Rivers v. Central & South West Corp.

                 UNITED STATES COURT OF APPEALS
                      For the Fifth Circuit
           __________________________________________

                           No. 98-31112
            _________________________________________
                 RHEBA HAWTHORNE FRANKLIN RIVERS

                                               Plaintiff-Appellant,

                                 v.

            CENTRAL AND SOUTH WEST CORPORATION, ET AL

                                              Defendants-Appellees.

           __________________________________________

          Appeal from the United States District Court
               for the Western District of Louisiana
            __________________________________________

                        September 7, 1999
Before REYNALDO G. GARZA, HIGGINBOTHAM, and DAVIS, Circuit
Judges.

REYNALDO G. GARZA, Circuit Judge:

     Rheba Hawthorne Franklin Rivers (“Rivers”) seeks a judgment

awarding her a portion of the pension benefits currently being

paid to the second wife, and widow, of pension plan participant

Perry Franklin (“Franklin”).    Rivers, Franklin’s ex-wife, asserts

that she is both a “participant” and “beneficiary” as

contemplated under ERISA and that the district court erred by

determining that Franklin’s pension benefits had irrevocably

vested in his second wife.   Finding no error in the district

court’s rationale, we affirm.

                                 I.

     Rivers and Franklin were married on February 2, 1946, and
     divorced on February 16, 1972.    Franklin had been employed

by Southwestern Electric Power Company (“SWEPCO”) since September

16, 1952, where he remained an employee until his retirement on

April, 1, 1983.    A community property settlement agreement was

entered into between Rivers and Franklin on the day of their

divorce.    The agreement did not address Franklin’s pension

benefits in SWEPCO.    Franklin married his second wife, Carolyn

Franklin (“Mrs. Franklin”) on February 19, 1972, and they

remained married until Franklin’s death on July 26, 1987.      On

April, 1, 1983, the day of his retirement, Franklin began to

receive joint and survivor annuity benefits from SWEPCO.    Under

the terms of the pension agreement, Mrs. Franklin was entitled to

receive a survivor annuity equal to fifty percent of her

husband’s pension when he died.

     On July 29, 1997, Rivers filed suit in state court against

Central and Southwest Corporation1 and SWEPCO asserting a claim

to one-half of twenty-four and one-half years worth of Franklin’s

pension from SWEPCO.    The suit was removed to the United States

District Court for the Western District of Louisiana and Rivers

was subsequently ordered to join Mrs. Franklin as a defendant in

the suit.    In her petition to the lower court, Rivers argued that

she is entitled to Franklin’s pension money as one-half owner of

the pension plan under Louisiana’s community property laws.      She

     1
      Central and Southwest Corporation (“C&S”) is SWEPCO’s
parent corporation.

                                  2
requested that a “qualified domestic relations order” (“QDRO”) be

issued recognizing her as the rightful beneficiary of that plan,

thereby remedying the parties’ failure to include Franklin’s

retirement benefits in the divorce settlement agreement.

     On June 8, 1998, Mrs. Franklin filed a motion for summary

judgment which was adopted in-full by C&S and SWEPCO.    The lower

court granted the motions for summary judgment and dismissed with

prejudice all claims that Rivers had against the defendants.

This appeal followed.

                                  II.

     This court reviews the grant of a summary judgment de novo,

applying the same standards as the district court.     See Duffy v.

Leading Edge Products, Inc., 44 F.3d 308, 312 (5th Cir. 1995).

Summary judgment is appropriate, when, viewing the evidence in

the light most favorable to the non-moving party, the record

reflects that no genuine issue of any material fact exists, and

the moving party is entitled to judgment as a matter of law.     See

Celotex Corp. v. Catrett, 477 U.S. 317, 322-24 (1986); see also

FED.R.CIV.P.56(C).    After the movant meets its burden, the non-

movant must designate specific facts showing there is a genuine

issue for trial.     Little v. Liquid Air Corp., 37 F.3d 1069, 1075

(5th Cir. 1994).

     Rivers argues that ERISA does not preempt the settlement

agreement she entered into at the time of her divorce.    She


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asserts that, although the agreement failed to include an

interest in Franklin’s pension money, the court can now

“supplement” the agreement by ordering that she be given a one-

half interest in Franklin’s pension plan.

     It is well settled that ERISA generally preempts state law.

Morales v. Trans World Airlines Inc., 504 U.S. 374, 383 (1992).

This sweeping preemption made it difficult in the past for state

courts to divide pension entitlements in divorce proceedings.

Surviving spouse benefits were payable to the surviving spouse

only if the surviving spouse was married to the participant on

both the date of the participant’s retirement and the date of the

participant’s death.     See 26 C.F.R. § 1.401(a)-

11(d)(3)(i),(ii),(iii)(1977).    To remedy this situation, the

Retirement Equity Act (“REA”) of 1984 amended ERISA’s marriage

requirements.   Presently, a former spouse can replace the current

spouse as the beneficiary of the plan if they obtain a qualified

domestic relations order (“QDRO”), recognizing the former spouse

as an alternate payee.    29 U.S.C.A. § 1056(d)(3)(A).

     In Hopkins v. AT&T Global Information Solutions Co., 105

F.3d 153, 155 (4th Cir. 1997), the Fourth Circuit acknowledged

that a former spouse can be recognized as a surviving spouse when

all of the statutory requirements of § 1056 are met.     Most

importantly, however, it determined that the benefits irrevocably

vest in the plan participant’s current spouse on the date of the


                                   4
participant’s retirement.    Id. at 156.    In Hopkins, the former

spouse of the plan participant obtained a Surviving Spouse Order

and argued that it granted her an ownership right, under § 1056,

in her ex-husband’s pension plan.2     The court determined, as a

matter of first impression in the federal courts, that a plan

participant’s benefits vest in his current spouse on the day of

retirement.   Id. at 156.   Since the petitioner had obtained the

order one year after the plan participant’s date of retirement,

the court held that the pension’s benefits had irrevocably vested

in the current spouse and that the order was not a QDRO for

purposes of § 1056.   Id.

     This Circuit agrees with the Fourth Circuit’s decision in

Hopkins and adopts its rationale.      Rivers failed to protect her

rights in Franklin’s pension plan by neglecting to obtain a QDRO

prior to Franklin’s retirement date.     Consequently, Franklin’s

pension benefits irrevocably vested in Mrs. Franklin on the date

of his retirement and Rivers is forever barred from acquiring an

interest in Franklin’s pension plan.

                                III.

     River’s failure to obtain a QDRO prior to Mrs. Franklin’s

vesting of Franklin’s pension benefits forbids any recovery by

Rivers.   Accordingly, we AFFIRM the district court’s decision in



     2
      The court order was granted as a method of collecting
alimony that was due to her.

                                  5
all respects.




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