CourtListener opinion 10920316

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IN THE UNITED STATES DISTRICT COURT 
 FOR THE WESTERN DISTRICT OF WISCONSIN 

PACKAGING CORPORATION OF AMERICA 
THRIFT PLAN FOR HOURLY EMPLOYEES, 

 Plaintiff, 
 v. 

 OPINION and ORDER 
DENA LANGDON, CHRISTINA COPISKEY, as the 

personal representative of the estate of Carl Kleinfeldt, 
 23-cv-663-jdp 
and THE ESTATE OF TERRY SCHOLZ, 

 Defendants. 
 This case involves a dispute over the proper beneficiary of a 401k account belonging to 
Carl Kleinfeldt, who died in January 2023. Interpleader plaintiff Packaging Corporation of 
America Thrift Plan for Hourly Employees filed this action after both Kleinfeldt's estate and 
Kleinfeldt's former spouse Dena Langdon requested the funds, so it could avoid liability for 
paying the wrong party. The court dismissed Packaging Corporation from the case after it 
deposited the funds into the court's registry account. Dkt. 19. After the parties filed their 
summary judgment materials, the court determined that the estate of Terry Scholz, Kleinfeldt's 
sister, also has a potential interest in the 401k, so the court ordered joinder of Scholz's estate 
under Federal Rule of Civil Procedure 19(a)(2). Dkt. 48. 
 The question before the court is which defendant is the proper beneficiary of the 401k 
account. Both Langdon and Kleinfeldt's estate have moved for summary judgment. Dkt. 20 
and Dkt. 22. Scholz's estate did not appear until after the motions for summary judgment were 
fully briefed, but the court gave it a chance to respond to the issues raised by the other two 
parties or to raise any new issues. Dkt. 50. Scholz's estate did not respond, so the motions for 
summary judgment are now ready for decision. 
 The court will deny both Langdon's and Kleinfeldt's estate's motions for summary 
judgment and sua sponte award summary judgment to Scholz's estate because the undisputed 

facts show that it is the proper beneficiary of the 401k. At the time of Kleinfeldt's death, plan 
documents listed Langdon as the primary beneficiary of the 401k and Scholz as the contingent 
beneficiary. But before he died, Kleinfeldt sent a fax to Packaging Corporation asking it to 
remove Langdon as the primary beneficiary. Kleinfeldt did not comply with the plan 
requirements when he tried to change his beneficiary by fax, but the court concludes that the 
fax was a valid change of beneficiary under the federal common law rule of substantial 
compliance. Scholz was still alive when Kleinfeldt died, so as the contingent beneficiary, she 
was the proper recipient of the 401k after Langdon's removal. 

 UNDISPUTED FACTS 
 The following facts are undisputed. 
 Carl Kleinfeldt worked at Packaging Corporation of America for 32 years and 
participated in a 401k retirement plan administered by plaintiff Packaging Corporation of 
America Thrift Plan for Hourly Employees. The plan allows participants to name beneficiaries 
to receive unpaid plan benefits if the participant dies. Dkt. 27-8, at 5. There are two ways to 
change a beneficiary: a participant can "contact the PCA Benefits Center at 1-877-453-0945" 
or "update [his] beneficiaries online at benefitscenter.packagingcorp.com." Id. If there is no 

named beneficiary or all named beneficiaries die before the participant, then the benefits are 
paid out to the participant's estate. Id. If a beneficiary outlives the participant but dies before 
receiving a distribution from the plan, then the benefits are paid to the beneficiary's estate. Id. 
 Kleinfeldt named his spouse Dena Langdon as his primary beneficiary. Dkt. 21-17. He 
named his sisters Terry Scholz and Lisa Kottke as contingent beneficiaries. Id. Kottke died in 

2012, but Scholz was still living when Kleinfeldt died. 
 Kleinfeldt and Langdon divorced in September 2022 after a 16-year marriage. As part 
of the divorce, Kleinfeldt and Langdon agreed to a Qualified Domestic Relations Order 
(QDRO) stating that Langdon would receive 21.3% of Kleinfeldt's 401k benefits. Dkt. 21-7, 
at 2. Pursuant to the QDRO, the plan divided the benefits and paid Langdon her percentage 
of the plan, which amounted to $65,953.25. 
 After the divorce, Kleinfeldt attempted to remove Langdon as the primary beneficiary 
of his 401k. On October 4, 2022, Kleinfeldt sent a fax to Packaging Corporation, attaching a 

copy of the divorce judgment and writing: "Please remove my former spouse, Dena Suzanne 
Kleinfeldt from the health, vision and dental insurance and as a beneficiary of my 401(k), 
pension and life insurance accounts. Please feel free to fax any necessary paperwork to the 
above fax that I may need to complete."1 Dkt. 27–3. Packaging Corporation received the fax 
and removed Langdon from health, vision, and dental insurance. Dkt. 23 at 2. Packaging 
Corporation did not remove Langdon as a beneficiary of the 401k plan. Id. 
 Kleinfeldt died on January 16, 2023. Id. After Kleinfeldt's death, both Langdon and 
Kleinfeldt's estate, through his personal representative Scholz, asserted claims over the 401k 

1 Langon disputes that Kleinfeldt "sent" the fax, saying it was actually sent by Jordan Renn, an 
HR manager at Packaging Corporation. Dkt. 33, ¶¶ 8–9. But in her own proposed facts, 
Langdon says that Kleinfeldt directed Renn to send the fax, so it is undisputed that Kleinfeldt 
authored the fax. Dkt. 39, ¶ 27. 
benefits. Packaging Corporation informed Kleinfeldt's estate that it intended to pay out the 
401k benefits to Langdon because she was the designated primary beneficiary. Dkt. 21-10. 
Kleinfeldt's estate appealed the decision. Dkt. 21-12. Rather than decide the appeal, Packaging 
Corporation filed this interpleader suit to avoid liability for paying the wrong person. 

 Scholz died in August 2023. Her daughter Christina Copiskey now serves as the 
personal representative of both Kleinfeldt's estate and Scholz's estate. 

 ANALYSIS 
 The question before the court is which defendant is the proper beneficiary of 
Kleinfeldt's 401k plan. The 401k plan is an employee benefit plan governed by the Employee 
Retirement and Security Act of 1974 (ERISA), so this court has subject-matter jurisdiction 
under 29 U.S.C. § 1132(e)(1). 
 Both Langdon and Kleinfeldt's estate have moved for summary judgment. In ruling on 

a motion for summary judgment, the court views all facts and draws all inferences in the light 
most favorable to the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 
(1986). "With cross-motions, our review of the record requires that we construe all inferences 
in favor of the party against whom the motion under consideration is made." Metro. Life Ins. 
Co. v. Johnson, 297 F.3d 558, 561–62 (7th Cir. 2002) (quoting Hendricks-Robinson v. Excel Corp., 
154 F.3d 685, 692 (7th Cir. 1998)). Summary judgment will be granted only if "the record 
taken as a whole could not lead a rational trier of fact to find for the non-moving party." Sarver 
v. Experian Info. Sols., 390 F.3d 969, 970 (7th Cir. 2004) (quoting Matsushita Elec. Indus. Co. v. 

Zenith Radio Corp., 475 U.S. 574, 586–87 (1986)). 
A. Standard of review 
 Langdon contends that this court should apply a deferential arbitrary and capricious 
standard of judicial review because Kleinfeldt's plan granted discretionary authority to the plan 

administrator to determine benefits eligibility under the plan. Dkt. 21-13, at 3. In actions to 
recover benefits brought under 29 U.S.C. § 1132(a)(1)(B), the court applies an arbitrary and 
capricious standard to review a plan administrator's decision if the plan grants discretionary 
authority to determine benefits eligibility. Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101, 
115 (1989). But interpleader cases like this one are equitable actions under § 1132(a)(3)(B), 
not actions to recover benefits under § 1132(a)(1)(B). See, e.g., Metro. Life Ins. Co. v. Marsh, 119 
F.3d 415, 418 (6th Cir. 1997); Aetna Life Ins. Co. v. Bayona, 223 F.3d 1030 (9th Cir. 2000). 
 The Seventh Circuit has not decided whether arbitrary and capricious review applies to 

interpleader cases brought under § 1132(a)(3)(B) and neither side in this case briefed that 
issue. But the court need not decide the issue because even if arbitrary and capricious review 
applies to interpleader cases, it would not apply here. As explained below, the dispositive 
question in this case is whether the fax Kleinfeldt sent was a valid change of beneficiary under 
the common law principle of substantial compliance, notwithstanding Kleinfeldt's failure to 
follow plan requirements for changing beneficiaries. The applicability of the substantial 
compliance rule is a question of law, not policy interpretation, so de novo review applies. 
Williams v. Midwest Operating Eng'rs Welfare Fund, 125 F.3d 1138, 1140 (7th Cir. 1997). 
B. Valid change of beneficiary 

 The key issue is whether Kleinfeldt's fax asking Packaging Corporation to remove 
Langdon as the primary beneficiary of his 401k account was a valid change of beneficiary, even 
though Kleinfeldt failed to comply with the plan's established methods for changing a 
beneficiary. 
 Langdon relies on Kennedy v. Plan Administrator for DuPont Savings & Investment Plan. 
555 U.S. 285 (2009). In that case, the Court considered whether a pension plan participant's 

ex-spouse was entitled to pension benefits when she had disclaimed any interest in the pension 
in a divorce agreement, but the participant had never removed her as the beneficiary on plan 
documents. The Court held that the beneficiary designation on the plan documents superseded 
the divorce agreement because ERISA requires plan administrators to act "in accordance with 
the documents and instruments governing the plan." Id. at 300–01 (quoting 29 U.S.C. 
§ 1104(a)(1)(D)). Langdon argues that she was listed as the primary beneficiary of the 401k 
at the time of Kleinfeldt's death, so under Kennedy, she is entitled to the funds. 
 Kleinfeldt's estate argues that Kennedy is distinguishable because Kleinfeldt attempted 

to remove Langdon as his primary beneficiary by sending a fax to Packaging Corporation. The 
estate acknowledges that Kleinfeldt didn't comply with the strict terms of the plan, which 
required him to change his beneficiary online or by phone. But the estate argues that the fax 
nevertheless evidenced Kleinfeldt's clear intent to change his beneficiary. 
 The Seventh Circuit has recognized the federal common law doctrine of substantial 
compliance in ERISA cases. Metro. Life Ins. Co. v. Johnson, 297 F.3d 558 (7th Cir. 2002) (citing 
Phoenix Mut. Life Ins. Co. v. Adams, 30 F.3d 554, 567–68 (4th Cir. 1994)). Under the substantial 
compliance rule, a change of beneficiary that fails to comply with plan requirements is valid if 

two elements are met: (1) the participant intended to make a change of beneficiary; and (2) 
the participant took positive action to effectuate the change. Id. at 567. 
 The court concludes that Kleinfeldt's fax satisfies both elements of substantial 
compliance. The intent element is established by the plain language of the fax, which asks 
Packaging Corporation to "remove my former spouse, Dena Suzanne Kleinfeldt from the 
health, vision and dental insurance and as a beneficiary of my 401(k), pension and life 

insurance accounts." Dkt. 27-3. Langdon admits that Kleinfeldt authored the fax, which on its 
face demonstrates Kleinfeldt's intent to remove Langdon as the primary beneficiary of his 
401k.2 Dkt. 29, ¶ 27. 
 The positive action element requires that the participant take steps to effectuate his 
beneficiary change that are "for all practical purposes similar" to the actions required by the 
plan. Johnson, 297 F.3d at 566. In evaluating whether an action is "for all practical purposes 
similar," courts should focus on substance rather than form, and in particular on whether the 
actions the participant took were sufficient for plan administrators to determine the 

participant's intent. Compare Johnson, 297 F.3d 558 (substantial compliance where participant 
checked the wrong box on a form) and Davis v. Combes, 294 F.3d 931 (7th Cir. 2002) 
(substantial compliance where participant failed to sign and date a form) with Rendleman v. 
Metro. Life Ins. Co., 937 F.2d 1292 (7th Cir. 1991) (no substantial compliance where decedent 
told a friend he wanted to change his beneficiary and obtained the necessary form but didn't 

2 In her opposition brief to Kleinfeldt's estate's motion for summary judgment, Langdon argues 
that intent is disputed. To support that assertion, Langdon submitted an affidavit in which she 
says that Kleinfeldt and Langdon did not "hate each other," Kleinfeldt knew that his sister and 
sole heir Scholz was dying, and Kleinfeldt viewed his nieces and nephews, who would be his 
heirs following Scholz's death, as financially irresponsible. Dkt. 34. Kleinfeldt's estate moves 
to strike the affidavit on the basis that it contains inadmissible hearsay because it describes 
things Kleinfeldt and Scholz told Langdon. The court need not determine whether the affidavit 
is admissible, because even if a jury fully credited Langdon's statements in the affidavit, no 
reasonable jury could find that Kleinfeldt didn't intend to change his beneficiary in light of the 
plain language of the fax. 
complete it). Kleinfeldt indisputably took action to effectuate his beneficiary change by sending 
the fax to Packaging Corporation. The fax plainly communicated Kleinfeldt's desire to change 
his beneficiary designation, so it meets the positive action requirement. 
 Langdon contends that the fax was not sufficient to change Kleinfeldt's beneficiary 

designation, for two reasons. First, she argues that Kleinfeldt's intent is unclear based on the 
second sentence of the fax, in which Kleinfeldt asks the plan to "feel free to fax any necessary 
paperwork to the above fax that I may need to complete." Dkt. 27-3, at 1. Langdon says that 
this sentence demonstrates that Kleinfeldt knew there were additional steps beyond the fax 
that he needed to take to complete his change of beneficiary. Langdon points out that 
Kleinfeldt had previously changed his beneficiary via the proper means, so he knew that the 
fax was not enough to complete his change of beneficiary. 
 But whether Kleinfeldt thought he might need to do more to complete his beneficiary 

change has no bearing on the issue of substantial compliance. The federal common law test for 
substantial compliance requires only that a plan participant take positive action; it does not 
require the participant to do everything within his power to complete the beneficiary change. 
Davis, 294 F.3d at 941 (noting a difference between federal common law and California law). 
Kleinfeldt took positive action by sending the fax, so it doesn't matter whether he believed he 
might have needed to do more to complete the beneficiary change. 
 Second, Langdon argues that the fax is insufficient because Kleinfeldt never signed the 
fax; all he did was type "CARL" at the end of the fax message. Langdon argues that accepting 

unsigned faxes would open the plan up to fraud because anyone could type a name onto a fax. 
Dkt. 42, at 3. But the purpose of the substantial compliance rule is to effectuate a plan 
participant's intent in the absence of technical requirements like signatures; in fact, the court 
of appeals has previously applied the substantial compliance rule in a case where the plan 
participant failed to sign a change of beneficiary form. Davis, 294 F.3d 931. Kleinfeldt's 
authorship of the fax is undisputed, so his failure to sign the fax doesn't change the court's 
analysis. 

 In sum, Kleinfeldt substantially complied with plan requirements when he sent a fax 
asking the plan to remove Langdon as the primary beneficiary of his 401k. Langdon is not 
entitled to the 401k benefits, so the court will deny her motion for summary judgment. 
C. Contingent beneficiary 
 The remaining question is whether Kleinfeldt's estate or Scholz's estate is the proper 
beneficiary of the 401k. Here, the language of the plan is clear. The plan states that if all 
beneficiaries die before the plan participant, then the benefits go to the participant's estate. 

Dkt. 27-8, at 5. But if a beneficiary outlives the plan participant but dies before receiving the 
benefits, the benefits go to the beneficiary's estate. Id. 
 Kleinfeldt listed his sisters Lisa Kottke and Terry Scholz as contingent beneficiaries of 
the 401k. Kottke predeceased Kleinfeldt, so her estate is not entitled to the benefits under the 
terms of the plan. But Scholz died eight months after Kleinfeldt, on August 13, 2023. 
Dkt. 21-21. Under the terms of the plan, the benefits go to her estate, not to Kleinfeldt's. The 
court will deny Kleinfeldt's estate's motion for summary judgment. 
 Although Scholz's estate did not move for summary judgment, the court will award 

summary judgment to her estate sua sponte. "While not encouraged, a district court can enter 
summary judgment sua sponte, or on its own motion, under certain limited circumstances." 
Golden Years Homestead, Inc. v. Buckland, 557 F.3d 457, 461–62 (7th Cir. 2009). Generally, sua 
sponte summary judgment should be awarded only if the parties against whom summary 
judgment is entered have had notice and an opportunity to present their evidence. Id. Here, 
both Langdon and Kleinfeldt's estate moved for summary judgment, so they had a chance to 
present their evidence and arguments in support of their own claims for the 401k. They also 
had a chance to respond to the issue whether Scholz's estate was entitled to the benefits. 

Langdon raised the issue of Scholz's estate's claim to the 401k in her own brief in support of 
summary judgment, arguing that even if Langdon was not entitled to the 401k, Scholz's estate 
would be the proper beneficiary. Dkt 20, at 15–16. In response, Kleinfeldt's estate argued that 
Langdon waived the issue of Scholz's estate's claim because Langdon admitted in her answer 
that all potential claimants had been named as parties. Dkt. 35, at 10. But waiver doesn't apply 
here because Langdon cannot waive a third party's claim to the 401k. 
 The undisputed facts establish that Scholz's estate is the proper beneficiary of the 401k 
balance. All the parties have had a chance to present their evidence and respond to the other 

parties' arguments, so the court will grant summary judgment sua sponte and award the balance 
of the 401k to Scholz's estate. 

 ORDER 
 IT IS ORDERED that: 
 1. Defendant Dena Langdon's motion for summary judgment, Dkt. 20, is DENIED. 
 2. Defendant Estate of Carl Kleinfeldt's motion for summary judgment, Dkt. 22, is 
 DENIED. 
 3. Defendant Estate of Carl Kleinfeldt's motion to strike the affidavit of Dena 
 Langdon, Dkt. 40, is DENIED as moot. 
 4. Summary judgment is awarded sua sponte to the Estate of Terry Scholz. The clerk 
 of court is directed to distribute to the Estate of Terry Scholz the $320,299.50 
 previously deposited into the court's registry by plaintiff Packaging Corporation of 
 America, plus any interest that has accrued. 
5. When the funds have been distributed, the clerk of court is directed to enter 
 judgment in favor of the Estate of Terry Scholz and close this case. 
Entered April 30, 2025. 
 BY THE COURT: 

 /s/ 
 ________________________________________ 
 JAMES D. PETERSON 
 District Judge