Opinion
A154972
11-22-2019
In re the Marriage of TERESA J. and ERIC R. STINE. TERESA J. STINE, Appellant, v. BRANDEN A. STINE, as Personal Representative, etc., Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Solano County Super. Ct. No. FFL135657)
Teresa Stine, the ex-wife of Eric R. Stine, now deceased, appeals from a trial court order denying her entitlement to one-half of his life insurance proceeds. Metropolitan Life Insurance Company (MetLife) paid Teresa $191,000 because she was one of the named beneficiaries of Eric's life insurance policy. The trial court determined Teresa was not entitled to such proceeds because she expressly waived any right to receive them in the stipulation for judgment that dissolved the Stine marriage.
For the sake of clarity, we refer to the parties by their first names. We intend no disrespect.
Teresa argues the subject life insurance policy was part of an Employee Retirement Income Security Act of 1974 (ERISA; 29 U.S.C. § 1001 et seq.) employee benefits plan, and as a result, the insurance proceeds must be paid to the named beneficiaries notwithstanding state law. Alternatively, Teresa argues she did not waive her right to receive the proceeds under state law in any event, because the stipulation for judgment made no mention of the life insurance policy. We affirm.
I. BACKGROUND
Teresa and Eric married in September 1998. In 2014, Teresa filed a petition for dissolution. After the parties exchanged preliminary disclosures, the court held a hearing and approved a settlement agreement, directing Eric's attorney to prepare a judgment of dissolution. The judgment of dissolution was signed by the trial court on June 30, 2015 and filed on July 1, 2015. The judgment terminated marital status effective October 1, 2015.
The stipulation for judgment attached to the judgment awarded and assigned community property assets and liabilities. As to retirement assets, it provided: "The community property interest in all pension, retirement and other deferred compensation assets, including [Eric's] Chevron Pension Plan and [Eric's] Chevron Employee Savings Investment Plan, shall be assessed and equalized through preparation of Domestic Relations Order(s)." In a section entitled "Waivers and Releases," the stipulation for judgment also stated: "(C) Except as otherwise provided for in this Stipulation for Judgment, each party hereby releases the other from all interspousal obligations and all claims of property of the other[,] including but not limited to support and property claims." In addition, it provided: "(E) Each party hereby waives the right to receive any property or rights whatsoever on the death of the other, unless such rights is [sic] created or affirmed by the other under a Last Will and Testament or other written document executed after the filing date of this Stipulation for Judgment."
On November 29, 2015, Eric was found dead near the Point Arena lighthouse in Northern California. At the time of Eric's death, his son, Branden A. Stine, and Teresa were designated beneficiaries of Eric's group term life insurance policy through his employer, Chevron. In June 2016, Teresa received a check for approximately $191,000 from MetLife; Branden also received a check for the same amount.
Though Branden appears in this case as personal representative of Eric's estate, he was designated a beneficiary of the life insurance in his individual capacity.
A few months later, Teresa filed a request for order in the dissolution matter, asking the court to allow her to keep the $191,000 in insurance proceeds. Branden, as personal representative of Eric's estate, also filed a request for order, asking the trial court to order Teresa to reimburse Eric's estate for her share of the insurance proceeds. Teresa argued she was entitled to the proceeds because the Chevron employee benefit plan was governed by ERISA, which preempts state law divorce decrees unless they are qualified domestic relations orders (QDRO), and because the waiver in the parties' stipulation for judgment was not effective as to the life insurance policy. Branden argued Eric's estate was entitled to reimbursement of the life insurance proceeds because Teresa specifically waived the right to receive any property or other rights upon Eric's death, and the fact that ERISA governed the benefit plan was irrelevant because once the benefits were distributed, the estate could enforce the waiver.
In the trial court, Teresa also argued (1) the purported waiver of her right to receive life insurance proceeds was invalidated by Eric's failure to disclose the policy under Family Code section 2100 et seq., and (2) Eric's election not to act to change his designation of Teresa as beneficiary was essentially an affirmation of his designation. Because she does not renew these arguments on appeal, we do not consider them in our analysis below.
The court held a hearing on May 4, 2017 and a two-hour trial on May 22, 2017. At trial, Teresa testified Eric received yearly statements from Chevron showing the beneficiaries of his life insurance. When asked whether she was aware if Eric ever changed the beneficiary designations on his life insurance, Teresa replied, "In 2010 I found out that he had me as a sole beneficiary on a life insurance, and I asked him not to do that. So he was to split it between Branden and I." She affirmed that "[a]t one point in time" she knew Eric had a life insurance policy.
On direct examination, Teresa testified she received disclosures from Eric in the dissolution proceeding, but they did not mention any life insurance. The parties stipulated there was "no specific mention" of life insurance in the stipulation for judgment. Teresa then had the following exchange with her counsel:
"Q. At that time that you were getting divorced, did you know—did you have any personal knowledge that there was life insurance in place?
"A. I thought there was. But the document said there wasn't. So I figured he canceled mine, so he probably canceled his.
"Q. Are you saying that because the disclosures of your former husband failed to mention insurance, you understood none to exist?
"A. Correct.
"Q. . . . When this judgment was entered, your understanding was that there was probably not a life insurance, correct?
"A. Correct.
"[¶] . . . [¶]
"Q. . . . Now, was it your understanding when this judgment [of dissolution] was entered that the waiver contained at item E on page 6 of the attachment to the judgment applied to any of the categories of moneys that you received from Chevron after Eric Stine passed away?
"A. No. It pertains to the judgment.
"Q. In other words, only things that were specifically mentioned in the judgment?
"A. Right."
After hearing argument from the parties, the trial court took the matter under submission. The court ordered as follows: "The Court determines that the parties' Judgment and Marital Settlement Agreement specifically provided that the parties (mutually) waived the right to receive any property, including as here life insurance proceeds from Met Life Insurance upon the death of the other party unless such rights were created or affirmed by the other under a Will or other written document executed after the filing date of their Stipulated Judgment. [¶] The Court specifically finds that no such Will or document exists as to the Met Life Insurance in which the deceased designated his then Wife as a beneficiary to one-half of the proceeds, which here amounted at his death to $191,000 (being ½ of $382,000). Such proceeds were received by Wife subject to her former Husband's death and therefore are to be repaid to his Estate. The Court does find the case of Life Insurance [Co.] of North America v. Cassidy [(1984)] 35 Cal.3d 599 to be controlling." Teresa timely appealed.
II. DISCUSSION
A. ERISA
Teresa first argues the estate's claim to the life insurance fails because the subject life insurance policy is governed by ERISA and therefore must be paid to the named beneficiary regardless of state law.
As an initial matter, the parties disagree whether the group term life policy was governed by ERISA. We need not reach this issue, however, because even assuming it was, the trial court was not precluded from ordering Teresa to reimburse the estate once the plan benefits were distributed.
Teresa relies on Egelhoff v. Egelhoff (2001) 532 U.S. 141 and other federal authorities to argue that the proceeds of an ERISA life insurance policy must be paid to the plan's beneficiary unless they are the subject of a QDRO. In Egelhoff the Supreme Court held that ERISA preempted the application of a state statute that automatically revoked, upon divorce, any designation of a spouse as a beneficiary of an ERISA benefit plan. (532 U.S. at pp. 144, 147-150.) The Supreme Court based its holding on the fact that the state statute required administrators to "pay benefits to the beneficiaries chosen by state law, rather than to those identified in the plan documents," creating a "direct[] conflict[] with ERISA's requirements that plans be administered, and benefits be paid, in accordance with plan documents." (Id. at pp. 147, 150.) The Supreme Court has not, however, determined whether ERISA preempts state law claims against named beneficiaries after benefits are distributed. (See Kennedy v. Plan Administrator for DuPont Sav. and Investment Plan (2009) 555 U.S. 285, 299-300, fn. 10 [expressly declining to state view on whether estate of deceased ERISA plan participant could have brought an action in state or federal court to obtain benefits from a former spouse after they had been distributed to her]; see also Hohu v. Hatch (N.D.Cal. 2013) 940 F.Supp.2d 1161, 1174-1175 (Hohu).)
Here, it is undisputed the plan benefits were paid to Teresa as one of the designated beneficiaries. Branden does not challenge MetLife's distribution of the benefits to Teresa, but challenges her right to retain the benefits under the terms of the stipulation for judgment in the dissolution proceeding. Numerous federal and state courts have concluded ERISA does not preempt postdistribution suits against plan beneficiaries, and have allowed individuals and estates to pursue such claims. (See Andochick v. Byrd (4th Cir. 2013) 709 F.3d 296, 299, 301 [concluding decedent's estate could enforce a waiver in a martial settlement agreement against ERISA plan beneficiary and noting "every published appellate opinion" to address the issue had concluded ERISA did not preempt postdistribution suits against ERISA beneficiaries]; Estate of Kensinger v. URL Pharma, Inc. (3d Cir. 2012) 674 F.3d 131, 136-137 ["permitting suits against beneficiaries after benefits have been paid does not implicate any concern of expeditious payment or undermine any core objective of ERISA"]; Hohu, supra, 940 F.Supp.2d at p. 1175; Sweebe v. Sweebe (Mich. 2006) 712 N.W.2d 708, 712-713.) Teresa does not meaningfully distinguish any of the authorities cited by Branden on this issue. Accordingly, we conclude Branden's claim to the insurance proceeds is not preempted by ERISA. B. Waiver
Teresa contends Hohu is inapposite because "the issue was whether ERISA preempts post-distribution suits against ERISA beneficiaries, not whether a family court judgment supersedes an ERISA beneficiary." But Branden does not contend the family court judgment "supersedes an ERISA beneficiary"; he argues Teresa waived her right to the proceeds of the insurance policy in the stipulation for judgment. As in Hohu, his efforts to pursue that postdistribution state-law claim in the trial court are not preempted by federal law.
Teresa next argues that she did not waive the right to receive the proceeds of Eric's life insurance policy because the stipulation for judgment did not mention a life insurance policy. She contends the trial court erred in determining Life Insurance Co. of North America v. Cassidy, supra, 35 Cal.3d 599 (Cassidy) was controlling, and asserts the rule explained in that case and in Thorp v. Randazzo (1953) 41 Cal.2d 770 (Thorp) should have led the trial court to the opposite conclusion it reached. For reasons we will explain, we disagree.
In Cassidy, a husband and wife divorced and entered a marital settlement agreement designed " ' to effect a final and complete settlement of all rights and duties of the parties with reference to each other . . . .' " (Cassidy, supra, 35 Cal.3d at p. 603.) When the ex-husband died 20 months later, the ex-wife was still named as the beneficiary of his life insurance policy. (Ibid.) The ex-wife argued she did not waive her right to the insurance proceeds in the parties' settlement agreement because the agreement did not refer to either the expectancy interest in the insurance policy or the particular insurance policy, nor did the agreement explicitly revoke the designation of beneficiary. (Id. at p. 605.)
Our Supreme Court affirmed the trial court's determination that the ex-wife was not entitled to the insurance proceeds, finding the marital settlement agreement "does clearly show an intent by the Cassidys to waive expectancies which may have existed at the time of the settlement." (Cassidy, supra, 35 Cal.3d at p. 605.) In doing so, it expressly found determinative the "rule . . . most recently confirmed by this court in Thorp v. Randazzo[, supra,] 41 Cal.2d 770 in which we held that general language in a marital settlement agreement will not be construed to include an assignment or renunciation of the expectancy interest conferred on the named beneficiary of an insurance policy or a will unless it clearly appears that the agreement was intended to deprive either spouse of such a right." (Ibid.)
Acknowledging its repeated adherence to that rule, the court examined the specific language of the Cassidy agreement. (Cassidy, supra, 35 Cal.3d at pp. 606-607.) First, the agreement released, transferred, and conveyed to ex-husband " 'all of [ex-wife's] right, title and interest' " to the community property assigned to ex-husband, "including all life insurance on Mr. Cassidy's life" (an exhibit described the community property as consisting of the cash value of life insurance on the lives of the parties). (Id. at pp. 607-608 (maj. opn. of Reynoso, J.); see id. at p. 612 (dis. opn. of Bird, C. J.).) The court specifically noted, however, that language applied only to the community property interest, and not to any benefits that might arise from the policies in the future, nor did the agreement specify what insurance policies were involved. (Id. at pp. 607-608.) Because the rights of a spouse to receive or recover the community share of an insurance policy are distinct and separate from any right which may accrue to a spouse named as the beneficiary of a life insurance policy, a spouse may release the community interest in an insurance policy without renouncing the right to receive insurance proceeds as a designated beneficiary. (Id. at p. 606.) Thus, the court concluded, "If the agreement contained no other relevant language, appellant's contention that it did not release her expectancy would prevail." (Id. at p. 608.)
On examining the entire agreement, however, the court found a further intent. Specifically, paragraph 12 of the parties' agreement released " 'all and every right as the spouse of the other and any and all present or future claims or demands of every nature on or against the other, or . . . the property of the other. . . .' " as well as " 'the right to inherit from the other or rights to or in connection with any family allowance, and the right to receive in any manner any property of the other upon the death of the other except as a devisee, legatee or beneficiary under any last will and testament hereafter executed. . . .' " (Cassidy, supra, 35 Cal.3d at p. 608.) The court concluded that language was "sweeping in nature, and [was] not limited to a waiver of all rights which might arise from the marital relationship. [Citation.] Rather, it shows the parties intended to waive and relinquish any expectancy that was not thereafter reaffirmed, as well as to settle their community property rights." (Ibid.)
Though more concise, the language used by the parties in this case is very similar to the "sweeping language" in Cassidy. In the stipulation for judgment, Teresa and Eric agreed to "waive[] the right to receive any property or rights whatsoever on the death of the other, unless such right[] is created or affirmed by the other under a Last Will and Testament or other written document executed after the filing date of this Stipulation for Judgment." Like the waiver in Cassidy, the language "any property or rights whatsoever on the death of the other" was not simply a general release, but clearly and broadly referred to any interest that would arise in the future upon the death of the other. As in Cassidy, the fact that the stipulation for judgment here did not mention the specific life insurance policy is not dispositive, because the language was broad enough ("any property or rights whatsoever" (italics added)) and specific enough ("on the death of the other") to cover an expectancy interest in the insurance proceeds. (Cassidy, supra, 35 Cal.3d at p. 608; Grimm v. Grimm (1945) 26 Cal.2d 173, 176 [expectancy interest can be renounced by contract of the beneficiary if it expressly or by necessary implication so provides]; Thorp, supra, 41 Cal.2d at pp. 773-774 [where property settlement agreement covers all property of parties and wife fully releases husband with respect to all other property, "such release ordinarily would cover and include her interest as the designated beneficiary on an insurance policy; but where the language is not broad enough to encompass such an expectancy . . . the wife may still take as beneficiary if the policy so provides"].)
Teresa argues this case is unlike Cassidy and Thorp because in both cases the agreements mentioned life insurance. In Cassidy, though, as we have explained, the agreement did not mention any specific policy, the only reference to life insurance was to the community property interest in any life insurance, and the court did not rely on that language in finding wife's expectancy interest had been waived, but on the broader language stating she waived any right to receive any property of the other upon the death of the other. (Cassidy, supra, 35 Cal.3d at pp. 607-609.) And while Thorp found the agreement's mention of the insurance policy clearly demonstrated the wife released an expectancy interest in the insurance policy, it did not say that was necessary to an effective waiver. Rather, it emphasized " 'general expressions or clauses in [property settlement] agreements are not to be construed as including an assignment or renunciation of expectancies and that a beneficiary therefore retains his status under an insurance policy . . . if it does not clearly appear from the agreement that in addition to the segregation of the property of the spouses it was intended to deprive either spouse of the right to take property under a will or an insurance contract of the other.' " (Thorp, supra, 41 Cal.2d at p. 774, italics added.) "Expectancies under a will or an insurance policy may be regarded as waived only when it appears that the attention of the parties was directed to such expectancies and their intention to disclaim future rights which might develop from such expectancies is made clear in their property settlement agreement." (Id. at p. 776.) Here, the broad language "any property or rights whatsoever on the death of the other" in a stipulation for judgment settling all of their property rights sufficiently directed the attention of the parties to any expectancy interest in the life insurance proceeds. (See Cassidy, supra, 35 Cal.3d at pp. 608-609.)
Teresa also relies on Life Ins. Co. of North America v. Ortiz (9th Cir. 2008) 535 F.3d 990, but that case is clearly distinguishable. In Ortiz, the Ninth Circuit reversed the trial court's decision awarding proceeds from a police officer's life insurance and accidental death policies to his wife and sons, rather than his ex-wife who was still the named beneficiary on the policies. In that case, however, the parties had entered a "Judgment on Reserved Issues" that specifically awarded " '[a]ll right, title and interest in any and all of Petitioner's retirement/pension, 457(b) plans, 401(k) plans or other deferred benefits in [ex-husband's] name' " to ex-husband, and included a preprinted notice stating that " '[i]t does not automatically cancel the rights of a spouse as beneficiary on the other spouse's life insurance policy.' " (Id. at p. 992.) There was no language in that judgment, like the stipulation for judgment here, that waived the right to "any property or rights whatsoever on the death of the other"—indeed, the language stating the judgment did not automatically cancel the rights of the spouse as a beneficiary on the other spouse's life insurance policy supported the reverse inference. (Id. at p. 993.) Moreover, the judgment in that case was on reserved issues, not a broad stipulation covering all of the property claims between the spouses like the stipulation for judgment in this case. (Ibid.; see Thorp, supra, 41 Cal.2d at pp. 773-774 [a property settlement covering all property and releasing all claims may be found to include a life insurance expectancy interest, "but where the language is not broad enough to encompass such an expectancy . . . , the wife may still take as a beneficiary if the policy so provides" (italics added)].) AIG Life Ins. Co. v. Lua (E.D.Cal. Dec. 17, 2008, No. 2:07-cv-00919-GEB-DAD) 2008 U.S. Dist. Lexis 116473, an unpublished district court decision also relied upon by Teresa, is similarly distinguishable. There, the judgment of dissolution entered between ex-spouses gave the ex-husband full interest and title to his work-sponsored savings fund and pension plan, but unlike the stipulation for judgment here, it did not waive all claims to any property or expectancy interest arising on the death of the other. (Id. at pp. *2-*4.)
We conclude, as in Cassidy, that Teresa waived her right to an expectancy in Eric's life insurance proceeds under the terms of the stipulation for judgment. C. Civil Code Section 1542
Finally, Teresa contends because there was no Civil Code section 1542 waiver, the general language in the stipulation for judgment was not effective to waive her right to collect benefits of an insurance policy of which she was not aware.
Civil Code section 1542 provides: "A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party." Teresa relies on Huddleson v. Huddleson (1986) 187 Cal.App.3d 1564 (Huddleson) to argue against her waiver of the proceeds under Civil Code section 1542 here, but that case is distinguishable for at least two reasons. First, the trial court in Huddleson determined the wife had not waived her right to benefits under Civil Code section 1542, but here the trial court came to the opposite conclusion. Noting "[i]t is a question of fact whether the releaser intended to discharge a claim," the appellate court in Huddleson affirmed the trial court's decision because there was substantial evidence from which it could have concluded the release did not bar her claim. (Id. at pp. 1572-1573.) Here, by contrast, the trial court found against Teresa on the issue of waiver. Though she argues "[s]he testified that she thought there was probably not a life insurance policy," the trial court may have found that portion of her testimony not credible. Teresa failed to demonstrate that no substantial evidence supported the trial court's implied finding she knew about the policy.
We also note, as Branden points out with respect to her ERISA argument, that Teresa failed to request a statement of decision from the trial court. The general rule is that in the absence of a statement of decision, the reviewing court must conclude that the trial court made all findings necessary to support the judgment under any theory that was before the court. (Slavin v. Borinstein (1994) 25 Cal.App.4th 713, 718.) Accordingly, we must presume the trial court found Teresa knew about Eric's life insurance policy, possibly based on her testimony that Eric received yearly statements from Chevron showing his beneficiaries, she "thought" he had a policy at the time of their divorce, and she had asked him to name her and Branden as beneficiaries in 2010. We also note that although Branden's counsel did not object, Teresa's attorney used leading questions in examining her about her knowledge of the life insurance policy at the time of the divorce, and the statement that "there was probably not a life insurance" was a question posed by her counsel to which she responded affirmatively. --------
Second, the release in Huddleson was more general than the release at issue here. There, the release provided: " 'Except as otherwise provided in this agreement, each party to this agreement does hereby release the other from any and all liabilities, debts or obligations of every kind or character heretofore or hereafter incurred and from any and all claims and demands including all claims of either party upon the other for support and maintenance as husband or as wife; it being understood that this agreement is intended to settle the rights of the parties hereto in all respects.' " (Huddleson, supra, 187 Cal.App.3d at p. 1572, fn. 5.) Here, as discussed above, the parties waived the right "to receive any property or rights whatsoever on the death of the other." That release specifically addressed any interest either party had when the other died (i.e., any expectancy interest), and was broad enough to cover the life insurance policy at issue.
In sum, we conclude the broad language of the stipulation for judgment in this case waived Teresa's right to recover the life insurance proceeds upon Eric's death. D. Request for Judicial Notice
Branden's request for judicial notice, filed June 13, 2019, is denied. The records are irrelevant to the issues raised in this appeal.
III. DISPOSITION
The judgment is affirmed. Branden is to recover costs on appeal.
/s/_________
Margulies, Acting P. J. We concur: /s/_________
Banke, J. /s/_________
Sanchez, J.