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United Refining Company Incentive Savings Plan for Hourly Employees v. Morrison

United States District Court, Third Circuit

November 22, 2013

DALLAS Q. MORRISON, an individual, and MARK WILLIAM PRATT, an individual, Defendants.



I. Introduction[1]

This is a dispute involving the rights to an account of James Jacobs ("Jacobs") in the United Refining Company Incentive Plan for Hourly Employees (the "Plan"). The Plan is a tax qualified individual account plan established under the Employee Retirement Income Security Act of 1974 ("ERISA"). Presently pending before the Court are cross-motions for summary judgment filed by Defendant Dallas Q. Morrison ("Morrison") (ECF No. 15), and Defendant Mark William Pratt ("Pratt") (ECF No. 33). Oral argument was held on November 18, 2013. Having considered the Motions, supporting Briefs, the factual record before the Court and the parties' arguments, and for the reasons set forth below, Morrison's Motion for Summary Judgment will be denied and Pratt's Motion for Summary Judgment will be granted.

II. Factual and Procedural Background[2]

Jacobs was a retired former employee of the United Refining Company ("United Refining") and, during his employment, was a participant in the Plan. (ECF No. 1 at ¶ 9; ECF No. 15 at ¶ 1). There is an accumulated vested balance of approximately $102, 959.90 in the account. Id. Morrison is a former neighbor and friend of Jacobs, and Pratt is Jacobs' nephew.

Pursuant to the terms of the Plan, a participant may designate a beneficiary to receive his benefit upon his death. (ECF No. 1-2 at ¶ 9.5). A "participant" is defined as any employee who has met the eligibility requirements to participate in the Plan. (ECF No. 1-2 at ¶ 2.13). A "beneficiary" is defined as any person or entity designated in writing by a participant, inactive participant or beneficiary in accordance with the terms of the Plan, who is entitled to receive any benefits payable in the event of the participant's death. (ECF No. 1-2 at ¶ 2.4). Paragraph 9.5 of the Plan provides as follows:

9.5 Beneficiary Designation
(a) Participant Designation. Any Participant may designate a primary Beneficiary to receive any amount payable from the Trust Fund as a result of the Participant's death. A Participant may from time to time change such Beneficiary designation. Notwithstanding the foregoing, the Beneficiary of a Participant who is married shall be the Spouse, unless spousal consent has been obtained as described below.
(i) Spousal consent shall be in writing and shall acknowledge the receipt of material explaining such Spouse's right to be designated as Beneficiary and the effect of the alternative Beneficiary designation. Such consent shall be witnessed by a notary public. The Plan Administrator shall accept the designation of a Beneficiary other than the Spouse without the Spouse's consent only if it determines such Spouse cannot be located, or under such circumstances as may be prescribed by regulation.
(ii) Subject to (a)(i) above, the Participant shall have the right to designate more than one primary Beneficiary and more than one contingent Beneficiary. Unless the Participant specifies otherwise, each surviving primary or contingent Beneficiary shall receive equal shares (or all to the survivor). If no designation of a primary or contingent Beneficiary is in effect at the time of the Participant's death or if no person or entity so designated shall survive the Participant, Beneficiary shall mean the Spouse of the Participant if the Participant is married on the date of death, or if the Participant is not married on said date, Beneficiary shall mean the estate of the Participant.
(iii) Subject to (i) above, a Participant or an Inactive Participant shall have the right to revoke his or her Beneficiary designation at any time. If a Participant terminates service with the Employer or an Affiliate, any beneficiary designation in effect at the time of such termination of service shall remain in effect until such designation is revoked or the Participant's Account balances are disbursed by the Trustee.
(b) Beneficiary Designation. A Beneficiary who is entitled to any benefits hereunder may name a successor Beneficiary to receive any unpaid benefits on the death of the first beneficiary. Designations by Beneficiaries or successor Beneficiaries shall be made according to the same rules as are applicable to designations by Participants, except that spousal consent shall not be required. In the event of the death of a Beneficiary who has so designated a successor Beneficiary, the successor Beneficiary shall be entitled to the balance of any payments remaining due. If a Beneficiary is permitted to designate a successor Beneficiary but fails to do so, the balance of any payments remaining due will be payable to the estate of the deceased Beneficiary.

(ECF No. 1-2 at ¶ 9.5).

On or about February 25, 1992, Jacobs executed a designation of beneficiary on the Plan's form, designating his nephew Pratt as the recipient of his account in the event of his death. (ECF No. 1-1 at pp. 2-3). Jacobs never executed another designation of beneficiary or executed any document revoking the designation of Pratt as beneficiary of the account. (ECF No. 1 at p. 11).

At an undetermined date in 2009, Jacobs retained an attorney to prepare a Last Will and Testament. (ECF No. 15 at ¶ 4). On June 4, 2009, Jacobs signed a Last Will and Testament naming Morrison as the sole beneficiary of his estate. (ECF No. 15-1 at pp. 1-3). On the same date, Jacobs also executed a Durable Power of Attorney ...

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