Tarrant v. Halliburton ( 1995 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_______________
No. 95-50234
Summary Calendar
_______________
CHARLES TARRANT
and
JESSIE JUANITA TARRANT,
Plaintiffs-Counter-
Defendants-Appellants,
VERSUS
HALLIBURTON ENERGY SERVICES RETIREMENT PLANS,
Defendant-Third Party
Plaintiff-Counter-Plaintiff,
VERSUS
LARRY TARRANT, et al.,
Third Party
Defendants-Appellees,
THOMAS SCOTT TARRANT,
Third Party Defendant-
Counter-Plaintiff-Appellee.
_________________________
Appeal from the United States District Court
for the Western District of Texas
(CA-MO-94-169)
_________________________
November 17, 1995
Before GARWOOD, SMITH, and BENAVIDES, Circuit Judges.
JERRY E. SMITH, Circuit Judge:*
Charles Tarrant and Jessie Juanita Tarrant appeal a judgment
in favor of Thomas Scott Tarrant (“Thomas”) and Robert Leslie
Tarrant (“Robert”).1 They contend that the district court improp-
erly concluded that Thomas and Robert were the appropriate
beneficiaries of an ERISA2 pension account established by their
father, Bobby Joe Tarrant (“Bobby Joe”). Concluding that Thomas
and Robert are the proper beneficiaries under the ERISA plan, we
affirm.
I.
Bobby Joe died on September 21, 1993, two weeks after
divorcing Dana. Apparently recognizing that his divorce necessi-
tated a change in his will, Bobby Joe had executed a new will two
months earlier, on July 20. Among the provisions of that will was
one declaring his “intention by and through this will not to leave
any of my estate to my son Thomas Scott Tarrant.” He named several
family members, including the appellants and Robert, as the heirs
to his estate.
*
Local Rule 47.5.1 provides: "The publication of opinions that have no
precedential value and merely decide particular cases on the basis of well-
settled principles of law imposes needless expense on the public and burdens on
the legal profession." Pursuant to that rule, the court has determined that this
opinion should not be published.
1
Robert Leslie Tarrant is a minor and is represented by his mother and
guardian, Dana K. Tarrant.
2
“ERISA” is the Employee Retirement Income Security Act of 1974, 29 U.S.C.
§ 1001 et seq.
2
At the time of his death, Bobby Joe was a participant in the
Halliburton Profit-Sharing and Savings Plan (the Plan”), an ERISA
plan. Bobby Joe had designated Dana as the beneficiary of his Plan
account prior to his divorce. He did not change the designation
after the divorce.
The Plan contains specific provisions determining the
appropriate beneficiary of a Plan account. If a Plan member has
designated his spouse as beneficiary, he may change that designa-
tion only with her consent. If he has designated his spouse as
beneficiary and has subsequently divorced, the designation is void.
If no valid beneficiary exists, the Plan determines the beneficiary
in the following order of preference: (1) the participant’s living
spouse; (2) his child or children; (3) his parents; and (4) his
executor or administrator, or his heirs at law. Thus, under the
terms of the Plan, Thomas and Robert would be the appropriate
beneficiaries of their father’s Plan account.
Following Bobby Joe’s death, the plaintiffs filed this action
in state court seeking a judicial determination of the proper
beneficiaries of his Plan account. The action was removed to
federal court on the basis of federal question jurisdiction. See
28 U.S.C. §§ 1331, 1441. The case was tried by consent before a
magistrate judge, who determined that Thomas and Robert were the
appropriate beneficiaries.
II.
The issue is whether Bobby Joe’s beneficiaries must be
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determined in accordance with the Plan’s terms. The plaintiffs
contend that we may invoke federal common law to determine that the
proper beneficiaries are Bobby Joe’s heirs at law. At the outset,
we note that a written ERISA plan generally controls the distribu-
tion of plan benefits. See Rodrigue v. Western & Southern Life
Ins. Co.,948 F.2d 969 (5th Cir. 1991); In re HECI Exploration Co.,
862 F.2d 513, 524 (5th Cir. 1988).
The plaintiffs argue as follows: Bobby Joe took the best and
only course legally available to him to change his beneficiaries.
His divorce occurred on September 7, 1993, and was not final until
the time for filing an appeal or motion for new trial expired
thirty days later. TEX. R. CIV. P. 392b. He thus could not alter
his designation of Dana as beneficiary without her permission until
October 7, sixteen days after his death. Bobby Joe was unable to
designate new beneficiaries and, through his will, did all that he
could do to change his designation. The plaintiffs invite us to
rely on federal common law to honor Bobby Joe’s wishes and
designate the heirs to his estate as his beneficiaries under the
Plan.
The plaintiffs rely upon Brandon v. Travelers Ins. Co., 18
F.3d 1321 (5th Cir. 1994), cert. denied, 115 S. Ct. 732 (1995). In
Brandon, the decedent had designated his wife as beneficiary to his
life insurance plan, an ERISA plan. He later divorced her. The
divorce decree provided that the ex-wife gave up any claim to the
life insurance proceeds, but the decedent failed to file a change-
of-beneficiary form required by the plan. Noting that “we ‘look to
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either the statutory language or, finding no answer there, to
federal common law which, if not clear, may draw guidance from
analogous state law,’” id. at 1325 (quoting from McMillan v.
Parrott, 913 F.2d 310, 311 (6th Cir. 1990)), we relied upon federal
common law, which borrowed from state law, to find that the ex-wife
was not the appropriate beneficiary.
The plaintiffs believe that Brandon should be construed
broadly to allow courts to invoke federal common law even when an
ERISA plan contains clear provisions governing an issue. We need
not address their argument, however. Even if we accepted it, they
could not prevail, as their assertion that Bobby Joe took all
available steps to alter his beneficiaries is incorrect.
Under Texas law, Bobby Joe had the opportunity to designate
new beneficiaries and failed to do so. The execution of his new
will did not alter his beneficiaries, because an employee pension
plan is not part of the estate that passes by will under Texas law.
See Valdez v. Ramirez, 574 S.W.2d 748, 750 (Tex. 1978). As soon as
the divorce decree was issued, Bobby Joe was free to designate new
beneficiaries without Dana’s permission, but he took no action.
Plaintiffs’ contention that Bobby Joe had to wait thirty days
for the decree to become final is incorrect, as Texas law makes a
judgment of divorce valid and enforceable on rendition. See Dunn
v. Dunn, 439 S.W.2d 830 (Tex. 1969); Ex parte Tarpley, 636 S.W.2d
21, 23 (Tex. App.——Eastland 1982, no writ) (holding a “judgment of
divorce, on its rendition, even without any entry, is valid and
enforceable between the parties”); Galbraith v. Galbraith, 619
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S.W.2d 238, 240 (Tex. App.——Texarkana 1981, no writ) (holding that
“although the written decree was not signed until March 24, 1976,
the divorce was fully effective for all purposes . . . at the time
it was pronounced from the bench”). It was thus possible for Bobby
Joe to designate new beneficiaries on or after September 7, when
the divorce decree was entered. He failed to do so. The proper
beneficiaries are therefore his sons, Thomas and Robert, in
accordance with the Plan’s provisions.
AFFIRMED.
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