United States District Court, D. South Carolina, Florence Division
Unum Life Insurance Company of America, Plaintiff/Counter-Defendant,
Donna Brookshire; Bryant Weaver, and Jennifer Weaver, Defendants/Cross-Defendants, and S.W., a minor, Defendant/Counter-Claimant/Cross-Claimant.
REPORT AND RECOMMENDATION
KAYMANI D. WEST, Magistrate Judge.
case is before the undersigned because all Defendants are
proceeding pro se. Pursuant to 28 U.S.C. Â§636(b)(1), and
Local Civil Rule 73.02(B)(2)(e) (D.S.C.), this magistrate
judge is authorized to review all pretrial matters in such
pro se cases and to submit findings and recommendations to
the District Court. The parties did not conduct any discovery
and the proceeds of the Policy are now subject to
distribution. Because no party filed a dispositive motion in
the case after being given notice of the importance and time
to do so, ECF Nos. 61, 78, and of the court's intention
to consider the merits sua sponte if no dispositive
motion was filed, ECF No. 97, the undersigned is considering
the merits of each party's positions as stated in their
initial pleadings on the court's own motion for summary
judgment. Fed.R.Civ.P. 56 (f). Therefore, under the liberal
construction of pro se pleadings rule, the undersigned hereby
construes S.W., a minor's Crossclaims, ECF No. 34, as a
motion for summary judgment so as to permit entry of a Report
and Recommendation ("Report") on the merits of this
interpleader action to the district court. For ease of
reference, the parties will be referred to according to their
positions relative to the Crossclaims.
undisputed facts show that Cross-Defendant Donna Brookshire
is a resident and citizen of Myrtle Beach, South Carolina and
was the girlfriend of the Decedent, Clifford Weaver
("Decedent") at the time of his death.
Cross-Defendant Bryant Weaver is a resident and citizen of
Conway, South Carolina and is the brother of the Decedent.
Cross-Defendant Jennifer Weaver is a resident and citizen of
Alderson, West Virginia and is the former spouse of the
Decedent. Cross-Claimant S.W. is a surviving minor child of
the Decedent and Jennifer Weaver and currently resides in
West Virginia with Jennifer Weaver. S.W. is disabled with
cerebral palsy and receives medical benefits through
Medicaid. ECF Nos. 34, 55.
former employer, Conbraco Industries, Inc.
("Conbraco") established and/or maintained basic
group life and supplemental group life insurance coverage
with Unum Life Insurance Company of America
("Unum") for the benefit of its employees as part
of an employee-welfare benefit plan ("Plan")
governed by 29 U.S.C. Â§ 1001 et seq. ("ERISA").
This Plan was funded, at least in part, through Unum's
group life insurance policy number 417111 (the
"Policy"). Decedent was a participant in the Plan.
Decedent was a covered insured under a basic group policy in
the amount of Twenty Thousand and no/100 Dollars ($20,
000.00) and under a supplemental group policy in the amount
of One Hundred Fifty Thousand and no/100 Dollars ($150,
000.00) issued to Conbraco. Prior to Decedent's death and
almost five months after the June 16, 2014 entry of the final
judgment in his South Carolina divorce action (see below), on
November 15, 2014, Decedent designated Cross-Defendant
Brookshire (50%), Cross-Defendant Bryant Weaver (25%) and
Cross-Claimant S.W. (25%) as primary beneficiaries of the
Policy. ECF No. 1-2. Decedent made no further changes to his
beneficiary designation before he died on or about January 7,
undisclosed time, Cross-Defendant Jennifer Weaver provided
Conbraco with a copy of her divorce decree from an action
entitled Jennifer Sue Weaver v. Clifford Henry Weaver,
Jr., No. 2013-DR-26-1577 in the Family Court of Horry
County. The court decree specifically incorporates a
settlement agreement entered by the parties, which agreement
contains a provision that states "HUSBAND shall continue
to maintain the life insurance policy through his employer in
the amount of One Hundred Fifty Thousand and no/100 Dollars
($150, 000.00) and name WIFE as the sole beneficiary to the
policy. HUSBAND shall continue the policy and timely pay the
premiums and costs associated therewith. HUSBAND shall
provide proof of the coverage annually, by December 31 of
every year, to WIFE." ECF No. 1-3 at 3. This is the only
reference to insurance coverage in the divorce decree.
Standard of Review
court shall grant summary judgment "if the movant shows
that there is no genuine dispute as to any material fact and
the movant is entitled to a judgment as a matter of
law." Fed.R.Civ.P. 56(a). The movant bears the initial
burden of demonstrating that summary judgment is appropriate;
if the movant carries its burden, then the burden shifts to
the non-movant to set forth specific facts showing that there
is a genuine issue for trial. See Celotex Corp.
v. Catrett, 477 U.S. 317, 323-24 (1986). If a movant
asserts that a fact cannot be disputed, it must support that
assertion either by "citing to particular parts of
materials in the record, including depositions, documents,
electronically stored information, affidavits or
declarations, stipulations (including those made for purposes
of the motion only), admissions, interrogatory answers, or
other materials;" or "showing... that an adverse
party cannot produce admissible evidence to support the
fact." Fed.R.Civ.P. 56(c)(1).
considering a motion for summary judgment, the evidence of
the non-moving party is to be believed and all justifiable
inferences must be drawn in favor of the non-moving party.
See Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 255 (1986). However, "[o]nly disputes over
facts that might affect the outcome of the suit under the
governing law will properly preclude the entry of summary
judgment. Factual disputes that are irrelevant or unnecessary
will not be counted." Id. at 248. Further,
while the federal court is charged with liberally construing
a complaint filed by a pro se litigant to allow the
development of a potentially meritorious case, see,
e.g., Cruz v. Beto, 405 U.S. 319, 323 (1972),
the requirement of liberal construction does not mean that
the court can ignore a clear failure in the pleadings to
allege facts that set forth a federal claim, nor can the
court assume the existence of a genuine issue of material
fact when none exists. Weller v. Dep't of Soc.
Servs., 901 F.2d 387, 391 (4th Cir. 1990).
only to non-ERISA-based state law,  Cross-Claimant S.W., a
minor, through her GAL, contends that the full $150, 000.00
portion of the Policy should be distributed to
Cross-Defendant Jennifer Weaver based on an argument that the
Horry County divorce decree should prevail over the
Decedent's subsequent contrary beneficiary designation.
ECF No. 34 at 2. SW notes that, given her disability, there
are Medicaid reimbursement issues that might arise should she
be awarded any portion of proceeds. S.W. contends that the
remaining proceeds from the policy should be awarded in
accordance with Decedent's beneficiary designation.
Id. Cross-Defendant Bryant Weaver responds that he
does not know all the facts, but that he has suffered
emotional and financial hardships since his brother's
death, "there are discrepancies" in the Horry
County divorce decree, and he believes that Decedent's
wishes should be carried out. He, like Cross-Defendant
Brookshire, asks that the Policy proceeds be divided among
the three beneficiaries and in the percentages listed by
Decedent in the beneficiary-designation document. ECF No. 53.
Cross-Defendant Jennifer Weaver contends that the $150,
000.00 portion of the proceeds should be awarded to her as
provided under the divorce decree. She states that she and
S.W. have suffered financial hardship since Decedent's
death and that she had previously expended "thousands of
dollars toward attorneys fees" in connection with the
Horry County divorce proceedings "to protect" her
and her daughter. ECF No. 55 at 1. She states that "it
is in S.W.'s best interest" to enforce the Horry
County divorce decree and award the $150, 000.00 Policy
proceeds to her because that would protect the proceeds from
seizure by Medicaid to reimburse the amounts it has paid
toward S.W.'s care to date. Id. Cross-Defendant
Donna Brookshire responds that Cross-Claimant S.W. and
Cross-Defendant Jennifer Weaver, as the custodial parent of
the disabled child, are benefitting financially from Social
Security survivor benefits, that the child custody/visitation
provisions of the Horry County divorce decree had been
breached by Cross-Defendant Jennifer Weaver, and that the
wishes of Decedent should prevail over the vaguely and
broadly worded insurance provision of the settlement
agreement. Therefore, she requests that all proceeds from the
Policy be divided among the three beneficiaries and in the
percentages listed by Decedent in the beneficiary-designation
document. ECF No. 56.
noted in the Orders previously issued in this case, the
Policy at issue in this case is the type of life insurance
policy governed by the Employee Retirement Income Security
Act of 1974 ("ERISA"). "Interpleader actions
such as this one filed by ERISA plan stakeholders are quite
common... [i]ndeed, it has been held that failure to
interplead can constitute breach of ERISA's fiduciary
duty of prudent plan administration." John H. Langbein,
Destructive Federal Preemption Of State Wealth Transfer
Law In Beneficiary Designation Cases: Hillman Doubles Down On
Egelhoff, 67 VNLR 1665, 1676 n.56 (November 2014)
(citing ERISA Â§ 404(a)(1)(B), 29 U.S.C. 1104(a)(1)(B) and
Atwater v. Nortel Networks,388 F.Supp.2d 610 (M.D.
N.C. 2005)). Generally, ERISA "preempts all state laws
that relate to' an ERISA plan." Darcangelo v.
Verizon Commc'ns,292 F.2d 181, 194 (4th Cir. 2002);
see also 1 Ronald J. Cooke, ERISA Practice
and Procedure Â§ 2:23 (2d ed. 2015). However, an exception to
the preemption rule is state law respecting domestic
relations where a QDRO is entered by a state court.
Metro. Life Ins. Co. v. Pettit,164 F.3d 857, 863
(4th Cir. 1998); Metro. Life Ins. Co. v.