Plan Administrator of the Chevron Corporation Retirement Restoration Plan v. Minvielle

4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA PLAN ADMINISTRATOR OF THE Case No. 20-cv-07063-TSH CHEVRON CORPORATION RETIREMENT RESTORATION PLAN, et al., ORDER RE: MOTION TO LIFT STAY Plaintiffs, Re: Dkt. No. 76 v. ANNE MINVIELLE, et al., Defendants.

14 I. INTRODUCTION 15 Pending before the Court is Defendant and Cross-Claimant Martin Byrnes’ Motion to Lift Stay. ECF No. 76. Defendants Anne Minvielle and Leon Minvielle (the “Minvielles”) filed an Opposition (ECF No. 77), and Byrnes filed a Reply (ECF No. 78). On October 31, 2023, the Minvielles filed a Sur-Reply (ECF No. 82), and on November 6, 2023, Byrnes filed a Reply to the Sur-Reply (ECF No. 84). Having considered the parties’ positions, relevant legal authority, and the record in this case, the Court GRANTS the motion for the following reasons.

21 II. BACKGROUND 22 Plaintiffs Plan Administrator of the Chevron Corporation Retirement Restoration Plan and Plan Administrator of the Chevron Corporation Long-Term Incentive Plan (collectively, “Chevron”) commenced this interpleader action on October 9, 2020. ECF No. 1.

25 Margaret Broussard was a Chevron employee. ECF No. 59 ¶ 3. Defendant Anne Minvielle was Broussard’s sister. Id. ¶ 6. Anne Minvielle resides in Louisiana with her husband, Defendant Leon Minvielle. Id. ¶ 8. Defendant Martin Byrnes was married to Broussard at certain 1 Broussard died on January 21, 2019. Id. ¶ 5. During her work with Chevron, she earned a benefit under the Retirement Restoration Plan (“RRP”). Id. ¶ 17. She also was awarded non- qualified stock options under the Long-Term Incentive Plan (“LTIP”) (collectively with RRP, the “Plans”). Id. ¶ 20. The Plans permit a participant to designate a beneficiary to receive outstanding benefits in the event of the participant’s death. Id. ¶¶ 30, 31.

6 On January 12, 2017, Chevron received a form purporting to name Anne Minvielle as the sole beneficiary of benefits owed to Broussard under the Plans. Id. ¶ 35. On March 17, 2017, Broussard also provided to Chevron a document represented as a post-nuptial agreement between Broussard and Byrnes. Id. ¶ 38. That agreement included division of Broussard’s benefits under the Plan. Id. 11 Byrnes and Anne Minvielle both contend that they are the rightful recipients of the benefits owed under the Plans. Byrnes argues that he is entitled to the benefits under the Plans as Broussard’s surviving spouse. ECF No. 61 ¶ 35(b). Byrnes also alleges that the form received by Chevron purporting to designate Anne Minvielle as beneficiary is void because the form itself was improper, or, alternatively, it was a forgery, or, alternatively, Broussard did not have the mental capacity or was unduly influenced by Anne Minvielle to sign it. ECF No. 61 ¶¶ 35(d)-(g).

17 Chevron could not determine whether Anne Minvielle or Byrnes was the proper beneficiary, and thus commenced this action. ECF No. 59 ¶ 43. Chevron seeks, in part, a determination as to the proper beneficiary to any benefits owed with respect to Broussard under the Plans, namely: 1) five annual installment payments owed under the RRP; 2) shares held in a Morgan Stanley account resulting from Broussard’s January 2020 cashless exercise of 2,600 options; 3) outstanding LTIP option awards to Broussard; and 4) a cash payment resulting from the 2019 Performance Share Units payment held following Broussard’s death. Id. at 8-9. On July 26, 2021, this Court discharged Chevron from this action. ECF No. 57.

25 On June 3, 2021, the Minvielles filed a motion requesting the Court abstain and dismiss this proceeding or stay the proceeding pending determination of a probate case to determine allocation of Broussard’s estate filed in Louisiana state court. ECF No. 49.

1 executor of Broussard’s estate, had filed a Petition to Admit Notarial Testament to Probate and Confirmation of Independent Executor in Louisiana Civil District Court for the Parish of Orleans.

3 ECF No. 49-6. On September 16, 2020, he filed with the Louisiana court a Petition for Possession and for Declaratory Judgment. ECF No. 49-9. The Petition for Possession and for Declaratory Judgment sought, in part, a declaratory judgment as to ownership of Broussard’s Chevron benefits. ECF No. 49-9 at 5. On March 5, 2021, Byrnes filed an Answer to Petition for Possession and for Declaratory Judgment, Intervention and Reconventional Demand. ECF No. 49-10. Byrnes alleged in the Louisiana action that Broussard did not have the ability to obtain or prepare the beneficiary designation form at the time that of her alleged signature, and that the form’s execution was an example of Anne Minvielle’s undue influence. ECF No. 49-10 ¶ 47.

11 Byrnes also alleged that the Louisiana court did not have jurisdiction to determine entitlement to Broussard’s Chevron retirement benefits. ECF No. 49-10 ¶ 14.

13 On September 30, 2021, this Court ordered that the present action be stayed pending final disposition of the previously filed and pending parallel Louisiana suit. ECF No. 73. In explaining its ruling, the Court stated in the hearing on the Minvielle’s motion: 16 It looks to me like there is or there may be an ERISA claim for benefits pending in the Louisiana state court. And I understand that 17 Mr. Byrnes may have some jurisdictional challenges to certain aspects of what the state court is entitled to hear.

But I guess my thought is that I should let the state court decide what 19 is in front of it and decide what it has jurisdiction over and then make its findings of fact, and then those will have whatever collateral 20 estoppel effect they may have in the federal proceeding.

21 But it seems ill-advised for this Court to charge ahead and determine issues that seem to overlap, at least in part, with what the state court 22 may have in front of it.

23 ECF No. 75, Transcript of September 30, 2021 hearing, 4:2-14. The Court went on to say: “I think it would be more procedurally proper and efficient for the state court to decide what it has the power to decide; and then, if it agrees with you and says, ‘No, I can’t decide these claims,’ then you can just file a motion with me and say, ‘Lift the stay.’ But I would first like the state court to express its view about what it has in front of it and what it has the power to decide.” Id. at 1 On July 28, 2023, the parties filed a consent judgment in the Louisiana action, agreeing that Broussard and Byrnes’ post-nuptial agreement, dated January 19, 2017, was not an enforceable contract and did not constitute an agreement as to disposition of Byrnes and Broussard’s assets. ECF No. 76, Ex. B.

5 On July 31, 2023, the Louisiana Civil District Court Parish of Orleans determined that it did not have subject matter jurisdiction to determine claims related to Broussard’s LTIP or RRP.

7 ECF No. 76, Ex. A. The Louisiana court determined that it did have jurisdiction over money distributed from Broussard’s Chevron Retirement Plan and Investment Plan. Id..

9 III. LEGAL STANDARD 10 This Court previously ordered a stay pursuant to Colorado River Water Conservation Dist. v. United States, 424 U.S. 800 (1976), as well as its inherent authority. ECF No. 75 8:14-15 (stating the basis for the stay was “both Colorado River and the Court’s inherent power.”). The Ninth Circuit has recently clarified its position on a district court’s inherent authority to stay a case pursuant to its docket management powers. Ernest Bock, LLC v. Steelman, 76 F.4th 827, 842 (9th Cir. 2023). Formerly, there was some division at the district court level over a court’s inherent authority, pursuant to Landis v. N. Am. Co., 299 U.S. 248 (1936), to stay its own action where there were simultaneous and related federal and state actions. See Landis, 299 U.S. at 254 (“[T]he power to stay proceedings is incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants.”). The Ninth Circuit has now held that “Colorado River factors control whether a stay can issue in favor of parallel state proceedings.” Ernest Bock, LLC, 76 F.4th at 843; see id. (“A docket management stay may not issue in favor of parallel state proceedings if the Colorado River factors do not support a stay.”). As such, to the extent the Court previously relied upon its own inherent authority to control its docket, it now evaluates whether to lift the stay based solely upon applying the Colorado River factors.

26 Under Colorado River, there are eight factors guiding whether a district court should stay a proceeding: (1) which court first assumed jurisdiction over any property at stake; 2 (2) the inconvenience of the federal forum; (3) the desire to avoid piecemeal litigation; (4) the order in which the forums obtained 3 jurisdiction; (5) whether federal law or state law provides the rule of decision on the merits; (6) whether the state court proceedings can 4 adequately protect the rights of the federal litigants; (7) the desire to avoid forum shopping; and (8) whether the state court proceedings 5 will resolve all issues before the federal court.

6 Montanore Mins. Corp. v. Bakie, 867 F.3d 1160, 1165–66 (9th Cir. 2017), as amended on denial of reh’g and reh’g en banc(Oct. 18, 2017) (quoting Colorado River, 424 U.S. at 978–79). “Some factors may not apply in some cases, and ‘[a]ny doubt as to whether a factor exists should be resolved against a stay’ or dismissal.” Id. (quoting Seneca Ins. Co. v. Strange Land, Inc., 862 F.3d 10 835, 842 (9th Cir. 2017)). “[A] stay of federal litigation in favor of state court proceedings ‘is the exception, not the rule.’” Ernest Bock, LLC, 76 F.4th at 836 (quoting Colorado River, 424 U.S. at 12 813). “‘Only the clearest of justifications will warrant’ a stay.” Id (quoting Colorado River, 424 U.S. at 819).

14 IV. DISCUSSION 15 While Colorado River discusses eight factors to aid in evaluating whether to grant, or in this instance lift, a stay, the Court finds that the eighth factor —“whether the state court proceedings will resolve all issues before the federal court” — is dispositive here. “This factor asks about the similarity between the state and federal suits.” United States v. State Water Res.

19 Control Bd., 988 F.3d 1194, 1203 (9th Cir. 2021). “‘Though exact parallelism . . . is not required, substantial similarity of claims is necessary before abstention is available.’” Id. (quoting Seneca Ins., 862 F.3d at 845 (internal quotation marks omitted)). The Ninth Circuit has repeatedly, and recently, “emphasized that a Colorado River stay is inappropriate when the state court proceedings will not resolve the entire case before the federal court.” Id. at 1204. “If there is any substantial doubt as to” whether “the parallel state-court litigation will be an adequate vehicle for the complete and prompt resolution of the issues between the parties . . . it would be a serious abuse of discretion to grant the stay or dismissal at all.” Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 28 (1983). “[T]he decision to invoke Colorado River necessarily contemplates whether it stays or dismisses.” Id. 2 In initially finding that a stay was merited, this Court stated: “I think it would be more procedurally proper and efficient for the state court to decide what it has the power to decide; and then, if it agrees with you and says, ‘No, I can’t decide these claims,’ then you can just file a motion with me and say, ‘Lift the stay.’” ECF No. 73 8:4-11. That is now exactly the circumstance before the Court. The Louisiana court has concluded that it lacks subject matter jurisdiction to determine the rightful beneficiary of the Plans. ECF No. 76, Ex. A. As such, this Court now finds that there is “substantial doubt” that the Louisiana proceedings will resolve the entire case at-issue here. See Holder v. Holder, 305 F.3d 854, 859 (9th Cir. 2002) (“In this Circuit, the narrow Colorado River doctrine requires that the pending state court proceeding resolve all issues in the federal suit.”).

12 The Minvielles argue that there remain overlapping factual issues because the Louisiana Court must determine Broussard’s capacity as to her disputed February 8, 2017 will (“2017 Will”), and the evidence related to competence and undue influence presented in this proceeding will be identical to that in the Louisiana proceeding. ECF No. 77 at 15. They argue that it is more logical to continue to permit the Louisiana court to litigate these issues in relation to the 2017 Will, and then determine “what, if any, collateral estoppel effect that that fact finding might have as to any of the retirement plans that might come back to this Court for final adjudication.” Id. at 5. This argument that there might be overlapping factual determinations that might have collateral effect does not provide sufficient basis to continue the stay under Colorado River. A district court should stay a proceeding under Colorado River “only if it has ‘full confidence’ that the parallel state proceeding will end the litigation.” Intel Corp. v. Advanced Micro Devices, Inc., 12 F.3d 23 908, 913 (9th Cir. 1993) ((quoting Gulfstream Aerospace Corp. v. Mayacamas Corp., 485 U.S. 24 271, 277 (1988)). Even the Minvielles appear tentative to argue that a determination in the Louisiana court regarding Broussard’s capacity or any undue influence in executing the 2017 Will definitively will resolve questions of capacity and undue influence in this proceeding and thus that determinations in the Louisiana court will end this litigation.

1 Court will be resolved in the Louisiana court even if there is collateral estoppel effect regarding || capacity and undue influence. If the Louisiana court determines that Broussard had mental capacity at the time of the 2017 Will and this Court finds the Louisiana determination has || collateral estoppel effect, this Court will still have to determine whether the January 2017 beneficiary documentation was a forgery and if it was legally valid form. “When one possible || outcome of parallel state court proceedings is continued federal litigation, we find a ‘substantial doubt’ that the state court action will provide a ‘complete and prompt resolution of the issues,’ || because the federal court may well have something ‘further to do.’” Ernest Bock, LLC, 76 F.4th at 9 841 (quoting Moses H. Cone, 460 U.S. at 28). The Minvielles argue in their sur-reply that Byrnes’ || forgery claim, as well as his claim that the incorrect form was used, are without merit. ECF No. 11 82 at 2. However, the Court declines at this juncture to decide the merits of those claims.!

12 “Since we find that there exists a substantial doubt as to whether the state court 13 proceedings will resolve all of the disputed issues in this case, it is unnecessary for us to weigh the || other factors included in the Colorado River analysis.” State Water Res. Control Bd., 988 F.3d at 3 15 1208 (quoting Intel Corp., 12 F.3d at 913 n.7).

16 Vv. CONCLUSION = 17 For the reasons stated above, the Court GRANTS Byrnes’ Motion to Lift Stay. The Court 18 FURTHER ORDERS the parties to appear for a case management conference on December 21, 19 2023 at 10:00 a.m. by phone at 1-888-684-8852, passcode: 2925506. The parties shall file a joint || case management conference statement by December 14, 2023.

21 IT IS SO ORDERED.

22 Dated: November 9, 2023 23 AY \ - THOMAS S. HIXSON United States Magistrate Judge 26 ' The parties extensively briefed issues related to the burden of proof for testamentary capacity 07 and undue influence, including a request for judicial notice by Byrnes for an article in California Trusts and Estates Quarterly entitled “Undue Influence: Pressure Brought to Bear Directly on the 2g || Burden of Proof.” ECF No. 85. The Court does not rely upon those parties’ arguments in making its determination here, and thus DENIES as moot Byrnes’ request.