United States Court of Appeals,
Eleventh Circuit.
No. 96-4277.
Madeline LASCHE, Plaintiff-Appellee,
v.
GEORGE W. LASCHE BASIC PROFIT SHARING PLAN, a.k.a. George W.
Lasche Keogh Trust, Defendant-Appellant,
Theresa Wenisch, Defendant-Third Party Plaintiff-Appellant,
Patricia Clements, individually, and as Co-Personal
Representatives of the Estate of George W. Lasche and as Successor
Plan Administrators of the George W. Lasche Basic Profit Sharing
Plan, Defendant-Appellant,
Patricia Lasche Clements, as Trustee of the George W. Lasche
Trust, Defendant-Third Party Plaintiff-Appellant,
Theresa Lasche Wenisch, as Trustee of the George W. Lasche Trust,
Defendant-Appellant,
Kathryn Lasche Berggren, Third Party Plaintiff,
Merrill Lynch, Pierce, Fenner & Smith, Inc., Third Party
Defendant-Appellee.
May 6, 1997.
Appeal from the United States District Court for the Southern
District of Florida. (No. 93-8645-CIV-JAG), Jose A. Gonzalez, Jr.,
Judge.
Before HATCHETT, Chief Judge, BARKETT, Circuit Judge, and FAY,
Senior Circuit Judge.
FAY, Senior Circuit Judge:
In this appeal, we will decide whether a spouse legally waived
her rights to her deceased spouse's retirement plan. The district
court found that the spouse did not waive her rights to her late
husband's retirement plan because the spouse's waiver did not
comply with the ERISA requirement that a spouse's consent be
"witnessed by a plan representative or a notary public," 29 U.S.C.
§ 1055(c)(2)(A)(iii), and because the waiver language was too
general to be effective. Because the district court was correct in
concluding that the waiver failed to comply with the requirements
of ERISA, we affirm.
BACKGROUND
George Lasche and appellee Madeline Baker Lasche were married
in August of 1985. Prior to being married, George and Madeline
entered into a Prenuptial Agreement. Under the terms of the
Prenuptial Agreement, both George and Madeline agreed to waive any
rights to the other's property. Following their marriage, both
George and Madeline executed a First Amendment to Pre-Nuptial
Agreement ("Amendment"). In the Amendment, George and Madeline
specifically waived any interest to the other's retirement benefit
plan and agreed to execute any documentation required to confirm
their waiver in the other's retirement benefit plan.1
Several years before getting married to Madeline, George
adopted a "Keogh" retirement plan. This plan was reformed several
times mainly because George transferred his retirement funds to
different financial institutions. In 1989, George, for the last
time, transferred funds from a Dean Witter & Company retirement
plan to Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch") and its "Basic Retirement Program."
1
Specifically, paragraph (c) in the Amendment stated: Each
party waives and releases any claim, demand or interest in any
pension, profit sharing, KEOGH or other retirement benefit plan
qualified under ERISA and the Internal Revenue Code of the other
party and agrees to execute any documentation to verify and
confirm this fact with the administrator of such plan.
R1-39-Exhibit 1.
In connection with the opening of a Merrill Lynch Basic
Retirement Program, Merrill Lynch required George to execute a
document entitled "Basic Retirement Plan New Participant Form"
("Form"). The Form designated George's three daughters from a
previous marriage: Patricia Clements, Theresa Wenisch, and Kathryn
Berggren as his beneficiaries. Because George designated his
daughters as beneficiaries, instead of his spouse Madeline,
Madeline was required to sign part four of the Form, which states:
Spouse's Consent to Beneficiary Designation:
I am the spouse of the participant who made the beneficiary
designation on this form and I consent to it. I understand
that if someone other than me has been designated beneficiary,
my consent means that I give up rights I may have under the
Plan and applicable law (other than rights I may later have as
the survivor in a joint annuity with the participant) to
receive those amounts payable under the Plan by reason of the
participant's death to which I would otherwise be entitled if
I were the Participant sole beneficiary.
R2-49-Exhibit E-Part 4. Madeline signed part four of the form.
Part four also contains a designated space where the signature of
an "employer2" or notary public is needed to confirm the consenting
spouse's signature. This space was left blank. George signed part
five of the form as the Plan's Administrator.
George died in 1993 before receiving any benefits from the
Merrill Lynch retirement plan. After George's death, Madeline
requested a distribution of the plan's benefits from the
administrators of the plan, George's daughters. The daughters
2
We note that the Merrill Lynch waiver form provides that
the signature of the spouse be witnessed by an "employer or
notary public." We do not know why the term "employer" is used
when the law specifically provides for plan representative.
Under the facts of this case, whether such a difference in
terminology is material is not before us.
refused. Subsequently, Madeline filed suit against Defendants-
Appellants George W. Lasche Basic Profit Sharing Plan a/k/a George
W. Lasche Keogh Trust, Theresa Lasche Wenisch, and Patricia Lasche
Clements. The gist of Madeline's complaint is that under the
Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§
1001-1461 (1994), she, as George's surviving spouse, is entitled to
receive the benefits of George's retirement plan.
Prior to trial, both sides filed motions for summary judgment.
In Madeline's motion, she argued that her waiver was legally
defective, while Defendants asserted the opposite; Madeline's
waiver was legally valid. After conducting a hearing on the
cross-motions, the district court entered an order granting
Madeline's motion for summary judgment, consequently denying
Defendants' motion. In the order, the district court found as a
matter of law that Madeline's waiver "did not meet the ERISA
requirement that the consent be "witnessed by a plan representative
or a notary public,' " R3-85-6, and that the waiver language
contained in part four of the Form failed to disclose to Madeline
which specific rights were being relinquished by the waiver. R3-
85-4. In accordance with the ruling, the district court found that
Madeline was entitled to George's entire account balance under the
retirement plan.3 29 U.S.C. § 1055(a) (1994).
3
Following the district court's order granting Madeline's
motion for summary judgment, George's three daughters obtained
leave of court to file a Third Party Complaint against Merrill
Lynch. In the Third Party Complaint, the daughters allege that
Merrill Lynch breached its duty by failing to provide and execute
a legally effective Spousal Consent. The daughters also moved to
join Merrill Lynch to the original suit as an indispensable party
and to stay the execution of the final judgment pending Merrill
Lynch's joinder. The district court denied the motion. The
Final judgment was entered after Madeline voluntarily
dismissed a remaining count which was not resolved by the district
court's summary judgment order. Defendants appeal from this final
judgment. On appeal, Defendants contend that the district court
erred as a matter of law in holding that the waiver and consent
executed by Madeline failed to comply with the requirements of
ERISA.
STANDARD OF REVIEW
A motion for summary judgment may be granted only if no
genuine dispute remains as to any material fact and the moving
party is entitled to judgment as a matter of law. Fed.R.Civ.P.
56(c). Since the facts of this case are not in dispute, we need
only consider whether Madeline was entitled to summary judgment as
a matter of law. As with all questions of law, we review the
district court's order granting summary judgment under the de novo
standard of review. International Union, United Mine Workers v.
Jim Walter Resources, 6 F.3d 722, 724 (11th Cir.1993).
ANALYSIS
Because at issue in this appeal is whether Madeline legally
waived her rights to George's retirement plan, we will first set
forth the ERISA requirements of an effective waiver. To establish
an effective waiver of benefits under ERISA requires that:
(i) the spouse of the participant consents in writing to such
election, (ii) such election designates a beneficiary (or a
form of benefits) which may not be changed without spousal
consent (or the consent of the spouse expressly permits
designation by the participant without any requirement of
further consent by the spouse), and (iii) the spouse's consent
daughter's Third Party Complaint against Merrill Lynch remains
pending.
acknowledges the effect of such election and is witnessed by
a plan representative or a notary public....
29 U.S.C. § 1055(c)(2)(A). Thus, ERISA mandates that a spouse's
consent be "witnessed by a plan representative or a notary public."
29 U.S.C. § 1055(c)(2)(A)(iii). In our case, the space provided
for an "employer" (see supra note 2) or notary public to sign next
to Madeline's signature under the waiver clause was left blank.
Applying this undisputed fact to ERISA requirement 29 U.S.C. §
1055(c)(2)(A)(iii), the district court ruled that Madeline's waiver
failed as a matter of law. We agree.4
The statutory language of ERISA requirement 29 U.S.C. §
1055(c)(2)(A)(iii) is unambiguous. Strictly applying this
requirement to the facts of our case, the district court was
correct in concluding that Madeline's waiver was legally defective.
In an attempt to make Madeline's waiver legally valid, Defendants
urge us to consider that since Madeline acknowledges signing the
waiver, the purpose behind a plan representative or notary public
witnessing her signature is served. In support of this argument,
Defendants rely on Butler v. Encyclopaedia Britannica, Inc., 843
F.Supp. 387 (N.D.Ill.1994), aff'd in part and rev'd in part, 41
F.3d 285 (7th Cir.1994).
In Butler, a spouse designated her daughter, instead of her
husband, as the beneficiary of pension benefits. Because the
spouse designated her daughter as the beneficiary, rather than her
4
As to the district court's other basis for granting summary
judgment, the waiver language was too general, because we affirm
the district court on the basis that Madeline's waiver was not
"witnessed by a plan representative or a notary public....," we
find it unnecessary to address whether the waiver language was
legally effective.
husband, the husband needed to sign a consent form, which he
acknowledged doing. The notary portions of the consent forms were
notarized. Following the spouse's death and after the pension plan
administrator awarded benefits to the husband, the daughter filed
suit.
The husband challenged the designation of the daughter as
beneficiary, arguing among other grounds, that his consent to the
waiver of benefits is not valid because his signature was not
signed in the presence of a notary public. In awarding the
daughter the benefits, the district court dismissed the husband's
argument stating a "benefit fund may accept as valid a designation
form that a spouse admits signing, but which was signed by the
spouse outside the presence of the witnessing notary public or plan
representative, without defeating any substantive statutory
objective." Butler, 843 F.Supp. at 396. The husband appealed the
district court's order. On appeal, the Seventh Circuit declined to
address whether the husband signature was witnessed by a notary
public because the husband "lacked sufficient evidence to prove
that the consent form he signed was not properly witnessed."
Butler, 41 F.3d at 294.
Butler is distinguishable from our case on the basis that in
Butler a notary signed the consent form. The Seventh Circuit in
finding that the husband's consent form was valid relied on the
fact that the husband's signature was notarized. See Butler, 41
F.3d at 294-95 ("A notary public's certificate of acknowledgment,
regular on its face, carries a strong presumption of validity.").
In our case, neither a notary nor a plan representative ever signed
the form witnessing Madeline's signature. This omission is fatal
to Defendant's reliance on Butler. While Defendants argue that
Butler stands for the proposition that an acknowledged waiver is
valid "even if not signed in the presence of notary," we disagree.
To extend Butler as Defendants suggest and now allow a spouse's
acknowledged signature waiver to be effective absent the signature
being witnessed by a notary public or plan representative, is a
precedential path we refuse to travel. To hold otherwise would
contravene the explicit waiver requirements of ERISA that Congress
has enacted.
Defendants also assert that George's signature as the Plan's
Administrator in part five of the Form satisfies ERISA's
requirement that Madeline's consent be witnessed by a notary public
or plan representative. As an initial reason for rejecting this
contention is Defendants' failure to raise this issue before the
district court. See Narey v. Dean, 32 F.3d 1521, 1526-27 (11th
Cir.1994) (Court generally will not consider on appeal issues not
raised before the district court.). Moreover, George's signature
was in a different section than the spouse's consent section of the
Form. Part four of the Form contained the space where a notary
public or plan representative was required to sign the form
confirming Madeline's signature, not part five, a completely
different section. Thus, the fact that George signed part five of
the form as the Plan's Administrator is irrelevant to the
undisputed fact that the "employer" or notary public signature
space in part four of the Form was blank.
Defendants also argue that Madeline's intent to waive her
rights to George's retirement plan as evidenced by the Prenuptial
Agreement, the First Amendment to the Prenuptial Agreement, and by
her signature in the spousal consent section of Merrill Lynch's New
Participant Form should be considered in determining whether a
valid waiver took place. We disagree. Congress in enacting 29
U.S.C. § 1055(c)(2)(A) explicitly set forth certain requirements
that must be followed. A person's subjective intent is irrelevant
to whether these requirements were followed. In our case, the
parties failed to exactly comply with the requirements of ERISA,
unfortunately resulting in an outcome that may be contrary to both
George's and Madeline's intent.
Finally, we note the public policy of protecting spouses'
rights to spousal retirement benefits. See S.Rep. No. 98-575, at
1 (1984), reprinted in 1984 U.S.C.C.A.N. 2547, 2547. This policy
is consistent with the general policy of protecting spousal rights.
See, e.g., Via v. Putnam, 656 So.2d 460, 464 (Fla.1995) ("Florida
... has always maintained a strong public policy in favor of
protecting a surviving spouse of a marriage in existence at the
time of a decedent's death."). Thus, these strict ERISA
requirements designed to ensure a valid waiver of a spouse's
retirement plan are consistent with the legislative policy of
protecting spousal rights. Therefore, we believe any waiver of
retirements benefits by a spouse must strictly comply with the
consent requirements set forth in ERISA.
CONCLUSION
For the foregoing reasons, we affirm the district court's
order granting summary judgment.
AFFIRMED.