AI Generated Opinion Summaries

This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.

Facts

• Dona Lu Snyder, after marrying Alexandro Montes in 1992, designated him as the beneficiary of her Fidelity Savings and Investment plan offered through her employer, Raytheon. Following their divorce in 1997, their marital settlement agreement stipulated that Snyder would retain ownership of her retirement benefits, but she never removed Montes as the named beneficiary. Upon Snyder's death in 2013, Montes received the proceeds of the Fidelity plan. Snyder's estate and children filed suit to recover these proceeds, claiming entitlement based on the marital settlement agreement, state law, and equity principles (paras 2-3).

Procedural History

• [Not applicable or not found]

Parties' Submissions

• Plaintiffs: Argued they were entitled to the proceeds of the Fidelity plan because Montes waived his interest in Snyder’s retirement benefits in their marital settlement agreement, an unaffirmed pre-divorce beneficiary designation is invalid under state law, and equity justifies creating a constructive trust as Montes was not the intended beneficiary (para 3).
• Defendant: Contended that the Plaintiffs' action was preempted by the Employee Retirement Income Security Act of 1974 (ERISA) and should be dismissed. Asserted that he was unaware of the preemption at the time of entering into a stipulated agreement with the Plaintiffs, which should therefore be set aside (para 5).

Legal Issues

• Whether the Plaintiffs' claims to recover the proceeds of the Fidelity plan are preempted by ERISA.
• Whether the stipulated agreement between the parties should be enforced despite the Defendant's later motion to strike it based on ERISA preemption claims (paras 5-6, 15).

Disposition

• The Court of Appeals reversed the district court's decision, which had found the Plaintiffs' claims preempted by ERISA and granted the Defendant's motions to strike the stipulated agreement and to dismiss the action. The case was remanded to the district court for enforcement of the stipulated agreement (paras 1, 16).

Reasons

• The Court, with Judges M. Monica Zamora, Roderick T. Kennedy, and Timothy L. Garcia concurring, held that the district court erred in concluding that the Plaintiffs' claims were preempted by ERISA. The Court distinguished this case from previous Supreme Court decisions, noting that ERISA does not preclude enforcement of a waiver of benefits contained in a divorce decree once the plan benefits are distributed. The Court found that the Plaintiffs had stated a valid claim under their waiver theory, which was sufficient to defeat a motion to dismiss for failure to state a claim. Consequently, the Court concluded that the district court also erred in setting aside the parties' stipulated agreement based on an erroneous conclusion of preemption. The decision to reverse and remand was based on the legal sufficiency of the Plaintiffs' complaint and the inapplicability of ERISA preemption to the facts as alleged (paras 6-15).