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Patterson v. Chrysler Group, LLC

United States Court of Appeals, Sixth Circuit

January 11, 2017

Ardella Patterson, Plaintiff-Appellee,
v.
Chrysler Group, LLC, nka FCA U.S. LLC; Chrysler LLC UAW Pension Plan, nka FCA U.S. LLC-UAW Pension Plan, Defendants-Appellants.

          Argued: October 18, 2016

         Appeal from the United States District Court for the Eastern District of Michigan at Detroit. No. 2:15-cv-10563-Arthur J. Tarnow, District Judge.

          ARGUED: William E. Altman, THE MURRAY LAW GROUP, P.C., Bingham Farms, Michigan, for Appellants. Jack M. Schultz, JACK M. SCHULTZ, P.C., Bingham Farms, Michigan, for Appellee.

          ON BRIEF: William E. Altman, THE MURRAY LAW GROUP, P.C., Bingham Farms, Michigan, for Appellants. Jack M. Schultz, JACK M. SCHULTZ, P.C., Bingham Farms, Michigan, for Appellee.

          Before: BOGGS, SUHRHEINRICH, and McKEAGUE, Circuit Judges.

          OPINION

          SUHRHEINRICH, Circuit Judge.

         In this ERISA action brought pursuant to 29 U.S.C. § 1132, [1] Defendants-Appellants, Chrysler Group, LLC, et al. (Defendants), appeal the judgment of the district court ordering them to pay Plaintiff-Appellee, Ardella Patterson (Plaintiff), pension and surviving spousal benefits. We reverse, finding Plaintiff's claim barred by the statute of limitations.

         I. BACKGROUND

         Plaintiff and Henry Lee Patterson wed on February 15, 1987. They divorced on September 27, 1993. The Judgment of Divorce declared that Plaintiff was entitled to one-half of the pension benefits Henry had accrued during his marriage to Plaintiff, with full rights of survivorship, and that these benefits were due to Plaintiff when they became payable to Henry. It further stated that Henry was forbidden from choosing a pension payment option that would deprive Plaintiff of these benefits.[2] Henry worked for the Chrysler Corporation for 334 months, from June 3, 1965 to January 29, 1992, and began receiving retirement benefits under the Chrysler - UAW Pension Plan (the Plan)[3] on April 1, 1994, in the form of a "Lifetime Annuity Without Surviving Spouse" option. Thus, Henry violated the Judgment of Divorce by selecting an option that did not provide Plaintiff with the benefits awarded to her.

         Attempting to override Henry's choice of benefits under the Plan, Plaintiff's first attorney, Terry Williams, submitted the Judgment of Divorce to the Plan administrator on December 14, 1994. On January 18, 1995, a Plan representative called Williams and informed him that the Judgment of Divorce lacked the clerical information required by 29 U.S.C. § 1056(d)(3)(C)[4] to enable the Plan to qualify it as a "qualified domestic relations order" under 29 U.S.C. § 1056(d)(3)(B)(i), and, therefore, the Judgment of Divorce could not override ERISA's anti-alienation provision, 29 U.S.C. § 1056(d)(1).[5] Consequently, the Plan denied Plaintiff's request for benefits. At that time, the Plan also sent a letter conveying the same information, and attached a sample qualified domestic-relations order spelling out the required clerical information.

         Plaintiff did not communicate with the Plan again for almost thirteen years, until after Henry had died. Henry died on November 23, 2007. Plaintiff called the Plan on January 4, 2008. During the call Plaintiff (1) told the Plan about the Judgment of Divorce and how it ordered benefits to be paid to her once Henry had retired; (2) said that she would be mailing in the Judgment of Divorce; and (3) admitted to not having a domestic-relations order that satisfied the ERISA clerical requirements. On February 1, 2008, Plaintiff faxed the Plan a copy of the Judgment of Divorce. On February 28, 2008, the Plan sent Plaintiff a letter denying her benefits request, on the grounds that the Judgment of Divorce did not have the necessary clerical information, and because "the participant [Henry] does not have a remaining benefit to be assigned to an alternate payee." R. 11-2 at 201.

          Between 2008 and 2014, Plaintiff, both on her own and with the help of two other attorneys, attempted four more times to have the Plan qualify the Judgment of Divorce, and each time it was denied. In addition to explaining that the Judgment of Divorce did not meet the requirements of 29 U.S.C. § 1056(d)(3)(C), and that there were no remaining benefits to be paid, the Plan also denied benefits on the basis that changing the type of benefit at that time to one with a surviving spouse option was impermissible under the rules of the plan. See 29 U.S.C. § 1056(d)(3)(D)(i) (disqualifying domestic-relations orders which "require a plan to provide any type or form of benefit, or any option, not otherwise provided under the plan.").

         On February 28, 2014, to remedy the original clerical deficiencies in the Judgment of Divorce, Plaintiff, through the efforts of her fourth and current attorney, Jack Schultz, obtained from the Wayne County Circuit Court a nunc pro tunc order (the Nunc Pro Tunc Order). The Nunc Pro Tunc Order corrected the Judgment of Divorce by adding the missing "clerical" information required by 29 U.S.C. § 1056(d)(3)(C).

         Mr. Schultz submitted the Nunc Pro Tunc Order to the Plan on March 3, 2014. On June 24, 2014, the Plan declined Plaintiff's request for benefits by letter, stating that it had determined that the Nunc Pro Tunc Order was not a qualified domestic-relations order because "[d]ue to the optional form of payment chosen by [Henry] at the time of [Henry's] commencement, there is no survivor benefit. No further payments can be made . . . ." R. 11 at 53.

         On February 12, 2015, Plaintiff filed her complaint in the United States District Court for the Eastern District of Michigan, Southern Division. Plaintiff asserted two claims under ERISA: (1) a claim for recovery of pension benefits and (2) a claim for breach of fiduciary duty. Plaintiff later dropped the second claim, and the district court held it waived. Defendants filed a motion for summary judgment, arguing that (1) Plaintiff's claim is barred by the statute of limitations, and (2) the Nunc Pro Tunc Order is not a qualified domestic-relations order because: (a) it provides for a change in the form of benefits not otherwise provided under the Plan, in violation of 29 U.S.C. § 1056(d)(3)(D)(i); and (b) it requires the Plan to pay increased benefits, in violation of 29 U.S.C. § 1056(d)(3)(D)(ii).

         On February 17, 2016, the district court granted summary judgment in favor of Plaintiff. In its order, the district court held that: (1) the proper statute of limitations, borrowed from state law, is six years; (2) to the extent that Plaintiff's claim is based on the Plan's denial of benefits based on the Judgment of Divorce, the claim is time-barred because the statute of limitations began to run on February 28, 2008; (3) however, to the extent Plaintiff's claim is based on the Plan's June 24, 2014, denial of benefits based on the Nunc Pro Tunc Order, Plaintiff's claim is timely; and (4) because the Nunc Pro Tunc Order relates back to September 27, 1993, the Plan's compliance with that order does not (a) require the Plan to ...


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