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Metropolitan Life Ins. Co. v. Pressley, 82 F.3d 126, 20 Employee Benefits Cas. 1097, 1996 Fed.App. 0122P, Pens. Plan Guide (CCH) P 23919G

Facts

Alvin Pressley participated in a life insurance plan through his employer, General Motors, and designated his wife, Barbara Pressley, as the beneficiary. After their divorce in 1984, a judgment was entered that extinguished any rights to insurance proceeds unless specifically preserved. However, Alvin did not change the beneficiary designation before his death in 1993, leading to claims for the insurance benefits from both Barbara and the estate, represented by Mary Pressley, Alvin's mother.

The facts of this case are undisputed. As an employee of General Motors, Alvin Pressley ('Alvin') participated in a company life insurance plan (the 'Plan') subject to the Employee Retirement Income Security Act of 1974 ('ERISA').

Issue

The main legal issues were whether ERISA preempted state law regarding the designation of beneficiaries and whether the divorce decree constituted a waiver of Barbara's rights to the insurance benefits.

The Estate's argument that the Divorce Decree is a final judgment that cannot be collaterally attacked is without merit.

Rule

The court applied the principle that ERISA preempts state laws that relate to employee benefit plans, and that the designation of beneficiaries in plan documents is controlling.

Section 514(a) of ERISA provides that federal law shall supersede all state laws that 'relate to' an ERISA plan.

Analysis

The court found that the state statute requiring a divorce decree to determine the rights of a spouse to life insurance proceeds was preempted by ERISA. It ruled that since Alvin had not changed the beneficiary designation after the divorce, Barbara remained the designated beneficiary under the plan documents, which ERISA mandates must be followed.

The court found that the state statute requiring a divorce decree to determine the rights of a spouse to life insurance proceeds was preempted by ERISA.

Conclusion

The Court of Appeals affirmed the district court's decision, holding that Barbara was entitled to the insurance benefits as the designated beneficiary.

Accordingly, we must conclude that the district court did not err in holding that Barbara was entitled to Alvin's insurance benefits.

Who won?

Barbara Pressley prevailed in the case because the court determined that ERISA preempted state law and that she remained the designated beneficiary under the insurance plan.

Barbara filed a claim with Met Life for the insurance benefits on July 22, 1993. As Personal Representative of Alvin's estate (the 'Estate'), Alvin's mother, Mary Pressley ('Mary'), filed a claim for the same benefits on behalf of the Estate.

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