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Wengert v. Rajendran

United States Court of Appeals, Eighth Circuit

April 3, 2018

Susan Wengert, formerly known as Susan McConnell Plaintiff- Appellant
v.
Theresa A. Rajendran, Personal Representative of Estate of Timothy McConnell, deceased and Trustee of the Timothy McConnell Trust estate of, Timothy McConnell; Mark Swanson, Members of the Majors Plastics, Inc., Employee Stock Ownership Plan; Michael Herzog, Members of the Majors Plastics, Inc., Employee Stock Ownership Plan; Jay Van Roy, Members of the Majors Plastics, Inc., Employee Stock Ownership Plan Defendants - Appellees

          Submitted: November 15, 2017

          Appeal from United States District Court for the District of Nebraska - Omaha

          Before BENTON, SHEPHERD, and KELLY, Circuit Judges.

          BENTON, Circuit Judge.

         Susan Wengert sued the members of the plan-administrative committee of the Majors Plastics, Inc. Employee Stock Ownership Plan; the personal representative of the Estate of Timothy McConnell; and the trustee of the Timothy McConnell Trust. The district court[1] granted summary judgment against Wengert. Having jurisdiction under 28 U.S.C. § 1291, this court affirms.

         I.

         Wengert's husband was Timothy J. McConnell. He filed for divorce. He was a participant in an employee-benefit plan governed by the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001-1461. Under the plan, the amount in a participant's account is an "Accrued Benefit." McConnell's Accrued Benefit was $2, 721, 739.37. On Friday, September 12, 2014, McConnell requested a lump-sum distribution of the Accrued Benefit to his trust. The plan-administrative committee wired the funds that same day. McConnell died on Sunday. The trust did not receive the funds until Monday.

         McConnell was still married to Wengert when he died. The plan defines a "Beneficiary" as a "Participant's surviving spouse." The plan says: "A pay-out of the vested Accrued Benefit . . . shall satisfy all obligations of the Plan . . . to [the] Participant or his Beneficiary." Wengert submitted a claim for benefits. The plan-administrative committee denied it:

McConnell had no Accrued Benefit (i.e., Accounts) under the Plan. Therefore, there is no benefit for [Wengert] to claim from the Plan. . . . Since Mr. McConnell had no Accrued Benefit under the Plan, [Wengert] cannot be a Beneficiary of the Plan, and therefore has no basis to make a claim for benefits.

         II.

         Wengert believes she should receive the $2, 721, 739.37 as McConnell's beneficiary. She suggests that the Friday wire transfer is irrelevant because the trust did not receive the funds until after McConnell's death. The plan-administrative committee disagreed:

For purposes of the Plan, the relevant inquiry is not when funds are received by a Participant, but rather when funds are transferred out of the Plan. At the point of transfer of the remaining Accrued Benefit in a Participant's account, the Plan has satisfied all obligations to the Participant or his Beneficiary. In the present case, the full Accrued Benefit remaining in Mr. McConnell's account under the Plan was disbursed via wire transfer transmitted on September 12, 2014. At that time, the funds were no longer held by the Plan and therefore Mr. McConnell no longer had any Accrued Benefit in the Plan.

         A.

         The district court concluded that the plan gives the committee "broad discretionary authority" to determine eligibility for benefits. "Where an ERISA plan grants the administrator discretion to determine eligibility for benefits and to interpret the plan's terms, courts must apply a deferential abuse-of-discretion standard of review." Green v. Union Sec. Ins. Co., 646 F.3d 1042, 1050 (8th Cir. 2011), citing Firestone Tire & ...


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