                                                                           FILED
                            NOT FOR PUBLICATION                             JUL 20 2010

                                                                       MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                       U .S. C O U R T OF APPE ALS




                            FOR THE NINTH CIRCUIT



METROPOLITAN LIFE INSURANCE                      No. 07-36031
COMPANY,
                                                 D.C. No. CV-05-03104-FVS
             Plaintiff - Interpleader,

  v.                                             MEMORANDUM *

ROXANN CLINE, a single woman,

             Defendant - Appellant,

TERESA E. VALENTINE, individually
and as guardian form BRC, JWC and
BMC minor children,

             Defendant - Appellee.



                    Appeal from the United States District Court
                       for the Eastern District of Washington
                    Fred L. Van Sickle, District Judge, Presiding

                      Argued and Submitted February 5, 2009
                       Submission Vacated February 9, 2009
                           Resubmitted July 16, 2010
                               Seattle, Washington

Before: B. FLETCHER, RYMER, and FISHER, Circuit Judges.


        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
      Roxann Cline appeals the district court’s grant of summary judgment on

claims related to the disbursement of funds from her late husband’s life insurance

and 401(k) plans. We have jurisdiction under 28 U.S.C. § 1291 and we affirm in

part and reverse in part.

      In 2004, Roxann Cline’s husband, Raymond Cline, died. Mr. Cline

previously had been married to Teresa Valentine, with whom Mr. Cline had four

children. Through his former employer, Mr. Cline participated in two benefit plans

governed by the Employee Retirement Income Security Act (ERISA), a Group

Universal Life Insurance Plan administered by the Metropolitan Life Insurance

Company (MetLife) and a 401(k) retirement plan. The life insurance plan initially

provided for $432,000 in benefits in the event of Mr. Cline’s death, $218,000 in

spousal life insurance, and $10,000 of coverage for his children. The plan

documents designated Ms. Valentine as “[e]ntitled to 100% of benefits or

$432,000.00.”

      Ms. Valentine and Mr. Cline divorced in 2002. The divorce decree provided

that Ms. Valentine would receive the benefits from “[a]ll Insurance Policies upon

husband’s life” and that she would retain half of the value of the 401(k) plan in her

husband’s name. A year later, Mr. Cline married Ms. Cline, the appellant here.




                                     Page 2 of 6
Despite the provision in the divorce decree, Mr. Cline designated Ms. Cline the

beneficiary of the 401(k) plan.

      At the time of Mr. Cline’s death, the total benefits payable under his life

insurance plan were $660,016.19, an increase from the original $432,000.

MetLife, as administrator of the plan, distributed $432,000 to Ms. Valentine. But

MetLife was unable to determine to whom the remainder of the benefits should be

paid and initiated this action in federal court. Fidelity Employer Services Co. LLC

handled the disbursement of the 401(k) plan proceeds on behalf of the plan

administrator. Fidelity rejected Ms. Valentine’s claim to the money and all of the

funds were distributed to Ms. Cline.

      On summary judgment, the district court ruled that Ms. Valentine was

entitled to 100 percent of the life insurance proceeds. The district court also

imposed a constructive trust on the 401(k) funds that Ms. Cline had received to

provide for Ms. Valentine to receive 50 percent of the funds. In so doing, the

district court determined that ERISA did not preempt the imposition of a

constructive trust on the 401(k) disbursements.

      We review de novo the district court’s grant of summary judgment. See

Golden Gate Rest. Ass’n v. City & County of San Francisco, 546 F.3d 639, 643

(9th Cir. 2008). We also review de novo whether ERISA preempts state law. Id.


                                       Page 3 of 6
      ERISA requires that a plan fiduciary administer an ERISA plan for the

purpose of “providing benefits to participants and their beneficiaries” and “in

accordance with the documents and instruments governing the plan.” 29 U.S.C. §

1104(a)(1)(A)(I), (a)(1)(D); see also id. § 1002(8) (defining a “beneficiary” as “a

person designated by a participant, or by the terms of an employee benefit plan”).

An exception exists where a qualified domestic relations order (QDRO) specifies a

beneficiary different from what is in the plan documents. See id. § 1056(d)(3)(A);

Hamilton v. Wash. State Plumbing & Pipefitting Indus. Pension Plan, 433 F.3d

1091, 1096 (9th Cir. 2006). Otherwise, ERISA preempts “any and all State laws

insofar as they . . . relate to any employee benefit plan” governed by ERISA. 29

U.S.C. § 1144(a).

      Here, the district court correctly concluded that Ms. Valentine was entitled

to 100 percent of the life insurance proceeds. Courts interpret ERISA plan

documents using traditional contract principles. See Richardson v. Pension Plan of

Bethlehem Steel Corp., 112 F.3d 982, 985 (9th Cir. 1997). The plain language of

the plan designated Ms. Valentine as “[e]ntitled to 100% of benefits or

$432,000.00.” Mr. Cline never changed the designation of Ms. Valentine as the

beneficiary. And, contrary to Ms. Cline’s arguments, the designation of Ms.

Valentine as the beneficiary is not ambiguous. At the time Mr. Cline made the


                                    Page 4 of 6
designation, $432,000 equaled 100 percent of the value of the life insurance policy.

The fact that the value grew in subsequent years does not render the “100%”

designation ambiguous. Even if we did find the provision ambiguous in isolation,

Mr. Cline clearly intended for his then-wife, Ms. Valentine, to receive 100 percent

of the benefits at the time he designated her as the beneficiary. See Kemmis v.

McGoldrick, 767 F.2d 594, 597 (9th Cir. 1985) (“If a provision is ambiguous . . .

its interpretation depends on the parties’ intent at the time of execution.”). Mr.

Cline never changed the designation from Ms. Valentine. Therefore, we affirm the

district court’s grant of summary judgment in favor of Ms. Valentine with regard

to the distribution of the life insurance proceeds.

      We cannot agree, however, with the district court’s interpretation of the

scope of ERISA preemption in the circumstances we face here. A domestic

relations order, such as the divorce decree, can only reassign ERISA benefits if it is

a QDRO. The order must “clearly specif[y]” (1) the name and mailing address of

both the participant and the alternate payees, (2) the amount or percentage of the

participant’s benefits to be paid to each alternate payee, (3) the number of

payments to which the order applies, and (4) the plan to which the order applies.

29 U.S.C. § 1056(d)(3)(C). Ms. Valentine claimed entitlement to 50 percent of the




                                      Page 5 of 6
value of Mr. Cline’s 401(k) under the divorce decree. The divorce decree,

however, does not meet the requirements of a QDRO.

      The plan documents name Ms. Cline as the beneficiary. While certain

circumstances allow for the imposition of a constructive trust over the proceeds

from a pension plan, those circumstances are not present here. The imposition of a

constructive trust simply cannot be used to circumvent ERISA preemption except

in the limited circumstances where a valid QDRO exists. Congress did not intend

to permit reassignment of a surviving spouse’s benefits. Carmona v. Carmona,

603 F.3d 1041, 1062 (9th Cir. 2010). The creation of a constructive trust would do

just that and, accordingly, is preempted. See id. We therefore reverse the district

court’s grant of summary judgment and remand this case to the district court for

further proceedings consistent with this decision.

      Each party shall bear its own costs on appeal.

      AFFIRMED in part; REVERSED in part.




                                    Page 6 of 6
