH LEMA, AND

TOMICA ANN PARHAM-LEMA

[Docket Nos. 60 and 62]

On November 8, 2005, Defendant Seaoria Signars Lema (“Seaoria”) filed a motion for

summary judgment, asking the Court to declare her the sole beneficiary of the Sun Microsystems,

Inc. (“Sun”) Tax Deferred Retirement Plan (“Plan”) of Michael H. Lema (“Decedent”). On

December 29, 2005, Defendants David Thomas Lema (“David”), Gabrielle Lyn Lema

(“Gabrielle”), Paul Phillip Lema (“Paul”), Paula Sarah Lema (“Paula”), and Tomica Ann

Parham-Lema (“Tomica”) (collectively, “David et al.”) filed opposition to Seaoria’s motion for

Case 5:04-cv-04968-JF Document 67 Filed 02/02/06 Page 1 of 9
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1 Defendants David et al. did not file their cross-motion for summary judgment in

compliance with Local Rules 7-1 and 7-2. The motion was not separately noticed or filed at least

35 days prior to the scheduled hearing. Civ. L.R. 7-1(a)(1) and 7-2(a). However, because the

issues presented by the cross-motion for summary judgment are identical to those raised in

Seaoria’s motion for summary judgment, the Court in its discretion will consider the two motions

concurrently.

2 Defendants Seaoria, David, Gabrielle, Paul, Paula, and Tomica stipulate to the

authenticity of the employee benefit plan beneficiary designation form dated February 6, 1989.

2

Case No. C 04-04968 JF

ORDER (1) GRANTING MOTION FOR SUMMARY JUDGMENT OF SEAORIA SIGNARS LEMA, AND (2)

DENYING CROSS-MOTION FOR SUMMARY JUDGMENT OF DAVID THOMAS LEMA, GABRIELLE LYN

LEMA, PAUL PHILLIP LEMA, PAULA SARAH LEMA, AND TOMICA ANN PARHAM-LEMA

(JFLC1)

summary judgment. With their opposition, David et al. filed a cross-motion for summary

judgment, asking the Court to declare that David et al., and non-moving Defendant MichaelAnthony Lema (“Michael Anthony”), are the valid beneficiaries of the plan.1

 Seaoria filed a

reply in support of her motion for summary judgment and opposition to the motion of David et

al. David et al. have not filed a reply in support of their cross-motion for summary judgment. 

The Court heard oral argument on January 20, 2006.

I. BACKGROUND

Decedent was a participant in the Plan and was eligible to designate a beneficiary or

beneficiaries to receive, in the event of his death, payment of any portion of his Plan benefits that

was not distributed prior to his death. The terms of the Plan state that “[i]f a married Participant

designates someone other than his or her spouse as the Beneficiary with respect to any portion of

his or her Accounts, shall be invalid unless the spouse consents to such designation.” 

Declaration of Karen E. Phillips (“Phillips Decl.”), Ex. B, p. 22. Valid spousal consent “shall be

in writing, shall acknowledge the effect of the Participant’s election, shall specify the non-spouse

Beneficiary being designated . . . and shall be witnessed by a Plan representative or notary

public.” Id. When Decedent enrolled in the Plan in February 1989, he listed only his six

children, Michael-Anthony, David, Gabrielle, Paul, Paula, and Tomica, as equal beneficiaries on

his employee benefit plan beneficiary designation form. Seaoria’s Motion for Summary

Judgment, Ex. A.2 Decedent signed the form on February 6, 1989, Seaoria signed it on February

Case 5:04-cv-04968-JF Document 67 Filed 02/02/06 Page 2 of 9
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3

 Seaoria’s counsel has submitted a declaration that he called Plaintiffs’ attention to the

potential invalidity of this designation in August 2004. Declaration of Jonathan M. Kaplan ¶¶ 2,

3.

3

Case No. C 04-04968 JF

ORDER (1) GRANTING MOTION FOR SUMMARY JUDGMENT OF SEAORIA SIGNARS LEMA, AND (2)

DENYING CROSS-MOTION FOR SUMMARY JUDGMENT OF DAVID THOMAS LEMA, GABRIELLE LYN

LEMA, PAUL PHILLIP LEMA, PAULA SARAH LEMA, AND TOMICA ANN PARHAM-LEMA

(JFLC1)

9, 1989, and the Plan representative signed it on February 17, 1989. Id. The fact that neither a

Plan representative nor notary public was present at the time Seaoria signed the form does not

appear to have been discovered until at least July 2004.3 

More than twelve years later, in July 2001, Decedent attempted to designate the Michael

Henry Lema Trust (“Lema Trust”) as the beneficiary of his Plan benefits using Sun’s online Plan

administration system. Phillips Decl., Ex. C. Plaintiffs assert that when he did so, the system

generated a notification informing Decedent that, in order for his designation to be valid, he

needed to provide the Plan with written spousal consent to the beneficiary designation. Plaintiffs

also assert that the Plan never received such consent from Seaoria, and thus, under the terms of

the Plan, this beneficiary designation is invalid as well. The Lema Trust is not a party to this

action, and no party to this action argues that this 2001 beneficiary designation is valid.

Decedent died on November 14, 2001. Phillips Decl., Ex. D. At the time of his death,

Decedent had benefits under the Plan that had not yet been distributed to him. As of April 7,

2005, the value of the benefits was $127,796.37. Phillips Decl. ¶ 12. Following a dispute among

the Defendants, Plaintiffs Sun and Sun Microsystems, Inc. Tax Deferred Retirement Savings

Plan brought this action in interpleader pursuant to the Employee Retirement Income Security

Act of 1974 (“ERISA”) and Federal Rule of Civil Procedure 22 to determine who among the

seven Defendants is or are the proper beneficiary or beneficiaries of Decedent’s account under

the Plan. On June 9, 2005, this Court issued an order authorizing Plaintiffs to deposit benefits

with the Court and discharging them from further liability. 

Seaoria now argues that the February 1989 enrollment form is invalid, and moves for

summary judgment to declare her the sole beneficiary of the Plan. David et al. argue that the

February 1989 enrollment form is valid, and move for summary judgment to declare that they,

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4

 Additional facts have been alleged in the pleadings, some of which are disputed. For

example, parties dispute whether Seaoria was living with Decedent in February 1989, when the

employee benefit plan beneficiary designation form was signed. They also dispute whether

Seaoria understood the financial impact of signing the waiver. None of these alleged facts has

been presented to the Court in the form of competent, admissible evidence. However, because

the Court concludes that the February 6, 1989 beneficiary designation is invalid as a matter of

law, these factual disputes are immaterial.

4

Case No. C 04-04968 JF

ORDER (1) GRANTING MOTION FOR SUMMARY JUDGMENT OF SEAORIA SIGNARS LEMA, AND (2)

DENYING CROSS-MOTION FOR SUMMARY JUDGMENT OF DAVID THOMAS LEMA, GABRIELLE LYN

LEMA, PAUL PHILLIP LEMA, PAULA SARAH LEMA, AND TOMICA ANN PARHAM-LEMA

(JFLC1)

along with Michael-Anthony, are the sole beneficiaries of the Plan.4

II. LEGAL STANDARD

A motion for summary judgment should be granted if there is no genuine issue of

material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P.

56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). The moving party bears

the initial burden of informing the Court of the basis for the motion and identifying the portions

of the pleadings, depositions, answers to interrogatories, admissions, or affidavits that

demonstrate the absence of a triable issue of material fact. Celotex Corp. v. Catrett, 477 U.S.

317, 323 (1986). 

If the moving party meets this initial burden, the burden shifts to the non-moving party to

present specific facts showing that there is a genuine issue for trial. Fed. R. Civ. P. 56(e);

Celotex, 477 U.S. at 324. A genuine issue for trial exists if the non-moving party presents

evidence from which a reasonable jury, viewing the evidence in the light most favorable to that

party, could resolve the material issue in his or her favor. Anderson, 477 U.S. 242, 248-49;

Barlow v. Ground, 943 F.2d 1132, 1134-36 (9th Cir. 1991). 

“When the nonmoving party has the burden of proof at trial, the moving party need only

point out ‘that there is an absence of evidence to support the nonmoving party’s case.’” 

Devereaux v. Abbey, 263 F.3d 1070, 1076 (9th Cir. 2001) (quoting Celotex Corp. v. Catrett, 477

U.S. 317, 325 (1986)). Once the moving party meets this burden, the nonmoving party may not

rest upon mere allegations or denials, but must present evidence sufficient to demonstrate that

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28 5

Case No. C 04-04968 JF

ORDER (1) GRANTING MOTION FOR SUMMARY JUDGMENT OF SEAORIA SIGNARS LEMA, AND (2)

DENYING CROSS-MOTION FOR SUMMARY JUDGMENT OF DAVID THOMAS LEMA, GABRIELLE LYN

LEMA, PAUL PHILLIP LEMA, PAULA SARAH LEMA, AND TOMICA ANN PARHAM-LEMA

(JFLC1)

there is a genuine issue for trial. Id. 

II. DISCUSSION

The Court concludes that the employee benefit plan beneficiary designation form dated

February 6, 1989 is invalid because it did not inform Seaoria expressly of the effect of her

waiver. ERISA allows a plan participant to “elect at any time during the applicable election

period to waive the qualified joint and survivor annuity form of benefit or the qualified

preretirement survivor annuity,” but only if: 

 (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 designations by the participant without any requirement of further consent

by the spouse), and 

 (iii) the spouse’s consent acknowledges the effect of such election and is

witnessed by a plan representative or a notary public

29 U.S.C. §§ 1055(c)(1)(A)(I) and (c)(2)(A) (emphasis added). 

California’s doctrine of substantial compliance, while it has been applied in the Ninth

Circuit to a narrow category of ERISA cases, does not apply to the discrete issue of whether “the

spouse’s consent acknowledges the effect of such election [of a non-spouse beneficiary].” In

Bankamerica Pension Plan v. McMath, a case in which the plan participant failed to sign the

beneficiary designation form, the Ninth Circuit applied the California doctrine of substantial

compliance because that doctrine “on the facts of this case affects only the ultimate ownership of

the benefits.” Bankamerica, 206 F.3d 821, 830 (9th Cir. 2000). The court reasoned that the

connection with ERISA was too “‘tenuous, remote, or peripheral’ to trigger preemption.” Id. In

contrast, the question of whether the spouse’s consent acknowledges the effect of electing a nonspouse beneficiary is not “tenuous, remote, or peripheral” to the substance and meaning of

ERISA. Accordingly, federal common law applies. “Under ERISA, Congress has authorized the

courts ‘to formulate a nationally uniform federal common law to supplement the explicit

provisions and general policies set out in [the Act].’” Security Life Ins. Co. of America v.

Meyling, 146 F.3d 1184, 1191 (9th Cir. 1998) (quoting Peterson v. American Life & Health Ins.

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5

 The clause at issue in Lasche reads as follows:

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. 

6

Case No. C 04-04968 JF

ORDER (1) GRANTING MOTION FOR SUMMARY JUDGMENT OF SEAORIA SIGNARS LEMA, AND (2)

DENYING CROSS-MOTION FOR SUMMARY JUDGMENT OF DAVID THOMAS LEMA, GABRIELLE LYN

LEMA, PAUL PHILLIP LEMA, PAULA SARAH LEMA, AND TOMICA ANN PARHAM-LEMA

(JFLC1)

Co., 48 F.3d 404, 411 (9th Cir.1995)).

The employee benefit plan beneficiary designation form contains a single paragraph

concerning “Consent of Spouse,” which states:

If you are married and wish to designate someone other than or in addition to your

spouse, your spouse must sign this form. Your spouse’s consent will reduce the

potential for contested distribution of your account balance in the event of your

death.

Seaoria’s Motion for Summary Judgment, Ex. A. There is nothing in this clause, or elsewhere in

the designation form, that expressly acknowledges the effect of electing a non-spouse

beneficiary, i.e., that the spouse is giving up his or her legal entitlement to the Plan participant’s

benefits. The clause, like the clause at issue in Lasche v. George W. Lasche Basic Retirement

Plan, “does not describe or explain the right that the spouse is giving up (i.e. to get all the money

in the account).” Lasche, 870 F. Supp. 336, 338 (S.D. Fla. 1994), aff’d, Lasche v. George W.

Lasche Basic Profit Sharing Plan, 111 F.3d 863 (11th Cir. 1997).5

The 1989 designation also is likely invalid on the ground that Seaoria’s signature,

waiving her spousal benefits, was not witnessed by a Plan representative or notary public. 

Defendants David et al. argue that the California doctrine of substantial compliance applies to the

question of whether Seaoria’s signature was valid. While the question of whether the California

doctrine of substantial compliance applies to this issue is closer than it is with respect to the

consent issue described above, the most reasonable reading of the Ninth Circuit’s decision in

BankAmerica is that it does not. The issue of whether a spouse’s signature, waiving his or her

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Case No. C 04-04968 JF

ORDER (1) GRANTING MOTION FOR SUMMARY JUDGMENT OF SEAORIA SIGNARS LEMA, AND (2)

DENYING CROSS-MOTION FOR SUMMARY JUDGMENT OF DAVID THOMAS LEMA, GABRIELLE LYN

LEMA, PAUL PHILLIP LEMA, PAULA SARAH LEMA, AND TOMICA ANN PARHAM-LEMA

(JFLC1)

spousal benefits, was witnessed is an issue that touches on central policy intentions behind

ERISA. See, e.g., Lasche, 111 F.3d at 867 (“strict ERISA requirements designed to ensure a

valid waiver of a spouse’s retirement plan are consistent with the legislative policy of protecting

spousal rights”). 

Even assuming that the California doctrine of substantial compliance does apply, there is

little support for the contention that the unwitnessed signature of Seaoria would meet the

requirements of that doctrine. In BankAmerica, the Ninth Circuit applied the following doctrine

of substantial compliance:

Where the insured makes every reasonable effort under the circumstances, 

complying as far as he is able with the rules, and there is a clear manifestation of

intent to make the change, which the insured has put into execution as best he can,

equity should regard the change as effected. 

Bankamerica, 206 F.3d at 867 (quoting Pimentel v. Conselho Supremo De Uniao Portugeuza Do

Estado Da California, 6 Cal.2d 182, 188 (1936)). While it is arguable that there was a “clear

manifestation of intent to make the change,” it far from clear that Decedent complied “as far as

he [was] able with the rules.” There is no argument or evidence suggesting that Decedent was

unable to obtain a signature by Seaoria that was witnessed by a Plan representative or a notary

public. In any event, having found that the February 6, 1989 employee benefit plan beneficiary

designation form is invalid on the ground that the spouse’s consent does not acknowledge the

effect of electing a non-spouse beneficiary, the Court need not decide whether the California

doctrine of substantial compliance applies to this issue, and, if it did, whether it would be

satisfied in this case.

Thus, because neither the February 6, 1989 beneficiary designation form nor the July

2001 online beneficiary designation is valid, Seaoria is the sole beneficiary of Decedent’s plan. 

III. ORDER

Good cause therefore appearing, IT IS HEREBY ORDERED that Seaoria’s motion for

summary judgment is GRANTED. The cross-motion for summary judgment brought by David

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Case No. C 04-04968 JF

ORDER (1) GRANTING MOTION FOR SUMMARY JUDGMENT OF SEAORIA SIGNARS LEMA, AND (2)

DENYING CROSS-MOTION FOR SUMMARY JUDGMENT OF DAVID THOMAS LEMA, GABRIELLE LYN

LEMA, PAUL PHILLIP LEMA, PAULA SARAH LEMA, AND TOMICA ANN PARHAM-LEMA

(JFLC1)

and the other purported beneficiaries is DENIED. 

DATED: February 2, 2006

_______________________

JEREMY FOGEL

United States District Judge

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Case No. C 04-04968 JF

ORDER (1) GRANTING MOTION FOR SUMMARY JUDGMENT OF SEAORIA SIGNARS LEMA, AND (2)

DENYING CROSS-MOTION FOR SUMMARY JUDGMENT OF DAVID THOMAS LEMA, GABRIELLE LYN

LEMA, PAUL PHILLIP LEMA, PAULA SARAH LEMA, AND TOMICA ANN PARHAM-LEMA

(JFLC1)

This Order has been served upon the following persons:

R. Bradford Huss bhuss@truckerhuss.com,

Clarissa A. Kang ckang@truckerhuss.com

Jonathan Marc Kaplan jonnymkap@aol.com,

Loren Nizinski elniz@aol.com, Lidiaa@mylalaw.com

Karen Elaine Phillips kphillips@truckerhuss.com,

Robert Frank Schwartz rschwartz@truckerhuss.com, pmahoric@truckerhuss.com 

Case 5:04-cv-04968-JF Document 67 Filed 02/02/06 Page 9 of 9