Source: http://openjurist.org/174/f3d/606
Timestamp: 2013-06-18 06:12:09
Document Index: 199696084

Matched Legal Cases: ['§ 1001', '§ 1056', '§ 1056', '§ 303', '§ 514', 'art:\n29', '§ 1144', '§ 514', '§ 514', '§ 504', '§ 1102']

174 F3d 606 23953q Dial v. Nfl Player Supplemental Disability Plan | OpenJurist
174 F. 3d 606 - 23953q Dial v. Nfl Player Supplemental Disability Plan	Home174 f3d 606 23953q dial v. nfl player supplemental disability plan
174 F3d 606 23953q Dial v. Nfl Player Supplemental Disability Plan 174 F.3d 606
Pens. Plan Guide (CCH) P 23953QGilbert "Buddy" DIAL, Plaintiff/Counter Defendant/Appellee,v.NFL PLAYER SUPPLEMENTAL DISABILITY PLAN,Defendant/Counterclaimant/Third-Party Plaintiff/Appellant,v.Janice Marye, Third-Party Defendant/Appellant.
No. 97-21045.
Tom Preston Alexander, Alexander & Associates, Houston, TX, Fields Alexander, Brown McCarroll & Oak Hartline, Austin, TX, for Gilbert "Buddy" Dial.
Lonie A. Hassel, William F. Hanrahan, Douglas W. Ell, Groom Law Group, Chartered, Washington, DC, for NFL Player Supplemental Disability Plan.
Brian Graff, Arlington, VA, for American Society of Pension Actuaries, Amicus Curiae.
T.J. Wray, Stacey L. Shawn, Fulbright & Jaworski, Houston, TX, for Janice Marye.
* Gilbert "Buddy" Dial and Janice Marye married in 1959 and divorced in 1977. From 1959 until 1968, Dial played professional football in the National Football League. As an NFL player, Dial became eligible to receive benefits from the NFL Bert Bell Retirement Benefit Plan (the "Bell Plan"), which provided both retirement and disability benefits for players. Upon their divorce, Dial and Marye entered into a property settlement agreement, which was incorporated into their divorce decree. The property set aside for Marye in the agreement included "[o]ne-half of any interest Buddy Dial has in the Bert Bell NFL Player Retirement Plan or any consideration, monetary or otherwise, that presently or hereinafter will flow to Buddy Dial from said plan." The 1977 divorce decree also awarded Marye "one-half of any later-discovered property."
Not until February 1996 did Dial contact the Disability Plan and ask it to stop paying benefits to Marye. The Plan administrators refused, stating that the payments complied with the settlement agreement and that state court would be the appropriate forum for Dial to resolve with Marye any dispute concerning the 1977 settlement agreement. On April 25, 1996, Dial filed this action against the Disability Plan in federal district court for breach of fiduciary duty and for declaratory judgment that he is entitled to all of the Disability Plan benefits. Dial did not name Marye as a party to the action. On February 19, 1997, the district court granted the Disability Plan's motions (1) to add Marye as a third-party defendant and (2) to deposit the disputed benefits into an interest-bearing interpleader account each month. On May 1, 1997, Marye filed a state-law cross-claim against Dial, requesting the court to treat the Disability Plan benefits as community property earned during her marriage to Dial and to divide the benefits accordingly. The district court granted summary judgment to Dial on October 28, 1997. At the same time, the court denied as moot the Disability Plan's and Marye's motions for summary judgment and dismissed Marye's cross-claim without prejudice. The court also directed Dial to file a supplemental motion for attorneys' fees from the Disability Plan, which it awarded on December 8, 1997. The Disability Plan and Marye appealed to this Court.
The Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001 et seq., governs the Disability Plan. ERISA includes anti-alienation and anti-assignment clauses that apply to former spouses' rights to pension benefits. See 29 U.S.C. § 1056(d)(1), (d)(3)(a). The 1984 Retirement Equity Act ("REA") amended these provisions to allow ERISA-qualified benefits to be assigned pursuant to a QDRO, 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." 29 U.S.C. § 1056(d)(3)(I)(i). The REA provides procedures that a plan administrator must follow to determine if a state-court domestic relations order is "qualified." An ERISA plan administrator may treat a domestic relations order signed before the REA took effect in 1985 as a QDRO even if the order fails to meet the statutory requirements otherwise applied to QDRO's. See Retirement Equity Act, Pub.L. No. 98-397, § 303(d), 98 Stat. 1426, 1453 (1984). The Disability Plan treated Dial and Marye's 1977 divorce decree, which incorporated their property settlement splitting later-discovered property, as a QDRO.
The district court correctly characterized Dial's suit as an ERISA action. The Disability Plan contends that Dial should instead have brought a state-law claim against Marye for clarification of the settlement agreement. ERISA § 514(a) provides in part:
29 U.S.C. § 1144(a). The propriety of Dial's federal action rests upon whether it "relates to an[ ] employee benefit plan" under ERISA § 514(a). Courts read § 514(a)'s "relates to" provision very broadly. See Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 97, 103 S.Ct. 2890, 2900, 77 L.Ed.2d 490 (1983). This Circuit stated in 1990 that cases preempting state-law claims with ERISAhave at least two unifying characteristics: (1) the state law claims address areas of exclusive federal concern, such as the right to receive benefits under the terms of an ERISA plan; and (2) the claims directly affect the relationship among the traditional ERISA entities--the employer, the plan and its fiduciaries, and the participants and beneficiaries.
Memorial Hospital System v. Northbrook Life Insurance Co., 904 F.2d 236, 245 (5th Cir.1990). In the instant case, Dial's claim concerns "traditional ERISA entities": himself (a Plan participant), Marye (a potential Plan beneficiary), the Plan, and the NFL (administrator and employer). Dial seeks benefits that, in the absence of QDRO, he is due; paying him those benefits is among the Plan administrators' ERISA-governed responsibilities. Dial's suit was proper under ERISA. Cf., e.g., Brandon v. Travelers Insurance Co., 18 F.3d 1321, 1325 (5th Cir.1994) ("[T]he designation of a beneficiary 'relates to' the provision of an ERISA plan to a sufficient degree to be preempted by that statute."); Carland v. Metropolitan Life Insurance Co., 935 F.2d 1114, 1121 (10th Cir.1991) (holding that an ex-wife's state claim to recover ERISA-qualified insurance benefits pursuant to a divorce decree amounted to an ERISA § 504 claim for breach of fiduciary duty against the plan administrators); Brown v. Connecticut General Life Insurance Co., 934 F.2d 1193, 1195 (11th Cir.1991) (holding that ERISA preempted a state action for a declaration of the rightful beneficiary of an ERISA-qualified group life insurance policy pursuant to a divorce agreement); McMillan v. Parrott, 913 F.2d 310, 311 (6th Cir.1990) (holding that ERISA preempts a state-law claim for designation of beneficiary).
The Disability Plan gives its administrators discretionary authority to interpret the Plan provisions, such that a court should review the administrators' factual determinations and plan interpretations for abuse of discretion. See Sweatman v. Commercial Union Insurance Co., 39 F.3d 594, 597 (5th Cir.1994). In this case, however, the Plan administrators neither made factual determinations nor interpreted the Disability Plan. Instead, the Plan administrators interpreted the meaning of a separate contract between Dial and Marye; they had to answer two questions: (1) whether the 1974 property settlement agreement constitutes a QDRO for Plan purposes, and (2) if so, what the distribution of benefits should be under the settlement agreement. A court reviews a plan administrator's statutory and legal conclusions de novo. See Penn v. Howe-Baker Engineers, Inc., 898 F.2d 1096, 1100 (5th Cir.1990) (reviewing de novo plan administrators' determination as to whether an employee was an independent contractor for coverage purposes). Likewise, the district court here did not owe deference to the Disability Plan administrators' interpretation of a domestic relations order, a contract judicially approved by a state court. See Matassarin v. Lynch, 174 F.3d 549, ----, 1999 WL 246812 (5th Cir.1999); see also Hullett v. Towers, Perrin, Forster & Crosby, Inc., 38 F.3d 107, 114 (3d Cir.1994) (stating that the district court "did not err in holding that it should review de novo the plan administrator's construction of the [divorce agreement], which invoked issues of contract interpretation under the Agreement and not the plan"). The district court erred in reviewing the Plan administrators' decision for abuse of discretion only and should instead have employed de novo review.
In deciding to pay one-half of Dial's Disability Plan benefits to Marye, the Plan administrators relied on the 1977 property settlement. According to the Plan administrators, Dial's Disability Plan benefits fall within the settlement agreement's provision that "in the event the parties are mistaken and there exists any other property, separate or community, which is not listed herein which is later discovered, then the same shall be divided fifty percent (50%) to Wife and fifty percent (50%) to Husband."1 The Plan administrators did not find that the Disability Plan benefits were governed by the separate agreement, the 1993 QDRO, which awarded Marye just 37.5 percent of benefits that "flowed to" Dial from the Bell Plan.2
Husband and Wife have caused this Article to be added to and made a part of this Agreement in an effort to clarify the purposes of the parties and with a view of aiding any Court before which this Agreement should come for interpretation or enforcement.... The parties have attempted to divide their marital property in a manner which conforms to the "just and right" standard.... The parties believe that ... [a just and right] standard is best met by an equal division and partition of the marital property in existence as of the date ... [the settlement agreement] is executed.
A district court may in its discretion award attorneys' fees to any party in an ERISA suit. See 29 U.S.C. § 1102(g)(1). We review for abuse of discretion the district court's decision to grant attorneys' fees to Dial. See Todd v. AIG Life Insurance Co., 47 F.3d 1448, 1458 (5th Cir.1995). We find that the district court abused its discretion.
In deciding whether to award attorneys' fees, a district court applies the five-factor test set forth in Iron Workers Local No. 272 v. Bowen, 624 F.2d 1255 (5th Cir.1980). The court considers:
The Plan administrators argued to the district court:
At the time they entered into the Property Settlement Order in 1977, Mr. Dial and Ms. Marie [sic ] mistakenly believed that all of the rights to deferred benefits Mr. Dial had earned during his career as an NFL Player from the 1959 through 1968 football seasons were embodied in the Bert Bell Plan. With the establishment of the Bert Bell/Pete Rozelle Plan and the Disability Plan in 1993, it became apparent that this belief was mistaken. Ms. Marie [sic ] discovered the existence of the additional property--Mr. Dial's benefit under the Disability Plan--in 1994.
Curiously, however, the Plan administrators state in their brief that Article III of the 1977 divorce decree--the "flow to" provision--supports their decision to pay one-half of the Disability Plan benefits to Marye. The Plan administrators offer no explanation as to why the 1977 "flow to" provision would support their decision but the identical language in the 1993 QDRO would not apply. According to Dial, the Disability Plan's failure to apply the 1993 QDRO to the Disability Plan precludes it from relying on the 1977 settlement's "flow to" language. We agree with Dial. But the record reveals, and the district court's order granting summary judgment recognizes, that the Plan administrators neither needed to rely upon nor did rely primarily on the 1977 "flow to" provision. On August 11, 1994, the Plan wrote to Marye's counsel:
Although ... the property settlement agreement refers specifically only to benefits under the [Bell/Rozelle Plan], we think the language on page 3 of that document to divide 50/50 "any other property, separate or community, which is not listed herein which is later discovered" is sufficient to provide Ms. [Marye] with 50% of the benefit otherwise payable under the Supplemental Disability Plan to Mr. Dial.
NFL did not grant Marie [sic ] the lower percentage share of 37.5 percent as stipulated in the 1993 QDRO because that order explicitly stated that it related to the Bert Bell NFL Player Retirement Plan (Memorandum in Support of NFL's Motion, Instrument No. 43, Exh. 7, at 1). Thus, NFL reasoned, limiting Marie's [sic ] award to 37.5 percent of Dial's benefits under the new disability plan based on the later 1993 QDRO would be improper.
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