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Vassil v. Office of Personnel Management

United States District Court, E.D. Michigan, Southern Division

January 31, 2017





         This 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.


         Gary 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.

         In 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.

         After 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.

         III. ANALYSIS

         A. Standard of Review

         A Rule 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).

         B. Discussion

         Section 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.

         The 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 any ...

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