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Resolving disputes involving the payment of a New York State Employees? Retirement System member?s death benefit to a beneficiary

Resolving disputes involving the payment of a New York State Employees? Retirement System member?s death benefit to a beneficiary
Rice v Dinapoli, 2009 NY Slip Op 50979(U), Decided on May 21, 2009, Supreme Court, Albany County, Judge Joseph C. Teresi [This decision will not be published in the printed Official Reports]

Gary Rice [Gary] died, survived by three children and a wife. At the time of his death Gary was separated from his wife, Eva Rice [Eva]. Gary, a member of the New York Employees' Retirement System [ERS], had named Eva as his "100% beneficiary." Subsequently Eva and Gary entered into a "Separation and Property Settlement Agreement."

Adam D. Rice [Adam], the administrator of the Estate of Gary Rice, conceded Eva's designation as the named beneficiary of Gary?s ERS death benefit. However, Adam contended that Eva had waived one-half of her interest in the death benefit under the terms of the Separation Agreement and sought a court order directing ERS ?to correct the beneficiary designation pursuant to Retirement and Social Security Law §803-A.?*

Judge Terisi held that the documentary evidence in this action is undisputed but does not demonstrate Eva's entitlement to the full death benefit as a matter of law. Gary and Eva agree that Mr. Rice's beneficiary designation names Eva as the 100% beneficiary. They also concede that Gary and Eva entered into the Separation Agreement, or its contents. Rather, the dispute centered upon the effect of the Separation Agreement on Eva's interest in Gary?s ERS death benefit.

Noting that Eva may waive her rights to the ERS death benefit only by executing a waiver that is "explicit, voluntary and made in good faith," Judge Terisi said that the terms of a separation agreement, if they meet the above tri-part test, may effectuate such waiver.

Judge Terisi ruled that Eva failed to conclusively demonstrate that the Separation Agreement was not an explicit, voluntary or a good faith waiver as: ?the language of the Separation Agreement itself demonstrates that it was "voluntarily" entered; states that it was not entered as a result of "fraud, duress or undue influence", after both parties consulted with their own attorneys; and does not evidence a lack of good faith?.?

The relevant language of the ?pension portion? of the Separation Agreement states that ?after discussing the entry of a ?Majauskas Order? (i.e. Domestic Relations Order), that: ?[u]ntil such time as the Domestic Relations Order is signed, and entered, the Husband agrees to keep the Wife listed as a 50% beneficiary on his in-service death benefit?.??

Holding that although Eva demonstrated that the pension portion of the Separation Agreement does not "explicitly" waive her right to ERS death benefit, Judge Terisi ruled that she failed to demonstrate that the ?Mutual Release? portion of the Separation Agreement did not constitute her explicit waiver.

The issue to be resolved by Judge Terisi: Did Eva explicitly waive her right to receive Gary?s entire ERS death benefit? Adam contends that Eva affirmatively waived her right to 50% of Gary?s ERS death benefit; Eva claims that she did not and seeks to collect 100% of Gary?s ERS death benefit. In the absence of a court order to the contrary, ERS would pay 100% of the death benefit to Eva.

As Adam and Eva only dispute the proper beneficiary of one-half of Gary?s ERS death benefit, the court directed ERS to issue payment of one half of Gary?s ERS death benefit to Eva, and pay the other half into court in accordance with CPLR §2701. The court will, after hearing the arguments of the parties, determine to whom that half should be paid.

* ERS typically takes the position that it is merely a "stake-holder" in these types of disputes and "awaits the court's order instructing payment" of the benefit in question to the appropirate party.

The decision is posted on the Internet at:
http://www.courts.state.ny.us/reporter/3dseries/2009/2009_50979.htm

Full post as published by New York Public Personnel Law on May 26, 2009 (boomark / email).