Sun Life & Health Ins. Co. v. Colavito

• Decision Date: 28 March 2014
• Docket Number: No. 11–CV–5225 KMK.,11–CV–5225 KMK.
• Citation: 14 F.Supp.3d 176
• Court: U.S. District Court — Southern District of New York
• Parties: SUN LIFE AND HEALTH INSURANCE COMPANY (U.S.), Plaintiff, v. Kathleen COLAVITO, Domenic Colavito, and Teresa Mamone Colavito, Defendants.

14 F.Supp.3d 176

SUN LIFE AND HEALTH INSURANCE COMPANY (U.S.), Plaintiff

v.Kathleen COLAVITO, Domenic Colavito, and Teresa Mamone Colavito, Defendants.

No. 11–CV–5225 KMK.

United States District Court, S.D. New York.

Signed March 28, 2014.

Jeffrey Alan Hoerter, Esq., Martin Law Group, P.C., Wappingers Falls, NY, for Defendant Kathleen Colavito.

Paul Joseph Goldstein, Esq., Goldstein & Metzger, LLP, Poughkeepsie, NY, for Defendants Domenic Colavito and Teresa Mamone Colavito.

OPINION & ORDER

KENNETH M. KARAS, District Judge:

Sun Life and Health Insurance Company (U.S.) (“Sun Life”) brought this Interpleader Complaint against Kathleen Colavito, Domenic Colavito, and Teresa Mamone Colavito, to determine the proper distribution of benefits from a life-insurance policy held by Matthew Colavito. (See Am. Compl. (Dkt. No. 3).) In their Answer, Claimants Domenic Colavito and Teresa Mamone Colavito (“Nonmovants”) sought a judgment declaring themselves, collectively, to be the sole beneficiaries of the policy. (See Answer to First Am. Interpleader Compl. & Req. for Declaratory J. 5 (Dkt. No. 6).) In her Answer, Claimant Kathleen Colavito (“Movant” or “Kathleen”) sought a judgment declaring her to be the sole beneficiary. (See Answer to First Am. Interpleader Compl. & Req. for Declaratory J. 5 (Dkt. No. 8).)

Before the Court is Kathleen Colavito's Motion for Summary Judgment, wherein she seeks a judgment “declaring that she is the rightful beneficiary/owner of the proceeds” of the policy. (Notice of Mot. for Summ. J. (“Mot.”) 1 (Dkt. No. 24).) For the reasons stated below, the Court grants the Motion.

I. Background

A. Factual History

For the purposes of evaluating this Motion, the following facts are not in dispute. Matthew Colavito (“Matthew”) and Teresa Mamone Colavito (“Teresa”) were married in September 1986 and had a son, Domenic Colavito (“Domenic”), in September 1988. (See Decl. of Att'y Jeffrey A. Hoerter, in Supp. of Mot. for Summ. J. (“Mot. Decl.”) at ¶¶ 3–4 (Dkt. No. 25).) In December 1988, Matthew and Teresa entered into a separation agreement, and in September 1991, they entered into a settlement agreement (“Settlement Agreement”), which was later incorporated into a judgment of divorce. (See id. ¶¶ 5–6; id. Ex. 1 (Settlement Agreement).) In August 2000, Matthew married Kathleen. (See id. ¶ 7.)

Approximately seven years later, in October 2007, Matthew accepted a position as a Working Supervisor of Facilities at the Dutchess County Board of Cooperative Educational Services (“BOCES”). (See id. ¶ 8.) Thereinafter, Matthew enrolled in a number of benefits programs associated with his new position. In particular, on October 22, 2007, Matthew completed and signed RS Form 5420–I, which enrolled Matthew in a death-benefits program provided by the New York State and Local Retirement System (“NYSLRS”). (See id. ¶ 10.) In doing so, he designated Kathleen as the sole primary beneficiary and Domenic as the sole contingent beneficiary. (See id. Ex. 4 (NYSLRS Membership Registration Form).) Furthermore, on October 26, 2007, Matthew completed and signed a form entitled “Genworth Financial Enrollment Request,” wherein he elected to enroll in a life-insurance policy and designated Kathleen as the sole primary beneficiary and Domenic as the sole contingent beneficiary. (See id. ¶ 12; id. Ex. 6 (Genworth Financial Enrollment Request).) The Parties do not dispute that this enrollment request resulted in Matthew's enrollment in the life-insurance policy at issue in this Interpleader Action, brought by Sun Life.¹ Finally, around the same time, Matthew also enrolled in a life-insurance policy provided by the School Administrator's Association of New York State (“School Administrators Association”). (See id. ¶ 17.)²

Two years later, in September 2009, Kathleen instituted divorce proceedings against Matthew. (See id. ¶ 14.) Approximately one month earlier, on August 11, 2009, Matthew executed a form entitled “[']Designation of Beneficiary with Contingent Beneficiaries['] to the [NYSLRS].” (See id. ¶ 15; id. Ex. 7 (NYSLRS Designation of Beneficiary With Contingent Beneficiaries Form).) Although the Parties offer slightly different characterizations of this event, they both agree that “[b]y filing [this] form,” Matthew “effected a change of his designated primary beneficiaries of his [NYSLRS] death benefit, from [Kathleen] to [Domenic] and [Teresa].”³ (Id. ¶ 16; see also Claimants Domenic Colavito & Teresa Mamone Colavito Resp. to Claimant Kathleen Colavito's Statement of Facts (“Opp. Decl.”) ¶ 16 (Dkt. No. 28) (admitting the facts as stated in Movant's declaration).)

Furthermore, on December 18, 2009, Matthew executed a form entitled “Insurance Beneficiary Designation” and submitted it to the School Administrators Association, in which form Matthew designated Domenic and Teresa both as primary beneficiaries of the life-insurance policy provided by that organization. (See Mot. Decl. ¶ 17; id. Ex. 8 (Insurance Beneficiary Designation form).)

Before his divorce proceedings with Kathleen were resolved, Matthew died on January 5, 2011. (See Mem. of Law (“Mot. Mem.”) at 4 (Dkt. No. 26); Mem. of Law (“Opp.”) at 1 (Dkt. No. 27).) Subsequently, Kathleen, Domenic, and Teresa all filed separate claims for the proceeds due from the Sun Life policy. (See Am. Compl. ¶¶ 13–15.)

B. Procedural History

Sun Life filed its first Interpleader Complaint on July 27, 2011, (see Dkt. No. 1), and then filed an Amended Complaint on August 4, 2011, (see First Am. Interpleader Compl. & Req. for Declaratory J. (“Interpleader Compl.”) (Dkt. No. 3)). On September 19, 2011, Nonmovants filed an Answer, in which they sought a judgment declaring them “the true and lawful beneficiaries of the Sun Life insurance proceeds.” (Answer to First Am. Interpleader Compl. & Req. for Declaratory J. at 5 (Dkt. No. 6).) In her Answer, filed September 20, 2011, Kathleen sought a judgment declaring her “the only proper lawful claimant under the terms of the policy.” (Answer to First Am. Interpleader Compl. & Req. for Declaratory J. at 5 (Dkt. No. 8).)

On January 4, 2012, pursuant to a “Stipulation of Dismissal” signed by the Parties, Sun Life agreed, inter alia, to deposit $100,000 (the total amount of the policy) into the registry of the Court. (See Dkt. No. 11 (Stipulation of Dismissal with Prejudice as to Pl. Sun Life & Health Ins. Co. (U.S.) Only).) The Court subsequently dismissed Sun Life from the litigation with prejudice. (See id. ) Nonmovants then filed two amended answers to the Amended Complaint. The first, filed on July 27, 2012, (see Am. Answer to First Am. Interpleader Compl. & Req. for Declaratory J. (Dkt. No. 19)), was timely filed pursuant to the Court's Scheduling Order giving the Parties until July 27, 2012, to amend their pleadings. (See Dkt. No. 18.) The second, filed on August 7, 2012, (see Second Am. Answer to First Am. Interpleader Compl. & Req. for Declaratory J. (“Second Amended Answer”) (Dkt. No. 20)), was properly filed pursuant to Federal Rule of Civil Procedure 15, which allows a party to “amend its pleading once as a matter of course within ... 21 days after serving it.” Fed.R.Civ.P. 15(a)(1)(A).

In their Second Amended Answer, Nonmovants pled their declaratory-judgment claim in substantially the same fashion as they did in their original Answer. (See Second Amended Answer at 4–5, 7). In addition, Nonmovants included a cross-claim against Movant, asking the Court to impose a constructive trust on the entirety of the Sun Life proceeds based on Matthew's alleged continuing obligations to pay child support and maintain a life-insurance policy under the terms of his Separation Agreement with Teresa. (See id. at 5–7.)

Kathleen filed her Motion for Summary Judgment on April 11, 2013, seeking an Order “declaring that she is the rightful beneficiary/owner of the proceeds” of the Sun Life policy, (see Mot. at 1), and asking the Court for a judgment in her favor on the constructive-trust issue, (see Mot. Mem. at 11–12). Nonmovants filed a response on May 3, 2013, (see Opp.), and Kathleen filed a reply on May 24, 2013, (see Supplemental Mem. of Law (“Supp. Mem.”) (Dkt. No. 34)).

II. Discussion

A. Standard of Review

Summary judgment shall be granted where it is shown “that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a) ; see also Celotex Corp. v. Catrett, 477 U.S. 317, 322–23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (same). “When ruling on a summary judgment motion, the district court must construe the facts in the light most favorable to the non-moving party and must resolve all ambiguities and draw all reasonable inferences against the movant.”Dall. Aerospace, Inc. v. CIS Air Corp., 352 F.3d 775, 780 (2d Cir.2003).

A party seeking summary judgment bears the burden of establishing that no genuine issue of material fact exists. See Atl. Mut. Ins. Co. v. CSX Lines, L.L.C., 432 F.3d 428, 433 (2d Cir.2005). “When the burden of proof at trial would fall on the nonmoving party, it ordinarily is sufficient for the movant to point to a lack of evidence to go to the trier of fact on an essential element of the nonmovant's claim. In that event, the nonmoving party must come forward with admissible evidence sufficient to raise a genuine issue of fact for trial in order to avoid summary judgment.” Jaramillo v. Weyerhaeuser Co., 536 F.3d 140, 145 (2d Cir.2008) (citations omitted). “When the moving party has carried its burden under Rule 56(c), its opponent must do more than simply show that there is some metaphysical doubt as to the material facts.” Matsushita Electric Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (footnote omitted). “A fact is material when it might affect the outcome of the suit under governing law.” McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 202 (2d Cir.2007) (internal quotation marks omitted). At summary judgment, a court is not charged with...