This week’s notable decision is a district court decision in Estate of Colleen J. Brownell v. Lyczak, et al., 2019 WL 5485392 (D.N.J. Oct. 25, 2019), which is another cautionary tale for the notion that murder doesn’t pay, well at least a murder conviction.

In this case, Defendant Lyczak pleaded guilty to murdering his girlfriend, Colleen Brownell, who was a plan participant in a 401(k) Employee Savings Plan (“the Plan”) administered by her former employer, Defendant PHH Corporation.  Lyczak was Brownell’s named primary beneficiary.  In other words, in the event of her passing, Lyczak was to receive all the money in her Plan account.  The plaintiff is the Estate of Colleen J. Brownell.  

The Estate moved for summary judgment on the basis that Lyczak’s guilty plea to the murder disqualifies him from being a beneficiary of Brownell’s 401(k) account.  Lyczak did not respond and PHH did not oppose the motion.   Continue Reading Murder of Plan Participant Disqualifies 401(k) Beneficiary

This week’s notable decision is an unpublished ERISA preemption decision in Abernethy v. EmblemHealth, Inc., No. 19-422, __F.App’x__, 2019 WL 5302825 (2d Cir. Oct. 21, 2019), where the Second Circuit revived the state law claims retired officers brought against EmblemHealth after they cancelled the officers’ retiree medical coverage.

The retirees claimed that they were entitled to continued medical coverage based on their employment and separation agreements.  The employment agreements provide that the employee “shall be entitled to participate in, and receive benefits under” any retiree health benefit plan provided by EmblemHealth, “subject to the terms of such plans, program or policies.” But, the agreement also disclaims that the employee has any vested interest in any employee benefit plan, which the company may, in its discretion, change or revoke.  The separation agreements state that the employee will be able to “commence Retiree Health Benefits at the same level as that provided an active officer.” Continue Reading Second Circuit Holds Breach of Contract Claims for Retiree Medical Coverage Not Preempted by ERISA

This week’s notable decision is Moitoso v. FMR LLC, No. CV 18-12122-WGY, __ F.Supp.3d __, 2019 WL 4980390 (D. Mass. Oct. 8, 2019), where the court concluded that any money award the ERISA plan participants might win against the alleged breaching fiduciaries would be an equitable surcharge–not legal damages–such that the Seventh Amendment does not require a jury trial in this case.  Even so, the court did grant Plaintiffs’ alternative request for an advisory jury.  The court’s conclusion is not extraordinary; indeed, most courts to have considered the right to a jury in a fiduciary breach case have concluded the same.  What’s interesting about this decision is the depth of the court’s analysis of the historical practice of jury trials and ERISA’s text in rejecting the participants’ arguments in favor of a jury trial for their claims. Continue Reading Court Holds No Seventh Amendment Right to Jury Trial for ERISA Breach of Fiduciary Duty Claims