The opinion of the court was delivered by: BRYAN
Plaintiff, alleging that she is the legal widow of Robert Boyd, sues the trustees of the National Maritime Union Pension and Welfare Plan (hereinafter referred to as the Plan) to recover death benefits concededly due thereunder to the proper beneficiary of the decedent. Defendant trustees now move to dismiss the complaint, pursuant to Rule 12(b)(6), F.R.C.P., 28 U.S.C.A., for failure to state a claim, or, in the alternative, for summary judgment pursuant to Rule 56(b).
The complaint alleges, and it is admitted for purposes of this motion, that the plaintiff and the decedent were legally married domiciliaries of California at all times relevant to this controversy. Decedent was a seaman employed by a shipowner contributor to the Plan. He was accidentally drowned at Casablanca, Morocco, on, october 18, 1956. It does not appear who his employer was, where his employment took place, on what ship he was employed or where she sailed from.
However, what is denominated in the Plan as 'life insurance' in the sum of $ 3,500, and 'accidental death insurance' in the sum of $ 3,500, concededly became payable upon his death. On June 27, 1956, some four months before his death, decedent had executed a nomination of beneficiary form provided by the Plan containing the following language:
'I revoke all previous beneficiary nominations and make the following nomination with respect to all insurance provided now or at any time in the future under John Hancock's group insurance policy, still reserving to myself the privilege of other and further changes in accordance with such policy.'
The form designated one Emma Louise Boyd as beneficiary and her relationship to him as 'wife'.
The complaint alleges, and it is not controverted on this motion, that Emma Louise Boyd was never married, or in any way related, to the decedent. The plaintiff claims that under the California Community Property Laws,
since she and the defendant were California domiciliaries, as his legal widow she is entitled at the least to one-half of the death benefits payable, notwithstanding his designation of Emma Boyd as his beneficiary and wife. She also claims that the entire benefit payable upon the theory that the nominated beneficiary was not married to or related to the decedent, and that the designation was brought about by 'fraud, duress, misrepresentations and concealment of material facts'. The latter claim is not pressed by plaintiff on this motion which concerns the community property claim only.
Defendant trustees assert that they are bound to make payment to the designated beneficiary, and that the plaintiff has no rights to any part of the benefits payable even assuming that she is the legal widow of decedent and that she and the decedent were domiciled in California.
The National Maritime Union Pension and Welfare Plan was established on August 1, 1950, as a result of collective bargaining between the National Maritime Union and various steamship company employers. Contributions to the Plan are made by each employer by payment of a fixed sum per day per man employed. Under the most recent amendment each employer pays to the trustees the sum of $ 1 per day per man. The employees themselves made no payments to the Plan.
The Plan took the form of an agreement and declaration of trust between the National Maritime Union and the various employers who adopted the agreement. Under its terms the payments by the employers to the trustees of the National Maritime Union Pension and Welfare Fund are to be used for the payment of such employee benefits as the trustees determined. The trustees are given broad power and discretion to determine the character and amount of benefits to be paid.
In the exercise of this discretion the trustees have promulgated rules and regulations governing, among other things, eligibility, beneficiaries and their designation, life insurance, insurance for death and dismemberment by accidental means, and other benefits. Under Article II of the rules and regulations the eligible employee has 'the right to designate a beneficiary or beneficiaries to receive any benefits hereunder payable by reason of his death * * *, but such designation shall not be valid unless it is in writing, on forms supplied for that purpose by the Trustees or satisfactory to' them and filed at their office. The beneficiaries so designated are known as 'beneficiaries of record'. There are provisions for change of beneficiary. In the event of failure to designate a beneficiary, or if the beneficiary of record does not survive the employee, the amount of any benefit shall be paid 'to the executors or administrators of the employee', except that the trustees may, in their sole discretion, pay the amount of such benefits to his wife if then living or if she is not alive 'to any other person who is an object of the natural bounty of the employee'. Payments made in accordance with these provisions completely discharge the trustees from liability.
Upon death, except when caused by excluded risks or perils, the trustees 'shall pay to the beneficiary the amount of life insurance in force hereunder', now $ 3,500. If death is caused by accidental means the trustees 'shall pay * * * to the beneficiary, the amount of insurance specified for such loss' which is an additional $ 3,500.
The declaration of trust also provides that no employee 'shall have any vested rights in or to the fund or any part thereof except the right of the qualified employees, or their dependents, or their beneficiaries or next-of-kin, to receive the benefits provided for in the plan to which they may be respectively entitled * * *'. The rules and regulations provide that the trustees reserve the right in their sole discretion, but upon a non-discriminatory basis, to terminate or amend the amount and conditions of any benefit even though affecting claims which have already accrued, to alter or postpone the method of payment, and to amend any other provision of the rules and regulations.
The agreement and declaration of trust were executed in New York. The offices of the trustees are in New York. The fund is administered here. The declaration of trust provides that it 'is executed and is accepted by the trustees in the State of New York, and, regardless of the domiciles of the parties hereto, shall be interpreted and governed in accordance with the laws of that State'.
The motion poses a question which is of considerable importance to the trustees in the administration of a fund of this character. The precise question also appears to be one of first impression. The trustees' position is that the fund is a New York trust governed solely by New York law and that under such law the trustees' sole duty and obligation is to pay the insurance monies to the beneficiary designated by the employee under the terms of the Plan and to no one else. They ...