Boyd v. Metropolitan Life Ins. Co.,
2011 U.S. App. LEXIS 6605 (4th Cir. Mar. 31, 2011)
As an employee of Delta Air Lines, Boyd participated in an ERISA-governed life insurance plan administered by MetLife. At the time of her death in November 2008, the plan documents on file with MetLife designated Boyd’s former husband as her primary beneficiary. Boyd had made that designation in 2001.
Boyd and her husband were divorced in April 2008, and a state court order was entered to approve their property settlement agreement. The order provided: “Each party relinquishes and disclaims all right, claim or interest … in the property … of the other, including … the right to receive proceeds … as a beneficiary under any life insurance policies.”
Boyd never changed her beneficiary designation, although she had the right to do so by sending a written request to MetLife. The plan did not specify any procedure that could be followed by beneficiaries who wished to waive their claims to benefits.
Both the former husband and Boyd’s mother, who was the contingent beneficiary, claimed the death benefits. MetLife determined that the benefits should be paid to the former husband, since he was the beneficiary of record, and it paid the benefits to him.
Boyd’s mother, her son, and the personal representative of her estate sued MetLife, contending that the former husband had relinquished his right to claim the death benefits by entering into the property settlement agreement, which was approved by order of the state court in the divorce case.
The district court held that MetLife had correctly paid the benefits to the former husband. That order was appealed to the Fourth Circuit Court of Appeals, which agreed.
The Fourth Circuit concluded that the issue was controlled by Kennedy v. Plan Administrator for DuPont Savings & Investment Plan, 129 S.Ct. 865 (2009), in which the Supreme Court endorsed the “plan documents rule,” holding that ERISA plan administrators must look solely to “the directives of the plan documents” in determining how to disburse benefits.
Boyd’s mother relied, however, on footnote 13 in Kennedy, in which the Court said that its ruling did not “address a situation in which the plan documents provide no means for a beneficiary to renounce an interest in benefit.” Because the Delta plan contained no means to renounce benefits, the mother argued that the plan documents rule did not apply.
The Fourth Circuit held that this distinction did not require a different result, noting that Boyd’s former husband “filed a claim for benefits, belying any claim that he wanted to refuse them.” Rejecting the mother’s argument, the court said that “[n]othing in Kennedy authorizes a plan administrator to disregard a validly executed beneficiary designation form where the beneficiary has made no effort to disclaim his right to benefits.”
Despite the absence of a plan procedure by which a beneficiary could refuse benefits, the court concluded:
[E]ven where such procedures are absent, the beneficiary can still make his intent clear by refusing to take benefits. Moreover, to the extend the plan participant wishes to direct benefits to a different party, she can simply change the designation on file. Given the easy availability of these options – not to mention their simplicity – we see no reason to force plan administrators to scrutinize waivers extrinsic to plan documents.
The court noted that the same conclusion was reached by the Eighth Circuit under essentially identical facts in Matschiner v. Hartford Life & Accident Ins. Co., 622 F.3d 885 (8th Cir. 2010).
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