                                                                United States Court of Appeals
                                                                         Fifth Circuit
                                                                      F I L E D
                       UNITED STATES COURT OF APPEALS
                                                                      October 6, 2006
                           FOR THE FIFTH CIRCUIT
                                                                   Charles R. Fulbruge III
                                                                           Clerk


                                  05-50072



     DELORES DOHNALIK,

                                                 Plaintiff-Appellee,

                                     v.

     MAHAMALEA SOMNER,

                                                 Defendant-Appellant.



      Appeal from the United States District Court for the
                    Western District of Texas




Before JOLLY, DAVIS, and BENAVIDES, Circuit Judges.

BENAVIDES, Circuit Judge:


     This case presents a new twist on a long-resolved issue.                 The

question is whether Samuel P. King’s (“King”) designation of

Delores     Dohnalik     (“Dohnalik”)     as     the    beneficiary    of     his

Serviceman’s Group Life Insurance policy survives the divorce

decree that purports to divest her of any interest in his life

insurance    policies.      We   agree    with    the   district   court    that

Dohnalik’s beneficiary status did survive the divorce decree and

AFFIRM.
                  I. FACTS AND STANDARD OF REVIEW

     The facts are undisputed.   King and Dohnalik married in 1993.

In February, 2002, King attained an insurance policy under the

Servicemembers Group Life Insurance Act (“SGLIA”) that listed

Dohnalik as the principal beneficiary and his mother, Mahamalea

Somner (“Somner”), as the contingent beneficiary.   Several months

after the policy took effect the District Court of Bell County,

Texas entered its decree finalizing a divorce between King and

Dohnalik. The decree provided, in relevant part, that Dohnalik was

“divested of all right, title, interest and claim in . . . [a]ll

policies of insurance (including cash values) insuring [King’s]

life.” The decree was signed as “consented to” by both parties and

was entered on December 19, 2002.

     Just fifteen days after their divorce was finalized, King died

on January 3, 2003.     King never changed his SGLIA beneficiary

designation.   Dohnalik was still listed as the primary beneficiary

and Somner the contingent beneficiary.    After King’s death, both

Dohnalik and Somner filed claims for the SGLIA policy proceeds.

The office of Servicemembers Group Life Insurance informed both

parties that it viewed Dohnalik—the designated beneficiary—as the

rightful claimant.    After failed negotiations, Dohnalik brought

this action for a judgment declaring her the beneficiary.

     The parties filed cross motions for summary judgment.     The

district court found that Dohnalik was the rightful beneficiary of

King’s SGLIA policy and Somner brings this appeal.      This Court

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reviews the district court’s grant of summary judgment de novo.

Gowesky v. Singing River Hosp. Sys., 321 F.3d 503, 507 (5th Cir.

2003).

                            II. DISCUSSION

     The question raised is whether the designation of an SGLIA

policy beneficiary survives a state divorce decree purporting to

divest the designee of any such interests.           The district court,

relying on Ridgway v. Ridgway, 454 U.S. 46 (1981), held that the

designation survives.   We agree.

A. RIDGWAY V. RIDGWAY

     In Ridgway v. Ridgway, an SGLIA policy holder had designated

his first wife as his policy’s principal beneficiary.        When the two

divorced, a state court entered a divorce decree agreed to by both

parties that required him “to keep in force the life insurance

policies on his life now outstanding for the benefit of the

parties' three children.”   Id. at 51.      Shortly after the decree was

entered, he defied its terms by designating his second wife as the

new principal beneficiary.     After his death, both women filed

claims seeking his policy proceeds.

     The Supreme Court held that the plain terms of the SGLIA

dictate that the named designee receives the policy’s proceeds and

that “a state divorce decree . . . must give way to clearly

conflicting federal enactments.”        Id. at 55.   It further held that

“Congress has insulated the proceeds of SGLIA insurance from attack


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or seizure by any claimant other than the beneficiary designated by

the insured.”    Id. at 63.

      While Ridgway favors Dohnalik, as the named beneficiary of the

SGLIA policy, it is distinguishable.                In Ridgway, the divorce

decree circumscribed the policy holder’s right to freely choose his

beneficiary under the SGLIA.          It required him to maintain his three

children as beneficiaries of his policy, thereby frustrating the

SGLIA’s purpose of allowing policy holders to freely choose their

beneficiaries.        Here, the appellant points out that the divorce

decree in no way restricts King’s right to choose his designee; it

merely acts as a waiver of Dohnalik’s rights under the policy.

Since Ridgway left open the possibility that “wrongdoing by the

named beneficiary” may extinguish a designee’s claim, 454 U.S. at

63 n.12, the appellant argues that a voluntary waiver may also

revoke a designee’s beneficiary status.

       While this narrow reading of Ridgway is plausible, it fails

to appreciate the hardline stance that the Court applied.                    Like

this case, Ridgway involved a consensual divorce decree.                  Id. at

48,   53-54.     When    the   policy    holder    breached     that    voluntary

agreement, the Court did not undertake any analysis as to whether

his consent to the decree operated a waiver of his right to freely

choose the beneficiaries under the SGLIA.                    Id. (attaching no

significance     to    fact    that    decree     resulted    from     “voluntary

agreement”).

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       Ridgway took a strong stance that the provisions of the SGLIA

govern     these    disputes      and   that     the   party   designated    as   the

principal beneficiary prevails, regardless of any contrary state

court decrees. This Court has recognized that, under the pertinent

administrative regulations, a change of beneficiary under the SGLIA

“will take effect only if it is in writing, signed by the insured

and received prior to the death of the insured.”                     Prudential Ins.

Co.   v.   Smith,    762    F.2d    476,     478   (5th   Cir.   1985)    (citations

omitted).     Even before Ridgway, this Circuit recognized that an

SGLIA beneficiary “designation can be changed only by a document

and procedure [complying with the statutory formalities].”                    Coomer

v. United States, 471 F.2d 1, 6 (5th Cir. 1973).

       This stronger reading of Ridgway is supported by our sister

circuits.     For instance, the Eighth Circuit noted that “the only

way to change a beneficiary under the SGLIA is to communicate that

decision in writing to the proper office. . . .                  To allow a change

of beneficiary by other means would be contrary to the terms

established by Congress as addressed in Ridgway.”                    Prudential Ins.

Co. v. Hinkel, 121 F.3d 364, 367 (8th Cir. 1997).                    It further held

that “a divorce decree cannot operate as a waiver or restriction of

an    insured’s     right    to     change       the   beneficiary    when   federal

regulations conflict.”            Id.   Similarly, the Eleventh Circuit read

Ridgway as requiring strict construction of the designee provisions

to ease administrative costs and uncertainty. See Lanier v. Traub,

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934 F.2d 287, 289 (11th Cir. 1991).

     That this case concerns a potential beneficiary’s waiver,

rather than the policy holder’s, is of little significance.             In

either case the waiver would only be effective if a state divorce

decree could override the explicit terms of the SGLIA.          Ridgway is

quite clear that a policy holder’s explicit designation “pre-empts

all state law that stands in its way.”            454 U.S. at 61 (citing

Hisquierdo v. Hisquierdo, 439 U.S. 572, 584 (1979)).            While the

Court recognized that this formalism could lead to “unpalatable”

results, it is what the SGLIA dictates.          Id. at 62.

     King   was    free   at   any   time   to   change   his   designated

beneficiary.1     He chose not to, and there is no indication in the

record that he intended to, so his designation of Dohnalik as the

policy’s principal beneficiary is controlling.

B. ERISA WAIVER CASES ARE INAPPLICABLE




     1
       Since King could have removed Dohnalik as the SGLIA policy
beneficiary at any time, it is difficult to conceptualize what a
waiver of Dohnalik’s rights might entail. Query how one waives a
right they do not have.      Dohnalik had no right to remain a
designee.     That status was entirely contingent on King’s
discretion, so there was no future entitlement for her to waive.
Perhaps such a waiver prohibits the policy holder from ever
designating the waivee as a beneficiary, just nullifies any prior
designation but allows for a subsequent one, or maybe Dohnalik
remained the beneficiary but just waived her right to claim the
proceeds. As curious as a waiver concept may be in this context,
we have previously discussed it in similar terms. See Guardian
Life Ins. Co. of America v. Finch, 395 F.3d 238, 240 (5th Cir.
2004).

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       Appellant   points   out   that,   in   this    Circuit,   designated

beneficiaries under the Employee Retirement Income Security Act

(“ERISA”) may waive their entitlements through divorce decrees.

See Guardian Life Ins. Co. of Am. v. Finch, 395 F.3d 238 (5th Cir.

2004); Clift v. Clift, 210 F.3d 268 (5th Cir. 2000).              She argues

that   these   cases   apply   equally    to   SGLIA    beneficiaries.    We

disagree.

       We need not delve into the statutory differences between ERISA

and SGLIA.     Suffice it to say that the Supreme Court has provided

clear guidance that a properly designated SGLIA beneficiary cannot

be displaced by state divorce decrees, Ridgway, 454 U.S. at 61

(SGLIA designation “pre-empts all state law that stands in its

way”), but has never made so strong a statement with regard to

ERISA beneficiaries.

       While Ridgway held that the SGLIA preempts all state law,

including court orders, the preemptive power of ERISA is limited to

state statutory law.     See Finch, 395 F.3d at 242-43.        That was this

Court’s explicit basis for finding that a divorce decree may

override an ERISA beneficiary designation.            Finch held that recent

relevant Supreme Court authority “does not address the application

of federal common law to ERISA plans. . . . Egelhoff only addresses

whether ERISA preempts a state statute.”          Id. (citing Egelhoff v.

Egelhoff, 532 U.S. 141 (2004)).            Thus, Egelhoff was narrowly

construed as applying only to state statutory law.

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      Ridgway’s holding is not so limited.                    This is clear since

Ridgway did not concern a statute at all, but a divorce decree.

The   facts   of   Ridgway     also     implicated      the    common   law    waiver

doctrine,     since   the    divorce    decree    was    consented      to    by   both

parties, but the Court seemed unmoved by the voluntary nature of

the divorce decree.         In short, the Court in Ridgway took a hardline

stance that the SGLIA provisions override any law to the contrary.

While the Court did reserve judgment as to situations “where the

named beneficiary murders the insured service members,” 454 U.S. at

60 n.9, this only strengthens the point since even in such a

drastic situation the Court was not willing to fully retreat from

its formalistic approach.

      While limiting ERISA’s preemptive force to state statutes and

allowing beneficiaries to waive ERISA claims is consistent with

Supreme Court precedent—albeit fairly contested2—the same waiver

analysis cannot apply to the SGLIA in light of Ridgway.

                                 III.    CONCLUSION



      2
       See McGowan v. NJR Service Corp., 423 F.3d 241, 245 (3d Cir.
2005) (“ERISA imposes a fiduciary duty on plan administrators to
discharge their duties ‘in accordance with the documents and
instruments governing the plan.’”); Metropolitan Life Ins. Co. v.
Pressley, 82 F.3d 126, 130 (6th Cir. 1996) (“[ERISA] establish[es]
a clear mandate that plan administrators follow plan documents to
determine the designated beneficiary.”); Krishna v. Colgate
Palmolive Co., 7 F.3d 11, 16 (2d Cir. 1993) (“It would be
counterproductive to compel the Policy administrator to look beyond
those designations into varying state laws regarding wills, trusts
and estates, or domestic relations to determine the proper
beneficiaries of Policy distributions.”).

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      If an SGLIA policy-holder wishes to change his designated

beneficiary, he must communicate that decision to the proper

office.   King failed to do so, and the provisions of the SGLIA

dictate that Dohnalik remains the designated beneficiary.   Ridgway

requires that we strictly construe the SGLIA provisions, and it is

agreed that Dohnalik is the beneficiary under those terms.      We

therefore agree with the district court that Dohnalik is the

rightful claimant and AFFIRM.




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