CourtListener opinion 2966935

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PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

METROPOLITAN LIFE INSURANCE
COMPANY,
Plaintiff,

v.

BETTY T. PETTIT, No. 97-2244
Defendant-Appellant,

v.

PATRICIA B. PETTIT,
Defendant-Appellee.

METROPOLITAN LIFE INSURANCE
COMPANY,
Plaintiff,

v.

PATRICIA B. PETTIT, No. 97-2407
Defendant-Appellant,

v.

BETTY T. PETTIT,
Defendant-Appellee.

Appeals from the United States District Court
for the Eastern District of Virginia, at Alexandria.
Claude M. Hilton, Chief District Judge.
(CA-96-1311-A)

Argued: September 23, 1998

Decided: December 31, 1998
 Before MURNAGHAN and WILLIAMS, Circuit Judges, and
BULLOCK, Chief United States District Judge from the Middle
District of North Carolina, sitting by designation.

_________________________________________________________________

Affirmed by published opinion. Judge Williams wrote the opinion, in
which Chief Judge Bullock concurred. Judge Murnaghan wrote a sep-
arate concurring opinion.

_________________________________________________________________

COUNSEL

ARGUED: Robert Eric Greenberg, FRIEDLANDER, MISLER,
FRIEDLANDER, SLOAN & HERZ, Washington, D.C., for Appel-
lant. Brian Stuart Chilton, HOGAN & HARTSON, L.L.P., Washing-
ton, D.C., for Appellee. ON BRIEF: Glenn W. D. Golding,
FRIEDLANDER, MISLER, FRIEDLANDER, SLOAN & HERZ,
Washington, D.C., for Appellant. David G. Leitch, HOGAN &
HARTSON, L.L.P., Washington, D.C., for Appellee.

_________________________________________________________________

OPINION

WILLIAMS, Circuit Judge:

Upon the death of one of its insured, Tom Pettit (Tom), Metropoli-
tan Life Insurance Company (MetLife) sought to pay life insurance
proceeds due under an Employee Retirement Income Security Act
(ERISA) qualified plan. The designated beneficiary, Patricia Pettit
(Patricia), who was Tom's widow, and Tom's former wife, Betty Pet-
tit (Betty), both claimed a portion of the proceeds. Betty's claim was
based on a property settlement agreement that she entered into with
Tom in connection with their divorce. Faced with these competing
claims, MetLife filed an interpleader action to determine the proper
disposition of the insurance proceeds. Betty filed a cross-claim
against Patricia seeking to enforce a constructive trust against the dis-
puted proceeds. Both parties to the cross-claim filed competing
motions for summary judgment.

 2
 Relying on ERISA's preemption clause, the district court held that
Betty's claim was preempted because it was based upon state law that
related to an employee benefit plan. The district court noted further
that Betty had not employed a qualified domestic relations order
(QDRO), the method ERISA provided for a divorced spouse to
enforce property rights in an ERISA plan. Accordingly, the district
court granted Patricia's motion for summary judgment and denied
Betty's summary judgment motion. The district court also denied
Patricia's motion for attorney's fees and costs.

On appeal, Betty contends that because an ERISA plan administra-
tor should look outside of the plan provisions to allocate benefits
properly and that this burden does not conflict with ERISA's policies,
her constructive trust claim is not preempted. She also argues that
although the district court did not reach the merits of her constructive
trust claim, this Court may resolve those issues without remand. Patri-
cia filed a cross-appeal challenging the district court's denial of her
attorney's fees and costs. Because we agree that ERISA preempts the
constructive trust claim and that no attorney's fees should be awarded
in this case, we affirm the judgment of the district court.

I.

During divorce proceedings in 1989, Tom and Betty Pettit divided
their marital property through a property settlement agreement, which
was incorporated but not merged into their divorce decree, and a sepa-
rate QDRO that was entered by the Circuit Court of Fairfax County,
Virginia. The property settlement agreement provided for a division
of personalty and realty, the payment of spousal support, and other
general matters. That agreement also specifically required Tom to
maintain $200,000 of life insurance benefits in favor of Betty1 and to
transfer to Betty ownership of several life insurance policies issued by
Connecticut Mutual, American Mutual, and Prudential. The trans-
ferred policies are not at issue in this appeal. The QDRO transferred
to Betty one-half of Tom's interest in his income savings plan, which
_________________________________________________________________
1 The life insurance provision also required Tom to provide at least
annual proof of compliance therewith. Betty never received or requested
such proof.

 3
 was maintained through his employer, but it made no mention of life
insurance benefits.

This appeal concerns the life insurance policy that Tom carried
through his employer, the National Broadcasting Company (NBC),
which was administered by MetLife. This life insurance policy was
subject to the provisions of ERISA; it was not specifically mentioned
in the property settlement agreement. Tom also owned and privately
maintained other life insurance policies. The beneficiary designations
on the policies were changed frequently, but at Tom's death, Betty
was not named as the beneficiary of either the MetLife policy or any
other policy that would fulfill the property settlement agreement's
$200,000 insurance obligation.2 Unbeknownst to Betty, Tom had des-
ignated his then wife, Patricia, as the beneficiary of the MetLife plan.

Seeking to enforce the property settlement agreement, Betty pre-
sented a claim to MetLife for a portion of the life insurance proceeds.
Faced with competing payment obligations because Betty's claim
clearly conflicted with the plan's beneficiary designation, MetLife
filed an interpleader action in the United States District Court for the
Eastern District of Virginia naming Betty Pettit and Patricia Pettit as
defendant-claimants. Betty then filed a counterclaim against MetLife,
which she later dismissed via consent order, and a cross-claim against
Patricia to enforce a constructive trust against the MetLife proceeds.
Upon cross motions for summary judgment, the district court granted
Patricia's motion and denied Betty's. Subsequently, the district court
denied Patricia's motion to obtain attorney's fees and costs from
Betty. This appeal followed.

II.

The threshold question in this case is whether ERISA preempts the
enforcement of a property settlement agreement against life insurance
benefits paid through an ERISA-governed plan. Betty asks that we
impose a constructive trust upon the life insurance proceeds if we find
that ERISA does not preempt her claim.
_________________________________________________________________
2 The other policies variously named his children or Patricia as the ben-
eficiaries.

 4
 We review the district court's grant of Patricia's motion for sum-
mary judgment de novo. See M & M Med. Supplies & Serv. v. Pleas-
ant Valley Hosp., Inc., 981 F.2d 160, 163 (4th Cir. 1992) (en banc).
If there is no genuine issue of material fact and the moving party is
entitled to judgment as a matter of law, then summary judgment is
appropriate. See Fed. R. Civ. P. 56(c); M & M Medical, 981 F.2d at
162-63. As the district court found and the parties agree, there are no
material facts in dispute. Our inquiry, therefore, necessarily extends
only to the application of the law in this case.

In any inquiry involving statutory construction, we begin with the
language of the statute itself. Commonly known as ERISA's preemp-
tion provision, 29 U.S.C.A. § 1144(a) states that ERISA \shall super-