Ministers and Missionaries Benefit Board v. Snow

Clark Flesher and LeAnn Snow (defendant) divorced in 2008. Prior to the divorce, Flesher enrolled in a retirement plan and a death benefit plan administered by Ministers and Missionaries Benefit Board (MMBB) (plaintiff), a New York nonprofit corporation. Flesher named LeAnn as his primary beneficiary under both plans and named LeAnn’s father, Leon Snow (defendant), as contingent beneficiary. Flesher did not change the beneficiary designations after the divorce. In 2010, Flesher moved to Colorado and subsequently died there. MMBB filed a federal interpleader action seeking guidance about how to distribute Flesher’s plan benefits. Both MMBB plans contained a choice-of-law provision in favor of New York law. However, New York’s Estates, Powers, and Trusts Law (EPTL) stated that the disposition of any property not governed by a will, like Flesher’s MMBB plans, must be distributed in accordance with the laws of the state in which the property owner died. In both Colorado and New York, the divorce revoked LeAnn’s status as a beneficiary of Flesher’s MMBB plans. However, Leon’s rights as contingent beneficiary would be determined based on whether New York or Colorado law applied. In New York, divorce did not void beneficiary designations naming the divorced spouse’s family members; however, in Colorado, divorce did void such designations. Accordingly, Leon stood to benefit from Flesher’s MMBB plans only if New York law applied to the distribution of Flesher’s MMBB plan benefits. The New York Court of Appeals accepted a certified question from the Second Circuit. The certified question was whether New York’s EPTL statutory conflict-of-laws directive controlled over the contractual choice-of-law provisions in the MMBB plans. If the EPTL controlled, then Colorado law would apply because Flesher died in Colorado. If the MMBB plans’ choice-of-law provisions controlled, then New York law would apply.