Court Opinion

ID: 12945
Source: CourtListenerOpinion
Date Created: 2010-04-25 06:22:29+00
Date Added: 2024-06-11T13:31:42.561549
License: Public Domain

United States Court of Appeals,

                            Fifth Circuit.

                     Nos. 96-10797 and 96-10979.

R. Scott NICKEL, as Plan Benefit Administrator of the Thrift Plan
of Phillips Petroleum Company; Thrift Plan of Phillips Petroleum
Company, Plaintiffs-Counter Defendants-Appellees,

                                   v.

  Estate of Lurline ESTES, Defendant-Cross Defendant-Appellee,

Estate of Annie J. Layman, Defendant-Counter Claimant-Appellant,

     Clifford D. Estes;     Lisa C. Williams, Defendants-Cross
Defendants-Appellees,

    Tom Fowler; C.W. Fowler; R.L. Layman;        Barbara Peeples,
Defendants-Counter Claimants-Appellants.

                            Sept. 22, 1997.

Appeal from the United States District Court for the Northern
District of Texas.

Before REYNALDO G. GARZA, SMITH and EMILIO M. GARZA, Circuit
Judges.

     EMILIO M. GARZA, Circuit Judge:

     In this case, a decedent's cousins (including a step-cousin)

appeal the district court's decision that the decedent's children

are entitled to his pension benefits.          We reverse and render

judgment in favor of the cousins.

                                    I

     Benny Brooks Estes ("Benny"), a former employee of Phillips

Petroleum Company ("Phillips"), had a vested interest in Phillips'

Thrift Plan. Benny designated his father and mother—Onis B. Estes

("Onis")   and   Lurline   H.   Estes   ("Lurline")—as   equal   primary

beneficiaries of his plan benefits, but did not list any contingent

                                    1
beneficiaries.   Benny's only sibling passed away in 1930.         Also,

Benny was divorced and had two children, Lisa Williams ("Lisa") and

Clifford Estes ("Clifford") (jointly, "the Estes defendants").

     Benny died on November 14, 1992, and was survived by Lurline,

Lisa, and Clifford (Onis predeceased Benny).          At the time of

Benny's death, the plan proceeds consisted of about 6,881 shares of

Phillips and about $4,725.50 in cash.      The proceeds are currently

worth about $322,112.1

     Lurline became the "entitled beneficiary" of these proceeds.2

However, Lurline died just three weeks after Benny.        Lurline never

received any of the proceeds or designated a beneficiary for them.

Moreover, she did not have any surviving spouse, children, or

parents;     besides     her   surviving   grandchildren    (the   Estes

defendants), she had only a surviving sister, Annie Jane Layman

("Annie").

     Section 1(B) of article XII of the plan provides that

     [e]ach participant or entitled Beneficiary may designate a
     primary Beneficiary or Beneficiaries, and a contingent
     Beneficiary or Beneficiaries to receive distributions due upon
     the person's death.... After receipt by the [Phillips' Thrift
     Plan] Committee such Beneficiary designation shall take effect
     as of the date the form was signed by the Participant or
     entitled Beneficiary, whether or not he is living at the time

     1
      On July 28, 1997, the closing price for a share of Phillips
on the New York Stock Exchange was $46.125. We calculate the value
of the proceeds using this closing price.
     2
      Under the plan, an "entitled Beneficiary" is "a Beneficiary
who has become entitled to an interest in the Plan due to a
Participant's death." A "Beneficiary" is "a natural person, or a
legal entity, estate or corporation, designated to receive any
benefit under the Plan in the event of the Participant's or
entitled Beneficiary's death." A "Participant" is the person who
had the original interest in the plan, in this case Benny.

                                   2
     of such receipt.... If no such designation is on file ... the
     Participant's or entitled Beneficiary's surviving spouse,
     surviving children in equal shares, surviving parents in equal
     shares, surviving sisters and brothers in equal shares, or his
     estate, in that order of priority, shall be conclusively
     deemed to be the Beneficiary designated to receive such
     benefits.... If any Beneficiary of an entitled Beneficiary,
     whether primary or contingent, dies before receiving the full
     distribution of any interest he has become entitled to, his
     estate shall receive the remaining distribution.

     Given this language, Annie would presumably be "conclusively"

entitled to receive the full proceeds of the plan once Lurline

died.    However, Annie passed away seven months after Lurline, and,

like Lurline, Annie never received any plan proceeds before her

death.     Moreover,     she   left    behind   a   will      naming    four   equal

beneficiaries—Barbara Ann Peeples ("Barbara"), Tom Fowler ("Tom"),

C.W. Fowler ("C.W."), and R.L. Layman ("R.L.") (collectively, "the

Layman defendants").      Barbara, Tom, and C.W. are Annie's children

from her first marriage, and Benny's cousins;                    R.L. is Annie's

stepson from her second marriage, and Benny's step-cousin.                     Under

the plan, Annie's estate would apparently receive the entire amount

of the proceeds.       Then, assuming Annie left a valid will, the

proceeds would be distributed equally among the Layman defendants.

     Several    months    after       Benny   expired,     the       probate   court

appointed Marcus Armstrong as independent executor of Lurline's

estate.     Shortly after his appointment, Armstrong executed on

behalf of    Lurline's    estate      a   disclaimer     of    all    of   Lurline's

interest in the plan. The Phillips' Thrift Plan Committee received

a copy of the disclaimer within nine months of Benny's death.

     Section 4 of article XII of the plan states that

     [i]n the event that a Beneficiary or an entitled Beneficiary

                                          3
     signs and delivers to the Committee a written disclaimer of
     Plan benefits which satisfies the [Internal Revenue] Code's
     requirements to be tax qualified, and such benefits, but for
     the disclaimer, would otherwise pass to such person as a
     result of the death of a Participant or entitled Beneficiary,
     the person executing such disclaimer of benefits shall be
     deemed to have failed to survive the deceased Participant or
     entitled Beneficiary from whom he otherwise would have taken.
     For such disclaimer to be considered effective for purposes of
     the Plan, the disclaimer must be received by the Committee
     prior to the earlier of the date which is 9 months after the
     death of the Participant or entitled Beneficiary, or the date
     on which such person has requested any Plan transaction
     involving such Plan benefits. In the event that Plan benefits
     are distributed to the Beneficiary or entitled Beneficiary
     prior to the receipt of such disclaimer, pursuant to the other
     terms of the Plan, such distribution shall completely release
     and relieve [Phillips and others] on account of and to the
     extent of any payment made before receipt of the disclaimer.

     There is no dispute that the disclaimer was written, signed,

timely, and satisfied the applicable Code requirements.                The

parties also agree that, assuming the disclaimer was otherwise

valid, Lurline would be deemed to have predeceased Benny and the

plan's proceeds would pass to the Estes defendants.             The issue,

then, is simply whether the disclaimer was valid.         If it was, the

Estes defendants should get the proceeds.            If not, the Layman

defendants should get them.

     Because Phillips did not know whether the disclaimer was

valid, it   was   unsure   whether   the   Estes   defendants   or   Layman

defendants should receive the plan's proceeds.           Thus, R. Scott

Nickel, the plan benefit administrator of the Phillips' Thrift

Plan, brought an interpleader action against Lurline's estate,

Annie's estate (of which Barbara is independent executrix), Lisa,

Clifford, Barbara, Tom Fowler, C.W. Fowler, and R.L. Layman.           Lisa

and Clifford then filed counterclaims against Nickel and the plan,

                                     4
and the Layman defendants filed counterclaims against the Estes

defendants and Lurline's estate.

     The Estes defendants and Layman defendants both moved for

summary judgment.      The   district     court    agreed   with    the   Estes

defendants, granting their motion for summary judgment and denying

the Layman defendants' motion.        On appeal, the Layman defendants

argue that the district court erred.          Specifically, they assert

that (1) the Employee Retirement Income Security Act ("ERISA"), 29

U.S.C. §§ 1001 et seq., preempts the state statutes authorizing the

appointment of Armstrong as executor and permitting the disclaimer

and (2) Armstrong could not execute a valid disclaimer under the

plan because he was not a "Beneficiary or an entitled Beneficiary."

We examine these arguments in turn.

                                     II

      The Layman defendants contend that the district court erred

in determining that ERISA does not preempt the state statutes that

authorize   the   appointment   of   Armstrong      as   executor    and   the

disclaimer that Armstrong made on behalf of Lurline's estate.               We

review de novo a district court's preemption analysis under ERISA.

Hook v. Morrison Milling Co., 38 F.3d 776, 780 (5th Cir.1994).

      ERISA states that it "shall supersede any and all State laws

insofar as they may now or hereafter relate to any employee benefit

plan...." 29 U.S.C. § 1144(a). The ERISA preemption provision has

a "broad scope" and "expansive sweep."            A state law " "relate[s]

to' a covered employee benefit plan for purposes of [§ 1144(a) ]

"if it has a connection with or reference to such a plan.' "

                                     5
District of Columbia v. Greater Washington Bd. of Trade, 506 U.S.
125, 129, 113 S. Ct. 580, 583, 121 L. Ed. 2d 513 (1992) (quoting Shaw

v. Delta Air Lines, Inc., 463 U.S. 85, 96-97, 103 S. Ct. 2890, 2899-

2900, 77 L. Ed. 2d 490 (1983)).     ERISA may preempt a related state

law even if the state law is not specifically intended to regulate

ERISA-covered plans.     Ingersoll-Rand Co. v. McClendon, 498 U.S.
133, 139, 111 S. Ct. 478, 483, 112 L. Ed. 2d 474 (1990).              However,

ERISA's preemptive scope has limits.          "Some state actions may

affect employee benefit plans in too tenuous, remote, or peripheral

a manner to warrant a finding that the law "relates to' the plan."

Shaw, 463 U.S. at 100 n. 21, 103 S. Ct. at 2901 n. 21.

     The district court determined that state law was merely

"peripheral" to the plan and thus would not be preempted under

ERISA.   However, it looked to Texas Probate Code § 145 et seq. and

Texas Probate Code § 37A to interpret the plan and decide that

Armstrong's disclaimer was valid.      Texas Probate Code § 145 et seq.

governs the appointment of independent administrators; the probate

court appointed Armstrong independent executor pursuant to these

provisions.3    Texas   Probate   Code   §   37A   permits   any   personal

representative of a decedent with court approval or independent

executor of a decedent without prior court approval to disclaim

property that the decedent would be entitled to receive as a

beneficiary.   The statute goes on to provide that the disclaimer

     3
      "Independent executor" means the personal representative of
an estate under independent administration. TEX. PROB.CODE ANN. §
3(q).    "Independent executor" includes the term "independent
administrator." Id.

                                   6
will relate back to the death of the person making the decedent a

beneficiary and will ensure that the property passes as if the

later decedent (i.e., the person on whose behalf the disclaimer is

made) had predeceased the earlier decedent (i.e., the person making

the later decedent a beneficiary).

        Putting aside the merits of the district court's preemption

analysis, we determine that the district court erred by reaching

the preemption issue in the first place.                As the Estes defendants

concede      in   their   brief,   we    can   decide    the    validity   of   the

disclaimer without resort to state law. Indeed, we can resolve the

validity of the disclaimer without going beyond the terms of the

plan itself.       As the Sixth Circuit has noted, "ERISA plans are to

be administered according to their controlling documents....                    [I]f

the designation on file controls, administrators and courts need

look    no    further     than   the    plan   documents       to   determine   the

beneficiary...."          McMillan v. Parrott, 913 F.2d 310, 312 (6th

Cir.1990);        see also MacLean, 831 F.2d at 728 (finding that state

testamentary law "interfere[d] with the administration of the Plan

and violate[d] its terms" since the plan provided "a valid method

for determining the beneficiary").

       In short, we determine that the district court did not need to

go beyond the plain language of the plan to resolve the parties'

dispute.      Thus, the district court erred not only in looking to

state law but in conducting a preemption analysis at all.

                                         III

       The Layman defendants next maintain that Armstrong could not

                                          7
execute a valid disclaimer under the plan because he was not a

"Beneficiary or an entitled Beneficiary."                         We review de novo

questions of law, such as whether an ERISA plan's terms are clear

and, if they are, how those terms should be interpreted.                    Sunbeam-

Oster Co. Group Benefits Plan for Salaried and Non-Bargaining

Hourly Employees v. Whitehurst, 102 F.3d 1368, 1373 (5th Cir.1996).

We review for clear error findings of fact, such as the intent of

parties regarding an ERISA plan.                 Id.

      The plan states that "[i]n the event that a Beneficiary or an

entitled Beneficiary signs and delivers to the Committee a written

disclaimer of Plan benefits which satisfies the [Internal Revenue]

Code's requirements to be tax qualified, and such benefits, but for

the disclaimer, would otherwise pass to such a person as a result

of   the   death    of    a    Participant       or    entitled   Beneficiary,"    the

disclaimer is valid.            The question is whether the reference to

"Beneficiary" encompasses a personal representative, executor, or

administrator who disclaims on behalf of the beneficiary.

       In answering this question, we look first to the plain

meaning of the plan.             See Lockhart v. United Mine Workers of

Am.1974 Pension Trust, 5 F.3d 74, 78 (4th Cir.1993) (stating that

an "award of benefits under any ERISA plan is governed in the first

instance by the language of the plan itself").                     Clearly, the plan

says nothing about anyone disclaiming on behalf of the beneficiary

or entitled beneficiary.           It merely states that "a Beneficiary or

an   entitled       Beneficiary      [can        disclaim     by]    sign[ing]     and

deliver[ing]       to    the   Committee     a    written    disclaimer."        Since

                                           8
Armstrong,    rather    than   Lurline,    signed     and   delivered   to    the

Committee a written disclaimer, that disclaimer is invalid under

the plan.    See Rodrigue v. Western & So. Life Ins. Co., 948 F.2d
969, 971 (5th Cir.1991) (ruling that court cannot alter plain

meaning of plan);       see also Coleman v. Nationwide Life Ins. Co.,

969 F.2d 54,   57   (4th   Cir.1992)   (noting     that   courts    may   not

disregard plain meaning of plan) cert. denied, 506 U.S. 1081, 113
S. Ct. 1051, 122 L. Ed. 2d 359 (1993);                 Bellino v. Schlumberger

Technologies, Inc., 944 F.2d 26, 30 (1st Cir.1991) (holding that

employees were entitled to plan benefits under plain meaning of

plan).

      Our interpretation of "Beneficiary or an entitled Beneficiary"

as meaning just the beneficiary or entitled beneficiary himself (as

opposed to the beneficiary/entitled beneficiary himself or the

personal     representative      of   a    deceased     beneficiary/entitled

beneficiary) is bolstered by looking at the words immediately

preceding and following the "sign and deliver" language.                      The

relevant sentence reads:        "In the event that a Beneficiary or an

entitled Beneficiary signs and delivers to the Committee a written

disclaimer of Plan benefits which satisfies the Code's requirements

to be tax qualified, and such benefits, but for the disclaimer,

would otherwise pass to such person as a result of the death of a

Participant or entitled Beneficiary, the person executing such

disclaimer of benefits shall be deemed to have failed to survive

the deceased Participant or entitled Beneficiary from whom he

otherwise would have taken" (emphasis added).               Like "Beneficiary"

                                      9
or "entitled Beneficiary," the phrases "such person" and "the

person executing such disclaimer" in this sentence cannot refer to

a   personal   representative         of    the     beneficiary     or       entitled

beneficiary, but only to the beneficiary or entitled beneficiary

himself.    In short, "Beneficiary or an entitled Beneficiary" can

mean nothing more than beneficiary or entitled beneficiary.

     In    response,    the   Estes    defendants       emphasize      the     clause

following "which" in the sentence "... a Beneficiary or an entitled

Beneficiary    signs    and   delivers      to    the      Committee     a    written

disclaimer of Plan benefits which satisfies the Code's requirements

to be tax qualified ...."         They contend that various Internal

Revenue Service ("Service") regulations and private letter rulings

as well as Tax Court decisions specifically permit a personal

representative to disclaim on behalf of a decedent.                This, though,

is irrelevant.        The plan drafters used "which" in the quoted

sentence to add a clause restricting the meaning of the antecedent

clause.     See OXFORD ENGLISH DICTIONARY 225 (2d ed.1989) (defining

"which" as pronoun "[i]ntroducing a clause defining or restricting

the antecedent and thus completing the sense" and offering examples

of this usage such as "[t]his is the path which leads to death").

In other words, the clause following "which" is an additional

requirement that must be met before a disclaimer is valid.                        The

Estes defendants' interpretation of the sentence would require us

to construe "which" as "or";          they want us to read the sentence to

mean either    that    a   beneficiary      signs    and    delivers     a    written

disclaimer or that a beneficiary meets the Code's requirements for

                                       10
a qualified disclaimer (one of which arguably permits a personal

representative to disclaim on behalf of a decedent). We decline to

adopt this strained construction of the plan.    The quoted sentence

clearly requires a beneficiary to sign and deliver a written

disclaimer that also meets the Code's requirements for being tax

qualified.

      In addition, even if the Estes defendants could show that the

plan permits executors to disclaim on behalf of the estates of dead

beneficiaries, such a disclaimer would still be invalid. Under the

plan, Lurline ceased being the beneficiary of the proceeds the

instant she died, and the proceeds never passed to her estate.   As

soon as Lurline expired, the plan designated Annie—rather than

Lurline's estate—as beneficiary.

     Article XII(1)(A) of the plan states that

     [s]ubject to Paragraph B of this Section, upon the death of a
     Participant, or the death of a Beneficiary of a Participant
     who has become entitled to an interest in the Plan due to a
     Participant's death (entitled Beneficiary), prior to the
     Valuation Date upon which complete distribution of his entire
     account under the Plan occurs, the remaining full balance of
     his account shall be payable to his designated Beneficiary....

Paragraph B then provides in pertinent part that

     [i]f no [Beneficiary] designation is on file ... the
     Participant's or entitled Beneficiary's ... surviving sisters
     and brothers in equal shares, or his estate, in that order of
     priority, shall be conclusively deemed to be the Beneficiary
     designated to receive such benefits.... If any Beneficiary of
     an entitled Beneficiary, whether primary or contingent, dies
     before receiving the full distribution of any interest he has
     become entitled to, his estate shall receive the remaining
     distribution.

After Benny's death, Lurline became the entitled beneficiary of the

proceeds. Upon Lurline's death, the proceeds became payable to her

                                11
designated      beneficiary.         Since    Lurline   did   not   designate    a

beneficiary,      Annie     (Lurline's        only    sibling)—not    Lurline's

estate—became the beneficiary of the proceeds under the plan. Upon

Annie's death, Annie's estate received the proceeds since Annie was

the beneficiary of Lurline, an entitled beneficiary.                  Thus, the

proceeds should now pass under state law, presumably pursuant to

Annie's will.4      Accordingly, since the proceeds never passed to

Lurline's estate, Armstrong—in his capacity as the executor of

Lurline's    estate—could      not    have    disclaimed   them.     He   had    no

authority over the proceeds at all.

     The Estes defendants dispute this conclusion by pointing to a

Second Circuit opinion, Rolin v. Commissioner of Internal Revenue,

588 F.2d 368 (2d Cir.1978).              Apparently, the Estes defendants

believe that Rolin stands for the proposition that an executor can

disclaim an interest on behalf of a decedent that the decedent

originally possessed but which did not pass to the decedent's

estate.     In particular, they rely on the court's statement that

"since    the   principle    of      retroactive     renunciation    is   that   a

disclaimer of an interest may be treated as relating back in time,

it seems irrelevant to the efficacy of that principle that the

interest has expired."         Id. at 370.

     In Rolin, Daniel established a trust which, upon his death,

      4
       ERISA does not preempt state law governing passage of the
proceeds from Annie's estate to the beneficiaries of her will
because the plan does not discuss how the proceeds should pass from
a beneficiary's estate. In other words, once the proceeds pass to
Annie's estate, the plan ceases to designate a beneficiary; hence,
state law that determines who takes the proceeds under Annie's will
does not relate to the plan and is not preempted.

                                         12
would be divided into "Trust A" and "Trust B." His wife, Genevieve,

would receive income from the trusts for life.         In addition,

Genevieve obtained the right to invade the corpus of Trust A during

her life as well as general testamentary power of appointment over

Trust A's assets.   If Genevieve died without having exercised her

power of appointment, Trust A would merge into Trust B and the

assets would be distributed to the Rolins' issue.     Subsequently,

Daniel passed away and, four months later, so did Genevieve.

Genevieve never received income from either trust and never used

her power of appointment.    Genevieve's executors then tried to

renounce Genevieve's interest in the merged trust.      The Service

opposed this attempt, arguing that the executors could not disclaim

Genevieve's power of appointment because it expired at her death.

In deciding the dispute, the court noted that, under New York law,

an executor could disclaim a legacy left to a decedent and the

disclaimer would relate back to the date of the gift and prevent

title from ever divesting.    The court then held that, since an

executor could disclaim a legacy, there was no reason why he could

not also disclaim a power of appointment, even if that power had

expired.   The court reasoned that a power of appointment was just

one right in the bundle of rights constituting a fee simple, and if

an executor could disclaim the whole bundle of rights, he could

also disclaim one of the rights.

     Rolin is not really on point here.   First, since no ERISA plan

was involved in Rolin, the court relied heavily on New York wills

and trust law for its decision.    However, we may not follow state

                                  13
law in this case because such law would "relate" to the plan and

thus be preempted (though, of course, we decide that state law

governs the passage of the proceeds from Annie's estate).    Second,

the trust agreement in Rolin specifically provided that Genevieve's

executors could renounce her interest in the trust should she die

before accepting trust benefits. Here, the plan says nothing about

a personal representative, executor, or administrator disclaiming

on behalf of a decedent.   Third, while the power of appointment may

have expired at Genevieve's death, at least some interest from the

trust passed to Genevieve's estate.    In other words, some rights

from the bundle of rights over the trust that Daniel bequeathed to

Genevieve passed to her estate.    Given the passage of some of the

trust rights, the court held that Genevieve's executors could

disclaim all of these rights.     In our case, though, none of the

rights Lurline had over the proceeds passed to her estate.      They

all went to Annie and then Annie's estate.   Fourth, even if we were

to construe Rolin as adopting the general rule that an executor can

disclaim an interest on behalf of a decedent that the decedent

originally possessed but which did not pass to the decedent's

estate (which we do not), it would not matter here.         The plan

states that plan benefits "but for the disclaimer, [must] otherwise

pass to [the entitled Beneficiary] as a result of the death of a

Participant...." But if Armstrong had not disclaimed the proceeds,

the entitled beneficiary would not have been Lurline or Lurline's

                                  14
estate but, rather, Annie or Annie's estate.5             Under the plan,

Annie received the proceeds upon Lurline's death (i.e., Annie

became the entitled beneficiary) and, after Annie expired, the

proceeds passed to Annie's estate.

     Therefore,   we   determine     that   Armstrong's   disclaimer    was

invalid and that the proceeds must pass according to the plan.

This means that Annie received the proceeds upon Lurline's death,

and that, after Annie expired, the proceeds passed to Annie's

estate.    Accordingly, the proceeds must now go to Barbara, the

independent executrix of Annie's estate, for distribution under the

terms of Annie's will or otherwise.6

                                     IV

      Lastly, the Layman defendants challenge the district court's

order that they pay the plaintiffs $4,461.54 in attorneys' fees and

costs.    Apparently, the district court awarded this amount to the

plaintiffs   because   they   were   merely   the   stakeholders   in   the

litigation and because the Layman defendants were "the unsuccessful

defendants in this case."      We review an award of attorneys' fees

and costs for abuse of discretion.        Bruce Hardwood Floors, Div. of

Triangle Pac. Corp. v. UBC, So. Council of Indus. Workers, Local

Union No. 2713, 103 F.3d 449, 453 (5th Cir.1997).

     5
      Armstrong executed the disclaimer before Annie expired but
did not file it until after her death.
     6
      We emphasize that we do not decide in this appeal whether
Annie's will is valid or, if it is, how the proceeds should be
distributed to the will's beneficiaries. We simply hold that the
proceeds passed to Annie's estate under the plan and thus should
now be given to Barbara for independent administration.

                                     15
     We agree with the district court that the plaintiffs should

not bear unnecessary costs and attorneys' fees in this litigation,

and that the plaintiffs should be able to recover costs and fees

from the unsuccessful defendants in this case. Thus, we will award

the plaintiffs $4,461.54 in costs and fees against the Estes

defendants.

                                         V

     For the foregoing reasons, we REVERSE the judgment of the

district    court   and     RENDER    judgment        in    favor    of     the   Layman

defendants.       Moreover,    we    ORDER     that        the   plaintiffs       recover

$4,461.54 in costs and fees against the Estes defendants.

     REYNALDO G. GARZA, Circuit Judge, dissenting:

     The     majority     states     that    the   district         court    erred     by

conducting a preemption analysis and that the case turns on whether

Lurline Estes' executor, Marcus Armstrong, can validly disclaim her

right to proceeds from the Phillips Thrift Plan within nine months

of Benny's death, as was Lurline's right under the terms of the

plan.     The majority believes that Armstrong was not a beneficiary

under the plan, and therefore, did not have the right to validly

disclaim the proceeds from the plan. Accordingly, the majority has

voted to reverse the decision of the district court in this matter.

While I concur with the first part of this line of reasoning, I

disagree with the majority's conclusion that Armstrong does not

have the authority to disclaim.             I therefore respectfully dissent,

for the following reasons.

     As    the   majority    points    out,     the    parties      agree     that    the

                                        16
disclaimer satisfied the applicable Code requirements, and if the

disclaimer is otherwise valid, Lurline would be deemed to have

predeceased Benny Brooks Estes (as did Onis, Benny's father).                   If

the   disclaimer    is    valid   and   Lurline     is   considered      to   have

predeceased Benny, the proceeds from the plan will pass to Benny's

children, the Estes defendants.              If the disclaimer is not valid,

Benny's cousins, the Layman defendants, get the proceeds.

      The majority states that proper interpretation of the "plain

language" of the plan can lead us to proper resolution of this

dispute, and I agree.       The key issue is whether the reference to

"Beneficiary or an entitled Beneficiary," as listed in the plan,

includes a personal representative or executor who disclaims on

behalf of the beneficiary.        The majority believes that the phrase

"Beneficiary or an entitled Beneficiary" should be strictly and

literally construed, and therefore, the phrase does not encompass

executors or representatives (such as Armstrong in this case).

Under this interpretation, Armstrong's disclaimer is invalid, and

the Layman defendants should take the proceeds of the plan rather

than the Estes defendants.

      I   believe   the    majority's        interpretation   of   the    phrase

"Beneficiary or an entitled Beneficiary" is overly narrow.                    First

of all, while it is true that we must look to the plain meaning of

the terms within the plan for guidance, the cases cited by the

majority state or imply that clarity and a lack of ambiguity are

important factors in proper interpretation of the terms in a plan.

Specifically, in the cases cited where benefits are denied, the

                                        17
terms are more sharply restrictive and obvious in their meaning

than those in this case.         For example, in Rodrigue v. Western and

So. Life Ins. Co., this Circuit held that Rodrigue's claim under a

state equitable estoppel theory was invalid because he was asking

for payment for medical procedures explicitly excluded from the

plan.    Rodrigue v. Western and So. Life Ins. Co., 948 F.2d 969, 970

(5th Cir.1991) (Rodrigue had kidney stones and the plan stated it

would not pay for treatment for ailments of the genitourinary

system).      This case is distinguishable from the instant case

because Rodrigue was asking for a treatment explicitly forbidden in

the plan, there were no questions of grammar or definition of a

particular word involved in Rodrigue, and the other cases were

similarly specific in what was or wasn't allowed under their plans.

See also Coleman v. Nationwide Life Ins. Co., 969 F.2d 54, 57 (4th

Cir.1992), cert. denied 506 U.S. 1081, 113 S. Ct. 1051, 122 L. Ed. 2d
359 (1993);       Lockhart v. United Mine Workers of America 1974

Pension Trust, 5 F.3d 74, 78 (4th Cir.1993).              This specificity is

not in place here.

       A plain meaning interpretation of "beneficiary" will include

agents     and   representatives        of   beneficiary,        because    such

interpretation is commonplace in the law.              Postmortem disclaimers

by executors are quite common and hardly unforeseeable deviations

from    the   terms   of   the   plan   (which,   as   stated,   provides   for

disclaimers for quite some time after the death of the participant

or beneficiary). For example, a beneficiary's legal representative

can disclaim an interest just as the beneficiary herself can, under

                                        18
the qualified disclaimer definition as set forth in Section 2518(b)

of the Internal Revenue Code of 1986.                    26 C.F.R. § 25.2518-

2(b)(1)(1996).        An interpretation of the Plan which encompasses

such disclaimers is not a departure from standard plain language

interpretations of contract and labor law, and would not undermine

the integrity of the ERISA plan.

     Also,    the     Layman    defendants      cited   no   case    law     for    the

proposition that a beneficiary's legal representative or executor

cannot disclaim an interest in the plan.                In fact, there is ample

legal support for the contrary.            For example, the Rolin case cited

and distinguished by the majority stands for the proposition that

an executor stands in the shoes of a testator beneficiary for the

purposes of        disclaimer.      Estate      of   Rolin   v.   Commissioner       of

Internal Revenue, 68 T.C. 919, 1977 WL 3714 (1977), aff'd 588 F.2d
368 (2d Cir.1978);        see also Estate of Allen v. Commissioner of

Internal Revenue, 56 T.C.M. 1494 (1989).                  While the majority

distinguishes the Rolin case from the instant case due to the

difference in subject matter, I believe that the relevant point of

Rolin is the idea that executors have the authority to disclaim

property which was to be given to the testator beneficiary, and

that the time-period for disclaimers may relate back and act

retroactively.        I believe that a plain meaning interpretation of

beneficiary        incorporates     the    Rolin     approach     with     regard    to

executors.     The fact that Texas, as well as many other states,

considers executors to have certain powers of disclaimer further

bolsters     the     position     that    the   drafters     would       assume     that

                                          19
beneficiary would encompass executors, in terms of disclaimer and

all other powers listed for participants and beneficiaries in the

plan, and most specifically, regarding the right to wait up to nine

months after the death of Benny to disclaim.          TEX. PROB. CODE ANN.

§ 145, et seq.   (Vernon 1980 & Supp.1997);         TEX. PROB. CODE ANN. §

37A (Vernon 1980 & Supp.1997).

     Article XII, Section 4 of the Plan Document incorporates the

requirements for disclaimer from the Internal Revenue Code for the

purposes of describing the disclaimer requirements for the plan

with the following statement.

     In the event that a Beneficiary or an entitled Beneficiary
     signs and delivers to the committee a written disclaimer of
     Plan benefits which satisfies the [Internal Revenue] Code's
     requirements to be tax qualified, and such benefits but for
     the disclaimer, would otherwise pass to such person as a
     result of the death of a Participant or entitled Beneficiary,
     the person executing such disclaimer of benefits shall be
     deemed to have failed to survive the deceased Participant or
     entitled Beneficiary from whom he otherwise would have taken.

I believe the majority's concern over the implications of the word

"which" in this section of the plan is misplaced and serves to

unnecessarily complicate the issue.          A plain language reading of

this section, consistent with the plain legal usage of the word

"beneficiary"    leads   me   to   believe   that   the   reference   to   the

Internal Revenue Code is there for the purpose of aiding in the

definition of the requirements of an appropriate disclaimer, a

definition which (in both plain usage and the Tax Code) includes

executors. The "which" is there to modify the previous phrase, and

serves to point toward proper definition of what beneficiary will

encompass.   It does not create and "either/or" situation or an

                                     20
excessively limiting construction of the phrase.           This term is

therefore far from fatal to the Estes defendants.

     Moreover, the plan does not use the phrase "Beneficiary or an

entitled Beneficiary" exclusively in describing who can execute

disclaimer. The plan refers to "person executing such disclaimer."

I believe this further undermines the contention that the drafters

intended a very strict and literal definition of beneficiary, one

which would not encompass other persons such as executors or

representatives.     If that were the intent of the drafters, they

would   presumably   would   have   consistently   used   the   allegedly

limiting phrases throughout this section of the plan.

     In addition, I believe that the Estes defendants are the

appropriate recipients of the proceeds from the Plan for the simple

reason that I find it difficult to believe that Benny Brooks Estes

would want his hard-earned money to go to someone other than his

immediate family.     I suspect that Benny would turn over in his

grave at the thought of such a distribution.         Also, it has been

stated that one of the primary goals of ERISA is to provide support

for an employee and his family.       Cartledge v. Miller, 457 F. Supp.
1146, 1156 (S.D.N.Y.1978);          In re Masters, 73 B.R. 796, 799

(Bankr.D.Or.1987).    A distribution of plan proceeds which favors

the cousins of Benny Brooks Estes over his own children is not only

likely to be exactly the opposite of what Benny would have wanted,

but is also not in keeping with the goals of ERISA.

     Further, the majority's belief that the Layman defendants

should receive the proceeds from the plan because that would be the

                                    21
presumed intent of the drafters of the plan rings hollow, given

that Phillips was the party that filed an interpleader action to

clarify who rightfully should receive the proceeds.           I find it

unlikely that Phillips would have filed this action and hold up

distribution of the proceeds if it was so obvious that the proper

distribution under the plan would be to the Layman defendants.

Last, the majority's assertion that a distribution to the Estes

defendants is a strained construction of the plan seems a bit odd

given that it is the majority which seems to be straining to find

a way to take the proceeds away from the parties that Benny would

most likely want to have provided for.       A decision in favor of the

Estes defendants, aside from being the more just result, makes more

sense given the terms of the plan and the actions of Phillips.

     For   the   foregoing   reasons,   I   respectfully   dissent,   and

accordingly would affirm the decision of the district court.

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