Hernandez v. Unum Group, No. 5:2019cv00037 - Document 62 (N.D. Tex. 2020)
Court Description: ORDER AND MEMORANDUM OPINION: Before the court are two motions-each from Sara Haaland f/k/a Sara Hernandez, and each directed against the two remaining parties, Elizabeth Hernandez and Jose Hernandez. One is a motion for summary judgment, and the oth er is a motion for default judgment. Dkt. Nos. 53 , 57 . Elizabeth and Jose have submitted a response to Sara's motions. Dkt. No. 59 . For the reasons below, the Court finds that Sara's motion for summary judgment should be granted and h er motion for default judgment denied as moot. The Court directs the Clerk of Court to release to Sara Haaland the funds deposited by unum Life on May 9, 2019, as well as any interest that has accrued on the account between then and now. (Ordered by Judge James Wesley Hendrix on 6/4/2020) (krr)
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Hernandez v. Unum Group Doc. 62 Case 5:19-cv-00037-H Document 62 Filed 06/04/20 Page 1 of 6 PageID 279 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF TEXAS LUBBOCKDTVISION ELIZABETH HERNANDEZ, Plaintiff, UNUM GROUP, Defendant, No. 5:19-CV-037-H SARAHERNANDEZAND JOSE HERNANDEZ, Third-Party Defendants. o ANDMEM ORANDUM OPIMON Before the court are two motions-each from saraHaaland f /k/ a sara Hemandez, and each directed against the two remaining parties, Elizabeth Hemandez and Jose Hemandez. one is a motion for summary iudgment, and the other is a motion for default judgment. Dkt. Nos. 53,57. Elizabeth and Jose have submitted a response to Sara,s motions. Dkt. No. 59. For the reasons below, the Court finds that Sara,s motion for summary judgment should be granted and her motion for default judgment denied as moot. l. Factual and Procedural Backgrounil This case concems the distribution of life insurance proceeds. Xavier Hemandez worked in the oil fields of West Texas for C&J Energy Services, Inc. Dkt. No. 51 at 2; fl Dkt. No. 54 at 10. C&J Energy obtained a group policy from Unum Life Insurance Company of North America through which Xavier received basic life and accidental death and dismemberment (AD&D) insurance as a benefit ofhis employment. Dkt. No.51 atfl2 Dockets.Justia.com Case 5:19-cv-00037-H Document 62 Filed 06/04/20 Page 2 of 6 PageID 280 on May 24,2078,xavier died in a car accident while on his way home. Dkt. No. sr at1l4; Dkt. No. 54 at 11. He was 25 years old. From August 2015 until May 201g, Xavier was married to sara Hemandez. In January 2018, Xavier designated sara as the beneficiary ofhis life insurance policy. Dkt. No. 51 at fl 3. weeks before Xavier's death, he and Sara divorced. Dkt. No. 54 at 12_17 . The divorce desee indicates that both sara and Xavier were present at the proceeding and does not mention Xavier's life insurance p olicy. Id. sara represents that, at the time ofthe divorce, she was unavr'are that she was the beneficiary under Xavier,s poliry and onry became aware once C&J Energy advised her ofher status. did not waive her rights as a Id. atrr. she maintains that she beneficiary under the policy in the divorce decree or elsewhere. Id. once Sara leamed that she was the beneficiary under Xavier's policy, she submitted a written claim to unum Life, which was received on June 29,201g. Dkt. No. 51 at 1 7. Around that time, Elizabeth and Jose Hemandez-Xavier,s parents-advised Unum Life through the then-attorney that they would also be claiming the life insurance proceeds. Id Elizabeth and Jose based thei claim on Texas Family Code 9.301, which revokes spousal $ designations in life insurance policies following a divorce. Dkt. No. 1-l at g. The proceeds at issue include $100,000 in basic life insurance, $100,000 in AD&D insurance, a $10,000 airbag benefit, and a $5,000 seatbelt benefit. Dk. No. 51 at fif 2 _5. Case 5:19-cv-00037-H Document 62 Filed 06/04/20 Page 3 of 6 PageID 281 Elizabeth sued Unum Life in Texas state court, claiming that Sara could not receive the proceeds because she had divorced Xavier before he died.l Dkt. No. 1-1 at g. Unum Life then removed the case to this Court, interpleaded El izabeth, Jose, and Sara, and deposited the insurance proceeds with the court. Dkt. Nos. l, 19. unum Life has since been dismissed from this case, leaving only Elizabeth, Jose, and Sara. Dkt. No. 52. For her part, sara filed claims against Elizabeth and Jose, seeking a declaration that she alone is entitled to the life insurance proceedings. Dkt. No. 28 at 5-6. sara now requests that the Court grant her motion for summary judgment and issue a declaration that she is entitled to receive the interpleaded funds. Dkt. No. 55 at 20. 2. Legal Standard Summary judgment is appropdate when "the movant shows that there is no genuine dispute as to any material fact arld the movant is entitled to judgment as a matter of law.,, Fed. R. Civ. P. 56(a). Movants must cite to particular parts of the record to show the absence ofa genuine dispute or explain why the cited materials do not create a genuine dispute. Fed. R. Civ. P. 56(c). The Court must consider materials cited by the parties but may also consider other materials in the record. Fed. R. Civ. P. 56(c). In evaluating a motion under Rule 56, the Court must determine whether, after considering the evidence in the light most favorable to the nonmoving party, a rational jury couldfindinfavorofthatparty. Scottv.Hatis,550U.S.372,380(2007)(citngMatsushita Elec. IndustialCo.y. ZenithRadioCorp.,475 U.S.574,586-87 (1986). "The mere existence r Elizabeth and Jose have been inconsistent participants in this litigation. When this case was first removed, they were represented by counsel. However, their attomey withdrew on Apr1122,2019. Dkt. No. 15. Since then, Elizabeth and Jose have represented themselves pro se, and their appearances have been limited to handwritten letters addressed to the Court. 3 Case 5:19-cv-00037-H Document 62 Filed 06/04/20 Page 4 of 6 PageID 282 of nme alTeged factual dispute between the parties will not defeat an otherwise proper\ supported motion for summary iudgment; the requirement is that there be no genuine tsste of mateial fac,t." Anderson t. Libeny Lobby, Inc., 477 U .5. 242, 2474g (19g6) (emphasis in original). 3. Analysis The Employee Retirement Income Security Act of 1974 @RISA) regurates the administration of employee welfare plans. A "welfare plan" is defined as a ,,plan . . . maintained by an employer . . . to the extent that such plan . . . is maintained for the purpose of providing for its participants or their beneficiaries, through the purchase inswance orotherwise... benefits in the event of ... death." 29 u.s.c. of $ 1002(1). Benefit plans must be established and maintained pursuant to a written instrument. 29 U.S.C. $ 1102(a)(1). This instrument must "speciry the basis on which payments are made to and from the plan," and administrators must manage benefits plans "in accordance with the documents andinstruments govemingthe plat.,, 29 U.S.C.0$ ll}2@)@);1l0a(aXl)(D). Therefore, if a plan's goveming documents d ect an administrator to pay benefits to a participant's designated beneficiary, they must do so. Sav. and Inv. see Kennedy t. plan Adm'rfor Dupont Plan, 555 U.S. 285, 304 (2009). Here, no party contests that the C&J Energy,s group poliry, through which Xavier obtained his life and AD&D insurance, constitutes a "welfare plan" within ERISA,s scope. Further, there is no dispute that Xavier desigrrated Sara as the beneficiary under the policy. Instead, Elizabeth and Jose argue that Sara's designation should be invalidated based on Texas Family Code $ 9.301, which provides in relevant part: (a) Ifa decree of divorce or annulment is rendered after an insured has designated the insured's spouse as a beneficiary under a life insurance policy in force at the 4 Case 5:19-cv-00037-H Document 62 Filed 06/04/20 Page 5 of 6 PageID 283 time of rendition, a provision in the policy in favor of the insured's former spouse is not effective unless: 1. the decree designates the insured,s former spouse as the beneficiary; 2. the insured redesignates the former spouse is the beneficiary after rendition of the decree; or 3. the former spouse is designated to receive the proceeds in trust for, on behalfof, or for the benefit ofa child or a dependent ofeither former spouse. Despite Texas Family Code g 9.301, ERISA's starutory text and binding precedent preclude its operation here. ERISA preempts "any and all state laws insofar as they . . relate to any employee benefit plan." 29 u.s.c. . $ 1144. In a case similar to this one, the Fifth Circuit held that this provision meant that ERISA preempted rexas Family Code $ 9.301. Manning v. Hayes, 212 F.3d 866, 870 (5th cn. 2000). rn Manning, an emproyee designated his then-wife as the beneficiary ofa life insurance policy that was covered by ERISA. Id. at869. The employee divorced his wife and, shortly afterwards, died. Id. -rhe employee's ex-wife claimed his benefits under the policy, and the employee,s estate challenged her claim based on Texas Family Code g 9.301. Id. rJltimately, the Fifth Circuit determined that ERISA preempted rexas Family Code 9.301 and, therefore, could not $ form the basis of a challenge to the ex-wife's claim. Id. at g70; rel. Breiner,532 see also Egelhof v. Ercthof ex U.S. 141,14647 (2001) (citing to Manning favorably when holding that a similar washington state statute was preempted by ERISA). Because ERISA preempts Texas Family Code 3. ! 9.301, the court must reject Elizabeth and Jose's argument. Conclusion Because Xavier designated Sara as the beneficiary under his life insurance policy, the Court concludes that sara is entitled to the proceeds. Further, no evidence in the record suggests that either Elizabeth or Jose have a right to the life insurance proceeds at issue. Thus, the Court directs the Clerk of Court to release to sara Haaland the funds deposited by 5 Case 5:19-cv-00037-H Document 62 Filed 06/04/20 unum Life on May 9, 2019, as well Page 6 of 6 PageID 284 as any interest that has accrued on the account between then and now. Soorderedon lune 4 ,zozo. WESLEYHENDRIX STATES DISTRICT JUDGE 6
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