United States District Court, E.D. Michigan, Southern Division
OPINION AND ORDER GRANTING DEFENDANTS' MOTION TO
DISMISS (DKT. 12)
TERRENCE G. BERG UNITED STATES DISTRICT JUDGE.
case concerns the distribution of benefits from a life
insurance policy. Plaintiffs ask the Court to declare that
Denise Elaine Vassil is not entitled to any of the benefits
of Gary George Vassil's life insurance policy because the
couple divorced in 2003. Defendants ask this Court to dismiss
the case on the ground that the Designation of Beneficiary
form that Gary Vassil filled out prior to his death included
Denise Vassil as a beneficiary and was not affected by the
divorce. Because the divorce decree did not expressly revoke
Denise Vassil's interest in the life insurance policy as
required by 5 U.S.C. § 8705(e)(1), Defendants'
motion is GRANTED and the case is DISMISSED.
George Vassil was a civilian employee of the federal
government who died in April of 2016. Dkt. 12, Pg. IDs 95-96.
As a federal employee, he participated in the Federal
Employees Group Life Insurance (FEGLI) Program. Dkt. 12, Pg.
ID 95. On April 22, 1997, he submitted a beneficiary
designation form that designated Denise E. Vassil (83%),
Megan T. Vassil (10%), Melanie Vassil (5%), and Rhonda Ludwig
(2%) to receive his FEGLI benefits in the percentages shown
in parenthesis. Dkt. 12, Pg. ID 95. At the time the form was
completed, Denise Vassil was Gary Vassil's wife.
2003, the couple divorced. Dkt. 12, Pg. ID 96. The Court of
Common Pleas in Cumberland County, Pennsylvania entered a
Decree of Divorce in September 2003. Dkt. 12, Pg. ID 96; Dkt.
8, Ex. 1. The Decree, a certified copy of which was attached
to the Amended Complaint as an exhibit, is a one-page
certificate-style document that simply states that: the
couple are “divorced from the bonds of
matrimony”; the Court “retains jurisdiction of
the following claims which have been raised of record in this
action for which a final order has not yet been
entered;” and “NO CLAIMS HAVE BEEN RAISED.”
The Divorce Decree bears an embossed gold seal of the Court,
and is signed in ink by two witnesses as
“Prothonotary” and signed for the Court by the
Honorable Kevin A. Hess. The Decree references no assets,
life insurance policies, or benefits of any kind, and
mentions no settlement agreement between the parties.
Gary Vassil died in 2016, his children (Plaintiffs) made a
claim on his life insurance policy and learned that Denise
Vassil remained a named beneficiary of the policy. Dkt. 8,
Pg. ID 48. Plaintiffs asked Ms. Vassil to waive her status as
a beneficiary, but she was unwilling to do so. Dkt. 8, Pg. ID
48. Plaintiffs then asked Defendant Office of Personnel
Management (“OPM”) to change their father's
1997 beneficiary designation to exclude Ms. Vassil, but
Defendant OPM refused to do so without a court order
requiring it to make the change. Dkt. 8, Pg. ID 48. So
Plaintiffs brought this lawsuit, seeking a declaratory
judgment that Denise Vassil is not a beneficiary of Mr.
Vassil's life insurance policy. Defendants have moved to
dismiss the case under Federal Rule of Civil Procedure
12(b)(6). Dkt. 12. Plaintiffs oppose the motion. Dkt. 16. On
January 25, 2017, the Court held oral argument on the motion.
Standard of Review
12(b)(6) motion tests whether a legally sufficient claim has
been pleaded in a complaint, and provides for dismissal when
a plaintiff fails to state a claim upon which relief can be
granted. Fed.R.Civ.P. 12(b)(6). “To survive a motion to
dismiss, a complaint must contain sufficient factual matter,
accepted as true, to ‘state a claim to relief that is
plausible on its face.'” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 555 (2007)). A claim is
facially plausible when a plaintiff pleads factual content
that permits a court reasonably to infer that the defendant
is liable for the alleged misconduct. Id. (citing
Twombly, 550 U.S. at 556). When assessing whether a
plaintiff has set forth a “plausible” claim, the
district court must accept all of the complaint's factual
allegations as true. See Ziegler v IBP Hog Mkt.,
Inc., 249 F.3d 509, 512 (6th Cir. 2001).
8705 of Title 5 of the United States Code provides an
“order of precedence” for death claims under the
FEGLI Program. Section 8705(a) provides that, “[e]xcept
as provided in subsection (e), ” upon the death of a
participant, FEGLI benefits must be paid “[f]irst, to
the beneficiary or beneficiaries designated by the employee
in a signed and witnessed writing received before death in
the employing office.” The exception to this
requirement is set out in § 8705(e)(1):
Any amount which would otherwise be paid to a person
determined under the order of precedence named by subsection
(a) shall be paid (in whole or in part) by the Office to
another person if and to the extent expressly provided for in
the terms of any court decree of divorce, annulment, or legal
separation, or the terms of any court order or court-approved
property settlement agreement incident to any court decree of
divorce, annulment, or legal separation.
exception also provides that, even when a court decree,
annulment, order, or court-approved settlement meets §
8705(e)(1) requirements, the document “shall not be
effective unless it is received, before the date of the
covered employee's death, by the employing agency or, if
the employee has separated from service, by [OPM].” 5
U.S.C. § 8705(e)(2). Here, Plaintiffs do not allege that