Hammertime - Part Two: Sixth Circuit Weighs In On QDROs

Sun Life Assurance Co. v. Jackson, No. 17-3120 (6th Cir. 2017)
United States Court of Appeals for the Sixth Circuit: Decree Deemed to be a QDRO

Decided and filed: December 13, 2017
Affirming

It isn’t often LeBron James comes up in a QDRO case, trust me. But that is exactly what you will see when you sit down to read this important case coming out of the 6th Circuit. In outlining its standard of what is and is not 'clearly specified' (as defined under the 'REACT' amendments to ERISA, 1984), the Court observed:

"...of a sports fan asked this question: Who is the greatest basketball player of all time: Michael Jordan or LeBron James? He might respond “LeBron James,” which clearly specifies the answer. Or he might respond “Number 23,” which does not clearly specify the answer. But if he responded “Number 23 of the Cleveland Cavaliers,” no one would be confused. The sports fan did not state “LeBron James.” But he did specify him."

This case touches upon several circuit-specific themes, including preemption of state law, and the validity of posthumous orders. In this case, a divorce decree itself was deemed to be a QDRO, establishing the divorced couple's child as the legal beneficiary of Husband’s employer-sponsored life insurance policy. This, despite Husband’s failure to change his designation to name the child in compliance with the decree (Husband had instead left intact, through the time of his death, his pre-decree designation of his uncle). The Court found that the proceeds must be paid to the parties’ daughter, pursuant to the terms of the decree-deemed-QDRO, and not to Husband’s designated beneficiary on file with the insurance company (naming his uncle). To reach this result, the Court went through the QDRO requirements under ERISA in detail, and found, under § 1056(d)(3), that the terms of the decree “clearly specified” each of ERISA’s requisites.

That's it for this installment of my four-part 'Hammertime' blog series, but keep checking back for my Kentucky and Ohio case law updates, which will follow quite closely after this posting. And who knows? Maybe I'll work in a few more hammer jokes, while I'm at it. A certain Peter, Paul and Mary song, perhaps?

Editor’s Note: A recent Tenth Circuit case, Festini-Steele v. Exxonmobil Corporation, No. 20-1052, __F.App’x__, 2021 WL 629755 (10th Cir. Feb. 18, 2021), likewise came down on the side of deeming a divorce decree a QDRO for purposes of life insurance proceeds. Citing to Sun Life Assurance Co., v. Jackson, the Court opined: “We consider Jackson’s reasoning persuasive with respect to the Divorce Decree here.”

Editor’s Additional Note: Another one… but this case pertains to a deemed QDRO for retirement benefits; the same principles apply. See Bd. of Trs., Laborers' Dist. Council Constr. Indus. Pension Plan v. Bowman, No. 21-1965, 2021 BL 400942, 2021 Us Dist Lexis 200802 (E.D. Pa. Oct. 19, 2021)(property settlement agreement incorporated into a decree of divorce issued 15 years prior deemed a QDRO, thereby entitling former spouse to a share of Husband’s pension payments); see also https://news.bloomberglaw.com/employee-benefits/case-nondocketed-draft-qdro-had-detailed-pension-calculation-for-ex-wife-e-d-pa-irc-401 [LO1] [LO1].

Hammertime Installments:

Blog Posts are intended to bring attention to developments in the law and are not intended as legal advice for any particular client or any particular situation. Please consult with counsel of your choice regarding any specific questions you may have.

2018Eileen ZellFebruary 13, 2018ERISA, QDRO, Appeals, Ohio, Survivorship