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Estate of Hall v. Mary Teresa Hall

September 3, 2009

ESTATE OF CLIFFORD C. HALL, PLAINTIFF,
v.
MARY TERESA HALL, DEFENDANT.



The opinion of the court was delivered by: Slomsky, J.

OPINION

I. INTRODUCTION

Before the Court is Plaintiff's Motion to Remand this case to the Family Division of the Bucks Country Court of Common Pleas (Doc. No. 4) and Defendant's Response in Opposition to the Motion to Remand (Doc. No. 6). Because this Court finds that there is no outstanding dispute involving the Employee Retirement Income Security Act of 1974 ("ERISA"), which is the only federal statute on which this Court's jurisdiction is allegedly based, the Court will grant Plaintiff's Motion to Remand.

II. FACTUAL BACKGROUND

The Estate of decedent Clifford C. Hall brings this action against Clifford Hall's former wife, Mary Teresa Hall, to recover benefits from Clifford Hall's Novo Nordisk 401(k) (the "401(k)") that were distributed to Mary Hall upon Clifford Hall's death. The parties were divorced on April 30, 2008. The divorce decree incorporated the parties' Marital Settlement Agreement ("MSA"), which was entered into on April 15, 2008. (Notice of Removal, Exh. A at 1). The MSA provided that the value of the 401(k) on the date of separation, June 22, 2007, which was approximately $194, 388, was to be divided equally between the parties. (Id.; Mot. to Remand at 2.) The beneficiary of the 401(k) was to be changed through entry of a qualified domestic relations order ("QDRO"). The QDRO was never filed, and Clifford Hall did not change the beneficiary designation of the 401(k) before his death on September 7, 2008. (Notice of Removal, Exh. A at 2, 3.) Charles Schwab, the custodian of the funds in the 401(k), distributed the entire value of the 401(k) on February 10, 2009 to Mary Hall, because she was the designated beneficiary of the 401(k).

On June 19, 2009, Clifford Hall's Estate filed a Petition for Contempt and Special Relief against Mary Hall in the Family Division of the Bucks County Court of Common Pleas. Mary Hall was served with the Petition on July 8, 2009, and timely removed the action to this Court on August 3, 2009. On August 6, 2009, the Court approved a stipulation, agreed to by the parties, which directed that Mary Hall shall not transfer, dispose of, alienate, or remove the funds distributed to her as the named beneficiary of the 401(k), except as provided in that stipulation. On August 14, 2009, the Estate filed a Motion to Remand this case back to the Family Division of the Bucks County Court of Common Pleas, arguing that there is no federal issue to be decided in this case, and that there is no federal jurisdiction. Defendant opposed the Motion to Remand on August 28, 2009, and the Motion is now ripe for decision by the Court.

III. LEGAL STANDARD

There is a strong presumption against removal from state to federal court, and removal statutes are to be construed strictly. Meritcare Inc. v. St. Paul Mercury Ins. Co., 166 F.3d 214, 217-18 (3d Cir. 1999) (citing Nelson v. Keefer, 451 F.2d 289, 293-95 (3d Cir. 1971) (federal judiciary has been "too timid" in eliminating the "plethora of cases which do not belong in federal courts")). In a removal action based on a federal question, the existence of jurisdiction is determined by reviewing the "well-pleaded" complaint to determine whether state or federal claims are set forth. Rivet v. Regions Bank of La., 522 U.S. 470, 475 (1998); Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 10 (1983); Westmoreland Hosp. Ass'n v. Blue Cross, 605 F.2d 199, 123 (3d Cir. 1979).

IV. DISCUSSION

In its Notice of Removal, Defendant asserts that the Pennsylvania statute that Plaintiff relies upon in its Petition is preempted by ERISA, and therefore this case presents a federal question and is properly subject to federal jurisdiction. (Notice of Removal at 2.) In its Motion to Remand, Plaintiff argues that there is no federal question that would grant jurisdiction to a federal court in this case, because the funds in the 401(k) have already been distributed by the ERISA plan administrator, and are within the control of Defendant. Plaintiff argues that it is Defendant's obligation under the terms of the MSA to return to the Estate that portion of the 401(k)'s proceeds to which Defendant is not legally entitled.

The Court finds that Plaintiff's argument has merit. Because the proceeds of the 401(k) have already been distributed by the plan administrator to Mary Hall, Plaintiff's claims are properly against the Defendant ex-wife and not the ERISA plan administrator. Accordingly, Plaintiff's suit against Defendant is proper, and Pennsylvania state court is the only forum in which to litigate this dispute. For these reasons, the Court will grant the Motion to Remand.

Plaintiff's Petition states, in pertinent part, as follows:

7. The parties' [MSA] provided, inter alia, that the value of Decedent's Novo Nordisk 401(k), as of the date of separation, June 22, 2007, was to be divided equally between them.

16. As evidenced by the MSA, the Decedent did not intend for [Defendant] to receive any more from his Novo Nordisk 401(k) Savings Plan other than ...


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