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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

ESTATE OF JOHN C. SULLIVAN, Case No. 08-14719

Plaintiff, HON. SEAN F. COX

United States District Judge

v. 

FORD MOTOR COMPANY, et al.,

Defendants.

______________________________/

OPINION & ORDER ACCEPTING AND ADOPTING IN PART 

REPORT & RECOMMENDATION [Doc. No. 37]

This matter is before the Court for consideration of objections filed by Plaintiff the Estate

of John C. Sullivan (“the Estate”) and by Defendant Ford Motor Company and Ford Motor

Company Savings and Stock Investment Plan for Salaried Employees (collectively, “Ford”) to

the Report and Recommendation (“R&R”) filed by Magistrate Judge Michael Hluchaniuk on

December 8, 2009 [Doc. No. 37]. In the R&R, Magistrate Judge Hluchaniuk recommends that

the Court affirm Ford’s administrative decision [Doc. No. 12], grant Defendant MetLife’s

motion for sanctions against the Estate [Doc. No. 24], and recommends that MetLife and Ford be

allowed to deposit the life insurance proceeds and SSIP stock proceeds with the Clerk of the

Court and then dismiss Ford and MetLife from this case with prejudice. [See Doc. No. 27]. The

Court finds that oral argument would not significantly aid the decisional process. See E.D.

MICH. L.R. 7.1(f)(2). The Court therefore orders that the motion be decided without oral

argument. 

For the reasons that follow, consistent with Ford’s lone objection to the R&R, the Court
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REJECTS the R&R’s recommendation that Ford be allowed to deposit the SSIP stock proceeds

with the Clerk of the Court and be dismissed with prejudice from this action. The Court

OVERRULES the remaining objections filed by the Estate, and shall adopt the remainder of the

R&R in its entirety. 

BACKGROUND

Magistrate Judge Hluchaniuk’s December 8, 2009 R&R [See Doc. No. 37, pp.3-8]

adequately laid out the relevant facts of this case, and will be incorporated by reference herein. 

Ultimately, the R&R held that the Estate was not a named beneficiary of either the MetLife life

insurance proceeds or of the Ford SSIP stock proceeds. Id. at 16. As the Estate was not a

beneficiary, it was thus precluded from bringing breach of fiduciary duty claims against MetLife

and Ford. Id. at 19. Even assuming, aguendo, that the Estate were a beneficiary as defined by

ERISA, the R&R concluded that the Estate would have no valid claim for consequential

damages. Id. at 19-23. As the Estate was not a beneficiary for purposes of ERISA, the R&R

further concluded that the Estate was not entitled to attorney fees as a “prevailing party” under

29 U.S.C. § 1132(g). Id. at 23. Finally, the R&R found the Estate’s breach of fiduciary duty

action against MetLife frivolous, Id. at 26, and suggested that the Court order the Estate to pay

MetLife $7,312.50 in costs and attorney fees pursuant to 28 U.S.C. § 1927. Id. at 27. 

As Magistrate Judge Hluchaniuk noted that neither Ford nor MetLife contended that they

did not owe benefits - i.e., life insurance proceeds or stock proceeds - to some party, the R&R

recommended that both MetLife and Ford be allowed to interplead the funds held by those

parties by depositing them with the Court: 

The undersigned RECOMMENDS that the Court allow MetLife and Ford to

deposit the life insurance proceeds and SSIP stock proceeds with the Clerk of the
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Court, [and] that MetLife and Ford be DISMISSED from this case with

prejudice. . . .

[Doc. No. 37, p.27 (emphasis in original)]. 

Pursuant to FED. R. CIV. P. 72(b), a party objecting to the recommended disposition of a

matter by a Magistrate Judge must file objections to the R&R within fourteen days after being

served with a copy of the R&R. “The district judge to whom the case is assigned shall make a de

novo determination upon the record, or after additional evidence, of any portion of the magistrate

judge’s disposition to which specific written objection has been made.” Id. 

MetLife did not file an objection to the R&R within the required fourteen-day period, and

thus, pursuant to FED. R. CIV. P. 72(b), is deemed to have accepted R&R in its entirety. With

exception to one minor objection to the requirement that it interplead the SSIP stock funds [See

Doc. No. 38], discussed in detail below, Ford similarly did not object to the contents of the R&R. 

The Estate filed its objections to the R&R on December 22, 2010, listing five individual

objections to the R&R’s recommendations. 

ANALYSIS

The Estate raises five objections to Magistrate Judge Hluchaniuk’s December 8, 2009

R&R [Doc. No. 37]: 1) that the Estate had standing to bring a claim against Ford as a

“beneficiary” under ERISA; 2) that the Estate is the beneficiary of the MetLife proceeds; 3) that

the Estate is entitled to attorney fees under ERISA; 4) that counsel for the Estate should not have

been sanctioned for bringing an action against MetLife; and 5) that the R&R misapplied LaRue

v. DeWolff, Boberg & Associates, Inc., 552 U.S. 248 (2008). Ford’s sole objection to the R&R is

that, under the terms of the SSIP plan, Ford cannot simply transfer SSIP assets to the Court, but

must instead pay them directly to a beneficiary. For the reasons that follow, the Court ADOPTS
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Ford’s objection to the R&R, OVERRULES all of the Estate’s objections, and, with the

exception of the requirement that Ford interplead the SSIP funds, ADOPTS the R&R [Doc. No.

37] IN ITS ENTIRETY. 

I. The Estate’s Objections to the R&R.

The Estate raises five individual objections to Magistrate Judge Hluchaniuk’s December

8, 2009 R&R. The Court finds merit in none of these objections. 

A. The Estate’s Standing to Bring a Claim Against Ford Under ERISA. 

The Estate first objects to Magistrate Judge Hluchaniuk’s determination that the Estate

lacked standing to bring an ERISA claim against Ford. [Pl.’s Br., Doc. No. 39, pp.1-3]. The

Estate argues as follows: 

The SSIP Plan definitely provides that the Estate of the decedent could be a

beneficiary under its plan[,] which contradicts the Report and Recommendation

which holds that the SSIP Plan did not allow the Estate of the decedent to be

designated as a beneficiary of the plan. 

Id. at 2. 

The Estate’s argument in its first objection strikes the Court as confused. In arguing that

the R&R held the Estate lacked standing, the Estate’s brief [Doc. No. 39, p.2] cites to the third

footnote in the R&R as evidence supporting its contention. Footnote three in the R&R, however,

explicitly held that “[t]his is not technically a question of standing as argued by defendants.” Id. 

Rather, the R&R “recommend[ed] that the Court conclude that the Estate is not a beneficiary.” 

Id. (emphasis added). To the extent that the Estate therefore argues that the R&R held the Estate

to lack standing under ERISA, the Court overrules that objection as moot. 

To the extent that the Estate’s first objection was intended to challenge the R&R’s

determination that the Estate was not a beneficiary of the SSIP proceeds, the Court overrules that
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objection as well. As the R&R held: 

ERISA provides that a participant or beneficiary may recover or enforce benefits

under the terms of a plan, or clarify rights to future benefits under the terms of the

plan. 29 U.S.C. § 1132(a)(1)(B). ERISA defines a beneficiary as “a person

designated by a participant, or byt eh terms of an employee benefit plan, who is or

may become entitled to a benefit thereunder.” 29 U.S.C. § 1002(8). As

concluded above, Mr. Sullivan never designated the Estate as a beneficiary of his

SSIP benefits or his life insurance policy. And, neither plan provides that, where

no beneficiary is designated, the default beneficiary is the estate of the decedent. 

While the estate made a claim for both the life insurance policy proceeds and the

SSIP benefits, asserting a claim alone does not turn it into a “beneficiary” as

defined by ERISA. 

[R&R, Doc. No. 37, p.19]. The Court agrees, and overrules the Estate’s objections to the

contrary. 

B. The Estate as Beneficiary to the MetLife Insurance Proceeds. 

The Estate’s second objection to Magistrate Judge Hluchaniuk’s R&R contests the

R&R’s holding that the Estate was not a beneficiary to the MetLife Insurance Proceeds. [Pl.’s

Br., Doc. No. 39, pp.3-5]. For the reasons discussed supra, the Court agrees with the holding of

the R&R that the Estate was properly held not to be a beneficiary of the SSIP benefits held by

Ford. As the R&R held: 

Mr. Sullivan died on February 16, 2007, without ever submitting any designation

of beneficiary form subsequent to the October 11, 1996 form that was rejected by

[the policy’s prior underwriter before MetLife] John Hancock. Thus, the

undersigned agrees with MetLife that no beneficiary form had been accepted by

John Hancock at the time of Mr. Sullivan’s death and that the rejected beneficiary

designations could be used by a court to infer Mr. Sullivan’s intent, using

equitable principles. Based on the foregoing, there is no doubt that MetLife

appropriately decided that the Estate was not the named beneficiary. . . . 

[R&R, Doc. No. 37, p.15]. The Court agrees, and overrules the Estate’s objections to the

contrary. 

Further, in the Estate’s second objection to the R&R [Doc. No. 37, p.5], the Estate argues
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that “[t]here were never any competing interests between any of the beneficiaries as to whom the

proper beneficiary of the benefits were: it has always been the Estate.” The Estate therefore

argues that the R&R’s characterization of this action as a candidate for interpleader was

improper. Id. at 4. This argument misses the point. The R&R explicitly noted that counsel for

each of the Plaintiffs in this action “represent all the potential claimants,” and that between

themselves, “had already formulated a settlement as to the distribution of the funds amongst the

claimants.” [R&R, Doc. No. 37, p.11]. That a gentleman’s agreement may exist between the

universe of possible claimants to both the SSIP benefits and the MetLife insurance policy

benefits exists, however, does not change the essential character of this action as one involving

interpleader principles. The Estate’s objections to the contrary lack merit. 

C. The Estate’s Entitlement to Attorney Fees Under ERISA. 

The Estate’s third objection to Magistrate Judge Hluchaniuk’s R&R contests the R&R’s

holding that the Estate was not entitled to attorney fees, as it was not a prevailing party under

ERISA. [Pl.’s Br., Doc. No. 39, p5]. As the Estate argues: 

If Plaintiff is correct that the Estate is indeed a beneficiary of the life insurance

proceeds. . . then pursuant to the Magistrate’s own findings, the Estate would be

entitled to attorney fees under ERISA. Therefore, Plaintiff objects to the findings

that the Estate is not entitled to attorney fees under ERISA if it is found to be a

beneficiary of the same proceeds by this Court. 

Id. As discussed supra, however, this Court agrees with the R&R’s holdings that the Estate was

not a beneficiary of either the SSIP proceeds or the MetLife insurance policy proceeds. The

Court therefore overrules the Estate’s objections regarding its entitlement to attorney fees under

ERISA. 

D. The Propriety of Sanctions Being Levied Against Counsel for the Estate. 
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The Estate’s fifth objection to Magistrate Judge Hluchaniuk’s R&R contests the R&R’s

holding that Plaintiff’s counsel should be sanctioned as a result of bringing an action against

MetLife. [Pl.’s Br., Doc. No. 39, pp.5-7]. The Estate argues as follows: 

Although the Magistrate recommends the Estate’s counsel unreasonably and

vexatiously multiplied the proceedings, the real cause to the vexatious

proceedings was Defendant, MetLife, because it failed to file an interpleader

action to begin with nor provide any direction to Defendnat, Ford[,] as to how to

distribute the SSIP benefits. 

Id. at 6 (internal citation omitted). Later in their brief, the Estate elaborates upon this argument:

. . . Defendant, MetLife, had done nothing for a two year period which caused

Plaintiff to suffer damages as Ford stock was rapidly being devalued. Had an

interpleader action been sought by the Defendant [MetLife] as the Magistrate

indicates should have been brought, this claim would have been resolved much

sooner than it has been. 

Id. at 7. 

This argument is wholly without merit, and borders on frivolity. As the R&R held: 

With respect to the SSI plan, MetLife asserts that it is clearly not a fiduciary given

that it has no administrative responsibilities, exercises no control over the plan

assets, and does not provide investment advice. Thus, according to MetLife, it is

not a fiduciary with respect to the SSIP plan and could not possibly be held liable

for any claim alleging breach of fiduciary duty. The undersigned agrees. All

evidence in the record shows that MetLife has nothing to do with the

administration of the SSIP plan.

[R&R, Doc. No. 37, pp.24-25]. The Court agrees, and overrules the Estate’s objections to the

contrary. 

E. The R&R’s Application of the Supreme Court’s Holding in LaRue.

The Estate’s fifth and final objection to Magistrate Judge Hluchaniuk’s R&R contests the

R&R’s application of the Supreme Court’s holding in LaRue v. DeWolff, Boberg & Associates,

Inc., 552 U.S. 248 (2008). [Pl.’s Br. Doc. No. 39, pp.7-8]. The Estate argues as follows: 
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[U]nder LaRue, the U[.]S[.] Supreme Court has determined that participants under

an ERISA plan may sue for breach of fiduciary duty under their individual plans. .

. . If this Court determines that the Estate is the rightful beneficiary [of the SSIP

and MetLife insurance policy proceeds], then under LaRue, the Plaintiff would be

entitled to delayed damages. . . . 

Id. at pp.7-8. As discussed supra, however, the Court affirms the R&R’s holdings that the Estate

was not a beneficiary of either the SSIP proceeds or the MetLife insurance policy proceeds. The

Court therefore overrules the Estate’s fifth and final objection. 

II. Defendant Ford’s Sole Objection to the R&R.

Defendant Ford’s sole objection to Magistrate Judge Hluchaniuk’s R&R contests the

R&R’s requirement that Ford “deposit the. . . SSIP stock proceeds with the Clerk of the Court”

and then be allowed to be dismissed with prejudice from this action. [See R&R, Doc. No. 37,

p.27]. Ford argues as follows: 

. . . [T]he vast majority of the substance of the Magistrate’s Report and

Recommendation is correct and proper. Defendants object. . . only insofar as it

suggests that Defendants are permitted to deposit the subject SSIP funds into the

Court. In fact, though Defendants agree that in the normal course an interpleader

action in a similar case would be appropriate, the relevant Plan language does not

allow Defendants to transfer Plan assets to the Court. Rather, in the absence of a

valid designation of beneficiary form regarding the SSIP benefits, Defendants are

constrained to pay the proceeds to the individual or entity identified as the proper

beneficiary of the [MetLife] proceeds, only. 

[Def.’s Br., Doc. No. 38, p.1]. The Court agrees, and therefore OVERRULES the R&R’s

requirement that Ford deposit the SSIP proceeds with the Clerk of the Court. The Court shares

Ford’s admiration for Magistrate Judge Hluchaniuk’s novel resolution of this difficult matter, but

agrees that, given the SSIP Plan’s restrictive language, unfortunately such a tidy resolution of the

issues underlying this cause of action will not be possible. To be clear, the only part of the R&R

which this Court overrules in this Opinion & Order is the narrow holding that Ford be required
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to deposit the SSIP proceeds with the Clerk of the Court - other than this caveat, the Court

adopts Magistrate Judge Hluchaniuk’s December 8, 2009 Report and Recommendation in its

entirety. 

CONCLUSION & ORDER

Accordingly, the Court OVERRULES Magistrate Judge Michael Hluchaniuk’s

December 8, 2009 Report and Recommendation [Doc. No. 37] with respect to its

recommendation that Defendant Ford be required to deposit the SSIP proceeds with the Clerk of

the Court. The Court ACCEPTS and ADOPTS the remainder of Magistrate Judge

Hluchaniuk’s December 8, 2009 Report and Recommendation [Doc. No. 37] in its entirety. 

IT IS SO ORDERED.

S/Sean F. Cox 

Sean F. Cox

United States District Judge

Dated: March 30, 2010

I hereby certify that a copy of the foregoing document was served upon counsel of record on

March 30, 2010, by electronic and/or ordinary mail.

S/Jennifer Hernandez 

Case Manager