BERNAL BROWN v. CALIFORNIA IRONWORKERS FIELD PENSION TRUST (2024)

ORDER GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT [26]; AND DENYING DEFENDANTS' MOTION FOR JUDGMENT ON THE PLEADINGS OR IN THE ALTERNATIVE FOR SUMMARY JUDGMENT AS MOOT [25]

Before the Court are two motions: (1) Defendants California Ironworkers Field Pension Trust, Board of Trustees (the “Trustees”) of the California Ironworkers Field Pension Trust (the “Pension Trust”) (collectively, the “Defendants”) Motion for Judgment on the Pleadings, or in the alternative for Summary Judgment (“Defendants' Motion”) (Mot. for Judgment on Pleadings, Docket No. 25); and (2) Plaintiff Shala Bernal-Brown (the “Plaintiff”) Motion for Summary Judgment (“Plaintiff's Motion”) (Mot. for Summary Judgment, Docket No. 26). In support of Plaintiff's Motion, Plaintiff also filed a separate Statement of Uncontroverted Facts (“SUF”) (SUF, Docket No. 28), and a Request for Judicial Notice (“RJN”) (RJN, Docket No. 31). Defendants also filed the Administrative Record. (Decl. of Katherine McDonough (“McDonough Decl.”), Docket No. 24). Both parties filed their respective opposition and reply briefs. (Docket Nos. 34–37). This matter is fully briefed.

On April 12, 2024, the Court held a hearing and heard arguments from all parties.

After considering the parties' arguments and submitted evidence, and for the reasons discussed below, the Court GRANTS Plaintiff's Motion (Docket No. 26), and DENIES Defendants' Motion as moot (Docket No. 25).

I. BACKGROUND

A. Factual Background 1

Plaintiff is the former spouse of Richard George Bernal Jr. (“Mr. Bernal”), who was a “Participant” of the Pension Trust. (SUF 3). The Pension Trust is an employee pension benefit plan within the meaning of [the Employee Retirement Income Security Act of 1974] [‘ERISA’] § 3(1), 29 U.S.C. § 1002(1), sponsored by a Taft-Hartley trust fund. (Id. at 1).

i. The Qualified Domestic Relations Order

Plaintiff and Mr. Bernal were married on October 13, 1994, and subsequently divorced on April 26, 2011. (Id. at 5, 8). On August 22, 2012, the parties entered into a stipulated Qualified Domestic Relations Order (“QDRO”).

The QDRO states in relevant part:

4. This Order hereby creates and recognizes at to the Plans described above the existence of the Alternate Payee's [i.e. Plaintiff's] right to the following:

(a.1) One-half of the pension credits earned by the Participant [i.e. Mr. Bernal] under the [Pension Trust] during the marriage of the Parties. The Administrator of said Pension Plan shall use the dates of this marriage and separation of the parties as set forth above to calculate the Alternative Payee's pension entitlement under Participant's [Pension Trust], based on one-half of the pension credits earned during the marriage.

If the Plan requirements are met, and Alternate Payee is entitled to pension payments under the Plan, the Plan Administrator shall pay all payments to which Alternate Payee is entitled directly to Alternate Payee, commencing on the first of the month following receipt and approval of this QDRO by the Plan Administrator.

(b.1) One-half of the Participant's funds in the California & Vicinity Field Ironworkers Annuity Trust Fund that were acquired between the date [sic] marriage and the date of separation, also including one-half of all interest and other accumulations on said property of the Annuity Trust Funds, both during the marriage and thereafter, until the Alternate Payee has received all of her share of said Annuity Trust Funds.

Alternate Payee's share of said Annuity Trust Funds and the accumulations thereon shall be distributed to Alternate Payee upon application, following approval of this QDRO by the Plan Administrator and filing of this Order with the Court. In the meantime, the Plan Administrator shall hold Alternate Payee's proposed share of the California & Vicinity Field Ironworkers Annuity Trust Fund, and shall not release said funds to Participant or anyone other than the Alternate Payee, without a Court Order.

[․]

6. Benefits payable to the Alternate Payee under this QDRO are:

(a) based on the life of the Participant, and the Alternate Payee shall not be treated as the Participant's spouse under the Plans; or

(b) based on the life of the Alternate Payee, and the alternate payee shall not be treated as the Participant's spouse under the Plans.

(Raquel M. Busani Decl. (“Busani Decl.”), Docket No. 29, Exh. 6).

On September 6, 2012, Plaintiff submitted the QDRO for consideration to the Pension Trust's administrator. (SUF 11). On October 1, 2012, the Pension Trust administrator responded via letter informing Plaintiff that the Pension Trust found “that the order does comply with ERISA requirements, 29 U.S.C. § 1056(d)(3)(C) & (D); it does, therefore, constitute a qualified domestic relations order (‘QDRO’). Payment to you will be made in accordance with the terms of the order.” (Id. at 12).

ii. The Relevant Plan Terms

During the relevant time period, the Pension Trust was governed by the Third Restatement of the Rules and Regulations of the Pension Plan for the California Ironworkers' Field Pension Trust (the “Plan”). (SUF 31).

The relevant sections of the Plan include:

Article III

Section 4. Eligibility for Early Retirement Pension.

An active Participant who has retired and filed an application for benefits in accordance with Article VIII, Section 1 shall be entitled to an Early Retirement Pension if he meets the following requirements:

(a)

(1) For Pension Credit earned after August 31, 2011, he has attained age 45 but not yet attained age 65.

(2) For Pension Credit earned prior to September 1, 2011, he has attained age 45 but not yet attained age 62 (age 65 prior to June 1, 1989).

(b) He has at least 10 years of Pension Credit, and

(c) He has accumulated at least one full year of such Pension Credit since June 1, 1956.

[․]

Article IV

Section 4. Before Retirement

If a Vested Participant dies before his Annuity Starting Date, a pension shall be paid to his surviving legal spouse, if any․

[․]

Article V

Section 1. Eligibility for and Amount of Death Benefit.

(a) Death Before Retirement. If the death of a Participant occurs before his Annuity Starting Date, then upon receipt by the Trustees of proof of his death, there shall be paid to his designated beneficiary or the person or persons selected in accordance with Section 3 of this Article, a death benefit in an amount equal to the amount of contributions made to the Trust on behalf of the Participant subsequent to any Breaks in Service as described in Article VI.

[․]

Section 3. Failure to Designated Beneficiary or Death of Beneficiary.

If no beneficiary is designated by a Participant, or if a designated beneficiary predeceases the Participant, any benefits payable under this Article shall be paid to the surviving spouse of the Participant, or, if there is no spouse then alive, to any other person who is the object of natural bounty of the Participant or to his estate, as the Board of Trustees, in its sole discretion, may designate.

[․]

Article VIII

Section 13. Non-Assignment of Benefits.

Notwithstanding the foregoing, benefits shall be paid in accordance with the applicable requirements of any qualified domestic relation order as defined in section 206(d)(3) or ERISA.

(Busani Decl., Docket No. 29, Exh. 26).

iii. Benefits Claim and Denial

On July 18, 2019, Plaintiff corresponded via email with the Pension Trust regarding the collection of her benefits under the QDRO. (SUF 16). On November 7, 2019, the Pension Trust, informed Plaintiff that “effective November 1, 2019, the amount payable to [Plaintiff] over her lifetime is $189.43 for 13 checks per year. This amount is based on the terms of the QDRO and the additional information you provided, including participant and alternate payee dates of birth, that the participant is early retirement eligible but not retiring at this time ․” (Id.). The Pension Trust similarly sent Mr. Bernal a letter informing him that “[t]he QDRO awards your ex-wife, $468.15 of your California Ironworkers Field Pension account before actuarial adjustment. [Plaintiff] will continue to receive $189.43 for the remainder of her lifetime.” (Id. at 21). Plaintiff did not exercise her right to collect her benefits at that time.

On April 11, 2022, Mr. Bernal died at the age of 50. (Id. at 22). On April 14, 2022, Plaintiff contacted the Pension Trust and informed them of Mr. Bernal's death and requested the benefits owed to her and her children. (SUF 24; Busani Decl., Exh. 18). In a letter dated September 15, 2022, the Pension Trust informed Plaintiff that while their records indicated that there was a filed approved QDRO on file “in regards to community property earned during the marriage ․ the QDRO does not protect your right to receive a Pre-Retirement Death Benefit.” (SUF 25; Busani Decl., Exh. 20). The letter further cited paragraph 6 of the QDRO, which states in relevant part that Plaintiff “shall not be treated as the Participant's spouse under the Plans,” and reasoned that the “QDRO does not award you benefits in the event of Mr. Bernal's passing because it specifically states that you will not be treated as a spouse under the Plans.” (Id.).

On November 9, 2022, Plaintiff filed an appeal of the Pension Trust's September 15, 2022, decision. (SUF 26; Busani Decl., Exh. 21). On February 28, 2023, Plaintiff's appeal was denied because the QDRO “does not protect [Plaintiff's] right to a Pre-Retirement Death Benefit by providing that she is not to be treated as the Participant's surviving spouse under the Plan.” (SUF 27; Busani Decl., Exh. 22). In a separate letter also dated February 28, 2023, the Pension Trust informed Plaintiff's counsel that it would accept “an amended QDRO obtained by [Plaintiff] that protects her interests in a Pre-Retirement Death Benefit.” (SUF 29; Busani Decl., Exh. 23). The Pension Trust further stated that it would place an 18 month hold on the beneficiary benefits to allow Plaintiff to seek an amended QDRO. (Id.).

B. Procedural History

On February 26, 2024, Defendant filed the Defendants' Motion. (Docket No. 25). Also on February 26, 2024, Plaintiff filed the Plaintiff's Motion. (Docket No. 26). In support of Plaintiff's Motion, Plaintiff also filed a separate SUF (Docket No. 28), and a RJN (Docket No. 31). On March 7, 2024, Plaintiff filed her Opposition to Defendants' Motion. (Docket No. 34). On the same day, Defendants filed their Opposition to Plaintiff's Motion. (Docket No. 35). Defendants and Plaintiff subsequently filed their Reply on March 21, 2024, respectively. (Docket Nos. 36, 37).

II. PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

A. Legal Standard

A motion for summary judgment must be granted when “the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The moving party bears the initial burden of identifying the elements of the claim or defense and evidence that it believes demonstrates the absence of an issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once the moving party meets this burden, the burden shifts to the opposing party to set out specific material facts showing a genuine issue for trial. See Liberty Lobby, 477 U.S. at 248–49, 106 S.Ct. 2505.

The Court must draw all reasonable inferences in the light most favorable to the nonmoving party. In re Oracle Corp. Sec. Litig., 627 F.3d 376, 387 (9th Cir. 2010) (citing Liberty Lobby, 477 U.S. at 255, 106 S.Ct. 2505). Where, taken in that light, the record “could not lead a rational trier of fact to find for the nonmoving party, there is no ‘genuine issue for trial,’ ” and the court must grant summary judgment. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). “[S]ummary judgment will not lie,” however, “if the dispute about a material fact is ‘genuine,’ that is, if the evidence is such that a reasonable [factfinder] could return a verdict for the nonmoving party.” Liberty Lobby, 477 U.S. at 248, 106 S.Ct. 2505.

B. Analysis

In general, a trustee's decision in an ERISA benefits case is subject to a de novo standard of review. See, e.g. Kearney v. Standard Ins. Co., 175 F.3d 1084, 1089 (9th Cir. 1999). The more lenient abuse of discretion standard of review applies, however, when a plan “expressly and unambiguously gives the administrator discretion to determine eligibility.” Salomaa v. Honda Long Term Disability Plan, 642 F.3d 666, 673 (9th Cir. 2011) (holding that a trustee abused its discretion when it denied plaintiffs based on illogical, implausible, or unsupported inferences); see also Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989) (holding that a deferential standard of review for actions by the trustee is “appropriate when the trustee exercises discretionary powers.”). Under the abuse of discretion standard, the Trustee's determination will only be found to be improper if it was: “(1) illogical, (2) implausible, or (3) without support in inferences that may be drawn from the facts in the record.” Salomaa, 642 F.3d at 676.

Here, the proper standard of review is abuse of discretion because the Plan expressly and unambiguously gives the administrator discretion to determine benefits eligibility. (See Docket No. 24, Exhs. B, D, Article VIII, Section 3) (providing the Trustee the authority to interpret the Plan). Nevertheless, even applying this standard, the Court finds that the Trustee abused its discretion based on the Trustee's misapplication of the Plan benefits and the plain language of the QDRO, which vests a separate interest in the pension benefits for Plaintiff.

Defendants' reliance on Article IV, Section 4 (survivor benefits) and Article V, Section 1(a) (death beneficiaries) of the Plan to deny Plaintiff's benefits is illogical, implausible, and without support from inferences properly drawn from the record. Here, Plaintiff does not seek survivor benefits. In fact, both parties concede that the QDRO states that Plaintiff is not a surviving spouse. Rather, Plaintiff seeks a separate vested interest outside of the survivor benefits for one-half of the pension credits earned by Mr. Bernal under the Pension Trust for the period that they were married. (Busani Decl., Exh. 6). The existence of this separate, vested benefit is demonstrated by the Pension Trust's letter dated November 7, 2019, in which the Pension Trust informed Plaintiff that “effective November 1, 2019, the amount payable to [Plaintiff] over her lifetime is $189.43 for 13 checks per year. This amount is based on the terms of the QDRO and the additional information you provided, including participant and alternate payee dates of birth, that the participant is early retirement eligible but not retiring at this time ․” (SUF 16). As such, Article IV, Section 4 and Article V, Section 1(a) are irrelevant for the determination of Plaintiff's benefits because those provisions focus on beneficiaries and the benefits for a surviving legal spouse.

Furthermore, the Trustee's determination that the QDRO did not protect Plaintiff's right to receive a pre-retirement death benefit because the QDRO deemed her a non-surviving spouse is irrelevant to the determination of her vested, separate interest under the QDRO.² (SUF 25, 27). Under ERISA, a valid QDRO “creates or recognizes the existence of an alternate payee's right to [receive] benefits payable with respect to a participant under a plan ․” 29 U.S.C. § 1056(d)(3)(B)(i)(I); I.R.C. § 414(p)(1)(A). There are two main types of QDROs: (1) “separate interest” QDROs and “shared payment” QDROs. Anderson v. Suburban Teamsters of N. Illinois Pension Fund Bd. of Trustees, 588 F.3d 641, 651 (9th Cir. 2009) (citing U.S. Dep't of Labor, The Division of Pensions Through Qualified Domestic Relations Orders, http://www.dol.gov/ebsa/publications/qdros.html, Question 3–3.).³ “A separate interest QDRO divides the benefit into two different pensions, one for the plan participant and one for the alternate payee.” Id. at 651–52. “[A] shared payment QDRO assigns the alternate payee a portion of each monthly payment.” Id. at 652. The two plans are distinct in that under a separate interest QDRO, an alternate payee can receive the pension benefit “at a time and in a form different from that chosen by the participant,” whereas in a shared payment, the alternate payee “will not receive any payments unless the participant receives a payment or is already in pay status.” Id. at 651–652 (internal quotation marks and citations omitted).

Here, Plaintiff's QDRO has all the hallmarks of a separate interest QDRO. In fact, even Defendants concede that the QDRO created a separate interest. (Docket No. 35 at 3) (“The Pension Plan is not disputing that the parties to the Bernal-Brown divorce agreed to a QDRO that was valid in form, which states that Plaintiff has a ‘separate interest.’ ”). First, paragraph 4(a.1) of the QDRO created an interest that consisted of “[o]ne-half of the pension credits earned by the Participant [i.e. Mr. Bernal] under the [Pension Trust] during the marriage of the Parties.” (SUF 16). Second, paragraph 4(b.1) of the Plan allows Plaintiff to exercise her right to collect on her share “upon application, following approval of this QDRO by the Plan Administrator and filing of this Order with the Court.” (Id. (emphasis added)). Indeed, just like the separate interest QDRO in Anderson, the QDRO in this matter permits Plaintiff to receive her pension benefit at any time and in any form and is not tied to the participant's recovery of benefits. Anderson, 588 F.3d at 652 (holding that the separate interest QDRO granted the ex-wife of participant one-half of pension to begin at participant's earliest retirement age even if participant were still working).

Defendants' reliance on Hamilton for the proposition that a former spouse of a deceased participant can only recover pre-retirement benefits when the QDRO explicitly assigns such rights is unavailing. See, e.g. Hamilton v. Washington State Plumbing & Pipefitting Indus. Pension Plan, 433 F.3d 1091, 1095 (9th Cir. 2006). Hamilton is factually distinguishable from this matter because in Hamilton, not only did the participant re-marry causing there to be a conflict between the surviving spouse and beneficiaries, but also the QDRO in that case was silent as to the surviving spouse's benefit. Here, there is no surviving spouse as Mr. Bernal did not re-marry, and the QDRO explicitly says Plaintiff is not the surviving spouse. Regardless of whether Mr. Bernal remarried before his death, Plaintiff would never have been considered the surviving spouse under the explicit terms of the QDRO. Instead, Plaintiff contends that the QDRO created a separate vested interest, which is wholly separate and apart from any survivor benefit. (Docket 27 at 18). This interest is unaffected by Mr. Bernal's death as it is tied to Plaintiff's life and Plaintiff could have begun collecting at any time with and with any method permissible under the Plan. (Busani Decl., Exh. 6). This reasoning is in line with Hamilton in that the QDRO is explicit about the assignment of surviving spouse benefits and does not attempt to usurp the surviving spouse benefits. Accordingly, the Court finds that the Trustee abused its discretion when denying Plaintiff's claims, and it is undisputed that the QDRO provides Plaintiff a separate vested interest in the pension benefit, and GRANTS Plaintiff's Motion.

III. CONCLUSION

For the foregoing reasons, the Court GRANTS Plaintiff's Motion. (Docket No. 26). The Court finds that there is no genuine issue as to any material fact, and Plaintiff is entitled to judgment as a matter of law.

Defendants are ORDERED to grant and pay Plaintiff's pension benefits to be determined by the Pension Trust under the terms of the QDRO (i.e. one-half of the pension credits earned by Mr. Bernal during the marriage of the parties) based on a claim date of April 14, 2022, which is the date that the Plaintiff contacted the Pension Trust and informed them of Mr. Bernal's death and requested the benefits owed to her and her children. (SUF 24; Busani Decl., Exh. 18). Further, the Court grants the parties leave to file any additional briefing as to the benefits calculation only.

Lastly, because the Court grants Plaintiff's Motion and enters judgment in her favor, the Court DENIES Defendants' Motion as moot. (Docket No. 25).

IT IS SO ORDERED.

FOOTNOTES

2.   The parties dispute the scope of Trustee's determination. In its moving papers, Defendants argue that “once Mr. Bernal died prior to retirement, there were only two benefits available: either a surviving spouse benefit (to which the Plaintiff admits she is ineligible) or a pre-retirement death benefit payable to his beneficiaries, [and] his children․” (Docket No. 25-1 at 14). Plaintiff counters that Defendants are limited by the determinations listed in the denial letters sent to Plaintiff and these two rationale were not contained within the denial letters. (Docket No. 34 at 4–5) (citing 29 C.F.R. § 2560.503–1(g)(1)(i), (j)(1)). The Court finds that the determinations stated in Defendants' papers are substantially similar to the determinations contained in the denial letters and makes no distinction for purposes of this Order.

3.   Plaintiff filed a RJN in support of Plaintiff's Motion containing a copy of the Department of Labor publication cited to in Anderson. ․”). A court “must take judicial notice if a party requests it and the court is supplied with the necessary information.” Fed. R. Evid. 201(c). That is, the party requesting judicial notice must show that the fact “is not subject to reasonable dispute” because it is either generally known or “can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001) (quotation omitted); Fed. R. Evid. 201(b). Here, the Court finds that the Department of Labor publication is a government publication and a matter of public record, and therefore judicially noticeable. See, e.g. Spy Optic, Inc. v. Alibaba.Com, Inc., 163 F. Supp. 3d 755, 763 (C.D. Cal. 2015) (taking judicial notice of a U.S. Securities and Exchange filing as it was a government publication and matter of public record.). Accordingly, the Court GRANTS Plaintiff's RJN. (Docket No. 31).

WESLEY L. HSU, UNITED STATES DISTRICT JUDGE