Opinion
3:22-cv-00263-HZ
02-06-2023
RUTH ANN MUNGER, Individually, and in her Capacity as Co-Personal Representative of the Estate of Philip Louis Cloud, Plaintiff, v. INTEL CORPORATION, a Delaware Corporation, as Plan Administrator of the Intel Retirement Contribution Plan, Intel 401K Savings Plan; Intel Minimum Pension Plan, Intel Retiree Medical Plan, and Sheltered Employee Retirement Medical Account; and TRACY LAMPRON CLOUD, Defendants.
Erin K. Olson Law Office of Erin Olson, P.C. Megan Johnson Pickett Dummigan McCall LLP Attorneys for Plaintiff Sarah J. Ryan Anthony Copple Donald P. Sullivan Jackson Lewis P.C. Attorneys for Intel Defendants Tracy Lampron Cloud #23662184 Coffee Creek Correctional Facility Defendant, Pro Se
Erin K. Olson Law Office of Erin Olson, P.C.
Megan Johnson Pickett Dummigan McCall LLP Attorneys for Plaintiff
Sarah J. Ryan
Anthony Copple
Donald P. Sullivan
Jackson Lewis P.C.
Attorneys for Intel Defendants
Tracy Lampron Cloud #23662184
Coffee Creek Correctional Facility
Defendant, Pro Se
OPINION & ORDER
MARCO A. HERNANDEZ, United States District Judge.
This matter comes before the Court on the Motions of Defendant Tracy Lampron Cloud (“Cloud”) to Dismiss or Put in Abeyance. ECF 24, 35. For the reasons that follow, the Court grants Cloud's Motions to Dismiss or Put in Abeyance to the extent that the Court stays this matter.
BACKGROUND
Philip Louis Cloud (“Philip Cloud”) was an employee of Defendant Intel Corporation and a participant in various retirement and pension plans through his employment with Intel (the Plans). Philip Cloud was fully vested or otherwise eligible to participate in the Plans at the time of his death. The Plans provide Philip Cloud's wife, Defendant Cloud, is his primary beneficiary and his estate is the secondary beneficiary.
It is undisputed that the Plans are governed by the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001 et seq.
On September 23, 2019, Cloud killed Philip Cloud. On January 8, 2020, a Washington County grand jury indicted Cloud on a charge of second degree murder.
On February 11, 2020, the Estate of Philip Cloud through Ruth Ann Munger filed in Washington County Circuit Court a petition for declaratory judgment pursuant to Oregon's Slayer Statute, Or. Rev. Stat. 112.455 et seq., in which it seeks a declaration of the “respective property interests, rights, claims, assets, and liabilities of the Decedent, Philip Louis Cloud; his slayer, Tracy L. Cloud; and any other heirs, entities or persons,” including the “proceeds of . . . benefit instruments or plans of the Decedent, pursuant to ORS 112.515.” FAC, Ex. 4 at ¶ 8(4).
Currently there are three matters involving Philip Cloud's estate and Cloud pending in state court: a probate case, a trust matter, and a wrongful-death action. Olson Decl., Ex. 1 at 5. ECF 38. In a hearing before the probate court on October 21, 2022, the court noted the estate had filed motions for partial summary judgment in all three matters. Id.
On November 13, 2020, Ruth Ann Munger, acting on behalf of Philip Cloud's estate, submitted a claim to Intel Retirement Plans Administrative Committee for Philip Cloud's Plan benefits on the grounds that Oregon and federal law prohibit “slayers from profiting from their crimes” and Cloud was “being held without bail in Washington County, Oregon, on charges of Murder in the Second Degree.” FAC, Ex. 4 at 1.
On November 9, 2021, a Washington County jury convicted Cloud of second degree murder. On November 16, 2021, Washington County Judge Eric Butterfield sentenced Cloud to life in prison. At some point Cloud filed an appeal of her conviction to the Oregon Court of Appeals. Cloud's appeal remains pending.
On February 17, 2022, Ruth Ann Munger, individually and in her capacity as personal representative of the Estate of Philip Cloud, filed a Complaint in this Court pursuant to ERISA in which she seeks payment of Philip Cloud's Plan benefits to the estate of Philip Cloud on the basis that Cloud is the “slayer” of Philip Cloud and, therefore, she is not entitled to any Plan benefits. On February 24, 2022, before the Complaint was served, Plaintiff filed a First Amended Complaint to add further facts in support of her claims. Cloud opposes payment of the Plan funds to Philip Cloud's estate on the basis that she was wrongfully convicted of murdering Philip Cloud.
On November 15, 2022, Defendants filed a Counterclaim and Crossclaim and request for declaratory relief in which they note the competing claims to the Plan funds and request this Court determine the rights of the parties to the funds.
On November 28, 2022, Cloud filed a Motion to Dismiss or Put in Abeyance in which she requests this Court dismiss, or in the alternative, stay this matter.
On December 15, 2022, Cloud filed a second Motion to Dismiss or Put in Abeyance that is a duplicate of her November 28, 2022 Motion to Dismiss or Put in Abeyance.
The Court took this matter under advisement on January 9, 2023.
DISCUSSION
Cloud requests the Court dismiss or stay this matter on the basis that she has appealed her criminal conviction and her appeal is pending. The Court also notes the pendency of the probate, trust, and wrongful-death proceedings in state court that address, among other things, Cloud's status as a slayer and Cloud's entitlement to the Plan benefits.
I. Standards
In Colorado River Water Conservation District v. United States, 424 U.S. 800 (1976), the Supreme Court recognized “there are principles . . . [that] govern in situations involving the contemporaneous exercise of concurrent jurisdictions . . . by state and federal courts[, which] . . . rest on considerations of wise judicial administration, giving regard to conservation of judicial resources and comprehensive disposition of litigation.” Id. at 817 (quotation omitted). The Court noted the general rule that “as between state and federal courts . . . the pendency of an action in the state court is no bar to proceedings concerning the same matter in the Federal court having jurisdiction.” Id. (quotation omitted). Moreover, in light of the “virtually unflagging obligation of the federal courts to exercise the jurisdiction given them,” the circumstances permitting the dismissal or stay of a federal action “due to the presence of a concurrent state proceeding for reasons of wise judicial administration” are “exceptional,” but “do, nevertheless, exist.” Id. at 817-18. The Court noted several factors courts should consider when deciding whether “exceptional circumstances” exist to stay a federal court action on the ground that there is a similar action pending in state court including: (1) which court first assumed jurisdiction over property, (2) “the inconvenience of the federal forum,” (3) “the desirability of avoiding piecemeal litigation,” and (4) “the order in which jurisdiction was obtained by the concurrent forums.” Id. at 818. “No one factor is necessarily determinative; a carefully considered judgment taking into account both the obligation to exercise jurisdiction and the combination of factors counselling against that exercise is required.” Id. at 819.
II. Authority to Consider A Stay
Plaintiff brings two ERISA claims in her First Amended Complaint. In her first claim, brought pursuant to 29 U.S.C. § 1132(1)(1)(B), Plaintiff alleges Philip Cloud's estate is “entitled to the receipt of” his benefits under the Plans and seeks payment to Philip Cloud's estate of Plan benefits and accrued earnings. FAC ¶¶ 19, 25(A). In her second claim, brought pursuant to 29 U.S.C. § 1132 (a)(3)(B), Plaintiff alleges Defendants “owed fiduciary duties . . . to administer the Plans in accordance with their terms and to pay [Plan] balances to” Philip Cloud's estate and Defendants breached their duties “by nonpayment and nonresponse.” FAC ¶ 21. Plaintiff seeks “enforcement of [Defendants'] fiduciary duties under the Plans . . . to pay [Plan] balances” to Philip Cloud's estate. FAC ¶ 25(B).
The Ninth Circuit has held that a stay pending resolution of a state case is impermissible under the Colorado River doctrine when a claim is under the exclusive jurisdiction of the federal courts. SeeSilberkleit v. Kantrowitz, 713 F.2d 433, 434 (9th Cir. 1983)(“[t]he district court had no discretion to stay proceedings [under the Colorado River doctrine] on these exclusively federal claims.”); Gen. Motors Corp. v. Cal. State Bd. Of Equalization, 815 F.2d 1305, 1309 (1987)(noting the ERISA claim “by appellees is one over which the federal courts exercise exclusive jurisdiction” and finding, therefore, that a stay would be inappropriate).
Plaintiff's first claim under ERISA, however, does not “enjoy exclusive federal jurisdiction,” rather jurisdiction for claims for non-payment of Plan benefits brought pursuant to § 1132(a)(1)(B) is vested concurrently in state and federal courts. 29 U.S.C. § 1132(e)(“Except for actions under subsection (a)(1)(B) of this section, the district courts of the United States shall have exclusive jurisdiction of civil actions under this subchapter....State courts . . . and district courts of the United States shall have concurrent jurisdiction of actions under paragraph[] (1)(B) . . . of subsection (a) of this section.”). The Court, therefore, has the authority and discretion to permit a stay of Plaintiff's first claim pursuant to Colorado River.
Plaintiff's second claim is brought under § 1132(a)(3) and claims asserted under that section “enjoy exclusive federal jurisdiction.” The Ninth Circuit, however, has held that plaintiffs who assert claims for damages under § 1132(a)(1)(B) cannot also obtain relief under § 1132(a)(3). Ford v. MCI Communications Corp. Health & Welfare Plan, 399 F.3d 1076, 1083 (9th Cir. 2005)(“The Supreme Court has held that [29 U.S.C. § 1132(a)(3)] is a catchall provision that acts as a safety net, offering appropriate equitable relief for injuries caused by violations that [29 U.S.C. § 1132] does not elsewhere adequately remedy.”)(quotation omitted), overruled on other grounds by Cyr v. Reliance Standard Life Ins. Co., 642 F.3d 1202 (9th Cir. 2011). Plaintiff here does not allege wrongful conduct by Defendants such as self-dealing or biased claim practices and does not seek relief other than the payment of Plan benefits. In addition, the facts supporting Plaintiff's second claim are the same as those supporting her first claim for non-payment of benefits. As pled, therefore, Plaintiff's second claim is “not otherwise appropriate, and has no life independent of the claim for benefits.” Rotondo v. Blue Cross ofIdaho, No. 1:11-CV-00493-EJL, 2012 WL 1664089, at *5 (D. Idaho Mar. 2, 2012), report and recommendation adopted, No. 1:11-CV-00493-EJL, 2012 WL 1658685 (D. Idaho May 11, 2012). Accordingly, the Court concludes exclusive federal jurisdiction is not supported by Plaintiff's second claim and, therefore, the Court has the authority and discretion to permit a stay of Plaintiff's second claim pursuant to Colorado River.
III. Analysis
Turning to the Colorado River factors, the Court finds the relevant factors favor a stay.First, as noted, in February 2020 Philip Cloud's estate filed a petition for declaratory judgment in state court pursuant to Oregon's Slayer Statute in which it seeks a declaration of the “respective property interests . . . of . . . Philip Louis Cloud; . . . Cloud; and any other heirs, entities or persons,” including the “proceeds of . . . benefit instruments or plans of the Decedent.” FAC, Ex. 4 at ¶ 8. Plaintiff did not file the action in this Court until February 2022. The state court, therefore, first assumed jurisdiction over the Plan benefits as well as jurisdiction over the question of Cloud's status as a slayer.
The inconvenience of the federal forum factor is irrelevant in this matter.
Second, the desirability of avoiding piecemeal litigation is particularly relevant here because a decision by this Court regarding entitlement to the Plan benefits would, as a matter of law, require a determination whether Cloud is a slayer under federal common law. The resolution of that determination would require the Court to evaluate whether Cloud feloniously and intentionally killed Philip Cloud. See, e.g.,Standard Ins. Co. v. Guy, No. 218CV00074 DCLCCRW, 2021 WL 2410667, at *1 (E.D. Tenn. May 20, 2021)(Courts have uniformly concluded federal common law “‘prohibits a life insurance beneficiary who murders an insured from recovering under the policy.'”)(quoting Giles v. Cal., 554 U.S. 353, 384 (2008)(Breyer, J., Stevens, J., and Kennedy, J., dissenting)). Prudential Ins. Co. of Am. v. Athmer, 178 F.3d 473, 475-76 (7th Cir. 1999)(“The principle that no person shall be permitted to benefit from the consequences of his or her wrongdoing has long been applied to disqualify murderers from inheriting from their victims, whether the route of inheritance is a will, an intestacy statute, or a life insurance policy.”); Hartford Life & Acc. Ins. Co. v. Rogers, No. 3:13-CV-101, 2014 WL 5847548, at *2 (D.N.D. Nov. 12, 2014)(“It is well established in federal law . . . that a person should not financially benefit from the felonious or intentional killing of another human being.”)(citations omitted). This Court's determination of that issue could directly affect the state-court probate and wrongful-death proceedings because whether Cloud feloniously and intentionally killed Philip Cloud is the central issue in the state wrongful-death action and relevant to whether Cloud may receive any of the assets of Philip Cloud's estate. This factor, therefore, favors a stay.
The Oregon Court of Appeals has held that ERISA preempts Oregon's slayer statute. Herinckxv. Sanelle, 281 Or.App. 869, 875 (2016). Because ERISA preempts state law, but is itself silent on the question of the distribution of benefits to a beneficiary who is responsible for killing the plan participant, the Court must turn to federal common law for a governing rule. See, e.g., McClure v. Life Ins. Co. of N. Am., 84 F.3d 1129, 1133 (9th Cir. 1996)(“ERISA requires that courts apply a federal common-law rule.”); McMillan v. Parrott, 913 F.2d 310, 311 (6th Cir. 1990)(ERISA does not address the proper designation of beneficiaries where a beneficiary feloniously kills the insured. Due to this lack of statutory direction, courts are instructed to look to “federal common law.”).
Finally, the Court finds the state-court proceedings, including the probate and wrongful-death matters as well as Cloud's criminal appeal, are adequate to protect the rights of the litigants in this action. In the various state proceedings the state courts will address Cloud's conviction for murder, her status as a slayer, and the estate's right to the various assets of Philip Cloud including the Plan benefits.
The Court, therefore, concludes the Colorado River factors favor a stay and these are the kinds of exceptional circumstances under which a stay is appropriate. Accordingly, the Court grants Cloud's Motion to Dismiss or to Put in Abeyance to the extent that the Court stays this matter until the completion of either Cloud's criminal appeal or the state-court wrongful-death proceedings.
CONCLUSION
The Court GRANTS IN PART Cloud's Motions to Dismiss or Put in Abeyance, ECF 24, 35, to the extent that the Court STAYS this matter until the completion of either Cloud's criminal appeal or the state-court wrongful-death proceedings, whichever occurs first. The Court DENIES the other Motions pending in this matter with leave to renew after the Court lifts the stay.
The Court DIRECTS Plaintiff to file status reports informing the Court of the status of the civil state-court proceedings every three months beginning May 5, 2023.
The Court DIRECTS Cloud to file status reports informing the Court of the status of the her criminal appeal every three months beginning May 5, 2023.
IT IS SO ORDERED.