United States District Court, D. New Mexico
MEMORANDUM OPINION AND ORDER GRANTING MOTION TO
C. YARBROUGH UNITED STATES MAGISTRATE JUDGE.
Tatiana Wallace seeks to recover funds held in the retirement
account of her deceased brother. After her brother's
death, Plaintiff discovered that her brother neglected to
change the beneficiary listed on his account after his
divorce. Consequently, all the funds are being held in the
name of his ex-wife, instead of his sister, the personal
representative of his estate and the sole beneficiary in his
filed the present suit in state court to recover the funds.
Defendant removed the case to federal court, alleging the
existence of subject-matter jurisdiction because federal law
preempts Plaintiff's state law claims. Plaintiff now
moves to remand the case to state court, arguing that her
claims have nothing to do with federal law. The Court agrees
that it lacks subject-matter jurisdiction over
Plaintiff's state-law claims, and therefore grants the
motion to remand to state court. But because the removal was
not objectively improper, the Court denies Plaintiff's
request for attorney's fees.
brother, William O. Wallace, Jr., married Defendant Carolyn
Cooper on May 25, 1973. First Amended Complaint
(“FAC”), Doc. 1-1 at 11-17, ¶ 5. William was
employed by Sandia National Laboratories
(“Sandia”) until his retirement on July 9, 2011.
Id. ¶ 9. While they were married, William named
Carolyn as the beneficiary of his retirement fund, the Sandia
Corporation Savings and Income Plan (“SIP” or
“the fund”). Id.
and Carolyn divorced in 1999. Id. ¶ 6. The
divorce was finalized upon the filing and court approval of a
Marital Settlement Agreement (“MSA”), a Qualified
Domestic Relations Order (“QDRO”) and a Final
Decree in the Second Judicial District Court on December 8,
1999. Id. ¶ 7. As part of the divorce, Carolyn
agreed to take half of the fund's balance at the time,
plus a lump sum. Id. ¶ 8. In exchange, the rest
of the fund became William's sole property. Id.
¶¶ 8-9. Carolyn received her share of the fund
“sometime after the divorce.” Id. ¶
9. But, William never changed the beneficiary named in the
SIP. Id. ¶ 13.
passed away on July 27, 2016. Id. ¶ 10. He
appointed his sister, Tatiana Wallace, as his Personal
Representative and named her as the sole beneficiary of his
estate. Id. As part of her duties as the Personal
Representative, Tatiana submitted a final accounting of the
assets of the estate in probate court. Id. ¶
11. In December 2017, she sent Sandia a demand for payment in
full of the SIP balance. Id. ¶ 12. Sandia
refused, because the named beneficiary is Carolyn.
Id. ¶ 13. Tatiana accordingly turned to Carolyn
with her demand for payment. Id. ¶ 16. Carolyn
promised to “‘think about it.'”
Id. ¶ 17. This lawsuit followed.
filed her complaint in state court on June 4, 2018. Doc. 1-1
at 1. Plaintiff filed a First Amended Complaint on July 29,
2018. Doc. 1-1 at 11. The FAC brings causes of action under
state tort law: Unjust Enrichment; Constructive Trust;
Conversion of Property; and Punitive Damages. FAC at 3-6. On
August 9, 2018, Defendant removed the case to federal court.
Doc. 1. In her Notice of Removal, Defendant argued that the
administration of the retirement fund is governed by the
Employee Retirement Income Security Act of 1974
(“ERISA”), 29 U.S.C. § 1001 et seq.
Doc. 1 ¶ 12. Defendant alleged that, because ERISA
completely preempts any state-law claim within its scope,
removal to federal court is proper. Id. ¶¶
filed the instant motion to remand on September 21, 2018.
Doc. 10. In the motion, she argues that she seeks an order to
compel Defendant to pay her, not an order to compel the plan
administrator to take any action. Doc. 11 at 2-3. ERISA does
not apply, she reasons, because the distribution of funds
from a plan administrator is not at stake. Id. at 3.
Defendant filed a response in opposition to the motion to
remand. Doc. 17. In her response, Defendant alleges that the
plan administrator has not distributed the funds to
Defendant. Id. at 6. Instead, according to
Defendant, the plan administrator placed a hold on the
distribution until either: “(1) the parties come to an
agreement as to the ERISA beneficiary designations . . . or
(2) this Court interprets the ERISA 401K Plan documents,
including the QDRO, to determine the appropriate ERISA
beneficiaries to the ERISA 401K Plan.” Id.
Therefore, according to Defendant, to resolve this suit
requires a court to interpret ERISA Plan documents, including
the QDRO, pursuant to federal law. Id.
reply, Plaintiff reiterates her stipulation that “the
administrator of a plan covered by ERISA must distribute the
proceeds to the designated beneficiary.” Doc. 18 at 3.
“Likewise, the Plaintiff acknowledges that the
Defendant is the beneficiary designated in the beneficiary
designation form.” Id.
action is removable from state court if the federal district
court has original jurisdiction over the matter. 28 U.S.C.
§ 1441(a). “One category of cases over which the
district courts have original jurisdiction are ‘federal
question' cases; that is, those cases ‘arising
under the Constitution, laws, or treaties of the United
States.'” Metro. Life Ins. Co. v. Taylor,
481 U.S. 58, 63 (1987) (quoting 28 U.S.C. § 1331).
“It is long settled law that a cause of action arises
under federal law only when the plaintiff's well-pleaded
complaint raises issues of federal law.” Id.
“The ‘well-pleaded complaint rule' is the
basic principle marking the boundaries of the federal
question jurisdiction of the federal district courts.”
well-pleaded complaint rule “makes the plaintiff the
master of the claim; he or she may avoid federal jurisdiction
by exclusive reliance on state law.” Caterpillar,
Inc. v. Williams, 482 U.S. 386, 392 (1987). “By
omitting federal claims from a complaint, a plaintiff can
guarantee an action will be heard in state court.”
Qwest Corp. v. City of Santa Fe, 380 F.3d 1258, 1264
n.1 (10th Cir. 2004). “Under the ‘artful
pleading' doctrine, however, a plaintiff may not defeat
removal by failing to plead federal questions that are
essential elements of the plaintiff's claim.”
Turgeau v. Admin. Review Bd., 446 F.3d 1052, 1060
(10th Cir. 2006). “[T]o invoke federal-question
jurisdiction, [Defendant] must meet its burden and show that
at least one of two recognized exceptions to the well-pleaded
complaint rule is applicable-either (1) that
[Plaintiff]'s state-law claims are completely preempted,