Justia Pennsylvania Supreme Court Opinion SummariesArticles Posted in ERISA
In Re: Estate of Easterday
Michael Easterday (“Decedent”) and Colleen Easterday (“Easterday”) married in 2004. Prior to marriage, Decedent worked for Federal Express and became a participant in a pension plan established by this former employer. He also purchased a $250,000 life insurance policy. Decedent designated Easterday the beneficiary of both during their marriage. The parties separated in 2013, and ultimately filed for divorce under section 3301(c) of the Pennsylvania Divorce Code, which provided for a divorce by mutual consent of the parties. She and Decedent subsequently settled their economic claims in a property settlement agreement (“PSA”) executed December, 2013. Pertinent here, the PSA provided that the parties would each retain "100% of their respective stocks, pensions, retirement benefits, profit sharing plans, deferred compensation plans, etc. and shall execute whatever documents necessary to effectuate this agreement." The issue this case presented was one of first impression for the Pennsylvania Supreme Court, namely, the interplay between provisions of the Divorce Code, the Probate, Estates and Fiduciaries Code, and the Rules of Civil Procedure. An ancillary issue centered on whether ERISA preempted a state law claim to enforce a contractual waiver to receive pension benefits by a named beneficiary. It was determined Decedent’s affidavit of consent was executed more than thirty days prior to the date it was submitted for filing (and rejected). The Superior Court ruled that because the local Prothonotary rejected the filing of Decedent’s affidavit of consent due to a lack of compliance with Rule 1920.42(b)(2)’s thirty-day validity requirement, grounds for divorce had not been established in accordance with section 3323(g)(2) of the Divorce Code at the time of Decedent’s death. Because the Decedent’s affidavit of consent was not filed, section 6111.2 of the PEF Code did not invalidate Easterday’s designation as the beneficiary of Decedent’s life insurance policy. Furthermore, the Superior Court determined ERISA did not preempt the state law breach of contract claim to recover funds paid pursuant to an ERISA-qualified employee benefit plan. The Pennsylvania Supreme Court affirmed the Superior Court's judgment. View "In Re: Estate of Easterday" on Justia Law
Barnett v. SKF USA, Inc.
The issue before the Supreme Court in this case concerned whether Section 514(a) of the Employee Retirement Income Security Act of 1974 (ERISA), preempted the breach of contract claim asserted by Appellees Lawrence J. Barnett, Christine Cookenback, James M. Defeo, and Madlin Laurent against Appellant SKF USA, Inc. under Pennsylvania law. Appellees were salaried, non-unionized, employees of SKF, working in its Philadelphia plant. The Company also employed hourly unionized employees at the plant. In 1991, SKF announced its decision to shut down the plant and terminate all workers. Over the course of the next year, the effect of the closing on employee retirement rights and benefits became a matter of discussion between Appellees and their supervisors. Appellees' retirement and pension rights were set forth in the an ERISA plan which SKF maintained and administered. Appellees became aware that, as a result of collectively bargaining the effects of plant closing, SKF agreed that any union worker with 20 years of service and 45 years of age, as of March 10, 1993, the date on which the collective bargaining agreement then in effect expired, would be entitled to receive an immediate and full pension (the creep provision). Two years after their employment with SKF was terminated, and prior to the submission of pension applications, Appellees commenced a breach of contract action against SKF alleging that throughout the course of their employment with the Company, they were employed under the same or better terms and conditions, including "pension eligibility," as SKF’s union workers. Upon review of the trial court record, the Supreme Court found that Appellees' claim was preempted, and accordingly reversed the Superior Court's order that affirmed the trial court's denial of summary judgment in favor of SKF. View "Barnett v. SKF USA, Inc." on Justia Law
In Re: Estate of Sauers
The issue on appeal to the Supreme Court in this case pertained to the extent to which the federal Employee Retirement Income Security Act (ERISA) preempted the Pennsylvania Probate, Estates and Fiduciaries Code, 20 Pa.C.S. 6111.2. The Decedent Paul Sauers, III obtained a $40,000 life insurance policy in 1997 from the Hartford Life Insurance Company pursuant to a employee group benefit plan which was subject to ERISA. At the time of his death, Decedent's beneficiaries were his ex-spouse and his nephew as contingent beneficiary. William F. Sauers, administrator of Decedent’s estate, filed in the Orphans’ Court of York County a petition for rule to show cause why primary beneficiary ex-Spouse should not have surrendered to the Contingent Beneficiary all interest in the proceeds of the insurance policy pursuant to 20 Pa.C.S. 6111.2. The ex-spouse objected and filed a motion to dismiss the petition for rule to show cause, arguing that regardless of any Pennsylvania statute to the contrary, ERISA mandated taht the proceeds of the policy be paid to her as the primary beneficiary of the policy. Upon review, the Supreme Court held that while an estate may properly bring a cause of action on behalf of a contingent beneficiary to a life insurance policy in a county orphans’ court seeking the proper distribution of assets, ultimately, ERISA preempts Section 6111.2 of the Probate Code. To the extent the en banc panel of the Superior Court held otherwise, the Court reversed and remanded this appeal to that court for further proceedings. View "In Re: Estate of Sauers" on Justia Law