UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

NICOLE TERRY, Personal Representative

of the Estate of John Hunter Wellman, Jr.,

Plaintiff, CASE NO. 09-13759

HON. LAWRENCE P. ZATKOFF

v. 

METROPOLITAN LIFE INSURANCE

COMPANY and DEBORAH A. WELLMAN,

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 September 14, 2011

PRESENT: THE HONORABLE LAWRENCE P. ZATKOFF

UNITED STATES DISTRICT JUDGE

I. INTRODUCTION

Currently before the Court are several matters:

1. Defendant Deborah A. Wellman’s (“Wellman”) Motion for Leave to File

Answer and Counterclaim, and Reconsideration and Setting Aside of that

Portion of the Court’s September 23, 2010 Opinion and Order Granting of

Summary Judgment in Plaintiff’s Favor and Establishing a Constructive

Trust in Favor of Plaintiff (“Motion for Leave”) (Docket #18). Plaintiff filed

a response to the Motion for Leave. 

2. Wellman’s Notice of Claim to Funds Held by Clerk of Court (“Notice of

Claim”) (Docket #19). Plaintiff has filed a response to the Notice of Claim.

3. Plaintiff’s Motion for Entry of Judgment (Docket #28). Wellman has filed

a response to the Motion for Entry of Judgment.

The Court finds that the facts and legal arguments pertinent to the motions are adequately presented

in the parties’ papers, and the decision process will not be aided by oral arguments. Therefore,

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pursuant to E.D. Mich. Local R. 7.1(f)(2), it is hereby ORDERED that the motions be resolved on

the briefs submitted, without this Court entertaining oral arguments. 

II. BACKGROUND

John Henry Wellman, Jr. (“Decedent”) was a participant in the Ford Motor Company Life

and Accidental Death and Disability Plan (“Plan”) by reason of his employment with Ford Motor

Company. Metropolitan Life Insurance Company (“MetLife”) issued a group insurance policy that

funded the life insurance benefits payable under the Plan. The Plan is an employee welfare benefit

plan that is regulated by the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. §§

1001 et seq., and MetLife is the claims fiduciary for the Plan. 

The Summary Plan Description provides that life insurance benefits are payable to the

designated beneficiary: 

Overview

Life and Accidental Death and Dismemberment (AD&D) insurance

provides protection for your survivors.

Basic Life Insurance and Optional Life Insurance pays benefits to

your beneficiary if you die from any cause. In addition, a portion of

your Basic Life Insurance and Optional Life Insurance benefit may

be available if you become terminally ill.

The Summary Plan Description also provides information regarding the naming of a beneficiary:

Naming a Beneficiary

Company-Paid Basic Life and Optional Life Insurance

You may change your beneficiary at any time. To do so, you must

complete a beneficiary designation form and mail it to the insurance

carrier (MetLife). You can also update your beneficiary online.

The Summary Plan Description further provides that MetLife, as the insurance carrier, has

discretionary authority in administering claims: 

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Discretionary Authority

The insurance carrier has discretionary authority to construe,

interpret, apply and administer the Plan. Decisions of the insurance

carrier are final and conclusive, and are only subject to the arbitrary

and capricious standard of judicial review. 

On May 15, 1995, Decedent completed a Beneficiary Authorization Form designating his then-wife

(Wellman) as the beneficiary to receive the life insurance benefits payable under the Plan in the

event of his death (the “Plan benefits”). The designation in the May 15, 1995, Beneficiary

Authorization Form was the last designation completed by the Decedent. 

On January 9, 2001, a Judgment of Divorce was entered in the Circuit Court for the County

of Wayne, thereby terminating the marriage between Wellman and Decedent. The “Insurance and

Pensions” paragraph of the Judgment of Divorce provided:

INSURANCE AND PENSIONS

IT IS FURTHER ORDERED AND ADJUDGED that any rights of

either party in any policy or contract of life, endowment or annuity

insurance of the other, as beneficiary, in or to any pension, annuity,

retirement allowance or accumulated contributions in any pension,

annuity or retirement system of the other including any rights in and

to the unvested pension, annuity or retirement benefits of the other is

hereby satisfied and extinguished unless specifically preserved by

this Judgment.

On May 15, 2009, Decedent died. At the time of his death, Basic Group Life benefits in the

amount of $25,000 (i.e., the Plan benefits) were payable to proper beneficiary. On May 23, 2009,

Attorney Caryl Williams forwarded a letter to MetLife advising that: (a) she represented the Estate

of John Hunter Wellman, Jr. (the “Estate”), and (b) Wellman had waived any right to receive the

Plan benefits by reason of the provision of the Judgment of Divorce quoted above. On May 26,

2009, Wellman completed a Life Insurance Claim Form and submitted it to MetLife. On June 18,

2009, Sheila Ross, the successor attorney representing the Estate (hereinafter, “Plaintiff’s counsel”),

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submitted a letter to MetLife on behalf of Plaintiff, which letter was similar to that prepared by

Attorney Williams. On June 24, 2009, Plaintiff’s counsel submitted another letter to MetLife,

wherein she advised MetLife that she intended to file a legal action in order to prevent distribution

of the Plan benefits to Wellman. 

On June 30, 2009, MetLife forwarded its determination regarding Plaintiff’s contention to

Attorney Williams. MetLife advised that it was denying the claim of the Estate, made by Nicole

Terry, the daughter of the Decedent, acting in her capacity as the Personal Representative. The

MetLife letter explained that the Plan was governed by ERISA and that the last designation

completed by the Decedent did not name either Nicole Terry or the Estate. The letter further

explained that under the holding in Kennedy v. Plan Administrator for Dupont Savings & Investment

Plan, 129 S.Ct. 865, 2009 WL 160440 (2009), as well as prior Sixth Circuit authority, a divorce

decree or other non-plan document that appears to waive a beneficiary’s right to plan benefits cannot

interfere with MetLife’s determination to pay benefits to the designated beneficiary. The MetLife

letter further explained that Nicole Terry and/or the Estate could file an appeal from MetLife’s

determination within 60 days. No appeal was ever filed.

On July 18, 2009, Plaintiff filed an action in the Wayne County Circuit Court against

MetLife and Wellman. On September 23, 2009, MetLife, with the concurrence of Wellman,

removed Plaintiff’s action to this Court. 

In the Court’s September 23, 2010, Opinion and Order, the Court ruled that: 

(1) [T]he Supreme Court’s recent decision, Kennedy v. Plan Administrator for

Dupont Savings & Investment Plan, 555 U.S. 285 (2009), is controlling in

this case, the Plan benefits are properly payable to Wellman under the Plan,

and MetLife must pay the Plan benefits to Wellman.

(2) As set forth in Kennedy and in well-settled Sixth Circuit law, see, e.g.,

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Prior to an attorney filing an appearance on Wellman’s behalf on October 20, 2010 (i.e.,

after the Court issued the September 23, 2010, Opinion and Order), Wellman had been

designated as a pro se litigant on the docket in this matter. Wellman herself never took any

action with respect to this case in Wayne County Circuit Court or this Court, however, other than

as a signatory on MetLife’s Notice of Removal.

5

Central States SE & SW Areas Pension Fund v. Howell, 227 F.3d 672, 677

(6th Cir. 2000), ERISA plan benefits must be distributed according to the

plan documents. Once the plan benefits have been distributed, however,

ERISA does not pre-empt the imposition of a constructive trust on those

benefits pursuant to state law. Central States, 227 F.3d at 677. Under

Michigan law, a constructive trust is appropriate in cases such as this one.

Here, an inequitable result would occur if Wellman received the Plan benefits

because waived her rights to the Plan benefits in the Judgment of Divorce.

See Sweebe v. Sweebe, 474 Mich. 151, 157-58 (2006) (holding that a prior

divorce decree extinguished any interest of the former spouse in life

insurance proceeds because such proceeds belonged in equity to the

decedent’s estate). As in Sweebe, the Court finds that the Judgment of

Divorce extinguished any right that Wellman may have had to the Plan

benefits. Therefore, the Court concludes that principles of equity require the

imposition of a constructive trust to prevent an unfair result in this case. 

In order to ensure that the obligations of MetLife are discharged in

accordance with the requirements of ERISA, the Court shall order that

MetLife deposit the Plan benefits into the registry of the Court for the benefit

of Wellman. Further, as Wellman has: (1) never answered the Complaint, (2)

filed an appearance, or (3) answered any other filing in this matter,1

 a

constructive trust on behalf of and in favor of Nicole Terry, Personal

Representative of the Estate, will be imposed upon those proceeds. MetLife

and Plaintiff each shall serve Wellman with a copy of this Opinion and

Order, via registered mail, at the address listed for on the docket. If

Wellman fails to make a claim against the proceeds within 30 days of the

date MetLife deposits such proceeds into the Court’s registry: (a) the

proceeds and any interest accrued thereon will be released in their entirety to

Plaintiff, and (b) MetLife will be discharged of all liability related to the Plan

benefits payable upon the death of Decedent.

Following the Court’s entry of the September 23, 2010, Opinion and Order:

a. MetLife deposited the $25,000 of Plan benefits with the Clerk of the Court;

b. Wellman filed the Motion for Leave;

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c. Wellman filed the Notice of Claim; 

d. Plaintiff and Wellman stipulated to the dismissal of MetLife and the release

of liability against MetLife; and

e. Plaintiff filed the Motion for Entry of Judgment.

III. ANALYSIS

This case, and all three of the filings noted above, pertain to the issue of whether Plaintiff

or Wellman is entitled to the Plan benefits deposited into the Court’s registry by MetLife. As noted

above, the Court previously ruled that MetLife had a duty to pay the Plan benefits to Wellman but

that a constructive trust was to be imposed on the Plan benefits - a constructive trust that was to be

effectuated by MetLife depositing the Plan benefits ($25,000) with the Court registry.

Notwithstanding the arguments of Wellman to the contrary in her recent filings, the Court continues

to find the reasoning in Central States supports its conclusion that equitable principles dictate that

the Plan benefits should be paid to Plaintiff, not to Wellman.

In Central States, the Court stated:

In this case, the JoAnn Howell seeks to impose a constructive trust

on Kenneth Howell’s ERISA welfare benefit plan benefits. Kenneth

Howell changed the beneficiary designation in accordance with the

plan documents. On this issue, our 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 designated 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. The district court's opinion did not fully discuss

the equities among the parties because it apparently believed that

ERISA precluded it from imposing a constructive trust. We therefore

REMAND this case for the district court's consideration of the

equities under applicable Michigan state law. However, in so doing,

we express no opinion whatsoever as to how those equities lie. 

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Central States, 227 F.3d at 679 (emphasis added) (footnote omitted).

In this case, the Court held that the Plan benefits were to be released to Wellman, the

designated beneficiary under the Plan documents. This step was consistent with the Sixth Circuit

cases Wellman cites and relies upon in her Motion to Leave and her response in opposition to

Plaintiff’s Motion for Entry of Judgment, specifically, Metropolitan Life Ins. Co. v. Pressley, 82

F.3d 126 (6th Cir. 1996), and McMillan v. Parrott, 913 F.2d 310 (6th Cir. 1990). Both of these

cases were decided prior to, and are not inconsistent with the Sixth Circuit’s ruling in Central States

(and the U.S. Supreme Court’s ruling in Kennedy, supra), both of which initially require that the life

insurance proceeds under an ERISA plan be paid to the designated beneficiary.

The Court also, however, exercised its discretion to impose a constructive trust upon the Plan

benefits, as permitted by Central States, a case that Wellman never addresses. In conformance with

Central States, the Court ordered the imposition of a constructive trust on the Plan benefits because

established equitable principles under Michigan state law weighed against permitting Wellman to

retain the Plan benefits. More specifically, the Court relied on, and continues to rely on, the

Michigan Supreme Court’s holding in Sweebe, supra (i.e., that when a prior divorce decree

extinguished all interests of a former spouse in the life insurance proceeds of the deceased, the

proceeds of the life insurance policy belong in equity to the decedent’s estate). 

For the foregoing reasons, and because Wellman did not file her Motion for Leave until more

than one year after she agreed that this should be removed to this Court, the Court concludes that

Wellman has not established good cause or extraordinary circumstances that would warrant granting

her permission to file the pleadings she requests. Therefore, the Court denies Wellman’s Motion

for Leave.

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In addition, as the Court finds that equitable principles preclude awarding the Plan benefits

to Wellman, and there being no other claimant to the Plan benefits other than Plaintiff, the Court

concludes the Clerk of the Court shall now pay out to Plaintiff the Plan benefits MetLife deposited

into the Court’s registry. Therefore, the Court grants Plaintiff’s Motion for Entry of Judgment.

IV. CONCLUSION

Accordingly, and for the reasons set forth above, IT IS HEREBY ORDERED that the Court

DENIES Wellman’s Motion for Leave (Docket #18) and GRANTS Plaintiff’s Motion for Entry of

Judgment (Docket #28). 

IT IS FURTHER ORDERED that, on or after October 18, 2011, the Clerk of the Court shall

release to Plaintiff the entirety of the proceeds of the Plan benefits that MetLife deposited with the

Court’s registry, together with any interest that has accrued thereon.

Judgment shall be entered accordingly.

IT IS SO ORDERED.

S/Lawrence P. Zatkoff 

LAWRENCE P. ZATKOFF

UNITED STATES DISTRICT JUDGE

Dated: September 14, 2011

CERTIFICATE OF SERVICE

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

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by electronic or U.S. mail on September 14, 2011.

S/Marie E. Verlinde 

Case Manager

(810) 984-3290

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