Aetna Life Insurance Company v. Frank
| Decision Date | 22 March 2022 |
| Docket Number | 19-CV-6259 (JPO), 19-CV-11001 (JPO), 20-CV-9729 (JPO) |
| Citation | 592 F.Supp.3d 317 |
| Parties | AETNA LIFE INSURANCE COMPANY, et al., Plaintiffs, v. Phyllis FRANK and Emily Rosen, Defendants. |
| Court | U.S. District Court — Southern District of New York |
Labinot Alexander Berlajolli, Riker Danzig Scherer Hyland & Peretti LLP, Morristown, NJ, for Plaintiffs.
Eric John Dinnocenzo, Law Office of Eric Dinnocenzo, New York, NY, for Defendant Phyllis Frank.
Cari Anne Lewis, Alonso, Andalkar & Facher, P.C., New York, NY, for Defendant Emily Rosen.
Following the death of Erich Frank, these three interpleader actions were filed to resolve the competing claims of Phyllis Frank and Emily Rosen over the proceeds of Erich Frank's life insurance policy, his 401k plan, and his Resource Management Account ("RMA"). Frank1 moves for summary judgment on her claims that she is solely entitled to the proceeds of the life insurance policy and the 401k plan (collectively, the "Plans"). Rosen cross-moves for summary judgment seeking identical relief, and additionally moves for summary judgment with respect to the proceeds of the RMA. For the reasons that follow, Frank's motion is granted and Rosen's motion is granted in part and denied in part.
The following facts are undisputed.
Erich Frank was employed as the Head of Global Services at Union Bank of Switzerland ("UBS"). (See Dkt. No. 74 ¶ 1.)2 UBS provided Erich Frank with a life insurance policy, with a face value of $150,000.00, and a 401k plan, with a value of $137,717.68 as of May 7, 2020. (See Dkt. No. 74 ¶ 2.) Erich Frank also maintained an RMA with UBS, a personal investment account that, as of November 18, 2020, had a value of approximately $361,071.00. (See Dkt. No. 74 ¶ 56.) Frank is Erich Frank's mother. Emily Rosen started dating Erich Frank in 2013 and they moved in together about a year later. (See Dkt. No. 74 ¶ 6.)
In August 2017, Erich Frank was diagnosed with Stage 4 colon cancer
. (See Dkt. No. 74 ¶ 9.) A little over a year later, in December 2018, Erich Frank was admitted into hospice care. (See Dkt. No. 74 ¶ 12.) Christopher Ferrara, a friend and co-worker of Erich Frank, arranged for Erich Frank to hire a lawyer, Barbara Lawrence. (See Dkt. No. 74 ¶¶ 14, 17.) Lawrence visited Erich Frank at his apartment on December 20, 2018, and Erich Frank signed a number of documents, including a Power of Attorney appointing Lawrence. (See Dkt. No. 74 ¶ 19.) On the same day, Ferrara visited Erich Frank's apartment and participated on a recorded phone call with the following individuals: Erich Frank; the Head of Benefits at UBS; and a representative from Alight Solutions, an online platform where UBS employees could make decisions about their benefits. (See Dkt. No. 74 ¶¶ 20, 62.) During this call, Erich Frank indicated that he wanted to change the beneficiary designations on his life insurance and 401k from Frank to Rosen. (See Dkt. No. 74 ¶ 63.)
Erich Frank's life insurance policy, however, stated that participants could change their beneficiary "by completing a new beneficiary designation form." (See Dkt. No. 74 ¶ 40.) His 401k plan similarly stated that participants could change their beneficiaries "by filing a new beneficiary designation form." (See Dkt. No. 74 ¶ 43.) After Erich Frank's phone call with the Head of Benefits at UBS and others, UBS mailed him a form dated the same day as the phone call that stated: "For your beneficiary designation(s) to be valid, this form must be completed and returned to Benefits Express by January 20, 2019." (See Dkt. No. 74 ¶ 34.) UBS never received this completed form from Erich Frank or Lawrence. (See Dkt. No. 74 ¶ 36.) The Head of Benefits at UBS also emailed Ferrara a certification, which attested that Erich Frank was unmarried, for Lawrence to sign. (See Dkt. No. 74 ¶¶ 25, 30.) The Head of Benefits at UBS said during the phone call that he needed this certification. (See Dkt. No. 55-7 at 10.) Ferrara forwarded the email to Lawrence (see Dkt. No. 74 ¶ 31), but there is no evidence that Erich Frank or Lawrence ever responded to this email or signed the certification.
UBS records also indicate that Erich Frank spoke to Frank Sabia, Erich Frank's financial advisor and a UBS employee, about his RMA on December 20, 2018. (See Dkt. No. 59-15; Dkt. No. 74 ¶ 70.) Following this conversation, Sabia's assistant sent a death beneficiary designation form for the RMA to Rosen. (See Dkt. No. 74 ¶ 71.) Rosen faxed the form back with what purports to be Erich Frank's signature. (See Dkt. No. 74 ¶ 72.) The form lists Rosen as the beneficiary of Erich Frank's RMA proceeds. (See Dkt. No. 59-14.)
Erich Frank passed away on January 6, 2019. (See Dkt. No. 74 ¶ 50.) Frank and Rosen now each claim that they are the sole beneficiaries of the proceeds from Erich Frank's life insurance, 401k, and RMA. Aetna, the provider of Erich Frank's life insurance policy, filed an interpleader action against Frank and Rosen for the life insurance proceeds on July 5, 2019 (Dkt. No. 1); the Head of Benefits at UBS, who is also the administrator of the 401k plan, did the same for the 401k proceeds on November 27, 2019, O'Connor v. Frank et al. , No. 19 Civ. 11001, Docket Number 1; and UBS Financial Services Inc. did the same for the RMA proceeds on November 18, 2020, UBS Financial Services Inc. v. Frank et al. , No. 20 Civ. 9729, Docket Number 1. Frank has moved for summary judgment as to the life insurance and 401k proceeds (Dkt. No. 54), and Rosen has cross-moved for summary judgment as to these proceeds and the RMA proceeds (Dkt. No. 59-35).
A party is entitled to summary judgment if it can "show[ ] that there is no genuine dispute as to any material fact and [it] is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A dispute of fact is "genuine" if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party," and a fact is "material" if "it might affect the outcome of the suit under the governing law." Hurley v. Tozzer, Ltd. , No. 15 Civ. 2785, 2018 WL 1087946, at *1 (S.D.N.Y. Feb. 26, 2018) (quoting Gayle v. Gonyea , 313 F.3d 677, 682 (2d Cir. 2002) ). The party moving for summary judgment bears the burden of showing that no genuine dispute of material fact exists, id. , and in assessing whether the movant has carried this burden, a court "must view the evidence in the light most favorable to the party against whom summary judgment is sought and must draw all reasonable inferences in his or her favor," Access 4 All, Inc. v. Trump Int'l Hotel & Tower Condo. , 458 F. Supp. 2d 160, 166 (S.D.N.Y. 2006).
Frank and Rosen dispute whether Erich Frank had the necessary mental capacity to make Rosen the beneficiary of the proceeds from his life insurance, 401k, and RMA. The parties also dispute whether Erich Frank designated Rosen as a beneficiary to these proceeds because she subjected him to undue influence. In the event that Erich Frank had the necessary mental capacity and was not subjected to undue influence to make Rosen the beneficiary, the parties disagree over whether Erich Frank substantially complied with the Plans’ requirements for changing a beneficiary. Frank also maintains that Rosen forged Erich's signature on the form that listed her as the beneficiary for the RMA proceeds. And Rosen argues that Frank does not have standing in the RMA action specifically.
The Court first considers whether Frank has standing in the RMA action. Because the Court holds that Frank does not have standing, it grants summary judgment in Rosen's favor with respect to the RMA proceeds. The Court next considers whether Erich Frank substantially complied with the Plans’ requirements for changing a beneficiary, ultimately concluding that he did not. This conclusion makes it unnecessary for the Court to separately consider whether Erich Frank had the mental capacity to change his beneficiary or whether Erich Frank was subjected to undue influence.
Rosen asserts that Frank lacks standing to bring claims over the RMA proceeds because she did not suffer an injury in fact. To have standing, a plaintiff must allege (1) an injury-in-fact, i.e. , "an invasion of a legally protected interest" that is concrete and particularized and not conjectural or hypothetical; (2) a causal connection between the injury and the defendant's alleged wrongful conduct; and (3) a likelihood that the requested relief will redress the injury. See Lujan v. Defs. of Wildlife , 504 U.S. 555, 560–61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992).
Unlike the life insurance and 401k accounts, where Erich Frank previously designated Frank as the beneficiary before switching it to Rosen, the RMA did not have a previously designated beneficiary before Erich Frank purportedly signed a form designating Rosen. Frank prevailing on a claim for the RMA would thus lead to its proceeds going to Erich Frank's estate — instead of Frank — because Frank was never a designated beneficiary of the RMA. Though Frank may have an interest in Erich Frank's estate as a beneficiary in his will or through intestacy, "in New York, heirs suing for damages resulting from a diminished inheritance generally have no standing to sue because ‘legatees and beneficiaries thereof have no independent cause of action either in their own right or in the right of the estate to recover estate property.’ " Witzenburg v. Jurgens , No. 05 Civ. 4827, 2007 WL 9710763, at *9 (E.D.N.Y. Mar. 1, 2007) (quoting Wierdsma v. Markwood Corp. , 53 A.D.2d 581, 384 N.Y.S.2d 836, 837 (1st Dep't 1976) ). In response, Frank does not contest that any claims she would bring for the RMA would be brought on behalf of the estate. Frank instead argues that this is a "circumstance[ ] where it is necessary to grant a third party standing to assert the rights of another." (Dkt. No. 68 at 17) (quoting Kowalski v. Tesmer , 543 U.S. 125, 130, 125 S.Ct. 564, 160...
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