Sun Life Assur. Co. of Canada v. Jackson, 877 F.3d 698 (6th Cir. 2017), cert. denied, 138 S. Ct. 2624 (2018)
(a) Facts: The parties were divorced in 2006. The divorce decree, which incorporated a separation agreement, ordered the husband to maintain any employer-provided life insurance policies for the benefit of the parties’ daughter until her emancipation.
The husband had such a policy, but his uncle was the sole beneficiary. The husband died in 2013, with the uncle still the only person on the policy. The daughter, still a minor, made a claim to the policy proceeds, but the insurer paid the uncle. The daughter then sued the insurer in federal court.
(b) Issue: Who is entitled to the policy proceeds?
(c) Answer to Issue: The daughter.
(d) Summary of Rationale: Employer-provided life insurance policies are regulated by ERISA. Therefore, the plan must pay the named beneficiary, and it cannot follow any contrary state court order.
As an exception, however, contrary state court orders are not preempted if the state court order is a QDRO. Thus, the result in Jackson turned on whether the divorce decree met the QDRO requirements.
The first requirement states that the DRO must specify the name and address of the alternate payee. The daughter was not named in the insurance provision, but she was named in the agreement, and the agreement was incorporated into the decree. The decree did not state the address of the daughter, but it also incorporated the parties’ parenting plan, which awarded both parties shared custody. The daughter, therefore, resided with the parties, and the addresses of both parties were stated in the agreement.
The second requirement states that the DRO must state the amount of benefits awarded. The divorce decree clearly required that the daughter receive 100% of the proceeds.
The third requirement states that the DRO must state the period of payment. The decree required that insurance must be maintained until the child’s emancipation.
The fourth requirement states that the plan must be identified. The court held that “all employer-provided life insurance” was sufficient to identify the plan.
Because the divorce decree met the requirements for a valid QDRO, the plan was required to pay the proceeds to the daughter.