In Re the Estate of John R. Young

\ l`f=ll.‘c=.n DEC 4 - 2002 SUPREME COURT OF ARIZONA NoHKlE&MmT EH B&HC cLEaKsuPaEMEcoun‘r ev Arizona Supreme Court No. CV-02-Ol81-PR In re the EState of Court of AppealS DiviSion Two No. 2 CA-CV 01-OO3l JOHN R. YOUNG, CochiSe County Superior Court No. PB99000244 Deceased. MEMDRANDUM DECISION \J\/\./\/\/\/`J`{`,`,`{`,`z\/ Appeal from the Superior Court of CochiSe County No. PB99000244 The Honorable JameS L. Conlogue, Judge Pro Tempore Memorandum Decision of the Court of AppealS Division Two Filed April 18, 2002 VACATED and REMANDED Slutes, Sakrison & Hill, P.C. TucSon by Tom Slutes and Michael B. Smith Attorneys for Christiane Young Malanga Law Office Bisbee by Ralph Malanga and Joel A. LarSon Attorneys for Personal Representative of the Estate of John R. ¥oung McGregor, Vice Chief Justice `iu¥\iw:__` 2 _.a. We granted review to determine whether the COUI°C Of ////;ppea1s abused its discretion in declining to consider Petitioner Christiane Young’s federal preemption argument under Egelhoff v. Egelhoff, 532 U.S. 141 , 121 S. Ct. 1322 (2001). L2 Christiane and John Young dissolved their twenty-five year marriage in 1999. John passed away after the divorce became final. At the time of John's death, Christiane remained the named beneficiary on his employer~provided life insurance and retirement plan. A dispute arose between Christiane and John's estate regarding who was entitled to receive the insurance and retirement proceeds. The trial court ordered Christiane to surrender the proceeds to the estate, ruling that the dissolution of the marriage automatically revoked John’s designation of Christiane as the named beneficiary under Arizona Revised Statutes (A.R.S.) section 14-2804 (1995). L3 On appeal, Christiane argued that the Employee Retirement 1ncome Security Act (ERISA) preempts the application of A.R.S. section 14-2804, relying on the United States Supreme Court's recent decision in Egelhoff. The Court of Appeals, however, declined to consider her federal preemption argument and Egelhoff’s impact, stating that Christiane did not preserve these arguments for appeal by raising them in the trial court. In re Estate of Young, No. 2 CA-CV 01-OO31, slip op. at 2, I 2 (App. April 18, 2002). I4 We hold that the Court of Appeals abused its discretion in concluding that Christiane waived the right to raise federal preemption and argue Egelhoff's impact. First, Christiane did argue that ERISA law preempts the state cause of action during the evidentiary hearing on May 23, 2000.1 Second, she was unable to argue Egelhoff’s impact to the trial court because the United States Supreme Court had not yet decided the case. The Court did not decide Egelhoff until almost a year after the trial court ordered Christiane to return the insurance and pension proceeds to John's estate, Accordingly, her inability to rely upon Egelhoff before the trial court does not waive her right to argue federal preemption under Egelhoff on appeal. See INernes v. City of Lakeside Park, 779 F.2d 1187 , 1188~89 (6th Cir. 1986) (remanding for further consideration in light of an FCC regulation preempting state and local laws pertaining to amateur radio facilities because the FCC promulgated the rule after the trial concluded and petitioner argued preemption during tria1). Finally, our courts prefer to resolve cases on the merits rather than on procedural grounds. See Golembieski v. O’Rielly R.V. Ctr., Inc., 147 Ariz. 134 , l35, 708 P.2d 1325, 1326 (App. 1985). L5 For the foregoing reasons, we vacate the Court of 1 Christiane also raised the ERISA preemption argument in her Notice of Removal to the United States District Court for the District of Arizona. Appeals’ memorandum decision in In re Estate of YOung and remand for further consideration in light of Egelhoff v. Egelhoff, 532 U.S. l41, 121 S. Ct. 1322 (2001). V. McGregor, Vic Chief Justice CONCURRlNG: F/ Charles E. JoEes¢/Chief Just c § 7 Stanley G. eldman,‘Uustic§ ¢. RebeccalWhite Berch, Justice myzi/<@/E/M Michael D. Ryan, Ju$tice