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Miller v. Nationwide Retirement Solutions, Inc.

United States District Court, N.D. Alabama, Southern Division

June 30, 2017

NATIONWIDE RETIREMENT SOLUTIONS, INC., Defendant/Counterclaim Plaintiff,


          John E. Ott, Chief United States Magistrate Judge

         Plaintiff Jacquetta Miller (“Jacquetta”) claims that she is the lawful beneficiary of a Deferred Compensation Plan account (the “Plan Account”) owned by her late husband Maurice Miller (“Maurice”) and administered by Defendant Nationwide Retirement Solutions, Inc. (“NRS”). (Doc.[1] 1-1 (“Complaint” or “Compl.”)). NRS removed the action to this court based on diversity jurisdiction (Doc. 1) and filed an answer that also raised counterclaims and a complaint in interpleader against Jacquetta and two new parties: Maurice's ex-wife Virginia Miller (“Virginia”) and his mother, Maple Miller (“Maple”). (Doc. 4). Virginia and Maple, in turn, filed counterclaims against NRS and Jacquetta, based on the assertion that it is they, i.e., Virginia and Maple, who are entitled to the proceeds of the Plan Account. (Doc. 22).



         The court previously disposed of various pre-trial motions. The court granted NRS's motion for summary judgment insofar as NRS sought dismissal of all of Jacquetta's claims and all of Virginia and Maple's counterclaims to the extent they might impose independent liability upon NRS beyond payment of the proceeds of the Plan Account, prejudgment interest, or costs. The court also granted NRS's motion for discharge from further liability to the claimants for the proceeds of Maurice's Plan Account, with the understanding that NRS formally remains a party and must pay the proceeds to the successful claimant or claimants as determined by the court, upon being ordered to do so. The primary remaining issue is resolution of the competing claims to the proceeds of the Plan Account. Accordingly, a trial was conducted without a jury at the request of counsel. (See Doc. 52 at 6).

         Virginia and Maple each claim one-half of the proceeds of the Plan Account as named beneficiaries upon the death of Maurice together with costs and applicable interest owed by NRS. They also assert a claim for attorney's fees and costs against Jacquetta for filing a frivolous case pursuant to the Alabama Litigation Accountability Act.[2] See Ala. Code § 12-19-20. Jacquetta claims that she is the sole beneficiary of the Plan Account because she and Maurice signed a change-in-beneficiary form in December 2014 naming her as the sole beneficiary of the Plan Account.



         Also before the court is Virginia and Maple's motion in limine (doc. 49), upon which the court deferred formally ruling prior to trial since this was a non-jury case. In the motion, they (1) seek to have this court prohibit introduction of evidence that contradicts the NRS Plan document or that purports “to set aside the designated beneficiaries set out by the deceased, Maurice Miller” (id. at 1 & 3) and (2) argue that a Qualified Domestic Relations Order (“QDRO”)[3] was unnecessary in this case (id. at 2). Jacquetta responds that she should not be prohibited from offering testimony concerning the change of beneficiary. (Doc. 50 at 1-5). She also argues that (1) Virginia is not entitled to any contributions to the Plan Account that were made after the date of the divorce decree and (2) if the divorce decree controls, Virginia and Maple “have failed, as a matter of fact and law, to introduce any evidence whatsoever as to the ‘present value' of Virginia Miller's claim, ” thus demonstrating a failure of their claim. (Id. at 5-6). Still further, Jacquetta asserts that because Virginia and Maple argue that a QDRO is not necessary in this instance, Alabama Code § 30-4-17 effectuated a revocation of their claims and, thereby, they have no claim to the Plan Account. (Id. at 6-11). In their reply, Virginia and Maple argue that any evidence offered by Jacquetta concerning statements by Maurice are due to be excluded as hearsay. (Doc. 51 at 1).

         The court will address the evidentiary issues presented by the motion in limine, but will defer an analysis of the substantive matters raised therein until the discussion of the merits below.[4] First, to the extent any aspect of the motion in limine was not raised by objection at trial, it is deemed waived.

         Second, concerning the request to exclude any evidence contradicting the NRS Plan document or “to set aside the designated beneficiaries set out” by Maurice (id. at 1 & 3), the court finds the motion to be overly broad. To the extent Virginia and Maple seek to exclude evidence that tends to change the terms of the Plan document, the motion is moot because counsel for Jacquetta acknowledge that the issue is not the terms of the Plan itself, but whether there has been an effective change of a beneficiary under the terms of the Plan or whether there was substantial compliance with the Plan so that the equities justify a finding for Jacquetta. Thus, Jacquetta is not seeking to challenge the terms of the Plan. To the extent the motion seeks to exclude any evidence intended to set aside the designated beneficiaries, the motion is denied. Such evidence, when properly authenticated, is relevant to the issues in this case. Accordingly, the motion in limine is denied to that extent.

         Third, Virginia and Maple argue that any evidence offered by Jacquetta concerning statements by Maurice is due to be excluded as hearsay. Because of the broadness of this issue, and the importance of placing the evidence in context, the court deferred ruling on this aspect of the motion prior to trial. Instead, it afforded the parties the opportunity to make necessary and appropriate objections during the trial of the case. This was necessary because some purportedly excludable testimony regarding statements by Maurice may be relevant to the issue of Jacquetta's intent in bringing this action when the court is evaluating and determining Virginia and Maple's claim under the Alabama Litigation Accountability Act. The trial findings herein have been made with this understanding in mind.



         Maurice was employed by the City of Birmingham (“City”) as a firefighter until his retirement in 2015. (R. 43, 87).[5] He participated in a Deferred Compensation Plan that the City sponsored while he was working for the City. (R. 44). NRS is the administrator of that Plan. On October 30, 1990, Maurice executed a Participation Agreement and Payroll Deduction Authorization form naming his then-wife Virginia as “Beneficiary Name 1” and his mother Maple as “Beneficiary Name 2” of his Plan Account. (Exh. 5).[6] He named his three children as equal contingent beneficiaries should Virginia precede him in death. (Id.)

         Maurice and Virginia had children who are now adults. (R. 60). Maurice and Virginia divorced on June 26, 2002. (R. 61-62; Exhs. 22 & 23). In the final divorce judgment, each spouse was awarded “50% of both [of their] pension, retirement and 401K plans.” (Exh. 22 at VI.B; R. 62). The decree further provides:

Each party shall hire attorneys to jointly assist in the preparation of all appropriate Qualified Domestic Relations Orders [QDROs] for approval and execution by the Court. The Court retains jurisdiction over the case until all appropriate [QDROs] are executed.
That the [parties] hereby relinquish all their right, title and interest or claim whatsoever with respect to said personal and real property awarded to the other herein and shall execute any and all paperwork necessary to relinquish their right to said items to the other within thirty days of demand by the other. That the [parties] shall indemnify and hold harmless the other from the payment of any liens, mortgages, etc., attached to said properties awarded to each of them respectively except as specifically set out herein.


         Maurice later married Jacquetta on December 11, 2009. (R. 45, 48). She remained Maurice's wife until he died from cancer on May 15, 2015. (R. 53; Exh. 25). They had a daughter who was born while Maurice was married to Virginia. (R. 48).

         On November 24, 2014, Maurice and Jacquetta completed a “DROP Benefit Election Form”[7] with the City of Birmingham Retirement System wherein Maurice elected to roll-over his accrued benefits into an Individual Retirement Arrangement with NRS.[8] (Exh. 21 at 1-2). The benefits were valued at $109, 216.82 at the time, and were, according to the City's documents, a lump sum equal to 36 monthly installments plus interest. (Id.)

         According to Jacquetta, during December 2014, she and Maurice met with Jeremy White, the NRS Retirement Specialist assigned to the Plan, at the fire station where Maurice worked. (R. 45-46). They met with him intending to take the necessary steps to ensure their daughter would be provided for in the event of Maurice's death. (Id.) The purpose of the meeting was to have Jacquetta listed as a beneficiary on Maurice's Plan Account. (Id. at 46). At that meeting, Jacquetta says, she provided White with her driver's license and her Social Security card and she signed a beneficiary form that made her the beneficiary. They left that form with White. (Id. at 45-49). During the trial, Jacquetta identified a blank “Beneficiary Change Form” as the document she filled out and signed. (Id. at 49; Ex.10). At the conclusion of the meeting with White, Jacquetta was satisfied that she had been made the beneficiary of the Plan Account. She further understood that White was going to do whatever was necessary with the form or forms. (R. 48). Neither she nor Maurice ever received copies of the form or forms that were executed that day. (Id. at 47). Additionally, they never received a letter from NRS indicating that there had been a beneficiary change. (Id. at 5 2-53).

         White testified, however, that he received never a change of beneficiary form at any time prior to Maurice's death. (R. 12, 20). He stated that the purpose of the December 9, 2014 meeting at the fire station was simply to roll the money from the City of Birmingham to Maurice's Plan Account.[9] (Id. at 11-13, 26, 37). The only form White had Maurice execute was an incoming asset form. (Id. at 13, 28). White specifically testified that he did not have Maurice complete any Beneficiary Change Form. (Id. at 19-20; see e.g. Exh. 10). White did not recall talking with Maurice or Jacquetta about any change of beneficiaries. (R. 37). White also stated that Jacquetta did not complete any forms. (Id.) White provided the rollover document to the City so that the transfer of funds could be made. (Id. at 29-31, 38-39).[10] White believed the approximate amount of the rollover was $109, 000. (Id. at 14, 39). Lastly, White stated that he never received any change of beneficiary form from Maurice. (Id. 20).

         NRS received the funds transfer on March 23, 2015, in the amount of $109, 216.74. (Exh. 11 & 12). It was deposited into Maurice's existing deferred compensation plan[11] that was authorized pursuant to Internal Revenue Code § 457(b).[12] The Plan Account was a part of the 457(b) Plan. (R. 38; Exh. 2 at Nationwide358, 362-63).[13]

         In June 2015, following Maurice's death, Jacquetta, Virginia, and Maple each executed and submitted to NRS respective claim forms by which each asserted that she was the beneficiary of Maurice's Plan Account. (See R. 22, 54, 62 & 72; Exh. 14, 15). At some time around June 2015, after Maurice's death, Jacquetta met with White and completed an alternate payee/beneficiary form. (R. 23-24, 39). White acknowledged during his testimony that he made a mistake in having Jacquetta complete the form under the circumstances. (Id. at 25). He simply assumed she was the beneficiary. (Id. at 40).

         On June 15, 2016, Virginia's attorney faxed a letter to NRS advising it of Virginia's claim to the Plan Account proceeds and requesting that a hold be put on them pending submission of a QDRO. (R. 59, 63; Exh. 16). As a result of the conflicting claims made by Jacquettta, Virginia, and Maple, NRS placed a hold on the Plan ...

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