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Southern Electrical Retirement Fund v. Gruel

United States District Court, M.D. Tennessee, Nashville Division

July 11, 2019



          Barbara D. Holmes United States Magistrate Judge.

         To: Honorable Eli J. Richardson, United States District Judge

         Pending are various dispositive motions, all of which seek a determination by declaratory judgment as to the proper beneficiary of the pre-retirement death benefits of Donald Lawhorne, Jr. The cross motions were referred to the undersigned Magistrate Judge for report and recommendation. See Order at Docket No. 32. For the reasons stated below, the undersigned respectfully recommends that the motion for judgment on the pleadings of Christiana Gruel (Docket No. 15) be DENIED; the motion of Southern Electrical Retirement Fund (the “Fund”) for judgment on the record (Docket No. 18) be GRANTED; and, the motion of Camryn Elizabeth Lawhorne for judgment on the administrative record and/or on the pleadings (Docket No. 24) be GRANTED. Further recommendation is made that judgment be entered declaring the preretirement death benefits of decedent Donald Lawhorne, Jr. payable to Camryn Elizabeth Lawhorne and directing payment.

         I. Background

         a. Proposed Findings of Fact[2]

         This is an interpleader action brought by the plaintiff, Southern Electrical Retirement Fund (the “Fund”), under Section 1332(a)(3) of the Employee Retirement Income Security Act, 29 U.S.C. §§ 1001, et seq. (“ERISA”), for a determination of which defendant, Christiana Gruel or Camyrn Elizabeth Lawhorne, is entitled to pre-retirement death benefits owing because of the death of plan participant, Donald Lawhorne, Jr. The Fund also seeks a declaratory judgment under Rule 57.

         The facts are largely undisputed.[3] Donald Lawhorne, Jr. was a participant in the Southern Electrical Retirement Fund. (Docket No. 1 ¶ 6.) The governing documents are an Amended and Restated Agreement and Declaration of Trust Creating Southern Electrical Retirement Fund (AR at 1-47) and an amended and restated Plan of Benefits (effective January 1, 2015) (AR at 48-96).

         Section 4.6 of the Plan directs:

In the event of the death of an Employee who has not yet commenced receipt of a Normal, Early or Disability Retirement benefit, his surviving spouse, if any, shall be eligible to receive a "Pre-Retirement Death" benefit. In the event the Employee is not survived by a spouse, his beneficiary, as designated in accordance with Section 6.2 hereof, shall be eligible to receive such benefit. Such benefit shall become payable immediately upon the death of the Employee, but contingent upon receipt of written application therefor as prescribed by the Trustees.

AR at 65. Section 6.2 of the Plan, which governs designation of beneficiaries, provides (in pertinent part) as follows:

Each Employee or former Employee may designate a primary beneficiary or beneficiaries and a contingent beneficiary or beneficiaries to receive any benefit that may become payable under this Plan by reason of the Employee's death, but only when such payment is not otherwise payable to the Participant's surviving spouse in accordance with the provisions of Sections 5.1 and 5.2 hereof. Such designation shall be made upon forms furnished by the Trustees, and may at any time and from time to time be changed or revoked without notice to the beneficiary or beneficiaries and shall not be effective unless and until filed with the Trustees. If any Employee or former Employee shall fail to designate a beneficiary or beneficiaries, or if all those so designated predecease him, then the Employee shall be deemed to have designated the following as his beneficiaries and contingent beneficiaries with priority in the order named: (i) his or her widow or widower, as the case may be; (ii) his children and children of deceased children, per stirpes; (iii) his parents; (iv) his brothers and sisters and nieces and nephews who are children of deceased brothers and sisters, per stirpes; and (v) his estate.

AR at 82.

         In February of 2015, Lawhorne executed a Designation of Beneficiary Form, which listed as the primary beneficiary “Christy Bender-Christina [sic]” with a relationship description of “Girlfriend” and a designated contingent beneficiary of “Camryn Lawhorne” with a relationship description of “Daughter”. (AR at 97.) No. change in beneficiary designation was made by Lawhorne prior to his death on January 10, 2018.

         According to the Indiana death certificate, Lawhorne died on that date from a sudden traumatic brain injury caused by a self-inflicted gunshot. (AR 98.) At the time of his death, Lawhorne was at his then “girlfriend's residence.” (Id.) There is no dispute that: (i) the residence where Lawhorne died was not the residence of Christiana Gruel; (ii) at the time of his death, Lawhorne and Ms. Gruel were no longer in a romantic relationship; and, (iii) at the time of Lawhorne's death, Ms. Gruel was married to someone else.

         Following Lawhorne's death, Ms. Gruel made a claim for death benefits under his pension plan. (AR 99.) On the claim form, Ms. Gruel refers to herself as “Christina M. Gruel” and describes her relationship to Lawhorne as “Ex-Girlfriend.” (Id.) Lawhorne's family contested payment of the benefits to Ms. Gruel. (AR 100.) By correspondence dated April 4, 2018, the plan administrator notified Ms. Gruel on behalf of the Fund that her application for benefits was denied on the following basis:

A beneficiary designation signed in February 2015 by participant Lawhorn[e] identified the beneficiary as “Christy Bender-Christina Girlfriend”. Participant Lawhorn[e] died from a self-infl[i]cted gunshot wound on 1/10/18 at his “Girlfriend's Residence”. This is from the death certificate.
It is evidence, “Christina Girlfriend” is not the same girlfriend at whose residence participant Lawhorn[e] died, as “Christy Bender-Christina Girlfriend” and participant Lawhorn[e] parted ways several years ago. You married someone else in June 2017 and are now known by your married name, Christina Gruel. It is in this name that you applied for the benefit as “Ex-Girlfriend[“].
The beneficiary designation card signed by Lawhorn[e] did not suggest the beneficiary was to be an ex-girlfriend. We have determined administratively that Lawhorn[e's] intended beneficiary was “Christina Girlfriend, ” a status which changed when you and participant Lawhorn[e] parted ways and, more particularly, when you married someone else. A review of circumstances existing at the time the designation of beneficiary was signed in February 2015, and the words used are given their ordinary meaning. Simply stated, this means the intention of participant Lawhorn[e] was to designate you-his girlfriend at the time in February 2015-as beneficiary, but with an awareness that if you[r] status as girlfriend changed, you would not be the beneficiary.
The words “Christina Girlfriend” are not descriptive of a person, but the status of a person. The status is a contingency which [c]an change with circumstances. For example, here the status did change when you married someone else. The term girlfriend is not an unusual word to use in describing the status of a person, and it is not an inept word. The meaning is clear and refers to a condition or circumstance that can be altered. The term suggests participa[nt] Lawhorn[e] intended you to be the beneficiary so long as you were his girlfriend, but not after that status changed.
Here, you-as Christina Gruel-lost your status as “girlfriend” at the latest, when you married. The application for the death benefit describing your relationship to participant Lawhorn[e] as “Ex-Girlfriend” is consistent with this changed status. As a result, your application is denied.

AR 101-102. Ms. Gruel timely elected to appeal the plan administrator's determination. (AR 103-104.) The Fund's Investment Review Committee of the Board of Trustees (the “IRC”) considered the appeal in a June 1, 2018 meeting and took the following action:

After careful consideration of the letters, emails, and a thorough discussion of the situation, the committee discussion of the situation, the committee determined to affirm the construction and interpretation of the plan, and any facts relevant to construction and interpretation of the plan as had been made by the administrative staff as when the administrative staff initially denied the person's claim. However, the committee determined not to grant or deny the person's appeal, but rather, instructed that a declaratory action be filed to obtain a ...

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