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Locals 40, 361 & 417 Pension Fund v. McInerney

January 9, 2007


The opinion of the court was delivered by: John F. Keenan, United States District Judge


Plaintiffs Locals 40, 361 & 417 Pension Fund and Local 580 Pension Fund (collectively, the "Funds") brought an action in interpleader, pursuant to 28 U.S.C. § 1335, against defendants Joan R. McInerney ("Joan M.") and Judith L. McInerney ("Judith M.") to determine the proper beneficiary of pension benefits that have accrued to non-party decedent Joseph A. McInerney ("Decedent") under employee pension plans administered by the Funds and governed by the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq. The Funds seek a discharge from interpleader and reimbursement of attorneys' fees and costs. Defendant Judith M. has moved for summary judgment, seeking an order declaring that she is entitled to receive all of the Decedent's accrued pension benefits being held by the Funds ("Benefits") and directing the Funds to release the Benefits to her. For the reasons that follow, the Funds are discharged from the action and awarded reasonable attorneys' fees and costs, Judith M.'s motion for summary judgment is granted in full.


On July 10, 1965, Joan M. married Decedent. (Affidavit of Judith L. McInerney in Support of Motion for Summary Judgment ("Aff."), ¶ 3). During the marriage, Decedent accrued pension benefits through his membership in the Funds. (Id. ¶ 4.) On April 22, 1999, Decedent and Joan M. entered into a separation agreement ("Separation Agreement"). (Id. ¶ 5.) The Separation Agreement provided, inter alia, that the rights that Decedent had acquired in the pension benefits administered by the Funds during the term of the marriage would be divided between Joan M. and Decedent pursuant to the equitable distribution formula set forth in Majauskas v. Majauskas, 61 N.Y. 2d 481 (1984).*fn1 (Aff., Ex. A, art. VII.) The Separation Agreement also provided that Joan M. could file a Qualified Domestic Relations Order ("QDRO"). (Id.)

A QDRO "is defined as an order 'made pursuant to a State domestic relations law' that 'creates or recognizes the existence of an alternate payee's right to, or assigns to an alternate payee the right to, receive all or a portion of the benefits payable with respect to a participant under a [pension] plan.'" Berlet v. Berlet, No. 98 Civ. 3263, 1999 U.S. Dist. LEXIS 923 (S.D.N.Y. Jan. 26, 1999) (quoting 29 U.S.C. § 1056(d)(3)(B))(alteration added)). An "alternate payee" is "any spouse, child, or other dependent of a participant who is recognized by a [Domestic Relations Order] as having a right to receive all, or a portion of, the benefits payable under a plan with respect to such participant." 29 U.S.C. § 1056(d)(3)(K).

Apart from the provisions granting equitable distribution of Decedent's rights in the Benefits that had vested during the term of the marriage and permitting Joan to file a QDRO, the Separation Agreement contained a broad waiver and release of each party's right to make any claim to the other's employee benefits. Specifically, the Separation Agreement stated that "the parties mutually release and waive any right or interest which he or she may have in the pension, IRAs, or other retirement accounts of his or her spouse." (Id.) The Separation Agreement also stated that "each party forever releases, waives, and relinquishes any and all rights or claims of any kind, character, or nature whatsoever, which he or she may hereafter acquire to the estate, property, assets or to any other effects of the other under the present or future laws of this state or any other jurisdiction." (Id., Ex. A, art. III.)

On August 24, 1999, a Judgment of Divorce ("Judgment") was obtained by Decedent and Joan M. in New York State Supreme Court. (Id. ¶ 9.) The Judgment provided that the Separation Agreement survived and did not merge into the Judgment. (Id., Ex. B, at 2.) The Judgment also reiterated that Joan M. had the right to file a QDRO. (Id.) Joan M., however, did not file a QDRO. (Id. ¶ 14.)

On October 23, 1999, Decedent and Judith M. were married in New York State. (Id. ¶ 11.) On July 18, 2005, while still married to Judith M., Decedent died. (Id. ¶ 12 & Ex. C) At the time of his death, Decedent had accrued pension benefits that he had not received. (Id. ¶ 13.) Decedent had expressly designated Judith M. as the beneficiary of any "pre-retirement, survivorship/death benefits" to be provided by the Funds. (Id. ¶ 14.)

On September 19, 2005, Joan M. commenced an action against Decedent, Decedent's estate, and the Funds in New York State Supreme Court. (Id. ¶ 15.) Joan M. sought, inter alia, the execution of a QDRO, nunc pro tunc, and an order restraining the Funds from releasing the Benefits. (Id. ¶¶ 15-16.) On January 27, 2006, at a conference in New York State Supreme Court (Garvey, J.), Joan M., through counsel, voluntarily dismissed the action, and Justice Garvey so-ordered the minutes of the conference. (Id. ¶ 17.) On March 27, 2006, Judith M. sent a letter to an employee of plaintiff Local 580 Pension Fund, requesting that Decedent's benefits be released to her. (Interpleader Compl., Ex. E.)

The Funds commenced this action in interpleader seeking a determination of who is to receive the Decedent's pension benefits currently being held by the Funds.*fn2 The Funds seek a judgment (1) enjoining the defendants from prosecuting any claims against the Funds relating to the disposition of the Benefits, (2) ordering the defendants to interplead their claims to the Benefits, (3) authorizing a person to receive the Benefits, (4) discharging the Funds from any liability to the defendants relating to any claims to the assets at issue, and (5) awarding the reimbursement of costs and attorneys' fees.

Judith M. served and filed an answer to the interpleader complaint. The answer contained claims against the Funds and affirmative defenses in which Judith M. sought a judgment declaring that Judith M. was entitled to all of Decedent's accrued pension benefits, directing the Funds to pay the Benefits directly to Judith, and denying any claims that Joan M. may assert against the Funds relating to the Benefits. Defendant Joan M. did not file an answer. Joan M. also has not filed a response to Judith M.'s motion for summary judgment, and the motion therefore is deemed to be unopposed.


I. Interpleader

The Funds brought this action in interpleader pursuant to 28 U.S.C. § 1335. A district court has jurisdiction over "any civil action of interpleader involving money or property worth $500 or more where two or more adverse claimants, of diverse citizenship as defined in 28 U.S.C. § 1332, are claiming or may claim to be entitled to such money or property, if the plaintiff has deposited the money or property with the court." New York Life Insurance Co. v. Connecticut Development Authority, 700 F.2d 91, 95 (2d Cir. 1983). "In such an action, the court is to hear and determine the case, and may discharge the plaintiff from further liability, may enter a permanent injunction restraining the claimants from proceeding in any state or United States court in a suit to affect the property, and may make all appropriate orders to enforce its judgment." Id. (citing 28 U.S.C. § 2361). Although diversity is lacking in this case because both adverse claimants and the Funds reside in New York, "ERISA provides an independent basis for subject matter jurisdiction in an interpleader action arising under ERISA." Am. Int'l Life Assur. Co. v. Vazquez, No. 02 Civ. 0141, 2002 U.S. Dist. LEXIS 17312, ...

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