Metropolitan Life Insurance Company v. Price

501 F.3d 271 (3rd Cir. 2007)

Purchase the Printed Copy at bsmsphd.com

Nature of the Case

To access this section all you need to do is click here and register.

Facts

The New Jersey Transit Corporation sponsors a Basic Life Plan for the benefit of its employees. The plan is funded through a group life insurance policy issued by P to New Jersey Transit. P is the plan's 'claims fiduciary.' Paul Price was a participant and had enrolled for $20,000 in life insurance benefits. In May 2002, Paul died. He was survived by his widow, Sandra Price, and his children from a previous marriage, Shannon and Andre Price. The widow and children submitted competing claims for the life insurance benefits. P’s investigation discovered that, in or around February 2000, Paul designated his widow as the primary beneficiary. P then informed the children's attorney that it was denying their claims. P explained that it had a fiduciary duty 'to administer claims in accordance with ERISA and the terms of the plan.' The children requested a review. Paul's first marriage ended in 1995 with a final judgment of divorce. Paragraph 11 of that judgment specifically referenced Paul's life insurance: The Husband shall amend these policies in order to name the children of the marriage as irrevocable beneficiaries until such time as Andre Price, the son of the marriage, is emancipated. The Husband shall name the Wife as trustee. Since Andre was unemancipated at the time of Paul's death. The children claimed they were the rightful beneficiaries under the divorce judgment's plain terms. Under ERISA, P had a duty to administer claims 'in accordance with the documents and instruments governing the plan' but the children had a state court order indicating they were the irrevocable beneficiaries. ERISA preempts any state law that 'relates to' an employee benefit plan. But, ERISA also contains an exception from this general rule for 'qualified domestic relations orders.' P could not tell if there was a QDRO. P let the parties determine a solution. They failed and P brought this interpleader action. The trial court dismissed for lack of subject matter jurisdiction. P appealed claiming jurisdiction under § 1332.