Scott Andochick v. Ronald Byrd , 709 F.3d 296 ( 2013 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
SCOTT ANDOCHICK, M.D., 
Plaintiff-Appellant,
v.
RONALD BYRD, Individually; JUNE  No. 12-1728
BYRD, Individually; RONALD AND
JUNE BYRD, As Co-Administrators
of the Estate of Erika L. Byrd,
Defendants-Appellees.

Appeal from the United States District Court
for the Eastern District of Virginia, at Alexandria.
Liam O’Grady, District Judge.
(1:11-cv-00739-LO-JFA)
Argued: January 30, 2013
Decided: March 4, 2013
Before MOTZ, KING, and FLOYD, Circuit Judges.
Affirmed by published opinion. Judge Motz wrote the opin-
ion, in which Judge King and Judge Floyd joined.
2 ANDOCHICK v. BYRD
COUNSEL
ARGUED: George Olai Peterson, PETERSON SAYLOR,
PLC, Fairfax, Virginia, for Appellant. Karl William Pilger,
BORING & PILGER, PC, Vienna, Virginia, for Appellees.
ON BRIEF: Michael T. Marr, PETERSON SAYLOR, PLC,
Fairfax, Virginia, for Appellant.
OPINION
DIANA GRIBBON MOTZ, Circuit Judge:
Scott Andochick brought this declaratory judgment action,
asserting that ERISA preempted a state court order requiring
him to turn over benefits received under ERISA retirement
and life insurance plans owned by his deceased ex-wife, Erika
Byrd. ERISA obligates a plan administrator to pay plan pro-
ceeds to the named beneficiary, here Andochick. The only
question before us is whether ERISA prohibits a state court
from ordering Andochick, who had previously waived his
right to those benefits, to relinquish them to the administrators
of Erika’s estate. Andochick appeals the district court’s grant
of the administrators’ motion to dismiss the ERISA preemp-
tion claim. For the reasons that follow, we affirm.
I.
The parties do not dispute the relevant facts.
In February 2005, Scott Andochick and Erika Byrd mar-
ried. During the marriage, Erika worked as an attorney at
Venable, LLP, where she participated in the Venable Retire-
ment ("401(k)") Plan and the Venable Life Insurance Plan.
Erika executed beneficiary designations for both plans, nam-
ing Andochick as her primary beneficiary. The Employee
Retirement Income Security Act of 1974 ("ERISA"), 29
U.S.C. §§ 1001 et seq., governs both plans.
ANDOCHICK v. BYRD 3
In July 2006, Andochick and Erika separated and entered
into a marital settlement agreement. In the agreement,
Andochick "waive[d] any interest, including but not limited to
any survivor benefits, which he may have in Erika’s Venable
LLP 401(k) Plan." Further, he released and relinquished any
future rights "as a beneficiary under any life insurance policy
. . . or any other beneficiary designation made prior to the
execution of th[e] Agreement." Finally, Andochick agreed to
execute any documents required to carry out the provisions of
the agreement.
In December 2008, Andochick and Erika divorced, and the
judgment of divorce incorporated their marital settlement
agreement. When Erika died in April 2011, her parents, Ron-
ald and June Byrd, qualified as administrators of her estate.
At the time of her death, Erika had failed to name a new
beneficiary of her ERISA plans. The ERISA plan administra-
tors of Erika’s 401(k) and life insurance plans determined that
the proceeds of both plans should be paid to Andochick,
because he remained the named beneficiary of the plans. The
Byrds appealed the administrators’ decisions. The administra-
tor of the 401(k) plan affirmed its determination, but the
administrator of the life insurance plan found that it was
unable to make a determination and stated its intention to file
an interpleader in the district court.
In addition to appealing the plan administrators’ decisions,
the Byrds made a direct claim on Andochick, asserting that he
was in breach of the marital settlement agreement and
demanding that he sign waivers renouncing any right to the
plan proceeds. Andochick refused.
On July 13, 2011, Andochick filed this action in the federal
district court for the Eastern District of Virginia asking for a
declaratory judgment that ERISA preempts the waiver provi-
sions in the marital settlement agreement and the Byrds there-
fore have no claim to the plan proceeds. Andochick also
4 ANDOCHICK v. BYRD
asked for a declaratory judgment that the Byrds lacked stand-
ing to enforce the marital settlement agreement, and that the
Byrds converted an automobile that properly belonged to
Andochick.
Two days later, on July 15, 2011, the Byrds filed suit
against Andochick in the Circuit Court for Montgomery
County, Maryland, asking the court to find Andochick in con-
tempt of the marital settlement agreement and judgment of
divorce, and to order him to waive his rights to the 401(k) and
life insurance proceeds. The state court found Andochick in
contempt of the judgment of divorce and ordered him to take
all actions necessary to renounce his interests in Erika’s plan
benefits. However, the court specifically declined to address
what effect, if any, ERISA might have on the ultimate
enforceability of Andochick’s waiver.
Given this success, the Byrds returned to the federal court,
which had stayed its proceedings pending conclusion of the
state court action, and moved to dismiss Andochick’s com-
plaint. In response, Andochick moved for partial summary
judgment. The district court granted the Byrds’ motion to dis-
miss as to standing and ERISA preemption and denied
Andochick’s motion for summary judgment as moot.1 The
district court "directed" the plan administrators "to pay the
ERISA funds to Andochick," and held that, "[i]n accordance
with the [state court’s] order, Andochick must then waive his
right to these funds, distributing them instead to Erika’s
estate." Andochick v. Byrd, No. 1:11-cv-739, 2012 WL
1656311, at *13 (E.D. Va. May 9, 2012).
Andochick timely noted this appeal, pursuing only the
1
The court noted that Andochick’s conversion claim was valued at
$25,000, an amount insufficient to establish diversity jurisdiction. Given
that Andochick’s federal claims had been dismissed, the court refused to
exercise supplemental jurisdiction over the conversion claim and dis-
missed it without prejudice.
ANDOCHICK v. BYRD 5
ERISA claim. We review de novo the district court’s grant of
the Byrds’ motion to dismiss. E.I. du Pont de Nemours & Co.
v. Kolon Indus., Inc., 637 F.3d 435, 440 (4th Cir. 2011).2
II.
ERISA requires that "[e]very employee benefit plan . . . be
established and maintained pursuant to a written instrument"
that "specif[ies] the basis on which payments are made to and
from the plan." 29 U.S.C. §§ 1102(a)(1), (b)(4). ERISA then
directs the plan administrator to discharge his duties "in
accordance with the documents and instruments governing the
plan." Id. § 1104(a)(1)(D). In Kennedy v. Plan Administrator
for DuPont Savings & Investment Plan, 555 U.S. 285 (2009),
the Supreme Court held that an ERISA plan administrator
must distribute benefits to the beneficiary named in the plan,
regardless of any state-law waiver purporting to divest that
beneficiary of his right to the benefits. Kennedy explicitly left
open the question of whether, once the benefits are distributed
by the administrator, the decedent’s estate can enforce a
waiver against the plan beneficiary. See id. at 299 n.10 ("Nor
do we express any view as to whether the Estate could have
brought an action in state or federal court against [the plan
beneficiary] to obtain the benefits after they were distrib-
uted."). That is the question we address today.3
2
We note the Byrds contend that the district court should have granted
their motion to dismiss without reaching the merits of the case. They
maintain that res judicata bars Andochick’s declaratory judgment action.
We agree with the district court that the state court explicitly declined to
decide what effect ERISA might have on the ultimate disposition of the
plan proceeds, so res judicata does not bar Andochick from pursuing his
ERISA preemption claim in federal court. The Byrds additionally argue
that Andochick’s claim is unsuitable for a declaratory judgment action and
that Andochick lacks standing. The district court ably dealt with these
arguments and we need not revisit them here.
3
This suit names the Byrds in their individual capacities and as adminis-
trators of Erika’s estate. The Byrds argued before the district court that
Ms. Byrd should receive some of the plan proceeds as a second named
beneficiary on one of the plans. We agree with the district court that Ken-
nedy forecloses this result.
6 ANDOCHICK v. BYRD
A.
Though the Kennedy Court expressly declined to decide the
issue we now address, Andochick contends that the Court’s
reasoning in that case dictates that ERISA must preempt
waivers of the kind embodied in the marital settlement agree-
ment. We find this argument unconvincing.
In Kennedy, the Court emphasized three important ERISA
objectives: "[1] simple administration, [2] avoid[ing] double
liability [for plan administrators], and [3] ensur[ing] that ben-
eficiaries get what’s coming quickly, without the folderol
essential under less-certain rules." Id. at 301 (some alterations
in original) (citation omitted).
Allowing post-distribution suits to enforce state-law waiv-
ers does nothing to interfere with any of these objectives. For
in situations like that at issue here, Kennedy merely dictates
that the plan administrator distribute plan benefits to the
named beneficiary. This ensures simple administration
regardless of whether post-distribution suits are permitted,
because the plan administrator would have no role in any
post-distribution proceedings. For the same reason, post-
distribution suits do not expose the plan administrator to dou-
ble liability—only the named beneficiary has any claim
against the plan administrator.
Finally, as the Third Circuit recently explained when
addressing facts nearly identical to those at hand, "the goal of
ensuring that beneficiaries ‘get what’s coming quickly’ refers
to the expeditious distribution of funds from plan administra-
tors, not to some sort of rule providing continued shelter from
contractual liability to beneficiaries who have already
received plan proceeds." Estate of Kensinger v. URL Pharma,
Inc., 674 F.3d 131, 136 (3d Cir. 2012). Permitting a post-
distribution suit against a plan beneficiary based on his pre-
distribution waiver does not prevent the beneficiary from
"get[ting] what’s coming quickly." Rather, as the district court
ANDOCHICK v. BYRD 7
noted, it merely prevents him from keeping what he "quickly"
received. Thus, we conclude that permitting post-distribution
suits accords with the ERISA objectives discussed in Ken-
nedy.
B.
Andochick maintains, however, that Boggs v. Boggs, 520
U.S. 833 (1997), and Egelhoff v. Egelhoff ex rel. Breiner, 532
U.S. 141 (2001), "establish that a pre-distribution waiver"
should not be held "effective against post-distribution pro-
ceeds." Plaintiff-Appellant’s Br. at 22. Given that Boggs and
Egelhoff pre-date Kennedy, in which the Supreme Court
expressly left this question open, Andochick’s argument
seems dubious indeed. Moreover, examination of Boggs and
Egelhoff reveals that they lend Andochick no support.
In Boggs, the Court held that ERISA preempted a Louisi-
ana community property law that would have allowed a plan
participant’s first wife to transfer by will her interest in the
participant’s undistributed retirement benefits. 520 U.S. 833.
Andochick contends Boggs established that there is no dis-
tinction between a suit claiming entitlement to undistributed
plan benefits, as in Kennedy, and one claiming entitlement to
distributed plan benefits, as here. This argument fails.
First, Boggs involved a very different situation from that at
issue here, and its reasoning does not logically extend to this
case. Operation of the community property law at issue in
Boggs would have resulted in the diversion of plan benefits
without the consent of the plan participant. See Boggs, 520
U.S. at 852 (noting that, unless ERISA preempted the state
statute, "retirees could find their retirement benefits reduced
by substantial sums because they have been diverted to testa-
mentary recipients"). Here, by contrast, the plan participant
and beneficiary agreed that the beneficiary would waive his
interest in the plan benefits.
8 ANDOCHICK v. BYRD
Further, as several other courts have noted, while the suit
in Boggs took place after benefits were distributed, unlike the
case at hand it involved a claimed interest in undistributed
plan benefits. See Estate of Kensinger, 674 F.3d at 138 (dis-
tinguishing Boggs from a situation parallel to that at issue
here on the basis that Boggs involved a claimed interest in
undistributed pension plan benefits); Alcorn v. Appleton, 708
S.E.2d 390, 392 (Ga. Ct. App. 2011) (same), aff’d, 728 S.E.2d
549, 551-52 (Ga. 2012); Pardee v. Pers. Representative for
Estate of Pardee, 112 P.3d 308, 313-14 (Okla. Civ. App.
2004) (same); see also Boggs, 520 U.S. at 854 ("It does not
matter that respondents have sought to enforce their rights
only after the retirement benefits have been distributed since
their asserted rights are based on the theory that they had an
interest in the undistributed pension plan benefits.").
Thus, Boggs does not lend support to Andochick’s conten-
tion that ERISA preempts post-distribution suits of the kind
at issue here.
Egelhoff is no more helpful to Andochick. In Egelhoff, the
Court held that ERISA preempted the application of a state
statute that automatically revoked, upon divorce, any designa-
tion of a spouse as a beneficiary of an ERISA benefit plan.
532 U.S. at 146-50. The Court based its holding on the fact
that the state statute required administrators to "pay benefits
to the beneficiaries chosen by state law, rather than to those
identified in the plan documents," id. at 147, creating a "di-
rect[ ] conflict[ ] with ERISA’s requirements that plans be
administered, and benefits be paid, in accordance with plan
documents." Id. at 150. Post-distribution suits of the kind at
issue here simply do not require plan administrators to pay
benefits to anyone other than the named beneficiary. Accord-
ingly, Egelhoff is inapposite.
C.
Because we detect no conflict with either ERISA’s objec-
tives or relevant Supreme Court precedent, we hold that
ANDOCHICK v. BYRD 9
ERISA does not preempt post-distribution suits against
ERISA beneficiaries. We note that in reaching this conclu-
sion, we adopt the same view as every published appellate
opinion to address the question. See Estate of Kensinger, 674
F.3d at 135-39; Appleton v. Alcorn, 728 S.E.2d at 552, aff’g
708 S.E.2d at 392; Sweebe v. Sweebe, 712 N.W.2d 708, 714
(Mich. 2006); Pardee, 112 P.3d at 315-16.
III.
For the reasons set forth above, the judgment of the district
court is
AFFIRMED.