Pam Miletello v. R M R Mechanical, Incorporated, e ( 2019 )

Case: 18-30942 Document: 00514917969 Page: 1 Date Filed: 04/16/2019
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
No. 18-30942
FILED
April 16, 2019
Lyle W. Cayce
PAM MILETELLO, Clerk
Plaintiff - Appellant
v.
R M R MECHANICAL, INCORPORATED; SANDRA BELLGARD
MILETELLO,
Defendants - Appellees
Appeal from the United States District Court
for the Western District of Louisiana
Before BARKSDALE, SOUTHWICK, and HAYNES, Circuit Judges.
HAYNES, Circuit Judge:
This case is a dispute between decedent Gerald Miletello’s ex-wife
Sandra and widow Pam about who is entitled to the funds in Gerald’s 401(k)
retirement account. The dispute hinges on the existence and timing of a
“qualified domestic relations order,” or QDRO, which is controlled by federal
law. The district court granted summary judgment in favor of Sandra,
concluding that she had timely received a QDRO. For the reasons set forth
below, we AFFIRM the district court’s judgment that Sandra is entitled to
$500,000 of the 401(k) balance.
Case: 18-30942 Document: 00514917969 Page: 2 Date Filed: 04/16/2019
No. 18-30942
I. Background
A. The ERISA Regulatory Scheme
The Employee Retirement Income Security Act of 1974 (“ERISA”) is a
comprehensive federal statute that regulates employee benefit plans. Boggs v.
Boggs, 520 U.S. 833, 841 (1997). It covers defined contribution plans like
401(k) accounts. See LaRue v. DeWolff, Boberg & Assocs., Inc., 552 U.S. 248,
250 (2008). ERISA generally prohibits the assignment or alienation of
employee benefits under covered plans. 29 U.S.C. § 1056(d)(1). It also
preempts state laws that “relate to” employee benefit plans. Id. § 1144(a).
But those prohibitions do not apply in the case of a QDRO. Id.
§§ 1056(d)(3)(A), 1144(b)(7). A QDRO is a type of domestic relations order, or
DRO. A DRO “is any judgment, decree, or order that concerns ‘the provision
of child support, alimony payments, or marital property rights to a spouse,
former spouse, child, or other dependent of a participant’ and is ‘made
pursuant to a State domestic relations law (including a community property
law).’” Boggs, 520 U.S. at 846 (quoting 29 U.S.C. § 1056(d)(3)(B)(ii)). A QDRO,
in turn, “is a type of domestic relations order that creates or recognizes an
alternate payee’s right to, or assigns to an alternate payee the right to, a
portion of the benefits payable with respect to a participant under a plan.”
Boggs, 520 U.S. at 846 (citing § 1056(d)(3)(B)(i)). Under a QDRO, the alternate
payee is considered a beneficiary of the relevant plan. 29 U.S.C.
§ 1056(d)(3)(J). The “alternate payee” may be a “spouse, former spouse, child,
or other dependent of a participant.” Id. § 1056(d)(3)(K).
A DRO must satisfy certain requirements to be a QDRO. Boggs, 520 U.S.
at 846; 29 U.S.C. § 1056(d)(3)(B)–(D). ERISA states:
During any period in which the issue of whether a
[DRO] is a [QDRO] is being determined (by the plan
administrator, by a court of competent jurisdiction, or
2
Case: 18-30942 Document: 00514917969 Page: 3 Date Filed: 04/16/2019
No. 18-30942
otherwise), the plan administrator shall separately
account for the amounts (hereinafter . . . the
“segregated amounts”) which would have been payable
to the alternate payee during such period if the order
had been determined to be a [QDRO].
29 U.S.C. § 1056(d)(3)(H)(i). ERISA provides an eighteen-month period for
determining whether a DRO is a QDRO. Id. § 1056(d)(3)(H)(i)–(v). The
eighteen-month period “begin[s] with the date on which the first payment
would be required to be made under the [DRO].” Id. § 1056(d)(3)(H)(v). If
during that period, the DRO is determined to be a QDRO, the plan
administrator must pay the segregated amounts to the person entitled to them
under the QDRO. Id. § 1056(d)(3)(H)(ii). But if (1) the DRO is determined to
not be a QDRO, or (2) the issue is unresolved by the time the eighteen-month
period expires, the plan administrator must pay the segregated amounts to the
person “who would have been entitled to [them] if there had been no order.”
Id. § 1056(d)(3)(H)(iii). Finally, if a DRO is determined to be a QDRO after the
eighteen-month period has expired, such a determination “shall be applied
prospectively only.” Id. § 1056(d)(3)(H)(iv).
B. Factual Background
Gerald Miletello and Appellee Sandra Bellgard Miletello were married.
Gerald participated in a 401(k) plan set up and administered by Appellee RMR
Mechanical, Inc. (“RMR”). He designated Sandra as the beneficiary of the
Plan.
Sandra and Gerald divorced on January 21, 2014. Gerald married
Appellant Pam Miletello four months later, in May 2014. As part of the
divorce, Sandra and Gerald agreed to a community property settlement (the
“Divorce Settlement”). The Divorce Settlement awarded $500,000 of the funds
in the 401(k), or the balance of the 401(k) if it was less than $500,000, to
Sandra. Gerald and Sandra executed the Divorce Settlement on April 20, 2015,
3
Case: 18-30942 Document: 00514917969 Page: 4 Date Filed: 04/16/2019
No. 18-30942
and May 4, 2015, respectively.
Gerald died in a plane crash on October 26, 2015. Shortly thereafter, on
October 28, 2015, the state court entered a judgment of partition incorporating
the terms of the Divorce Settlement into the divorce decree.
On November 22, 2016, Pam sued in federal court to claim the 401(k)
funds as Gerald’s surviving spouse. The court later granted RMR’s motion to
deposit the disputed funds into the court registry pending resolution of this
dispute.
On January 18, 2017, the state court entered a QDRO pursuant to the
Divorce Settlement. The QDRO granted Sandra $500,000 of the 401(k) funds.
On August 1, 2017, the state court issued an “Amended QDRO” providing that
it “shall have retroactive effect and be a nunc pro tunc order with an effective
date of May 4, 2015,” the day the Divorce Settlement was executed.
Pam and Sandra filed cross-motions for summary judgment. The district
court entered summary judgment for Sandra. Pam now appeals.
II. Standard of Review
We review a district court’s grant of summary judgment de novo.
Martinez v. Tex. Workforce Comm’n-Civil Rights Div., 775 F.3d 685, 687 (5th
Cir. 2014). In so doing, “[w]e view all facts and evidence in the light most
favorable to the non-moving party.” Ferraro v. Liberty Mut. Fire Ins. Co., 796
F.3d 529, 531 (5th Cir. 2015). In the absence of any genuine dispute of material
fact, the movant is entitled to prevail if she proves that she is correct as a
matter of law. FED. R. CIV. P. 56(a).
III. Discussion
The core question in this case is whether Sandra timely obtained a
QDRO. Pam argues that Sandra cannot claim any 401(k) funds because she
did not receive a QDRO within eighteen months of the October 28, 2015,
4
Case: 18-30942 Document: 00514917969 Page: 5 Date Filed: 04/16/2019
No. 18-30942
judgment of partition—the event that Pam says starts the clock for
determining whether a DRO is a QDRO. See 29 U.S.C. § 1056(d)(3)(H)(i)–(v). 1
Even if we assume Pam is correct that the eighteen-month window began on
that date, Sandra received a QDRO within that time frame. Though the
October 2015 judgment of partition was not a QDRO for technical reasons, 2 it
explicitly contemplated Sandra’s later seeking a QDRO to receive the 401(k)
funds. She obtained that QDRO on January 18, 2017. Even under Pam’s
proposed starting date, Sandra timely received a QDRO.
Pam incorrectly asserts that the January 18, 2017 QDRO cannot be
effective because it post-dates Gerald’s death. She relies on Rivers v. Central
& South West Corp., 186 F.3d 681 (5th Cir. 1999), in support of her argument.
Rivers had very different facts from those here. There, a husband and wife
were married while the husband earned a pension at a company. Id. at 682.
They divorced more than a decade before he retired. Id. Their divorce
settlement did not address his pension. Id. He remarried while still earning
a pension. Id. He retired, received payments under the pension, and died
years later. Id. His ex-wife requested a QDRO a decade after he died. Id. We
affirmed summary judgment against her, concluding that she had “failed to
protect her rights . . . by neglecting to obtain a QDRO” before her ex-husband
retired. Id. at 683.
Since Rivers was decided, Congress has modified ERISA to make “clear
that a QDRO will not fail solely because of the time at which it [was] issued.”
1The statute provides that a court of competent jurisdiction may determine whether
a DRO is a QDRO. Id. § 1056(d)(3)(H)(i). But here, the Plan states that payment under a
DRO will occur after the DRO “is accepted as a QDRO by the Plan Administrator.”
2 The judgment of partition did not contain “the last known mailing address (if any)
of the participant and the name and mailing address of each alternate payee covered by the
order.” See id. § 1056(d)(3)(C)(i).
5
Case: 18-30942 Document: 00514917969 Page: 6 Date Filed: 04/16/2019
No. 18-30942
Yale-New Haven Hosp. v. Nicholls, 788 F.3d 79, 85 (2d Cir. 2015) (citing
Pension Protection Act of 2006, Pub. L. No. 109-280, § 1001, 120 Stat. 780(2006)); see also 29 C.F.R. § 2530.206(c)(2) (stating that an “order does not fail
to be treated as a QDRO solely because it is issued after the death of the
Participant . . . even if no order [was] issued before the Participant’s death”). 3
“The QDRO provisions of ERISA do not suggest that [the former spouse] has
no interest in the plans until she obtains a QDRO, they merely prevent her
from enforcing her interest until the QDRO is obtained.” Nicholls, 788 F.3d at
86 (alteration in original) (quoting In re Gendreau, 122 F.3d 815, 818 (9th Cir.
1997) (emphasis omitted)). We thus reject Pam’s argument that the January
18, 2017 QDRO is insufficient.
IV. Conclusion
For the foregoing reasons, we AFFIRM the district court’s judgment
awarding $500,000 of the 401(k) funds to Sandra. 4
3 We need not decide whether this legislation and regulation abrogate Rivers. The
facts there are so egregious as to be different from this case.
4 In passing, Sandra argues she is entitled to the entire 401(k). A party who desires
greater relief than what the district court awards must appeal or cross-appeal the district
court’s order. See Robicheaux v. Radcliff Material, Inc., 697 F.2d 662, 667–68 (5th Cir. 1983).
Sandra did not cross-appeal, so we do not consider her argument.
6