[Cite as Crites v. Anthem Life Ins. Co., 2013-Ohio-2145.]




                       IN THE COURT OF APPEALS OF OHIO
                           THIRD APPELLATE DISTRICT
                               DEFIANCE COUNTY



TYLER P. CRITES, ET AL,

        PLAINTIFFS-APPELLEES,
                                                               CASE NO. 4-12-21
        v.

ANTHEM LIFE INSURANCE COMPANY,

        DEFENDANT-THIRD PARTY
        PLAINTIFF-APPELLEE,

        v.                                                     OPINION

BARBARA CRITES,

        THIRD-PARTY DEFENDANT-APPELLANT.


                 Appeal from Defiance County Common Pleas Court
                           Trial Court No. 11-CV-41188

                       Judgment Reversed and Cause Remanded

                              Date of Decision:        May 28, 2013


APPEARANCES:

        John S. Shaffer and Mark S. Tipton for Appellant

        Steven F. Hubbard for Appellees Crites

        Robert N. Webner and Bethany R. Spain for Appellee, Anthem Life
                 Insurance Company
Case No. 4-12-21




WILLAMOWSKI, J.

       {¶1} Third-Party Defendant-Appellant Barbara Crites (“B. Crites”) brings

this appeal from the judgment of the Court of Common Pleas of Defiance County

ordering Defendant/Third-Party Plaintiff-Appellee Anthem Life Ins. Co.

(“Anthem”) to pay the proceeds of the life insurance policy listing B. Crites as the

beneficiary to Plaintiffs-Appellees Tyler Crites (“T. Crites”) and Lindsay Crites

(“L. Crites”). For the reasons set forth below, the judgment of the trial court is

reversed.

       {¶2} Keith L. Crites (“the Decedent”) was employed by Magic Coil, LLC

and had a group life insurance policy through his employer with a death benefit of

$30,000.00. In October of 2006, the Decedent named his children, T. Crites and

L. Crites as the beneficiaries. On December 31, 2006, B. Crites and the Decedent

were married. In June of 2007, the Decedent changed the beneficiary on the life

insurance policy to B. Crites with his children being named as contingent

beneficiaries. On February 16, 2010, the Decedent and B. Crites entered into a

separation agreement which included all life insurance policies. The agreement

was adopted by the trial court and incorporated into a judgment entry terminating

the marriage of the Decedent and B. Crites on April 1, 2010. On April 10, 2010,

the Decedent died.


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Case No. 4-12-21


        {¶3} On February 23, 2011, T. Crites and L. Crites filed a complaint

against Anthem requesting payment of the death benefit to them. Anthem then

filed a third-party complaint against B. Crites on April 14, 2011. Anthem sought

an order allowing it to deposit the funds with the court. B. Crites then filed an

answer and a counter-claim demanding payment from Anthem on May 17, 2011.

On August 4, 2011, T. Crites and L. Crites filed an amended complaint against

Anthem and B. Crites requesting that if the funds were paid to B. Crites, she be

made an involuntary trustee holding the funds in a constructive trust for them.

Anthem filed its answer on August 29, 2011 again requesting permission to

deposit the funds with the court and then be dismissed from the suit.1 B. Crites

filed her answer on August 17, 2011, requesting that the counter-claim for a

constructive trust be dismissed and renewing her request for payment of the funds

from Anthem.

        {¶4} On December 19, 2011, the parties filed stipulations of fact with the

trial court. All parties conceded that the life insurance policy was an employer

provided benefit governed by the Employment Retirement Income Security Act

(“ERISA”). The stipulations also stated that the named beneficiary of the policy

was B. Crites.        Finally, the stipulations stated that the separation agreement

provided that each party released his or her rights to be the beneficiary of any


1
 The parties opposed allowing Anthem to deposit the money with the court because they did not want to
have to pay the fees to the court or lose out on the interest that Anthem would have to pay them.

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Case No. 4-12-21


insurance policy issued to the other.     The parties then filed their respective

motions for summary judgment on January 17, 2012. On August 14, 2012, the

trial court granted summary judgment to T. Crites and L. Crites. The trial court

held that B. Crites had waived her right to the proceeds of the life insurance

policy. Thus, the trial court ordered Anthem to pay the benefits to T. Crites and L.

Crites. B. Crites appeals from this judgment and raises the following assignment

of error.

       The Court of Common Pleas erred in awarding the life
       insurance proceeds to the decedent’s children when the
       decedent’s former wife was the named beneficiary of the ERISA
       controlled group life insurance policy and her Separation
       Agreement/Dissolution Decree did not waive such benefit.

       {¶5} The sole assignment of error claims that the trial court erred in

awarding the benefits to T. Crites and L. Crites. There is no dispute by the parties

that the life insurance policy in question is controlled by ERISA. That makes all

the difference in this case. “ERISA shall supersede any and all state laws insofar

as they may now or hereafter relate to any employee benefit plan covered by

ERISA.” 29 U.S.C. § 1144(A). The constitutionality of ERISA superseding state

laws and agreements was upheld by the U.S. Supreme Court in Egelhoff v.

Egelhoff ex rel Breiner, 532 U.S. 141, 121 S.Ct. 1322, 149 L.Ed.2d 264 (2001). In

Egelhoff, the decedent had an employer issued life insurance policy that was

subject to ERISA. The decedent had named his wife as the beneficiary. Ten years


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Case No. 4-12-21


before his death, he divorced his wife, but never changed the beneficiary. Upon

his death, his children tried to recover the proceeds from the policy. The Court

held that the plan administrators must follow the plan and could only pay the

proceeds to the named beneficiary absent a Qualified Domestic Relations Order

(“QDRO”).

      {¶6} The U.S. Supreme Court addressed a similar issue in Kennedy v. Plan

Adm’r. for Dupont Sav. and Inv. Plan, 555 U.S. 285, 129 S.Ct. 865, 172 L.Ed.2d

662 (2009). In Kennedy, the decedent had divorced his wife several years before

his death. The divorce decree ordered that the wife was divested of all claims to

the husband’s pension plan. However, the husband never changed the beneficiary

listed on the pension from the ex-wife to his daughter. The Court unanimously

held that absent a valid QDRO, the plan administrator must follow the terms of the

plan and make any payment to the designated beneficiary. Id. at 286-87. “ERISA

provides no exception to the plan administrator’s duty to act in accordance with

plan documents.” Id. at 286.

      {¶7} Here, both parties agree that the life insurance policy fell under the

control of ERISA. The parties also agree that pursuant to the plan documents, B.

Crites is the named beneficiary. T. Crites and L. Crites even concede that the trial

court erred as a matter of law by ordering Anthem to ignore the plan documents

and pay the proceeds of the plan to them. Appellee’s Brief, 5. We concur with


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Case No. 4-12-21


that concession. The trial court has no authority to enter a judgment that is

contrary to law. Thus, the trial court erred by ordering Anthem to pay T. Crites

and L. Crites. The assignment of error is thus sustained.

       {¶8} Having found the error in ordering distribution of the proceeds by

Anthem to T. Crites and L. Crites., the judgment of the trial court must be

reversed. However, this court is not ruling on what should or should not happen

after the money is distributed pursuant to the plan. T. Crites and L. Crites claim

that a constructive trust is implied. The trial court did not rule on that issue below

and thus we cannot consider it on appeal. That decision is left to the consideration

of the trial court upon remand.

       {¶9} The judgment of the Court of Common Pleas of Defiance County is

reversed and the matter is remanded for further proceedings.

                                                            Judgment Reversed and
                                                                 Cause Remanded

PRESTON, P.J. and SHAW, J., concur.

/jlr




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