Duggins v. Fluor Daniel Inc

• Court: Court of Appeals for the Fifth Circuit
• Decided: June 29, 2000
• Docket: 99-30502
• Status: Published

Opinion

IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT

No. 99-30502

DAVID D. DUGGINS,

Plaintiff-Appellant,

v.

FLUOR DANIEL, INC.,

Defendant,

STACEY LYNN CARPENTER; MICHAEL LEE NEWSOM; PATTY LYNN PUCKETT; CHARLES STEVEN NEWSOM,

Third Party Defendants- Appellees.

_______________________________

Appeal from the United States District Court for the Eastern District of Louisiana _______________________________ June 29, 2000

Before JONES and BENAVIDES, Circuit Judges, and COBB*, District Judge.

BENAVIDES, Circuit Judge:

Appellant David D. Duggins (“Duggins”) appeals the district

court’s ruling that decedent C. Fred Newsom (“Newsom”) designated

Duggins the beneficiary of his ERISA plan in Duggins’s capacity

as executor of Newsom’s estate, rather than in Duggins’s

individual capacity. The parties agree as to all the pertinent

* District Judge of the Eastern District of Texas, sitting by designation. facts. Newsom had originally designated his daughter, Stacey

Lynn Carpenter (“Carpenter”), with whom he had had a difficult

relationship, as beneficiary, but in 1993, Newsom drew a line

through her name and substituted Duggins as his beneficiary. On

the plan beneficiary designation form, two lines below the line

for the beneficiary’s name was a line that prompted Newsom to

indicate his relationship to the beneficiary; here Newsom wrote

“Attorney and Executor.” At the time of the designation, Duggins

was not Newsom’s executor. However, by 1995, when Newsom died,

he had executed a will naming Duggins both executor and

beneficiary. The only issue on appeal is whether Newsom named

Duggins as his plan beneficiary in Duggins’s individual or

representative (as executor) capacity.

To answer this question, the district court applied

Louisiana law. This was in error. ERISA preempts “any and all

State laws insofar as they may now or hereafter relate to any

employee benefit plan.” 29 U.S.C. § 1144(a). A law “relates to”

an employee benefit plan when the law has “a connection with or

reference to such a plan.” Shaw v. Delta Air Lines, Inc., 463

U.S. 85, 96 (1983). The law used to interpret the designation of

a beneficiary under the plan clearly relates to the plan, and

thus, ERISA preempts Louisiana law in this arena. See Manning v.

Hayes, — F.3d — (5th Cir. 2000), avaiable at 2000 WL 649952, *2

(5th Cir. (Tex.)) (“Almost every circuit court to consider the

issue, including this one, has determined that a state law

2 governing the designation of an ERISA beneficiary ‘relates to’

the ERISA plan, and is therefore preempted.”). However, a court

need not even reach the issue of preemption where it can “resolve

the validity of the [designation] without going beyond the terms

of the plan itself.” Nickel v. Estes, 122 F.3d 294, 298 (5th

Cir. 1997); see also McMillan v. Parrott, 913 F.2d 310, 312 (6th

Cir. 1990) (“If the designation on file controls, administrators

and courts need look no further than the plan documents to

determine the beneficiary[.]”), quoted with approval in Nickel,

122 F.3d at 298. Here, the plain language of the plan

beneficiary designation form controls and no preemption analysis

is necessary.

Newsom named Duggins as his beneficiary. His truthful

response—on a separate line of the designation form asking about

Newsom’s relationship to the beneficiary—that Duggins was his

attorney and executor in no way casts Duggins in the role of

beneficiary in his representative capacity. The case Faircloth

v. Northwestern Nat’l Life Ins. Co., 799 F. Supp. 815 (S.D. Ohio

1992), illustrates this point. In that case, the decedent, David

Faircloth, designated his beneficiary as “Faircloth James H.

Administrator.” James Faircloth was the decedent’s brother.

Because the term “Administrator” was included on the same line as

the beneficiary’s name, and not in the portion of the form

indicating the decedent’s relationship to the beneficiary, the

court found that the decedent named James Faircloth in his

3 representative capacity. Here, of course, Newsom did not

indicate that his beneficiary was “David D. Duggins, Executor,”

but rather, merely named “David D. Duggins.”

This case is no different than it would have been had Newsom

indicated that his relationship with Carpenter was “Daughter and

Executor.” In that situation, Carpenter would still be a

beneficiary in her individual capacity. The difference, of

course, is that Newsom has, by his choice of beneficiary,

forsworn his child in favor of his attorney of some thirty-odd

years. While some courts may find such conduct disfavored,

Newsom has every entitlement to dispose of his assets in

accordance with his wishes, and the plain language of the plan

beneficiary designation form indicates pellucidly that he chose

Duggins, in Duggins’s individual capacity, as beneficiary. We

therefore reverse and remand for entry of judgment in Duggins’s

favor.

REVERSED