In a recent decision, the New-Orleans based United States Court of Appeals for the Fifth Circuit affirmed a district court’s decision in an ERISA life insurance case where an insured’s formal beneficiary paperwork was incomplete but the insured’s intentions are unmistakably clear. The ruling in Morgan v. Barrera, No. 21-20497, 2025 WL 1234567 (5th Cir. Apr. 21, 2025), confirms that a person’s clearly expressed intent regarding the distribution of life insurance proceeds can take precedence over technical noncompliance with plan procedures.

The deceased plan participant Janie Barrera was employed by Walgreens and held a life insurance policy provided through her job. In 2009, she named her sisters as the beneficiaries of that policy. Several years later, Walgreens informed employees that old beneficiary forms were no longer accessible and that participants needed to submit new designation forms. Although Barrera never submitted updated paperwork, she made her intentions known through other means. In 2018, she executed a power of attorney in favor of Christine Morgan. She also signed a written statement indicating that she wished Christine and Denise Morgan to receive the life insurance benefits. She shared this decision with her pastor and later confirmed it during a phone call with a Walgreens representative while hospitalized.

At first, Prudential, the administrator of the plan, appeared to honor her wishes. It sent correspondence to Christine Morgan with instructions on how to initiate a claim. However, after a fraud investigation raised concerns about the documentation supporting the change, Prudential reversed its position. The company informed all parties that it would treat the designation as invalid and would instead distribute the proceeds to Barrera’s sisters in accordance with the plan’s default rules. Prudential advised the Morgans that if they objected, they would need to bring legal action. They did, and the district court ruled in their favor. On appeal, the Fifth Circuit affirmed that decision.

The court applied the federal common law doctrine of substantial compliance, which is often used in ERISA life insurance disputes. Under this doctrine, a change in beneficiary may be enforced when the insured person clearly intended to make the change and took meaningful steps to carry it out, even if the plan’s formal requirements were not strictly followed. The court found sufficient evidence of Barrera’s intent and actions. Her written statement, conversations with her pastor, and her direct confirmation to the Walgreens representative demonstrated her decision beyond doubt. The court also noted that Prudential initially treated the Morgans as beneficiaries, further validating their claim.

The Pellegrin Firm represents ERISA beneficiaries and life insurance claimants in the New Orleans area and throughout Louisiana.