COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 70117 BRENNAN PEHOTSKY, by and through : his mother and next friend, : BRIDGET M. PEHOTSKY, : : JOURNAL ENTRY PLAINTIFF-APPELLANT : v. : AND : : OPINION CHARLENE PEHOTSKY, ET AL. : : : DEFENDANTS-APPELLEES : DATE OF ANNOUNCEMENT OF DECISION: DECEMBER 19, 1996 CHARACTER OF PROCEEDING: Civil appeal from Court of Common Pleas, Case No. CV-281841. JUDGMENT: AFFIRMED. DATE OF JOURNALIZATION: APPEARANCES: For Plaintiff-appellant: Scott I. Levey, Esq. Frank P. Giaimo, Esq. Mondello & Levey 55 Public Square, Suite 1700 Cleveland, Ohio 44113-1901 For Defendants-appellees: Amelia A. Bower, Esq. Steven B. Wagner, Esq. Amelia A. Bower Co., L.P.A. P.O. Box 305 Berea, Ohio 44017 - 3 - SWEENEY, JAMES D., P.J.: Plaintiff-appellant Brennan Pehotsky, a minor (d.o.b. March 15, 1989), by and through his mother Bridget M. Pehotsky, appeals from the trial court's half-sheet status form ruling on competing motions for summary judgment in this declaratory judgment action. Plaintiff's motion was denied and defendant-appellee Charlene Pehotsky's motion was granted. In ruling on these motions, the court additionally ordered defendant Sun Life Assurance Insurance Company of Canada ("Sun Life") to pay Brennan Pehotsky the sum of $3,000 plus interest, and pay Charlene Pehotsky the sum of $22,000 plus interest. For the reasons adduced below, we affirm. A review of the record on appeal indicates that the heart of this case involves a difference of opinion over the beneficiary and amount of life insurance proceeds resulting from the untimely accidental death of Brennan Pehotsky's father, John M. Pehotsky. The life insurance policy ("policy") at issue was offered through the decedent's employer, Fairview General Hospital, and was underwritten by Sun Life in the amount of $144,000 on the life of the decedent father. The amount of coverage had three components. The first component of the policy had a base amount of coverage which was pegged to his salary. In addition, the decedent had opted to purchase an additional optional amount of coverage which was identical to the base amount. Finally, the decedent had selected a provision which would double the amount of the coverage in the event of an accidental death. Brennan Pehotsky was paid - 4 - $25,000, exclusive of interest, as a beneficiary of the policy prior to this action. Charlene Pehotsky was paid $94,000, exclusive of interest, as a beneficiary of the policy prior to this action. The principal amount remaining to be distributed under the policy was $25,000 prior to this action. In the amended complaint for declaratory judgment, plaintiff sought a constructive trust over the entire proceeds of the policy, whether distributed or not at that point, based on the "not less than" and "primary and irrevocable beneficiary" language employed in the Shared Parenting Plan, interpreting these phrases to indicate a floor amount of coverage and not a maximum amount of coverage. Defendant-Charlene Pehotsky's amended answer denied that plaintiff was entitled to these proceeds, sought a disposition of the $25,000 still in the possession of Sun Life, and further argued that in the event that the son was entitled to any proceeds of the balance of the policy, he was entitled to no more than $3,000 (the difference between the amount of insurance mentioned in the dissolution entry and the amount the son has received to date under the policy) with the remaining balance to her. The troubling aspect of this case springs from the construction and application of two documents, to-wit, (1) the decedent's judgment entry of divorce in which life insurance was provided for the benefit of Brennan Pehotsky and (2) the policy of insurance and its attendant change of beneficiary requests, and events surrounding these documents. - 5 - The decedent and Bridget Pehotsky were married on November 23, 1985. Brennan Pehotsky was the only issue of that union. On January 1, 1992, decedent executed a change of beneficiary form on the policy, designating his son, Brennan Pehotsky, as the only beneficiary of the policy. Less than eight weeks later, a judgment entry of dissolution was journalized on February 28, 1992, thereby 1 terminating the marriage of Bridget Pehotsky and decedent. Within the Shared Parenting Plan contained within the dissolution judgment entry, at Section 4 which is titled "Child Support," the following language appears at Paragraph F relative to the maintenance of life insurance, which vested the child with irrevocable rights to insurance proceeds: During such time as the child is subject to support as set forth above, Husband shall maintain insurance on his life in an amount which is not less than Twenty-Eight Thousand Dollars ($28,000.00) term or whole life policies. Husband shall designate the child as the primary and irrevocable beneficiary of such policy, and Husband shall, at his expense, keep such policy in full force and effect, and shall not transfer, assign, borrow or otherwise encumber such insurance policy during the period aforesaid. ***. (Emphasis added.) Journal Vol. 1933, pages 733-734. The domestic relations court adopted the monthly child support amount stated in the Shared Parenting Plan, and ordered the 1 At the time of the dissolution, Bridget Pehotsky was employed by plaintiff-appellant's counsel, Mondello & Levey. This same counsel also represented her in the dissolution and prepared the judgment entry of dissolution journalized by the domestic relations court. The decedent was not represented by counsel during the dissolution. - 6 - decedent in the dissolution order to pay $155.10 bi-monthly, plus 2% poundage, in child support. On June 20, 1992, approximately four months after the dissolution entry, the decedent married defendant-Charlene (Vasarhely) Pehotsky. On July 1, 1992, decedent executed a change of beneficiary form with respect to the policy, directing the beneficiaries therein to be "1) Brennan Pehotsky ($25,000.00) and 2) Charlene Pehotsky (Balance)." This beneficiary designation was in effect, through subsequent annual confirmations, at the time of decedent's death on September 25, 1994. The three assignments presented are the following: I THE TRIAL COURT ERRED BY NOT FINDING THAT THE DISPOSITION OF THE SUN LIFE INSURANCE POLICY WAS CONTROLLED BY THE PEHOTSKY DIVORCE DECREE. II THE TRIAL COURT ERRED BY NOT FINDING THAT THE INTENT OF THE DIVORCE DECREE OF JOHN AND BRIDGET PEHOTSKY WAS TO MAKE THEIR SON, BRENNAN PEHOTSKY, SOLE AND IRREVOCABLE BENEFICIARY OF ALL OF THE PROCEEDS OF THE SUN LIFE POLICY. III THE TRIAL COURT ERRED BY ONLY PARTIALLY GRANTING THE MOTION FOR SUMMARY JUDGMENT OF PLAINTIFF-APPELLANT BRENNAN PEHOTSKY AND BY NOT COMPLETELY OVERRULING THE MOTION FOR SUMMARY JUDGMENT OF DEFENDANT-APPELLEE CHARLENE PEHOTSKY. As previously stated, the life insurance policy at issue related to the decedent's employee benefit plan. The action - 7 - asserted by plaintiff alleged a breach of the contract of insurance in the improper processing/distribution of the proceeds from that policy. Accordingly, although not addressed by the parties, the issues of state court subject matter jurisdiction and the applicability of federal pre-emption under the Employee Retirement Income Security Act of 1974 (ERISA at 29 USC Section 1001 et seq.) must be addressed prior to any discussion of the merits of this appeal. The case of Pilot Life Ins. Co. v. Dedeaux (1987), 481 U.S. 41, 107 S.Ct. 1549, 95 L.Ed.2d 39, specifically addressed the applicability of ERISA to common law causes of action. In Pilot, the Court held that where common law causes of action "relate to" an employee benefit plan, ERISA's pre-emption clause (Section 514[a], whose corresponding cite is 29 USC Section 1144[a]) is controlling unless the application of ERISA's savings clause (Section 514[b][2][A] and [B], whose corresponding cite is, respectively, 29 USC Section 1144[b][2][A] and [B]) applies. The savings clause, excepts from the pre-emption clause laws that "regulate insurance." Section 514(b)(2)(A). The deemer clause makes clear that a state law that "purport[s] to regulate insurance" cannot deem an employee benefit plan to be an insurance company. Section 514(b)(2)(B). 481 U.S. at 45, 95 L.Ed.2d at 46. In the case before us, the common law cause of action is based on the alleged improper processing/distribution of the proceeds from the company benefit life insurance policy which insured the - 8 - decedent's life, thereby depriving plaintiff of those monies to which plaintiff considers himself to be entitled as a beneficiary of the policy. Under any stretch of the imagination, these claims of breach of contract "relate to" the company benefit plan and thereby meet the criteria for pre-emption under Section 514(a) of ERISA. Accordingly, unless these common law claims meet an exception to Section 514(a) under the savings clause contained in ERISA, they are expressly pre-empted. We do not conclude that the common law claims of plaintiff "regulate insurance." See Pilot Life Ins. Co., supra. The common law at issue, breach of a contract, is not specifically directed toward the insurance industry, but instead is a general principle applicable to the broad body of contract law in the State of Ohio, which touches every industry and activity in this state. Thus, the savings clause does not apply and the matter is pre-empted under ERISA. Although pre-empted, we must now consider whether the state courts have concurrent jurisdiction over these claims brought pursuant to ERISA, or whether the federal court has exclusive 2 subject matter jurisdiction. In answering this question we find Richland Hospital, Inc. v. Ralyon (1987), 33 Ohio St.3d 87, to be instructive. In Richland Hospital, the court stated the following: 2 "State courts of competent jurisdiction and district courts of the United States shall have concurrent jurisdiction of actions," 29 USC Section 1132(e)(1), "brought by a participant or beneficiary to recover benefits due." 29 USC Section 1132(a)(1)(B). (Emphasis added.) - 9 - ERISA vests state and federal courts with concurrent subject matter jurisdiction of certain enumerated civil actions brought by participants or beneficiaries against an employee benefit plan. Section 1132(e)(1), Title 29, U.S. Code states: "(e) Jurisdiction "(1) Except for actions under subsection (a)(1)(B) of this section, the district courts of the United States shall have exclusive jurisdiction of civil actions under this subchapter brought by the Secretary or by a participant, beneficiary, or fiduciary. State courts of competent jurisdiction and district courts of the United States shall have concur- rent jurisdiction of actions under subsection (a)(1)(B) of this section." Subsection (a)(1)(B) provides: "(a) Persons empowered to bring a civil action "A civil action may be brought - - "(1) by a participant or beneficiary -- "*** "(B) to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan." The controlling language of Section 1132(e)(1) and (a)(1)(B), Title 29 , U.S. Code, expressly limits the types of actions that may be brought against benefit plans in state courts to the recovery of benefits due under the plan, the enforcement of rights under the plan, or the clarification of rights to future benefits under the plan. Any action that is not included in subsection (a)(1)(B) falls within the exclusive subject matter jurisdiction of federal courts. The plain language of subsection (a)(1)(B) establishes that state courts clearly - 10 - have jurisdiction concurrent with that of the federal courts to award benefits due under the terms of a self-insured employee benefit plan adopted pursuant to ERISA. Id., at 89-90. "State courts have subject matter jurisdiction to hear cases in which the recovery of benefits due under an ERISA plan is sought." Wade v. Disbrow-Fisher Sail Co. (May 11, 1995), Cuyahoga App. Nos. 67294, 67409 and 67894, unreported, at 8. In the case sub judice, the action was brought to recover benefits due by a beneficiary under the employer's benefits plan which provided life insurance to the decedent-insured. Thus, concurrent jurisdiction is available by virtue of the applicability of 29 USC Section 1132(a)(1)(B). Having determined that the state courts have concurrent subject matter jurisdiction in this case, we will now turn our attention to the merits of the appeal. The three assignments will be discussed jointly since they each argue the trial court's ruling relative to summary judgment. The standard of review relative to a ruling on a motion for summary judgment in a case dealing with contract construction is provided in Yuda v. Saumer (July 21, 1994), Cuyahoga App. No. 65829, unreported, 1994 Ohio App. LEXIS 3214, as follows: As the Supreme Court of Ohio stated in Leibreich v. A.J. Refrigeration, Inc. (1993), 67 Ohio St.3d 266, 617 N.E.2d 1068: Under Civ.R. 56, summary judgment is proper when: "(1) No genuine issue as to any material fact remains to be litigated; (2) the moving party is entitled to - 11 - judgment as a matter of law; and (3) it appears from the evidence that reasonable minds can come to but one conclusion, and viewing such evidence most strongly in favor of the party against whom the motion for summary judgment is made, that conclusion is adverse to that party." Temple v. Wean United, Inc. (1977), 50 Ohio St.2d 317, 327, 4 O.O.3d 466, 472, 364 N.E.2d 267, 274. We have repeatedly stated that trial courts should award summary judgment with caution, being careful to resolve doubts and construe evidence in favor of the nonmoving party. Murphy v. Reynoldsburg (1992), 65 Ohio St.3d 356, 604 N.E.2d 138. On the other hand, we do not wish to discourage this procedure where a plaintiff fails to respond with evidence supporting the essentials of its claim. Summary judgment is appropriate when the nonmoving party does not "produce evidence on any issue for which that party bears the burden of production at trial." (Citation omitted.) Wing v. Anchor Media, Ltd. of Texas (1991), 59 Ohio St.3d 108, 570 N.E.2d 1095, paragraph three of the syllabus. The Ohio Supreme Court, under analogous facts to those before this court, held in Kelly, supra: The purpose of contract construction is to effectuate the intent of the parties. Skivolocki v. East Ohio Gas Co. (1974), 38 Ohio St.2d 244, 67 O.O.2d 321, 313 N.E.2d 374, paragraph one of the syllabus. The intent of the parties to a contract is presumed to reside in the language they chose to employ in the agreement. Id.; Blosser v. Enderlin (1925), 113 Ohio St. 121, 148 N.E. 393, paragraph one of the syllabus. A court will resort to extrinsic evidence in its effort to give effect to the parties' intentions only where the language is unclear or ambiguous, or where the circumstances surrounding the agreement - 12 - invest the language of the contract with a special meaning. See Blosser, supra, at paragraph two of the syllabus; 4 Williston on Contracts (3 Ed. 1961) 532-533, Section 610B. Also see Celotex Corp. v. Catrett (1987), 477 U.S. 317, 330, 91 L.Ed.2d 265, 106 S.Ct. 2548; State ex rel. Zimmerman v. Tompkins (1996), 75 Ohio St.3d 447 (reinforced the application of Wing v. Anchor Media, Ltd. of Texas); Kelley v. Medical Life Ins. Co. (1987), 31 Ohio St.3d 130, 509 N.E.2d 411. Moreover, our appellate review is plenary, which allows this court to review the judgment independently of, and without deference to, the trial court judgment. Stephens v. A-Able Rents Co. (Cuyahoga, 1995), 101 Ohio App.3d 20, 654 N.E.2d 1315, citing Brown v. Scioto Bd. of Commrs. (1993), 87 Ohio App.3d 704, 622 N.E.2d 1153. In the case sub judice, the trial court, by virtue of its ruling, necessarily concluded that the separation agreement which was incorporated in the dissolution decree's Shared Parenting Plan is not an ambiguous writing, rendering its interpretation a matter of law and not of fact. State ex rel. Parsons v. Fleming (1994), 68 Ohio St.3d 509, 511; Osborne v. Lyles (1992), 63 Ohio St.3d 326. The clear language employed in the section pertaining to child support in the Shared Parenting Plan provides in pertinent part that during the period of time that the child is subject to child support, "Husband shall maintain insurance on his life in an amount which is not less than Twenty-Eight Thousand Dollars ($28,000.00) - 13 - ... Husband shall designate the child as the primary and irrevocable beneficiary ..." Viewing the language used by the parties, we conclude that the child was due insurance proceeds equal to $28,000 total. Several factors support this conclusion. See Thomas v. Studley (Cuyahoga, 1989), 59 Ohio App.3d 76, 80. First, the Shared Parenting Plan fixed a cut-off date for coverage under the policy. This cut-off date was that point in time when the child support obligation ceased. This raises the inference that the purpose in providing life insurance was as security for unliquidated amounts of child support. This inference as to the purpose of the life insurance is further supported by the placement of the life insurance provision within the child support section of the Shared Parenting Plan. Second, the Shared Parenting Plan stated that the policy should carry a definite face value of at least $28,000, thereby leading us to conclude that the parties intended to limit the child's recovery under the policy. Id. Had no face value been stated, it could be implied that the parties intended that the child receive all of the benefits of the policy. Id. citing Schwass v. Schwass (1984), 126 Ill.App.3d 512. This intention, that the child would receive only the stated face value of the obligation and not the entire amount of the policy, is further supported by the fact that the decedent maintained the child as the primary beneficiary for $25,000 (which is $3,000 less than the required amount under the Shared Parenting Plan) with the balance - 14 - of the policy to his new wife, the defendant-appellee. Also, the Shared Parenting Plan used the language "primary and irrevocable beneficiary." The parties did not use the term "sole" beneficiary, inferring that more than one beneficiary was envisioned by the parties to share in the proceeds in a policy. Given the above, we concur in the trial court's determination in its ruling on the competing motions for summary judgment and the disposition of the policy proceeds. Assignments overruled. Judgment affirmed. - 15 - It is ordered that appellees recover of appellant their costs herein taxed. The Court finds there were reasonable grounds for this appeal. It is ordered that a special mandate issue out of this Court directing the Common Pleas Court to carry this judgment into execution. A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure. Exceptions. SARA J. HARPER, J., and TIMOTHY E. McMONAGLE, J., CONCUR. JAMES D. SWEENEY PRESIDING JUDGE N.B. This entry is an announcement of the court's decision. See App.R. 22(B), 22(D) and 26(A); Loc.App.R. 27. This decision will be journalized and will become the judgment and order of the court pursuant to App.R. 22(E) unless a motion for reconsideration with supporting brief, per App. R. 26(A), is filed within ten (10) days of the announcement of the court's decision. The time period for review by the Supreme Court of Ohio shall begin to run upon the journalization of this court's announcement of decision by the .