UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

SANDRA CHAVARRIA,

Plaintiff, Case No. 2:08-cv-14234

Hon. Lawrence P. Zatkoff

v.

METROPOLITAN LIFE INSURANCE

COMPANY, a foreign corporation, and

ANDRES CHAVARRIA, 

Defendants.

__________________________________________/

OPINION AND ORDER

AT A SESSION of said Court, held in the 

United States Courthouse, in the City of Port Huron,

State of Michigan, on June 25, 2009

PRESENT: THE HONORABLE LAWRENCE P. ZATKOFF

 UNITED STATES DISTRICT JUDGE

I. INTRODUCTION

This matter is before the Court upon cross-motions for summary judgment filed by Plaintiff

Sandra Chavarria (“Sandra”) and Defendant Andres Chavarria (“Andres”). The parties have fully

briefed the issues and filed all appropriate responses and replies. The Court finds that the facts and

legal arguments pertinent to the parties’ motions are adequately presented in the parties’ papers, and

the decision process will not be aided by oral arguments. Therefore, pursuant to E.D. Mich. Local

R. 7.1(e)(2), it is hereby ORDERED that the motions be resolved on the briefs submitted, without

this Court entertaining oral arguments. For the reasons that follow, Sandra’s Motion for Summary

Judgment (Docket #15) is GRANTED, and Andres’ Motion for Summary Judgment (Docket #16)

is DENIED. 

II. BACKGROUND

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This case arises from a dispute over the proceeds of a life insurance policy insuring the life

of Francisco Chavarria (“Decedent”). Decedent, a former employee of Detroit Diesel Corporation,

was a participant in the Detroit Diesel Life and Disability Program (“Plan”). The Plan included a

life insurance policy on Decedent through Metropolitan Life Insurance Company (“Met Life”).

Sandra, the ex-wife of Decedent, was the initial beneficiary designated on the Met Life policy. By

the time Decedent and Sandra divorced on May 16, 2005, however, Decedent had named his son

Andres the beneficiary on the Met Life policy. The Judgment of Divorce, which incorporated

Decedent’s and Sandra’s property settlement, provided the following waiver of rights under a

section entitled “Statutory Insurance Provision”:

IT IS FURTHER ORDERED AND ADJUDGED that any rights of

either [Sandra] or [Decedent] are hereby extinguished, unless

specifically preserved by this JUDGMENT OF DIVORCE particularly

[Decedent’s] obligation to maintain [Sandra] as beneficiary to protect

the spousal support award, in and to the proceeds of any policy or

contract of life insurance, endowment or annuity insurance of the other

upon the life of [Sandra] or [Decedent] in which either was named or

designated as a beneficiary, or to which either became entitled by

assignment or change of beneficiary during the marriage or in

anticipation thereof, whether such contract or policy was heretofore or

shall hereafter be written or become effective shall hereupon become

and be payable to the estate of the deceased party or such named

beneficiary as he or she shall affirmatively designate. 

The Judgment specifically provides in another section entitled “Alimony/Spousal Support” that:

IT IS FURTHER ORDERED AND ADJUDGED that [Decedent]

shall maintain [Sandra] as beneficiary on his existing Life Insurance

Policy, in declining balance of Spousal Support owed, for as long as

the Spousal Support obligation continues.

At all times, the only life insurance policy on Decedent was the Met Life policy. When Decedent

died on June 13, 2008, the last beneficiary designation of record was dated December 10, 2002, and

it named Andres as the sole beneficiary of the insurance proceeds.

Andres submitted a claim for the life insurance benefits under the terms of the Plan. Sandra

submitted a rival claim alleging that she is the rightful beneficiary by reason of the Judgment of

Divorce. Met Life, upon consent of the parties, paid for certain of the costs associated with

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Decedent’s funeral arrangements and interpled the balance of the funds into the Court. The dispute

over who is entitled to the remaining proceeds of the Met Life policy is now before this Court. 

III. LEGAL STANDARD

This Court will grant summary judgment “if the pleadings, depositions, answers to

interrogatories, and admissions on file, together with the affidavits, if any, show that there is no

genuine issue as to any material fact and that the moving party is entitled to judgment as a matter

of law.” FED R. CIV. P. 56(c). No genuine issue of material fact exists for trial unless, by viewing

the evidence in a light most favorable to the nonmoving party, a reasonable jury could return a

verdict for that party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The moving party

bears the burden of informing this Court of the basis for its motion and identifying those portions

of the record that establish the absence of a material issue of fact. See Celotex Corp. v. Cattrett, 477

U.S. 317, 323 (1986).

IV. ANALYSIS

A. The Judgment of Divorce Satisfies QDRO Requirements 

Under the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001 et seq.

(“ERISA”), administrators generally are obligated to manage ERISA plans “in accordance with the

documents and instruments governing” them. §1104(a)(1)(D). Andres contends that ERISA

preempts the Judgment of Divorce. Generally, state court divorce decrees purporting to affect the

benefits payable from an ERISA plan are preempted. See Kennedy v. Plan Adm’r for Dupont Sav.

and Inv. Plan, --- S.Ct. ---, 2009 WL 160440 (U.S.); Metropolitan Life Ins. Co. v. Pressley, 82 F.3d

126 (6th Cir.1996); McMillan v. Parrott, 913 F.2d 310, 311 (6th Cir.1990); Barsh v. General Motors

Corp., Case No. 2:04-cv-72324 (E.D. Mich. 2005). More specifically, ERISA requires covered

benefit plans to “provide that benefits . . . under the plan may not be assigned or alienated[.]”

§1056(d)(1). 

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ERISA preemption of state court divorce decrees, however, does not apply to qualified

domestic relations orders (“QDROs”). §1056(d)(3). A QDRO is defined as an order:

(I) which creates or recognizes the existence of an alternate payee’s

right to, or assigns to an alternate payee the right to, receive all or a

portion of the benefits payable with respect to a participant under a

plan and 

(II) with respect to which the requirements of subparagraphs (C) and

(D) are met . . . .

29 U.S.C. § 1056(d)(3)(B)(I) and (II). The requirements of a QDRO are set forth in 29 U.S.C.

§1056(d)(3)(C), which states:

A domestic relations order meets the requirements of this

subparagraph only if such order clearly specifies -

(i) the name and the last known mailing address (if any) of the

participant and the name and mailing address of each alternate payee

covered by the order,

(ii) the amount or percentage of the participant's benefits to be paid

by the plan to each such alternate payee, or the manner in which such

amount or percentage is to be determined.

(iii) the number of payments or period to which such order applies,

and

(iv) each plan to which such order applies.

In this case, the Court finds that the Judgment of Divorce entered on May 16, 2005 satisfies

the QDRO requirements. First, by specifying that Sandra shall be the beneficiary, the Judgment of

Divorce effectively named an alternate beneficiary. Compare Metropolitan Life Ins. Co. v. Marsh,

119 F.3d 415, 417 (6th Cir. 1997) (finding that the judgment of divorce substantially complied with

the requirements of a QDRO because it named alternate beneficiaries), with Metropolitan Life Ins.

Co. v. Pressley, 82 F.3d 126, 130 (6th Cir. 1996) (concluding that a broad waiver of rights provision

contained in a judgment of divorce is insufficient for a named beneficiary’s rights to be

extinguished).

Second, because the Judgement of Divorce specifies that a QDRO shall be entered regarding

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the Decedent’s pension benefits, the names and addresses of the participants are unambiguous and

can be ascertained by reviewing the pension QDRO. Although the Judgment of Divorce does not

clearly specify the amount or percentage of the benefits to be paid or the number of payments, life

insurance proceeds are paid in a lump sum. As the Judgment of Divorce required that Decedent

maintain Sandra as beneficiary of the life insurance policy, the language of the Judgment of Divorce

is sufficient to meet this requirement. See Marsh, 119 F.3d at 422.

Andres contends that the QDRO requirements are not satisfied because the Judgment of

Divorce did not specify the life insurance policy on which Decedent had to maintain Sandra as

beneficiary. The Court will not “demand literal compliance where Congress’ intent has been to give

effect to domestic relations orders where it is clear what the decree intended.” Marsh, 119 F.3d at

423. In this case, the Judgment of Divorce expressly stated that Sandra was to remain the

beneficiary on Decedent’s “existing Life Insurance Policy.” The Court has been provided no

evidence that Decedent ever had any other policy. Therefore, there is no ambiguity as to which life

insurance policy the Judgment of Divorce referred. 

For the reasons set forth above, the Court finds that no essential information is lacking and

no ambiguity exists as to the intent of the Judgment of Divorce. Therefore, the Court concludes that

(1) the Judgment of Divorce is specific enough to substantially comply with ERISA’s requirements

for a QDRO, and (2) the terms of the Judgment of Divorce (and not ERISA) govern in this case.

Accordingly, Sandra is entitled to the balance of the proceeds of the Met Life policy.

B. Equity Dictates that a Constructive Trust is Appropriate 

In this case, the Court also concludes that, even if the Judgment of Divorce did not constitute

a QDRO and ERISA applies such that Andres would be entitled to the Met Life policy proceeds,

equity dictates that a constructive trust be imposed such that Sandra would be entitled to the Met

Life policy proceeds. A constructive trust may be imposed “where such trust is necessary to do

equity or to prevent unjust enrichment . . . .” Ooley v. Collins, 344 Mich. 148, 158 (1955). The

party seeking the imposition of the constructive trust has the burden of proof. Krammer Asphalt

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Paving Co. v. East China Township Sch., 443 Mich. 176, 188 (1993). 

When a plan participant violates a court order requiring a change to the plan beneficiary, the

court may impose a constructive trust in favor of the court-ordered beneficiary. Southwest Areas

Pension Fund v. Howell, 227 F.3d 672 (6th Cir. 2000). In Howell, the court concluded that when

the decedent violated a court order and changed the beneficiaries of his insurance policy from his

wife to his children, his wrongdoing entitled his wife to the imposition of a constructive trust over

the plan proceeds. Howell, 227 F.3d at 676. According to the Howell court, such situations warrant

the imposition of a constructive trust:

[O]ur precedents are clear – the beneficiary card controls the person

to whom the plan administrator must pay the benefits. However, we

hold today that once the benefits have been released to the properly

desig-nated beneficiary, the district court has the discretion to impose

a constructive trust upon those benefits in accordance with applicable

state law if equity so requires.

Id. at 679.

Like the defendant in Howell, Decedent violated the court-ordered Judgment of Divorce.

Decedent misrepresented himself when signing the Judgment of Divorce, wherein he stated that he

“[had] not engaged in any assignment, transfer, or concealment of assets or liabilities which would

have in any way materially affected the good faith negotiations between the parties . . .” even though

he previously had designated Andres as the Plan beneficiary on December 10, 2002. Decedent

therefore failed to comply with the express provision in the Judgment of Divorce which ordered that

Decedent “maintain” Sandra as the beneficiary of the Decedent’s existing life insurance policy.

Decedent also violated the provision in the Judgment of Divorce that required the parties to “execute

such documents as are necessary to effect the terms of this Judgment.” Thus, although the named

beneficiary at the time of the divorce was Andres, these provisions required the Decedent to execute

a new change of beneficiary document naming Sandra as the beneficiary. As the Judgment of

Divorce is a binding contract, MacInnes v. MacInnes, 260 Mich. App. 280 (2004), the Decedent’s

failure to perform his duties under that contract entitle Sandra to an equitable solution. A

constructive trust would afford Sandra the benefit of the bargained-for divorce agreement and rectify

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the injustice that would result if she were deprived of such benefit because Decedent violated the

Judgment of Divorce.

The Court further notes that, even absent a violation of a court order by a plan participant,

a constructive trust may be appropriate if a decedent’s intended beneficiary can be determined. See

Metropolitan Life Insurance v. Mulligan, 210 F. Supp. 2d 894, 900 (E.D. Mich. 2002) (finding that

a hearing would be necessary to determine whether equity ought to prescribe a result different than

required by ERISA based on competing factual claims as to decedent’s intended beneficiaries on

his life insurance policy). In this case, it is undisputed that Decedent intended Sandra to be the

beneficiary of the Met Life policy. His intent is shown by (1) the Judgment of Divorce he signed,

wherein he agreed to maintain Sandra as the beneficiary of his existing life insurance policy, (2) the

affidavits of Sandra indicating the same, and (3) the affidavit of Decedent’s divorce attorney, who

also stated that Decedent’s intent was to name Sandra the beneficiary. Therefore, as the undisputed

evidence demonstrates Decedent’s intent when executing the Judgment of Divorce was that Sandra

would be the beneficiary of the Met Life policy, a constructive trust is appropriate to promote equity.

Accordingly, for the reasons set forth above, the Court concludes that the principles of equity

favor the imposition of a constructive trust to award the remaining proceeds from the Met Life

policy to Sandra.

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V. CONCLUSION

Accordingly, and for the reasons set forth above, Sandra’s Motion for Summary Judgment

awarding Sandra the remaining proceeds from the Met Life policy (Docket #15) is GRANTED, and

Andres’ Motion for Summary Judgment (Docket #16) is DENIED. Judgment shall be entered

accordingly. 

IT IS SO ORDERED.

S/Lawrence P. Zatkoff 

LAWRENCE P. ZATKOFF

UNITED STATES DISTRICT JUDGE

Dated: June 25, 2009

CERTIFICATE OF SERVICE

The undersigned certifies that a copy of this Order was served upon the attorneys of

record by electronic or U.S. mail on June 25, 2009.

S/Marie E. Verlinde 

Case Manager

(810) 984-3290

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