Revised May 3, 2000
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_____________________
No. 98-41601
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KATHY CLIFT, ETC; ET AL
Defendants
KATHY CLIFT, Kathy Clift as guardian of John Ryan Clift
and Jennifer Lee Clift
Defendant - Cross Claimant -
Appellee
v.
PAMELA SUE CLIFT, now known as Pamela Sue Page
Defendant - Cross Defendant -
Appellant
v.
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
Interpleader
_________________________________________________________________
Appeal from the United States District Court
for the Eastern District of Texas
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April 12, 2000
Before KING, Chief Judge, and REAVLEY and STEWART, Circuit
Judges.
KING, Chief Judge:
Defendant-Cross Defendant-Appellant Pamela Sue Clift, now
known as Pamela Sue Page, appeals from the district court’s grant
of summary judgment in favor of Defendant-Cross Claimant-Appellee
Kathy Clift. We affirm.
I. FACTUAL AND PROCEDURAL BACKGROUND
Prior to his death in July of 1997, Phillip Clift
(“Phillip”) was twice married and twice divorced. He and his
first wife, Appellee Kathy Clift (“Kathy”), had two children,
Jennifer Lee and John Ryan. Phillip and Kathy divorced, and
Phillip married his second wife, Appellant Pamela Sue Page,
(“Pamela”), in 1995. They divorced shortly before he died.
Upon his death, Phillip held a life insurance policy through his
employer in which he designated Pamela as the sole beneficiary.
When it came time for the life insurance proceeds to be paid
out, Pamela claimed that she was entitled to them in light of
Phillip’s designation of her as beneficiary. Kathy, as guardian
of her and Phillip’s two children, claimed that when Phillip and
Pamela divorced, Pamela waived her right to the life insurance
proceeds. Under the terms of the policy, therefore, the children
were entitled to the proceeds. Connecticut General Life
Insurance Company, the provider of the policy in question, was
uncertain to whom it should pay benefits, and this action ensued.
Very little is disputed in this case. The parties agree
that before their divorce, Phillip named Pamela as the
beneficiary of the proceeds from his life insurance policy. They
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agree that the policy in question was offered by Phillip’s
employer through an employee benefit plan that is subject to and
governed by the provisions of the Employee Retirement Income
Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001, et seq., and
that therefore the policy itself is subject to ERISA. They agree
that Phillip and Pamela divorced, and that their Texas divorce
decree provided, “[Phillip] is awarded the following as [his]
sole and separate property, and [Pamela] is hereby divested of
all right, title, interest, and claim in and to such property:
. . . Any and all policies of life insurance (including cash
value) insuring the life of [Phillip].” Record at 138-39. They
agree that Pamela consented to the terms of the divorce
voluntarily and that the settlement between Phillip and Pamela
was made in good faith. Finally, they agree that if Pamela has
waived her right to the insurance proceeds, the children are
entitled to them. The only question in the case is whether
Pamela waived her right to the proceeds from Phillip’s life
insurance policy in their divorce decree.
Pamela and Kathy filed competing motions for summary
judgment in the district court. The district court entered a
judgment granting Kathy’s motion and denying Pamela’s, from which
judgment Pamela timely appeals.
II. STANDARD OF REVIEW
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We review the granting of summary judgment de novo,
applying the same criteria used by the district court in the
first instance. See Norman v. Apache Corp., 19 F.3d 1017, 1021
(5th Cir. 1994); Conkling v. Turner, 18 F.3d 1285, 1295 (5th Cir.
1994). Summary judgment is proper “if the pleadings,
depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the moving party
is entitled to a judgment as a matter of law.” FED. R. CIV. P.
56(c); see Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986).
We must view all evidence in the light most favorable to the
party opposing the motion and draw all reasonable inferences in
that party’s favor. See Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 255 (1986). We construe an unambiguous divorce decree
de novo. See Webb Carter Constr. Co. v. Louisiana Central Bank,
922 F.2d 1197, 1199 (5th Cir. 1991).
III. DISCUSSION
In Brandon v. Travelers Ins. Co., 18 F.3d 1321 (5th Cir.
1994), we were confronted with a situation very similar to the
one before us now. Richard Brandon had designated his wife,
Wanda, as the primary beneficiary of the proceeds of a life
insurance policy he held through his employer. The policy was
governed by ERISA. The couple later divorced, and Richard
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subsequently died without changing beneficiaries. The couple’s
divorce decree provided, in part:
Petitioner [Richard] is awarded the following as
Petitioner's sole and separate property, and Respondent
[Wanda] is divested of all rights, title, interest, and
claim in and to such property ... (8) Any and all sums,
whether matured or unmatured, accrued or unaccrued, vested
or otherwise, together with all increases thereof, the
proceeds therefrom, and any other rights relating to any
profit-sharing plan, retirement plan, pension plan, employee
stock option plan, employee savings plan, accrued unpaid
bonuses, or other benefit program existing by reason of
Petitioner's past, present, or future employment.
Id. at 1323. We were asked to decide whether Wanda had waived
her right to the proceeds from the life insurance policy in the
divorce decree or whether the beneficiary designation controlled.
We first ruled that the anti-alienation provisions of ERISA do
not prevent waiver of a beneficiary interest in a life insurance
policy governed by ERISA. See id. at 1324. This left us with
the question of whether the language of the divorce decree before
us in that case constituted an effective waiver of Wanda’s
beneficiary interest in the policy insuring Richard’s life. We
determined that the question was governed by federal common law
rather than state law, but we looked to analogous state law for
guidance. See id. at 1326. Our analysis in that case was
informed by cases from two sister circuits. We briefly review
those cases here, as we did in Brandon.
In Lyman Lumber Co. v. Hill, 877 F.2d 692 (8th Cir. 1989),
Jeffrey Hill designated his wife, Colleen, as primary beneficiary
under his employer’s profit-sharing plan. The Hills were later
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divorced, and Jeffrey died without changing the primary
beneficiary designation. The Hills’ divorce decree stated that
Jeffrey “‘shall have as his own, free of any interest of
[Colleen], his interest in the profit-sharing plan of his
employer . . . .’” Id. at 693 (alteration in original). The
Court of Appeals for the Eighth Circuit held that because the
divorce decree did not “specifically refer to and modify the
beneficiary interest” in the profit-sharing plan, it did not
revoke Colleen’s interest, and she was entitled to the
distribution. See id. at 694. The court reached that result
even though the divorce decree “gave Jeffrey his entire interest
in the Plan free of any interest of Colleen.” Id. at 693.
Shortly after the decision in Lyman Lumber, the Court of
Appeals for the Seventh Circuit, sitting en banc, was presented
with a similar case. Fox Valley & Vicinity Constr. Workers
Pension Fund v. Brown, 897 F.2d 275 (7th Cir. 1989) (en banc),
concerned lump-sum death benefits provided for in a pension plan
governed by ERISA. James Brown named his wife, Laurine, as
beneficiary under the plan. James and Laurine divorced and
agreed to a court-approved property settlement that provided that
“[t]he parties each waive any interest or claim in and to any
retirement, pension, profit-sharing and/or annuity plans
resulting from the employment of the other party.” Id. at 277.
James died without changing the beneficiary on his pension plan.
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The court, in fashioning federal common law, looked to
Illinois law which provided that “a decree of divorce only
affects the rights of a divorced spouse if a property settlement
agreement specifically includes a provision terminating the
beneficiary’s interest.” Id. at 281. The court determined “that
the waiver contained in the marital property settlement
specifically dealt with the pension fund benefits, including the
Death Benefit at issue in [the] case.” Id.
In Brandon, we followed the approach used by the Eighth and
Seventh Circuits in Lyman Lumber and Fox Valley and looked to the
federal common law to determine whether the language from Richard
and Wanda’s divorce decree constituted a sufficient waiver of
Wanda’s beneficiary interest in the proceeds of Richard’s life
insurance policy. Like the Fox Valley court, we looked to state
law to inform the rule we fashioned under the federal common law.
See id. at 1326. “[W]e adopt[ed] the Texas rule creating a
presumption of waiver absent redesignation following divorce.”
Id. We modified that rule, however, by requiring that “any
waiver be voluntary and in good faith.” Id. We stated later in
the opinion that we “requir[ed] under federal common law that any
waiver of ERISA benefits be explicit, voluntary, and made in good
faith.” Id. at 1327. The decree in Brandon stated that Wanda
was “divested of all rights, title, interest, and claim in and to
. . . proceeds []from . . . any . . . benefit program existing by
reason of [Richard’s] past, present, or future employment.” Id.
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at 1323. We held that this language was sufficient to constitute
a bona fide waiver of Wanda’s beneficiary interest in the life
insurance policy. See id. at 1327.
Relying on the holding in Lyman Lumber and our requirement
of explicitness in Brandon, Pamela invites us to set forth a rule
in this case that waiver in a divorce decree of one’s beneficiary
interest in a life insurance policy governed by ERISA can only be
effected by specifically listing the “proceeds,” “beneficiary
interest,” or the like. We decline her invitation. Our holding
in Brandon does not require, as Pamela seems to suggest, that
certain “magic” words be used to accomplish an effective waiver
of a beneficiary interest. Such rigidity is unnecessary and will
undoubtedly frustrate the intentions of those who choose to
divorce.
While Brandon does not require that particular language be
used to waive a beneficiary interest, it likewise does not stand
for the proposition that waiver will be assumed absent language
to the contrary. In Brandon, we looked to state law in
fashioning a rule yet explained that “wholesale adoption of the
Texas redesignation statute [would] not sufficiently protect the
interests of beneficiaries.” Id. at 1326. One method of
protecting those interests is to require that waiver be explicit,
meaning that waiver should not be inferred from a divorce decree
that is completely silent on the issue. Requiring actual waiver
language rather than relying on silence helps protect the
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interests of beneficiaries. Moreover, the task of determining
voluntariness and good faith would be overly-complicated were
silence sufficient to constitute waiver. We will only find
waiver if, upon reading the language in the divorce decree, a
reasonable person would have understood that she was waiving her
beneficiary interest in the life insurance policy at issue.
Additionally, as we stated in Brandon, any waiver must be
voluntary and made in good faith.
Here, Pamela entered into the agreement in her divorce
decree voluntarily, and the agreement was made in good faith.
Pamela simply argues that the language of the decree was
insufficient to constitute waiver of her beneficiary interest.
We disagree. The divorce decree provided that “[Pamela] is
hereby divested of all right, title, interest, and claim in and
to . . . [a]ny and all policies of life insurance (including cash
value) insuring the life of [Phillip].” Record at 138-39. This
language is clear enough to trigger the presumption of waiver.
It placed Pamela on notice that she was waiving any and all
interests in the life insurance policy. Had she intended to
retain her beneficiary interest, she should have demanded that
the divorce decree so provide.
IV. CONCLUSION
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For the foregoing reasons, the judgment of the district
court is AFFIRMED.
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