Succession of Meyerer

Citations: 146 So. 3d 574; 2013 La.App. 1 Cir. 1015; 2014 La. App. LEXIS 710; 2014 WL 3537040Docket: No. 2013 CA 1015

Court: Louisiana Court of Appeal; March 19, 2014; Louisiana; State Appellate Court

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Lori and Lisa Meyerer appealed regarding the distribution of their deceased father William Albert Meyerer’s John Deere Savings and Investment Plan (SIP) and Pension Plan. William, married to Teresa Meyerer since June 8, 1974, at the time of his death on June 29, 2008, had his SIP account of $68,378.00 and monthly pension benefits of $242.68 paid to Teresa as beneficiary. Lori and Lisa, from a previous marriage, filed a petition on June 25, 2010, claiming that the retirement accounts should be considered separate property due to a separation of property agreement and that the lack of designated beneficiaries meant the funds belonged to them as legatees. Teresa responded with exceptions of prescription, no cause of action, and no right of action. Following a hearing, the district court denied these exceptions and allowed Lori and Lisa to amend their petition for clarity. On December 17, 2010, they filed an amended petition seeking restitution, enforcement of the separation agreement, and an accounting of funds from Teresa. A motion for partial summary judgment was filed by Lori and Lisa on March 4, 2011, to compel Teresa to account for the funds, citing her refusal to waive her interest. Teresa filed an answer with exceptions and affirmative defenses, including claims of ERISA preemption, the validity of their marriage at William's death, that he had not changed beneficiaries, and the absence of a Qualified Domestic Relations Order (QDRO). Teresa also made a third-party claim against Deere & Company for potential liability. The case was initially removed to federal court but was later remanded to state court, resulting in Deere & Company's dismissal. On March 23, 2012, Teresa sought partial summary judgment to be recognized as the sole beneficiary of the SIP and Pension Plan and to dismiss the plaintiffs’ claims.

The district court ruled against Lori and Lisa Meyerer’s motion for partial summary judgment while granting Teresa Meyerer's motion on the same. Consequently, it dismissed Lori and Lisa's claims regarding amounts from Mr. Meyerer’s John Deere plans and ordered the Clerk of Court to release $4,251.15 to Mr. Meyerer’s succession for half of the home’s maintenance and sale expenses. Lori and Lisa appealed, asserting two errors: 

1. The court incorrectly determined that Teresa was not bound by a provision in a Separation of Property Agreement, which required her to transfer her interest in employee benefits from Mr. Meyerer’s former employer, John Deere. This was erroneously concluded to be preempted by the Employee Retirement Income Security Act (ERISA).
   
2. The court erred by not awarding attorney fees stipulated in the Separation of Property Agreement, which Teresa allegedly breached.

The Separation of Property Agreement included clauses where Teresa agreed to transfer any ownership interest in the John Deere plans in exchange for property and debt assumptions from William Meyerer. It specified that obligations were personal and that both parties were to facilitate property transfers via necessary documents. Notably, no additional paperwork was executed by either Mr. or Teresa Meyerer regarding the John Deere plans, including beneficiary designations or a Qualified Domestic Relations Order (QDRO).

Additionally, the John Deere Savings and Investment Plan outlined that a participant could designate beneficiaries, which required proper filing and could only be altered during the participant's lifetime. If a participant had a surviving spouse, that spouse was automatically the beneficiary unless they consented otherwise, making any designation without consent ineffective.

If a Participant fails to designate a beneficiary, or if all designated beneficiaries die before the Participant or before complete distribution of benefits, the Plan Administrator has the discretion to distribute the benefits to the surviving spouse, relatives by blood, adoption, or marriage, or the estate of the last deceased beneficiary. A deceased Participant's beneficiary cannot designate a new beneficiary. The surviving spouse's consent for any designation must be written, acknowledge the effect, and be notarized, unless the Plan Administrator determines that consent cannot be obtained due to circumstances like the spouse's unavailability.

Lori and Lisa Meyerer assert that Teresa Meyerer breached a community partition agreement by not signing a waiver to allow the distribution of the John Deere SIP proceeds to them after Mr. Meyerer’s death. They claim she also breached the contract by not transferring the SIP money to them after receiving it. The separation of property agreement states that Teresa agreed to transfer her interest in the SIP to Mr. Meyerer, but this obligation was personal to him, making it unenforceable by Lori and Lisa after his death since he did not enforce it during his lifetime.

The John Deere Pension Plan specifies that for married employees who retire and have a surviving spouse, a monthly survivor benefit is payable to the spouse after the employee's death. Additionally, the plan allows a surviving spouse of a former employee to receive a preretirement survivor benefit under certain conditions, which include a minimum marriage duration and eligibility criteria. The pension plan does not allow the transfer of survivor benefits to another person.

Lori and Lisa Meyerer argue that Teresa Meyerer has violated her contractual obligation to Mr. Meyerer by not transferring to his estate the monthly payments she receives from the John Deere Pension Plan. They reference the case of Estate of Kensinger v. URL Pharma, Inc., which involved a divorce where the ex-wife waived her rights to her husband's 401(k) plan but remained the beneficiary at his death. The court allowed the estate to sue her for breach of contract, emphasizing that such suits do not interfere with ERISA's goals regarding timely benefit payments. Unlike the Kensinger case, the Meyerers were never divorced and did not complete the necessary steps to partition their community property concerning the pension plans. 

The excerpt also discusses Gorham v. Gorham, where a court upheld a surviving spouse's claim to retirement accounts despite an agreement about community property, as the parties never finalized their divorce or a Qualified Domestic Relations Order (QDRO) for the pension plan. The court ruled that prior agreements did not preclude the surviving spouse's claim to ownership of the accounts, noting the preemption of Louisiana community property law by ERISA, with exceptions for claims established by a QDRO.

The court upheld the trial court's decision favoring Mrs. Gorham, dismissing the co-executors’ claims to IRA funds, as Mrs. Gorham's statements did not constitute a judicial confession of ownership by the beneficiary. The court emphasized that Mrs. Gorham and her spouse were never divorced and that no Qualified Domestic Relations Order (QDRO) was established. Similarly, in the case of Mr. and Teresa Meyerer, the couple was not divorced, and necessary community property separation paperwork regarding the John Deere plans was not executed. Consequently, the court found no error in denying Lori and Lisa Meyeyer’s motion for partial summary judgment and granted Teresa Meyeyer’s motion, recognizing her as the sole beneficiary of Mr. Meyerer’s John Deere Savings and Investment Plan (SIP) and Pension Plan. The court also denied Lori and Lisa Meyeyer’s request for attorney fees related to their claim that Teresa breached her contractual duty. The judgment favoring Teresa Meyeyer was affirmed, with costs assigned to Lori and Lisa Meyeyer. Additionally, Lori and Lisa withdrew their claim that the trial court erred by striking their affidavit while allowing Teresa’s affidavit on the same subject. The Separation of Property Agreement mistakenly referred to the John Deere Pension Plan as a 401K, while clarifying that the John Deere SIP is the actual 401K account.