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Moore v. Moore

Supreme Court of Alabama

November 22, 2019

Beulah Jean James Moore
v.
Billy Edward Moore, individually and as executor of the Estate of Jimmy Lee Moore, deceased

          Appeal from Elmore Circuit Court (CV-17-900319)

          SHAW, Justice.

         The defendant below, Beulah Jean James Moore ("Beulah"), appeals from a summary judgment entered in favor of the plaintiff, Billy Edward Moore ("Billy"), individually and as executor of the estate of his brother and Beulah's husband, Jimmy Lee Moore ("Jimmy"), deceased, in an action filed by Billy seeking the enforcement of a prenuptial agreement. We affirm.

         Facts and Procedural History

         Before marrying Beulah, Jimmy had been employed by the NCR Corporation through which he obtained a 401(k) retirement plan ("the 401(k) plan") managed by Fidelity Investments Institutional Operations Company, Inc. ("Fidelity"). In addition to the 401(k) plan, Jimmy also had a pension-benefit plan called the "NCR Pension Plan PensionPlus Benefit" ("the pension plan"). Before he married Beulah, Jimmy had named Billy as the beneficiary of both the 401(k) plan and the pension plan. In July 2016, before marrying Beulah, Jimmy executed a will that did not provide for Beulah in which he stated that he intended to provide for Beulah "outside" the will and that he intended to leave his estate, including his real and personal property, to his brother, Billy.

         A few days after Jimmy executed his will, Beulah and Jimmy executed a prenuptial agreement. That agreement included a financial statement that specified Jimmy's assets, which included, among other things, the proceeds of the 401(k) plan and the pension plan. Under the terms of the prenuptial agreement, Jimmy and Beulah agreed that the separate property they each brought into the marriage would remain separate. They also agreed that neither of them would "claim, demand, assert any right to, take or receive any part of the property of the other as described on Schedules 1 and 2," which the parties do not dispute included the 401(k) plan and the pension plan. Additionally, under section 4.4 of the prenuptial agreement, which is discussed more fully below, Beulah and Jimmy renounced any right to any retirement account held by the other. That section further provided that it was not intended to restrict the rights of an account owner to "direct" account-benefit distributions to a beneficiary and that, in order to effectuate such a designation, each would be required to execute any necessary "spousal consents or waivers."

         In August 2016, Beulah and Jimmy married. Later that year, Jimmy died of cancer. According to Billy, as of March 2017, Fidelity's records indicated that he was still the designated beneficiary of the 401(k) plan. He also asserts that documentation related to the pension plan showed that he was still the beneficiary of that plan as well.

         At some point after Jimmy's death, the NCR plan administrator distributed the proceeds from both the 401(k) plan and the pension plan--totaling over $500, 000--to Beulah. In October 2017, concerned that Beulah was not entitled to those funds and that she was improperly retaining them, Billy, both individually and as executor of Jimmy's estate, filed the underlying action, alleging that Beulah had breached the prenuptial agreement. Billy sought both damages and injunctive relief. The trial court issued a temporary restraining order prohibiting Beulah from spending or distributing the funds she had received; it also ordered Beulah to interplead those funds.

         In November 2017, Beulah received a letter from the plan administrator for the 401(k) plan and the pension plan. That letter stated that Beulah, as the surviving spouse, was the beneficiary of the 401(k) plan and the pension plan under the Employee Retirement and Income Security Act ("ERISA"). The letter further stated that, under ERISA, a prenuptial agreement could not be considered in determining who was the proper beneficiary of the 401(k) plan and the pension plan.

         Billy subsequently amended the complaint to allege that, in addition to taking possession of the proceeds of the 401(k) plan and the pension plan, Beulah had also converted personal property of Jimmy's estate to her own use. He also asked the trial court to enter a permanent injunction prohibiting Beulah from transferring, spending, or otherwise disposing of any of the proceeds of the 401(k) plan or the pension plan. The trial court issued the permanent injunction.

         In November 2018, following several months of litigation, Billy filed a motion for a summary judgment. In his motion, Billy argued that Beulah had breached the prenuptial agreement by taking possession of and/or claiming the proceeds of both the 401(k) plan and the pension plan. He also argued that ERISA did not prevent him from suing Beulah on the theory of breach of contract once those funds had been distributed. Finally, Billy asked the trial court to enter a summary judgment in his favor and for the court to award him $568, 099.52, plus interest and costs.

         Beulah filed a response to Billy's motion and also filed a cross-motion for a summary judgment. In her response and cross-motion, Beulah did not contest that she had received the proceeds from the 401(k) plan and the pension plan. She argued, however, that she was the proper beneficiary and that, under ERISA, the prenuptial agreement did not constitute a valid waiver of her entitlement to those benefits. Although she acknowledged that, under section 4.4 of the prenuptial agreement, she had "renounced" her claim to Jimmy's retirement benefits, she argued that it required that "spousal consents or waivers" be executed in order for that waiver to take effect and for Billy to be a proper beneficiary. Because she never executed such a consent or waiver, Beulah argued, she was entitled to receive and retain the proceeds of the 401(k) plan and the pension plan and, thus, was entitled to a summary judgment in her favor as a matter of law.

         Billy argued in response that ERISA did not bar or preempt his breach-of-contract claim against Beulah based on a breach of the prenuptial agreement because, he said, the claimed damages are proceeds that have already been distributed. Specifically, he noted several appellate-court decisions that have held that ERISA does not preempt a claim for funds that have already been distributed from an ERISA- governed plan. As a result, Billy argued, he was entitled to a summary judgment in his favor.

         The trial court entered a summary judgment in favor of Billy and ordered Beulah to pay the requested amount plus prejudgment interest. The trial court also denied ...


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