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Jackson v. Parks

United States District Court, D. Montana, Missoula Division

September 14, 2017

ALETTE JACKSON, Cross-Claimant/ Cross-Defendant,
SAMANTHA PARKS, Cross-Claimant/ Cross-Defendant.

          OPINION & ORDER

          Donald W. Molloy, District Judge.

         This interpleader action concerns a dispute over who is entitled to the proceeds of an ERISA-qualified life insurance policy. The two claimants have filed cross-motions for summary judgment, each arguing they are entitled to the contested funds. Because ERISA preempts related state law, Claimant Alette Jackson's motion for summary judgment is granted, and Claimant Samantha Parks' motion is denied.


         Life Insurance Company of North America ("North America"), an insurance company with is principal place of business in Philadelphia, Pennsylvania, issued Life Insurance Policy No. FLX-980313, (the "Policy") to Applied Materials, Inc. (Doc. 20 at ¶ 1.) Sterling Stanley Jackson ("Sterling"), an Applied Materials employee, subsequently enrolled in the Policy. (Id. at ¶ 5.) The Policy is Employment Retirement Income Security Act ("ERISA") qualified. (Id. at ¶ 12.) Sterling died on March 11, 2016. (Id. at ¶ 6.) The total death benefit owed pursuant to the Policy is $124, 123.01, including interest. (Id. at ¶ 10.)

         Sterling's beneficiary designation under the Policy named Claimant Alette Jackson ("Jackson"), Sterling's spouse at the time. Sterling and Jackson divorced March 17, 2015, roughly a year before Sterling's death. (Id.) On October 2, 2015, approximately six months after his divorce and five months before his death, Sterling revised his Last Will and Testament. (Doc. 29-5.) The will devises "[a]ll the rest, residue and remainder of [Sterling's] estate ... in equal shares to [his] children, " Scott Jackson and Samantha Parks. (Doc. 29 at ¶¶ 12-13; Doc. 29-5.) Sterling's will neither refers to nor provides for Jackson. (Doc. 29. at ¶ 14; Doc. 29-5.)[1]

         Sterling's estate was opened for probate on March 25, 2016, in the Eleventh District Court of Montana, Flathead County. (Doc. 29 at ¶ 10.) Claimant Samantha Parks ("Parks") was appointed personal representative of the estate. (Doc. 20 at ¶ 3.) On February 6, 2017, North America filed a Complaint for Interpleader requesting a judicial determination of the proper payee or payees for benefits from the Policy. (Doc. 1.) The Complaint named Alette Jackson and Samantha Parks, as the personal representative of Sterling's estate. (Id.) North America deposited the contested funds with the Court, (Doc. 10), and was dismissed from the case, (Doc. 23). Claimants Jackson and Parks remain in the case as cross-defendants. They have now filed cross-motions for summary judgment, each requesting a declaratory judgment that they are entitled to the contested funds. (Docs. 27, 30.)


         A party seeking summary judgment will prevail if it can demonstrate that "there is no genuine dispute as to any material fact and [it] is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). Accordingly, summary judgment is appropriate where the evidence produced by the parties permits only one conclusion. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251 (1986). While factual disputes irrelevant or unnecessary to the outcome of the case are not considered, in deciding a motion for summary judgment a court must draw "all justifiable inferences" in favor of the party against whom summary judgment is asserted. Id. at 248, 255. "[W]hen parties submit cross-motions for summary judgment, each motion must be considered on its own merits." Fair Hous. Council of Riverside Cnty., Inc. v. Riverside Two, 249 F.3d 1132, 1136 (9th Cir. 2001) (citations and internal punctuation marks omitted). "It is well-settled . . . that the filing of cross-motions for summary judgment. . . does not vitiate the court's responsibility to determine whether disputed issues of material fact are present." United States v. Fred A. Arnold, Inc., 573 F.2d 605, 606 (9th Cir. 1978).


         I. ERISA and Montana Code Annotated § 72-2-814

         Parks argues that the contested funds should be distributed to the estate because Montana Code Annotated § 72-2-814 revoked Jackson's interest in those funds when she and Sterling divorced. Jackson argues that ERISA preempts § 72-2-814, and that she is the rightful recipient of the contested funds. Jackson is correct.

         A. ERISA

         In passing ERISA, Congress acted "to protect the rights of workers who earn pension benefits and to encourage plan participation." Carmona v. Carmona, 603 F.3d 1041, 1053 (9th Cir. 2010) (citation omitted). ERISA is "an intricate, comprehensive statute that governs both pension and welfare plans." Id. Among its requirements, ERISA established '"a straightforward rule of hewing to the directives of the plan documents, '" creating '"a bright-line requirement to follow plan documents in distributing benefits." Id. (citing Kennedy v. Plan Admin, for DuPont Savings & Inv. Plan, 555 U.S. 285, 300, 302 (2009)). To that end, "ERISA's pre-emption section, 29 U.S.C. § 1144(a), states that ERISA 'shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan' covered by ERISA." Egelhoff v. Egelhoff, 532 U.S. 141, 146(2001).

         "[A] state law relates to an ERISA plan 'if it has a connection with or reference to such a plan.'" Id. at 147 (quoting Shaw v. Delta Air Lines, Inc.,463 U.S. 85, 97 (1983)). To evaluate the "connection with" prong of ERISA preemption analysis, courts must "look both to the objectives of the ERISA statute as a guide to the scope of the state law that Congress understood would survive, as well as the nature of the effect of the state law on ERISA plans." Id. ...

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