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Wisconsin Province of Society of Jesus v. Cassem

United States District Court, D. Connecticut

March 18, 2019

AUDREY F. CASSEM, THOMAS F. OWENS, II, et al., Defendants.


          Hon. Vanessa L. Bryant, United States District Judge.

         I. Introduction

         Plaintiff, the Wisconsin Province of the Society of Jesus (“Province” or “Plaintiff”), brings this claim against Defendants, Audrey F. Cassem and Thomas F. Owens (“Defendants”), concerning two retirement accounts held by the late Rev. Edwin H. “Ned” Cassem (“Fr. Cassem”). Before the Court is Defendants' Motion to Dismiss Count One of the Amended Complaint, which seeks “declaratory judgment that the original beneficiary designations remain enforceable pursuant to 28 U.S.C. §§ 2201 and 2202” on the grounds that “[a]s a result of his vows, Fr. Cassem did not own the funds in the TIAA-CREF Accounts and thus, did not have the authority to designate a beneficiary in place of the province.” [Dkt. 44 (Amended Complaint) at 8-9]. Defendants argue that Plaintiff's claim is preempted by the Employment Retirement Income Security Act of 1974 (ERISA) and that ERISA's anti-alienation provision prohibits Plaintiff from asserting a contractual right to Fr. Cassem's retirement accounts. [Dkt. 58 (Motion to Dismiss)]. For the following reasons, Defendants' Motion to Dismiss is GRANTED as to Count One.[1]

         II. Background

         The following facts are taken from the Amended Complaint [Dkt. 44]. The facts alleged in the Amended Complaint are taken as true and construed in the light most favorable to Plaintiff for the purpose of a motion to dismiss. See Conley v. Gibson, 355 U.S. 41, 45-46 (1957).

         The Province is a nonstock corporation organized in Wisconsin with its principal place of business in Chicago. [Id. at ¶ 2]. The Province is one of several geographical subgroups of the Society of Jesus (the “Society”), commonly known as the “Jesuits.” [Id.] Defendant Audrey V. Cassem (“A. Cassem”) is the widow of Fr. Cassem's deceased brother, John M. Cassem. [Id. at ¶ 3]. Defendant Thomas M. Owens, II (“Owens”) is the son of A. Cassem from a marriage that predated her marriage to John M. Cassem. [Id. at ¶ 4].

         Fr. Cassem was a lifelong Jesuit and member of the Province. [Dkt. 44, ¶ 11]. He died on July 4, 2015. [Id. at ¶ 1]. He entered the society in 1953, at the age of eighteen. [Id. at ¶ 12]. He was ordained on June 4, 1970, and pronounced his “final vows of perpetual poverty, chastity, and obedience on December 26, 1985.” [Id. at ¶ 14]. While a member of the Society, Fr. Cassem obtained an undergraduate degree in psychology and a medical degree in psychiatry. [Id. at ¶ 13].

         Following his graduation from Harvard Medical School, Fr. Cassem began what would become a long and distinguished career as a psychiatrist in Boston, Massachusetts at Massachusetts General Hospital (“MGH”) and Harvard Medical School (“HMS”). [Dkt. 44, ¶ 16]. He founded the Optimum Care Committee at MGH in 1973 and chaired it until 2009. [Id. at ¶ 17]. He served as Chief of Psychiatry at MGH from 1989 to 2000. [Id.] Fr. Cassem conducted research on the relationship between depression and heart disease and worked in palliative and end-of-life care. [Id. at ¶ 18].

         Throughout Fr. Cassem's career, he “tendered his income, as he earned it, to the Province, and the Province, in turn, provided for his lifelong wants and needs. [Dkt. 44, at ¶ 15]. This was in fulfillment of his vows, which included “a renunciation of his right to own property.” [Id.] Plaintiff alleges that the vow of poverty:

Enables each Jesuit to live simply and promotes a feeling of empathy for the poor. Jesuit priests share possessions communally. Accordingly, a Jesuit turns over all after-acquired property to his province after taking his vows, and the province, in turn, provides for his wants and needs . . . Each member of the community relinquished title to personal property and monies, turned over money and property for their common benefit, and, in return, received a living sustenance in the form of food, shelter, health insurance premiums, car payments and car insurance.

[Id. at ¶ 14 n. 3].

         In connection with his positions at MGH and HMS, Fr. Cassem accumulated two retirement accounts with TIAA-CREF (the “Accounts”). [Dkt. 44, at ¶ 20]. As of September 30, 2017, the value of the funds in the Accounts was $1, 258, 530.07 in “TIAA-A741815-3” and $253, 656.04 in CREF-P741815-0. [Id. at ¶ 23]. In 1976, Fr. Cassem executed beneficiary designation forms with TIAA-CREF naming the Province as the beneficiary for the TIAA-CREF accounts. [Id. at ¶ 21].

         Beginning in roughly 2010, Fr. Cassem “began to display symptoms of dementia, which symptoms became significantly worse over time.” [Dkt. 44, at ¶ 24]. In or around December 2010, Fr. Cassem moved into A. Cassem's home in West Hartford. [Id. at ¶ 25]. In or around December 2010, Fr. Cassem “was taken to a local attorney, previously unknown to him, and executed a Durable Power of Attorney in favor of Owens.” [Id. at ¶ 26].

         On or about January 11, 2011, “TIAA-CREF received a form purportedly executed by Fr. Cassem” that changed the beneficiary of the Accounts from the Province to A. Cassem, as primary beneficiary, and Owens, as contingent beneficiary. [Dkt. 44, at ¶ 22]. At this time, Fr. Cassem was seventy-five years old, residing alone with A. Cassem, and “living hundreds of miles away from any blood relatives and hours away from his friends and colleagues at the Society.” [Id. at ¶ 27]. Fr. Cassem continued to live with A. Cassem until his death in 2015. [Id. at ¶ 28].

         On September 1, 2017, the Province brought this action against Audrey Cassem, Thomas Owens II, TIAA-CREF, and Neil Kraner in his capacity as Temporary Administrator of the Estate of Edwin H. Cassem. [Dkt. 1]. Defendant TIAA-CREF filed a Counterclaim for interpleader on November 13, 2017, asking the Court to order that Plaintiff and Defendants A. Cassem, Thomas Owens, and Neil Kraner interplead their respective claims amongst themselves. [Dkt. 22 (Answer to Complaint and Counterclaim for Interpleader), at 8]. Plaintiff filed the Amended Complaint on June 7, 2018. [Dkt. 44]. TIAA-CREF filed a renewed counterclaim for interpleader on July 4, 2018. [Dkt. 51]. Defendants A. Cassem and Thomas Owens filed this Motion to Dismiss on August 20, 2018. [Dkt. 58].

         III. Legal Standard

         To survive a motion to dismiss, a plaintiff must plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). In considering a motion to dismiss for failure to state a claim, the Court should follow a “two-pronged approach” to evaluate the sufficiency of the complaint. Hayden v. Paterson, 594 F.3d 150, 161 (2d Cir. 2010). “A court ‘can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth.'” Id. (quoting Iqbal, 556 U.S. at 679). “At the second step, a court should determine whether the ‘well-pleaded factual allegations,' assumed to be true, ‘plausibly give rise to an entitlement to relief.'” Id. (quoting Iqbal, 556 U.S. at 679). “The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Iqbal, 556 U.S. at 678 (internal quotations omitted).

         Rule 8(a) provides that a pleading must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Twombly, 550 U.S. at 570. A claim is “facially plausible” when “the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id.

         IV. Discussion

         Plaintiff alleges that the change in beneficiary designation was improper because Fr. Cassem's vows prevented him from legally acquiring personal property and, therefore, he never owned the Accounts. Plaintiff alleges that “Fr. Cassem's final vows constitute an enforceable contract among and between the Province and Fr. Cassem, through which Fr. Cassem fully and finally renounced and assigned any and all property then owned or later acquired to the Province.” [Dkt. 44, at ¶ 33]. The Province argues that because Fr. Cassem was not entitled to retain or direct property for the benefit of any party other than the Province, the original designation of the Province as the beneficiary of the Accounts remains valid and enforceable. [Id. at ¶ 38].

         Defendant argues that Fr. Cassem's contractual obligation to tender property to the Province is pre-empted and legally barred by the Employee Retirement Income Security Act of 1974 (ERISA). [Dkt. 58-1 (Memo. of Support of Defendant's Motion to Dismiss), at 2-3]. Specifically, Defendant invokes § 514(a) of ERISA, which states that the Act pre-empts “any and all State laws insofar as they may now or hereafter relate to any employee benefit plan, ” with exceptions. See [Dkt. 58-1, at 8] (quoting 29 U.S.C. § 1144(a)). Furthermore, Defendants argue that Fr. Cassem's rights to designate a beneficiary could not be alienated due to the ERISA provision stating that “[e]ach pension plan shall provide that benefits provided under the plan may not be assigned or alienated.” See [Dkt. 58-1, at 16] (quoting 29 U.S.C. § 1056(d)(1)).

         A. Whether Fr. Cassem's Vows are Enforceable

         Plaintiff argues in briefing that the Province has a right to the accounts because Fr. Cassem's vows are enforceable under federal common law. [Dkt. 64, at 4-10]. Although Plaintiff cites precedent for the proposition that a cause of action exists at federal common law, the courts in Plaintiff's cases all say they are interpreting the enforceability or validity of a contract. It is axiomatic that contract formation is governed by state law in the United States. The Amended Complaint even characterizes the vows as an “enforceable contract.” [Dkt. 44, at ¶¶ 33, 34]. Therefore, the Court construes Count One as alleging a contractual right. Formation of a contract generally requires a bargain in which there is a manifestation of mutual assent and a consideration. See Restatement (II) of Contracts, § 17; see e.g. Knauss v. Ultimate Nutrition, Inc., 514 F.Supp.2d 241, 245 (D. Conn. 2007). Plaintiff pleads facts supporting the inference that Fr. Cassem and the Province formed a contract in which Fr. Cassem provided all of his income and property to the Province, and in return the Province paid for his undergraduate and medical studies and his living expenses throughout his life. See [Dkt. 44, at ¶¶ 14, 14 n. 3, 15, 19, 21, 32-34].

         The case principally relied on by Plaintiff, Order of St. Benedict v. Steinhauser, does not create federal common law requiring the enforcement of religious vows. See Order of St. Benedict of New Jersey v. Steinhauser, 234 U.S. 640 (1914). Plaintiff argues that “[i]n Steinhauser, a unanimous Supreme Court applied long-standing federal precedent to explicitly recognize ‘[t]he validity of agreements providing for community ownership with renunciation of individual rights of property during the continuance of membership in the community, where there is freedom to withdraw, has repeatedly been affirmed.” [Dkt. 73 (Plaintiff's Sur-Reply to Defendant's Memorandum of Law) at 2] (quoting Steinhauser, 234 U.S. at 649) (emphasis added). This statement mischaracterizes the opinion. In Steinhauser, Augustin Wirth - a member of the religious Order of St. Benedict - took a similar vow to that allegedly taken by Fr. Cassem. See Id. at 642. The Order's constitution included the provision that “the real estate of said order and the individual earnings of its members are and must be considered as common property of the Order of St. Benedict of New Jersey, from which the members of said Order derive their support, and the balance of which income and property should serve for following up and carrying out of the charitable objects of the Order.” Id. at 642-43. The Supreme Court identified the question before it by stating that it was “not concerned in the present case with any question of ecclesiastical requirement or monastic discipline. The question is solely one of civil rights.” Id. at 641-42. First, the Court interpreted the constitution of the Order to determine whether Wirth had some special dispensation to retain certain property. Id. at 642-47. It concluded that he did not. Ibid. Second, the Supreme Court was “brought to the question whether the requirement [to renounce all property], which lies at the foundation of this suit, is void as against public policy.” Id. at 647. The Court found that the requirement was not contrary either to Wirth's individual liberty or the inherent right to acquire and hold property, or to New Jersey public policy. Id. at 649. These two holdings were the extent of the opinion in Steinhauser. The Supreme Court did not hold that federal common law required enforcement of the agreement - the Court applied New Jersey law to enforce the contract and cited federal cases to determine whether the contract was contrary to public policy.

         Contrary to Plaintiff's assertions, “federal common law” does not recognize religious oaths as enforceable as a distinct category from contract law. See [Dkt. 64, at 5]. The cases cited by Plaintiff all enforce contracts. The Supreme Court in Steinhauser relies, in part, on a 19th century case characterizing the vows of a religious order as follows:

An association of individuals is formed under a religious influence, who are in a destitute condition, having little to rely on for their support but their industry; and they agree to labor in common for the good of the society, and a comfortable maintenance for each individual; and whatever shall be acquired beyond this shall go to the common stock. This contract provides for every ...

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