CourtListener opinion 10220518

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UNITED STATES DISTRICT COURT 
 EASTERN DISTRICT OF MICHIGAN 
 SOUTHERN DIVISION 

The Lincoln National Life 
Insurance Company, 
 Case No. 21-cv-12984 
 Plaintiff, 
 Judith E. Levy 
v. United States District Judge 

Sowndharya Subramaniam, et al., Mag. Judge Elizabeth A. Stafford 

 Defendants. 

________________________________/ 

 OPINION AND ORDER GRANTING DEFENDANT 
 SOWNDHARYA SUBRAMANIAM'S MOTION FOR SUMMARY 
 JUDGMENT [24] AND DENYING AS MOOT DEFENDANT 
BRINDHA PERIYASAMY'S MOTION TO FILE A CROSSCLAIM 
 [28] 

 Before the Court are Defendant Sowndharya Subramaniam's 
motion for summary judgment (ECF No. 24) and Defendant Brindha 
Periyasamy's motion to file a crossclaim against Subramaniam. (ECF No. 
28.) For the reasons set forth below, Subramaniam's motion for summary 
judgment is granted. Accordingly, Periyasamy's motion to file a 
crossclaim is denied as moot. 
 I. Background 
 On May 5, 2022, Periyasamy filed a motion for summary judgment. 

(ECF No. 14.) On January 13, 2023, Magistrate Judge Elizabeth A. 
Stafford issued a Report and Recommendation ("R&R") recommending 

the Court deny Periyasamy's motion for summary judgment. (ECF No. 
23.) Periyasamy filed two timely objections to the R&R on January 27, 
2023. (ECF No. 25.) On February 13, 2023, the Court overruled 

Periyasamy's objections and adopted the R&R. (ECF No. 31.) 
 Subramaniam filed her motion for summary judgment on January 
16, 2023. (ECF No. 24.) This motion is fully briefed. (ECF Nos. 24, 27, 

33.) On February 6, 2023, Periyasamy filed a motion to file a crossclaim 
against Subramaniam. (ECF No. 28.) Subramaniam filed a response. 
(ECF No. 32.) 

 Because Subramaniam's and Periyasamy's summary judgment 
motions involve the same facts, the Court adopts by reference the 
background set forth in the R&R on Periyasamy's motion, having 

reviewed it and finding it to be accurate and thorough. (See ECF No. 23, 
PageID.316–319.) 
 II. Legal Standard 
 Summary judgment is proper when "the movant shows that there 

is no genuine dispute as to any material fact and the movant is entitled 
to judgment as a matter of law." Fed. R. Civ. P. 56(a). "A party asserting 

that a fact cannot be or is genuinely disputed must support the assertion 
by: (A) citing to particular parts of materials in the record . . . ; or (B) 
showing that the materials cited do not establish the absence or presence 

of a genuine dispute, or that an adverse party cannot produce admissible 
evidence to support the fact." Fed. R. Civ. P. 56(c)(1). The Court may not 
grant summary judgment if "the evidence is such that a reasonable jury 

could return a verdict for the nonmoving party." Anderson v. Liberty 
Lobby, Inc., 477 U.S. 242, 248 (1986). The Court "views the evidence, all 
facts, and any inferences that may be drawn from the facts in the light 

most favorable to the nonmoving party." Pure Tech Sys., Inc. v. Mt. 
Hawley Ins. Co., 95 F. App'x 132, 135 (6th Cir. 2004) (citing Skousen v. 
Brighton High Sch., 305 F.3d 520, 526 (6th Cir. 2002)). 

 III. Analysis 
 In her summary judgment motion, Subramaniam argues that she 
is entitled to the decedent's life insurance proceeds because ERISA 
preempts state law and she was the named beneficiary. (See ECF No. 24, 
PageID.332–334.) She also argues that there is no exemption to ERISA 

preemption because the divorce decree is not a qualified domestic 
relations order ("QDRO"). (Id.) Periyasamy disagrees. (ECF No. 27, 

PageID.458–461.) 
 As the R&R explained, 
 ERISA is the federal statute that governs employee 
 benefit welfare plans. 29 U.S.C. §§ 1001 et seq. Under ERISA, 
 federal law must supersede all state laws which "relate to" an 
 ERISA plan. See 29 U.S.C. § 1144(a). And "[t]he designation 
 of beneficiaries plainly relates to…ERISA plans." McMillan v. 
 Parrott, 913 F.2d 310, 311 (6th Cir. 1990), on reh'g, 922 F.2d 
 841 (6th Cir. 1990). Generally, divorce decrees purporting to 
 affect the benefits payable under an ERISA plan are not 
 exempt, but a divorce decree that constitutes a qualified 
 domestic relations order (QDRO) is exempt from ERISA's 
 coverage. 29 U.S.C. §§ 1144(a), 1056(d)(3)(A); Unicare Life & 
 Health Ins. Co. v. Craig, 157 F. App'x 787, 791 (6th Cir. 2005). 
 To qualify as a QDRO, the divorce decree must meet the 
 requirements in 29 U.S.C. § 1056(d)(3). See Metro. Life Ins. 
 Co. v. McDonald, 395 F. Supp. 3d 886, 890 (E.D. Mich. 2019). 
 Among other requirements, the divorce decree must identify 
 an alternate payee who would "receive all or a portion of the 
 benefits payable with respect to a participant under a plan." 
 29 U.S.C. § 1056(d)(3)(B)(i)(I). Both Periyasamy and 
 Subramaniam agree that the divorce decree lacks the 
 requisite information and is not a QDRO. ECF No. 20, 
 PageID.266; ECF No. 21, PageID.295. Thus, the divorce 
 decree is not exempt from preemption by ERISA. 
(ECF No. 23, PageID.320–321.) 
 The same analysis applies here. As the R&R correctly notes, the 

divorce decree is not a QDRO because it does not specify an "alternate 
payee who would ‘receive all or a portion of the benefits payable with 
respect to a participant under a plan.'" (Id.) In addition, both Periyasamy 

and Subramaniam agree that the divorce decree is not a QDRO. (ECF 
No. 20, PageID.266; ECF No. 21, PageID.295; ECF No. 23, PageID.321; 
ECF No. 24, PageID.332.) Because the divorce decree is not a QDRO, 

there is no genuine dispute of material fact that ERISA preempts state 
law and "the plan documents naming Subramaniam as the beneficiary of 
the policy controls." (ECF No. 23, PageID.324.) 

 Periyasamy's arguments in response do not challenge this 
conclusion. In her response brief, Periyasamy argues that Subramaniam 
waived her rights to the insurance proceeds by executing the divorce 

decree. (ECF No. 27, PageID.461–462.) However, as the R&R correctly 
noted, executing a divorce decree does not waive one's interest as a 
beneficiary under ERISA even if the divorce decree contains a waiver 

provision. (ECF No. 23, PageID.322–323 (citing McMillan v. Parrott, 913 
F.2d 310, 311–12 (6th Cir. 1990)).) 
 In addition, Periyasamy appears to bring an unjust enrichment 
claim in her response brief. (ECF No. 27, PageID.463–464.) But the Court 

cannot consider a claim raised for the first time in a response brief. Cf. 
Jocham v. Tuscola Cnty., 239 F. Supp. 2d 714, 732 (E.D. Mich. 2003) 

("The pleading contains no such allegation, and the plaintiffs may not 
amend their complaint through a response brief."). See generally Fed. R. 
Civ. P. 8. 

 Finally, Periyasamy argues that "a question of fact exists as to . . . 
whether the Court should impose a constructive trust over the proceeds 
of the insurance proceeds." (ECF No. 27, PageID.452–453.) The Court 

previously declined to impose a constructive trust in its order adopting 
the R&R: 
 Under Michigan law, "a constructive trust is strictly not 
 a trust at all, but merely a remedy administered in certain 
 fraudulent breaches of trusts." Metro. Life Ins. Co. v. 
 Mulligan, 210 F. Supp. 2d 894, 899 (E.D. Mich. 2002) (citing 
 Blachy v. Butcher, 221 F.3d 896, 905 (6th Cir. 2000)). A 
 constructive trust "may be imposed when property has been 
 obtained through fraud, misrepresentation, concealment, . . . 
 or any other similar circumstances which render it 
 unconscionable for the holder of the legal title to retain and 
 enjoy the property." Blachy, 221 F.3d at 903. "[T]he party 
 wanting the constructive trust to be imposed has the burden 
 of proof." Mulligan, 210 F. Supp. 2d at 899. There is a 
presumption against imposing a constructive trust "upon 
parties ‘who have in no way contributed to the reasons for 
imposing a constructive trust.'" Kammer Asphalt Paving Co. 
v. E. China Twp. Sch., 443 Mich. 176, 188 (1993); Mulligan, 
210 F. Supp. 2d at 899 (citing Ooley v. Collins, 344 Mich. 148, 
158 (1955)). 
 Here, there is no evidence of "fraud, misrepresentation, 
concealment, . . . or any other similar circumstances" that 
warrants imposing a constructive trust against 
Subramaniam. Blachy, 221 F.3d at 903; see, e.g., Chavarria v. 
Metro. Life Ins. Co., No. 2:08-cv-14234, 2009 WL 1856542, at 
*4 (E.D. Mich. June 25, 2009) (imposing a constructive trust 
under Michigan law because it "would afford [a decedent's ex- 
wife] the benefit of the bargained-for divorce agreement" 
when the decedent "misrepresented himself when signing the 
Judgment of Divorce"). It is undisputed that this litigation 
arose because decedent "did not complete a new enrollment 
form to designate his new spouse, Periyasamy, as his life 
insurance beneficiary." (ECF No. 23, PageID.317.) This case 
involves no allegations of fraud, misrepresentation, or 
concealment, and there is no showing of this type of 
misconduct. Although Periyasamy argues that it would be 
unconscionable for Subramaniam to get the life insurance 
proceeds because decedent and Subramaniam did not 
maintain a relationship following their divorce, Periyasamy 
points to no authority that demonstrates that a constructive 
trust should be imposed on this basis. (See ECF No. 25; 
PageID.411–412.) 
 Moreover, Subramaniam "in no way contributed to the 
reasons for imposing a constructive trust.'" Kammer, 443 
Mich. at 188. Given the presumption under Michigan law 
against imposing a constructive trust against someone who 
did not contribute to the reasons for imposing the trust, see 
 id., Periyasamy has failed to meet her burden of showing that 
 the Court should impose a constructive trust. Because 
 Periyasamy does not show that the R&R erred in 
 recommending that the Court decline to impose a constructive 
 trust, Periyasamy's first objection is overruled. 

(ECF No. 31, PageID.571–573.) 
 Periyasamy again fails to provide evidence of "fraud, 
misrepresentation, concealment, . . . or any other similar circumstances" 
that would warrant imposing a constructive trust against Subramaniam. 
Blachy v. Butcher, 221 F.3d 896, 903 (6th Cir. 2000). To support that a 
constructive trust is warranted, Periyasamy only states that the "consent 

judgment in the divorce . . . specifically allowed for the imposition of a 
constructive trust" and provides more details on the financial hardship 

she experienced. (ECF No. 27, PageID.453, 454–456.) She also does not 
counter the Court's earlier statement that Subramaniam "in no way 
contributed to the reasons for imposing a constructive trust.'" (ECF No. 

31, PageID.573 (quoting Kammer Asphalt Paving Co. v. E. China Twp. 
Sch., 443 Mich. 176, 188 (1993)).) Even viewing the evidence in the light 
most favorable to Periyasamy, there are no facts here that support the 

existence of "fraud, misrepresentation, concealment, . . . or any other 
similar circumstances." Blachy, 221 F.3d at 903. 
 Periyasamy also argues that because the life insurance proceeds 
were deposited into the court registry, the Court must impose a 

constructive trust. (ECF No. 27, PageID.466–468.) As the Court 
previously noted, "once the benefits are released to the proper 

beneficiary, the Court may turn to state law in deciding whether to 
impose a constructive trust." (ECF No. 31, PageID.575.) Like before, 
Periyasamy has not shown that the benefits were released to the proper 

beneficiary. (See ECF No. 27.) Nor has she provided any authority to 
support that the Court must impose a constructive trust. (See id.) 
Accordingly, "the plan documents naming Subramaniam as the 

beneficiary of the policy controls." (ECF No. 23, PageID.324.) 
 IV. Conclusion 
 For the reasons set forth above, the Court GRANTS 

Subramaniam's motion for summary judgment. (ECF No. 24.) 
Accordingly, Periyasamy's motion to file a crossclaim (ECF No. 28) is 
DENIED AS MOOT. 

 IT IS SO ORDERED. 
Dated: April 5, 2023 s/Judith E. Levy 
 Ann Arbor, Michigan JUDITH E. LEVY 
 United States District Judge 
 CERTIFICATE OF SERVICE 

 The undersigned certifies that the foregoing document was served 
upon counsel of record and any unrepresented parties via the Court's 
ECF System to their respective email or first-class U.S. mail addresses 
disclosed on the Notice of Electronic Filing on April 5, 2023. 

 s/William Barkholz 
 WILLIAM BARKHOLZ 
 Case Manager