HETTA MOORE V CLARK A MOOREAnnotate this Case
STATE OF MICHIGAN
COURT OF APPEALS
April 28, 2005
CLARKE A. MOORE, Deceased, by the ESTATE
of CLARKE A. MOORE,
Macomb Circuit Court
LC No. 98-003538-DO
Official Reported Version
Before: Saad, P.J., and Fitzgerald and Smolenski, JJ.
The deceased defendant, by his estate, appeals by delayed leave granted the trial court's
order that denied defendant's motion for postjudgment relief. We reverse and remand.
I. NATURE OF THE CASE
We address the question of who is entitled to the proceeds of a life insurance policy and a
pension death benefit, the decedent's estate or decedent's former wife. Here, the decedent named
plaintiff, his former spouse, as the beneficiary, but after the divorce he died without changing the
beneficiary designation. The decedent and his former wife had entered into a consent judgment
of divorce that provided that each party's interests in the other party's life insurance policies1 was
terminated by the judgment of divorce. The estate of Clarke A. Moore maintains that plaintiff,
Hetta Moore, waived any right to retain the funds paid to her as the named beneficiary by
agreeing to the entry of the consent judgment of divorce. On the other hand, plaintiff maintains
that the Employee Retirement Income Security Act (ERISA)2 preempts the Michigan statute3
that mandates that all judgments of divorce contain language disposing of each party's interest in
The waiver also included pensions and other similar retirement plans.
29 USC 1001 et seq.
the other's retirement and pension plans, and that this preemption negates any claimed waiver.
Accordingly, plaintiff argues that she is entitled to retain the funds as the named beneficiary.
Though the United States Supreme Court has held that ERISA preempts state statutes
that relate to benefits plans governed by ERISA, this case involves a question of the waiver of
the rights to retain funds, not the question of ERISA preemption. Here, the question is not
whether a plan administrator should be required to determine whether someone other than the
named beneficiary is entitled to the proceeds of an ERISA plan, but whether ERISA mandates
that a named beneficiary who has expressly waived her right to those proceeds in a consent
judgment of divorce should be allowed to retain those funds. We hold that a named beneficiary
to an ERISA benefits plan who has expressly waived an interest in that plan in a consent
judgment of divorce is not entitled to retain those benefits.
II. FACTS AND PROCEDURAL HISTORY
Plaintiff and the decedent were divorced on April 12, 1999. The judgment of divorce,
signed by both parties, contained the following provisions concerning life insurance and pension
and annuity benefits:
IT IS FURTHER ORDERED AND ADJUDGED that any right of either
party in any policy or contract of life, endowment or annuity insurance of the
other, as beneficiary are hereby extinguished unless specifically preserved by this
* * *
IT IS FURTHER ORDERED AND ADJUDGED that any right of either
A. Any vested pension or annuity or retirement benefits,
B. Any accumulated contributions in any pension, annuity, or retirement
C. Any right or contingent right in and to unvested pension, annuity, or
of the other party is hereby extinguished unless specifically preserved by this
Judgment or a Qualified Domestic Relations Order. The parties hereto will enter
into a Qualified Domestic Relations Order as to Defendant, Clarke A. Moore,
Jr.'s, pension through his employment. [Emphasis added.]
During the marriage, the decedent designated plaintiff as the beneficiary of an employment life
insurance policy worth $60,000 and a pension death benefit worth $72,000. Following the death
of the decedent on February 17, 2003, his estate sought to receive these proceeds, but learned
from the plan administrator that these funds had already been disbursed to the named
beneficiary. Relying on the waiver language in the divorce judgment, defendant moved for
postjudgment relief in the divorce case to invoke the trial court's jurisdiction to enforce its
judgment of divorce and asked the trial court to order plaintiff to turn the proceeds over to the
estate. The trial court ruled that plaintiff was entitled to the proceeds because she was the named
beneficiary and because the waiver language was invalid, as being preempted by ERISA.
Defendant argues that the trial court erroneously denied the motion for payment of the
funds because the consent judgment of divorce clearly terminated any interest plaintiff had in the
decedent's pension death benefit and life insurance policy.
A. ERISA and Preemption
In Egelhoff v Egelhoff, 532 US 141, 148; 121 S Ct 1322; 149 L Ed 2d 264 (2001), the
United States Supreme Court held that an ERISA plan administrator must pay plan benefits, such
as the proceeds at issue here, to the named beneficiary only.5 However, in MacInnes v
Because MacInnes v MacInnes, 260 Mich App 280; 677 NW2d 889 (2004), is controlling, we
quote here the "waiver" language at issue in MacInnes to compare that language with the waiver
provision quoted above:
It is further ordered and adjudged, that except as otherwise provided, all
rights of either party in and to the proceeds of any policy or contract of life
insurance, endowment, or annuity upon the life of the other in which said party
was named or designated as beneficiary, or to which said party became entitled by
assignment or change of beneficiary during the marriage or in anticipation
thereof, whether such contract or policy was heretofore or shall hereafter be
written or become effective, shall hereupon become and be payable to the estate
of the owner of said policy, or such named beneficiary as shall hereafter be
affirmatively designated. [Id. at 287-288.]
The Retirement Equity Act of 1984 provides an exception to this restriction. A qualified
domestic relations order (QDRO) "creates or recognizes the existence of an alternative payee's
right to, or assigns to an alternate payee the right to, receive all or a portion of the benefits
payable with respect to a participant under the plan . . . ." 29 USC 1056(d)(3)(B)(i)(I). Thus, a
QDRO is exempted from ERISA's preemption provisions and may be used to distribute funds to
a payee who was not a named beneficiary. 29 USC 1144(b)(7). Here, plaintiff concedes that no
QDRO was filed with respect to the proceeds at issue.
MacInnes, 260 Mich App 280, 286-290; 677 NW2d 889 (2004), this Court determined that
Egelhoff was inapposite in a case with a fact pattern nearly identical to that in this case. The
ultimate issue in MacInnes was whether the named beneficiary had waived any right under
ERISA to funds payable from ERISA benefit plans.
Egelhoff involved a state of Washington statute that provided that a judgment of divorce
automatically revokes a named beneficiary designation in all nonprobate assets, including life
insurance policies and retirement and pension plans. Egelhoff, supra at 144. By contrast, MCL
552.101 does not revoke such designations by operation of law but mandates that a trial court's
judgment of divorce contain some language that disposes of the parties' rights to such benefits.
Here, unlike in Egelhoff, defendant does not argue that the plan administrator should have paid
the funds to someone other than the named beneficiary; rather, like in MacInnes, defendant
argues that the named beneficiary, having received the funds, was not entitled to retain them
because she had waived that right in a consent judgment of divorce. Accordingly, this case does
not implicate ERISA's preemption provisions, but, instead, is governed by principles of waiver
and the issue is: Did plaintiff waive her right to retain the funds paid to her as named
beneficiary? See MacInnes, supra.
Plaintiff is not entitled to the proceeds from the insurance policy and the pension death
benefits because she expressly waived any entitlement in the divorce judgment. MacInnes,
supra at 286-290. The facts of this case are nearly identical6 to those in MacInnes. In MacInnes,
this Court stated, in language equally applicable here, "The circumstances of this case convince
us that the issue presented is most appropriately resolved under principles of waiver rather than
preemption." MacInnes, supra at 286.
As our Court noted in MacInnes, the federal courts are split on the question whether
ERISA preempts an attempt to explicitly waive a named beneficiary's rights to an interest in an
ERISA-regulated benefits plan. Id. The United States Court of Appeals for the Sixth Circuit has
held that a common-law waiver cannot override the designation of a named beneficiary under
ERISA. Metropolitan Life Ins Co v Pressley, 82 F3d 126, 129-130 (CA 6, 1996); see also
MacInnes, supra at 286-287 n 4. The trial court here relied on Pressley to rule in favor of
plaintiff.7 However, Pressley represents the minority view on this issue. MacInnes, supra at 286
n 4. The majority and better view holds that a person can explicitly waive his rights to ERISA
plan benefits even where he may be the named beneficiary. Id. at 286, citing Melton v Melton,
324 F3d 941 (CA 7, 2003). With respect to questions of federal law, this Court is not bound by
precedent from federal courts except the United States Supreme Court. Cowles v Bank West, 263
Mich App 213, 233; 687 NW2d 603 (2004). However, where the United States Supreme Court
See n 3.
We note that the trial court issued its ruling on August 6, 2003, several months before our
Court's release of MacInnes on January 8, 2004.
has not resolved an issue, a state court may choose among conflicting lower federal court
decisions, as we do, to adopt the rule it determines to be most appropriate. MacInnes, supra at
286 n 3, citing Schueler v Weintrob, 360 Mich 621, 634; 105 NW2d 42 (1960). This Court
expressly repudiated the minority view that waiver is not permitted by ERISA and, instead,
adopted the majority view that allows waiver. MacInnes, supra at 286.
To determine whether a waiver is valid, our courts have asked if the waiver of ERISAregulated benefits is explicit, voluntary, and made in good faith. MacInnes, supra at 287, citing
Melton, supra at 945-946. As our Court in MacInnes said, quoting Melton, "'Essentially, when
we are evaluating whether the waiver is effective in a given case, we are more concerned with
whether a reasonable person would have understood that she was waiving her interest in the
proceeds or benefits in question than with any magic language contained in the waiver itself.'"8
Michigan courts define "waiver" as the voluntary and intentional relinquishment of a known
right. MacInnes, supra at 287.
Plaintiff does not argue that she did not knowingly and voluntarily agree to the waiver
language contained in the judgment of divorce. Instead, she argues, disingenuously in our view,
that this language is too vague to be considered a waiver. However, in MacInnes, this Court held
that nearly identical language9 explicitly demonstrated that each party intended to waive any
interest in the other's ERISA-regulated policies. Id. at 288. Here, plaintiff's attorney prepared
the divorce judgment, and plaintiff signed it. The language in the divorce judgment is plainly a
waiver of plaintiff's rights to the decedent's insurance proceeds and pension death benefits.
Therefore, we hold that the trial court should have ordered plaintiff to turn over the proceeds of
decedent's insurance policy and pension death benefits to defendant.
Reversed and remanded for entry of judgment in favor of defendant consistent with our
opinion.10 We do not retain jurisdiction.
/s/ Henry William Saad
/s/ E. Thomas Fitzgerald
/s/ Michael R. Smolenski
MacInnes, supra at 287, quoting Melton, supra at 945-946.
The language at issue here differs in form, but not substance, from the language in MacInnes.
We emphasize that "waiver" will be found where, as here, a reasonable person would have
understood that she was waiving her interest in the proceeds or benefits in question. In other
words, there is no "magic" language required for a finding of waiver.
In light of our resolution of the above issue, we need not address the other issues that
defendant raised on appeal.