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Premera Blue Cross v. Winz

United States District Court, W.D. Washington, Seattle

April 30, 2018

PREMERA BLUE CROSS, Interpleader Plaintiff,



         Interpleader Defendants Mary Winz (“Winz”) and Tracie Lesan (“Lesan”) move pursuant to Rule 56 of the Federal Rules of Civil Procedure for an order of judgment directing Premera Blue Cross (“Premera”), to pay them the interpleaded funds pursuant to the most recent beneficiary designations governing two employee benefit plans (a pension equity plan (“PEP”) and 401(k) savings plan (“401(k)”)) (collectively “the Plans”) owned by Gerald Lesan (“Gerald”), who is now deceased. Co-Interpleader Defendant, Joyce Arlene Nelson (“Nelson”), who was formerly married to Gerald, claims she is entitled to the benefits from both Plans.[1] Dkt. 27.

         Winz and Lesan, Gerald's mother and sister respectively, contend that Nelson is not entitled to the funds because the Plans are governed by the Employee Retirement Income Security Act of 1974 (ERISA) and the Retirement Equity Act of 1984 (REA), which preempt state law and the Plan benefits must be distributed according to the beneficiary designations at the time of Gerald's death. In addition, they argue that Nelson agreed in her divorce from Gerald to accept not more than 50% of the benefits, existing at the time of the divorce, in the 401(k).

         Nelson contends that, in addition to the 50% share of the 401(k) benefits she has received, she is entitled to all remaining 401(k) benefits and all of the PEP benefits. She argues that she is equitably entitled to these additional amounts because Gerald violated discovery rules and hid the existence of the PEP from her during their divorce. Dkt. 31. Nelson proposes that this Court should rule on the division of the retirement benefits “despite ERISA, under Washington law” or alternatively, “certify the issue to the Snohomish County Superior Court.” Id.

         Having reviewed the memoranda, declarations, and exhibits submitted by the parties, the Court finds that summary judgment in favor of Winz and Lesan is appropriate.


         Summary judgment is appropriate when, viewing the facts in the light most favorable to the nonmoving party, there is no genuine dispute as to any material fact that would preclude the entry of judgment as a matter of law. L.A. Printex Indus., Inc. v. Aeropostale, Inc., 676 F.3d 841, 846 (9th Cir.2012). The party seeking summary dismissal of the case “bears the initial responsibility of informing the district court of the basis for its motion” (Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)) and identifying those portions of the materials in the record that show the absence of a genuine issue of material fact (Fed. R. Civ. P. 56(c)(1)).

         Once the moving party has satisfied its burden, it is entitled to summary judgment if the non-moving party fails to identify specific factual disputes that must be resolved at trial. Hexcel Corp. v. Ineos Polymers, Inc., 681 F.3d 1055, 1059 (9th Cir.2012).


         Gerald and Nelson were married on May 5, 1997. Dkt. 28, Declaration of Hans P. Juhl, ¶ 4. During their marriage, Gerald was employed by Premera. Dkt. 29, Declaration of Robert Moe, ¶ 2. While employed at Premera, Gerald participated in Premera's PEP and 401(k) plans, which are employee pension benefit plans as defined by Section 3(2)(A) of ERISA. Id. ¶ 3-7; Dkt. 30, Affidavit of Daniel W. Nason, ¶ 1. On March 13, 2003, Gerald designated Nelson as the primary beneficiary of his PEP and 401(k) plan benefits. Dkt. 29, Moe Decl. ¶ 5-7. He designated his mother Winz, as the secondary beneficiary of his PEP and 401(k) plan benefits. Id.; see also, Exhibit D (designation form for 401(k) plan).

         On December 12, 2016, Snohomish County Superior Court issued a Final Divorce Order and Dissolution Decree between Nelson and Gerald. Dkt. 28, Juhl Decl. ¶ 5. The parties entered their final dissolution pleadings by agreement. Id. The agreement provided that Nelson was entitled to the lump sum value of 50% of Gerald's 401(k) benefits as of November 30, 2016 (the date of the Decree). Id., Exhibit A at 2. The lump sum was to be payable when the plan administrators received a Qualified Domestic Relations Order (“QDRO”), as defined in Section 206(d) of ERISA and Section 414(p) of the Internal Revenue Code. Dkt. 29, Moe Decl. ¶ 6. The divorce decree also awarded to Gerald all employment benefits “including but not limited to any 401k, pension or other retirement benefit . . . except as otherwise listed….” Id., Exhibit A at 2. Nelson was awarded all of her own employment benefits, including “but not limited to any 401k, pension or other retirement benefit….” Id.

         At the time of the parties' divorce, Gerald's 401(k) was worth $180, 000.00 and the PEP was valued at approximately $125, 000.00. Dkt. 32, Declaration of Joyce Lesan, p. 2. During the divorce proceedings, Gerald responded to interrogatories and requests for production, in which he was asked if he had “any interest of any kind in any retirement or pension fund, ” to which he responded “yes, ” and identified the 401(k) fund with a balance of $180, 000.00. Id., Exhibit 3.

         Nelson states that had she “been aware at all that the PEP existed at the time we negotiated and finalized our divorce by agreement, I would most certainly have claimed 50% of the PEP plan.” Had the PEP plan been revealed to her attorney and herself, Nelson asserts that the asset would have been specifically included in the “50/50 division of other assets” and she would not have allowed the inclusion of the “generic language…awarding to each of us our employment benefits ‘except as otherwise listed.'” Id., Exhibit 1 at 2; Dkt. 33, Declaration of Lara Dethlefs.

         As a result of the dissolution decree, Gerald's designation of Nelson as the primary beneficiary of his PEP and 401(k) plan benefits was automatically revoked, pursuant to Section 8.5(f) of the PEP and Section 15.1(e) of the 401(k). Dkt. 29, Moe Decl. ¶ 5, 7; Exhibits A and C. On December 16, 2016, Gerald designated his sister, Lesan, as the primary beneficiary of his PEP benefits. Id. ¶ 5; Exhibit B. He did not change the beneficiary designations on his 401(k) Plan. Id. ΒΆ 7. By virtue of the automatic revocation, this left Gerald's ...

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