Michigan federal court awarded life insurance benefits from Lincoln Financial to the ex-wife of the decedent over his spouse at the time of death.
In response to receiving two competing claims, The Lincoln National Life Insurance Company (“Lincoln”) filed an interpleader action to allow the district court to determine the proper beneficiary of life insurance proceeds under a benefit plan governed by the Employee Retirement Income Security Act of 1974 (“ERISA”). Sowndharya Subramaniam, the ex-wife of the decedent and the named beneficiary of the plan, moved for summary judgment. Brindha Periyasamy, the decedent’s widow, opposed Ms. Subramaniam’s summary judgment motion and filed a crossclaim against her.
First, the court reviewed the divorce decree between the decedent and Ms. Subramaniam and found that it did not meet the legal requirements for a qualified domestic relations order (“QDRO”) because it failed to “identify an alternate payee who would receive all or a portion of the benefits payable with respect to a participant under a plan.” In addition, both women agreed that the divorce decree is not a valid QDRO. Therefore, there was no genuine dispute of material fact that ERISA preempts state law and “the plan documents naming Subramaniam as the beneficiary of the policy controls.”
Next, with no evidence of fraud, concealment, or misrepresentation by Ms. Subramaniam, the court further found that she was entitled to the benefits as the named beneficiary because the uncontroverted evidence showed that the decedent never completed a new enrollment form to designate his new spouse, Ms. Periyasamy, as the beneficiary. Moreover, Ms. Periyasamy’s argument that Ms. Subramaniam should not receive the proceeds because she and the decedent did not maintain a relationship after their divorce was determined by the court to be without merit as no legal authority supports a ruling that such circumstances justify imposing a constructive trust.
Accordingly, the court held there was no genuine dispute of material fact that Ms. Subramaniam was entitled to the proceeds as she is the only named beneficiary of the life insurance policy and she was therefore granted summary judgment.
Help from an Attorney with Expertise in Life Insurance Claims
Life insurance law is complicated. If your claim for life insurance benefits was denied or being delayed by an insurance company, it is important to get help from a lawyer with expertise in this area of law.
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