Beltway Paving Co. v. PRUCO Life Ins. Co., PWG 21-cv-264

• Court: United States District Courts. 4th Circuit. United States District Court (Maryland)
• Parties: BELTWAY PAVING COMPANY, INC., Plaintiff, v. PRUCO LIFE INSURANCE COMPANY and LISA M. MOORE, AS PERSONAL REPRESENTATIVE OF THE ESTATE OF TIMOTHY S. MOORE Defendants.
• Docket Number: PWG 21-cv-264
• Decision Date: 06 September 2022

BELTWAY PAVING COMPANY, INC., Plaintiff,
v.
PRUCO LIFE INSURANCE COMPANY

and LISA M. MOORE, AS PERSONAL REPRESENTATIVE OF THE ESTATE OF TIMOTHY S. MOORE Defendants.

No. PWG 21-cv-264

United States District Court, D. Maryland, Southern Division

September 6, 2022

MEMORANDUM OPINION AND ORDER

Paul W. Grimm United States District Judge

Pending before me are the Motions to Dismiss filed by the Defendants, Pruco Life Insurance Company (“Pruco”) and Lisa M. Moore, as personal representative of the estate of Timothy S. Moore (the “Estate”). The Defendants' Motions to Dismiss are fully briefed.^[1] I have reviewed the filings and find a hearing unnecessary. See Loc. R. 105.6 (D. Md. 2021). For the reasons stated below, both Defendants' Motions to Dismiss are DENIED.

BACKGROUND

Timothy S. Moore and Michael B. Williams, both deceased, were shareholders and directors of Beltway Paving Company, Inc. (“Beltway”). ECF No. 25, Second Amended Complaint (“SAC”) ¶ 7. On September 28, 2017, Defendant Pruco issued an Individual Term Life

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Policy “upon the life of” Mr. Moore (“the Policy”). ECF No. 28-2, Policy; SAC ¶ 7. Mr. Moore was the Policy's owner as well as its insured. Id. The Policy named Mr. Williams as its sole beneficiary. Policy at 4.

Beltway alleges in its Second Amended Complaint that naming Mr. Williams as the beneficiary of the Policy was an error, and that Mr. Moore and Mr. Williams intended that the proceeds of the Policy would be paid to Beltway “to assist it in continued operations and to compensate for the loss of one of its shareholders, directors, and principal operators.” SAC ¶ 7-8. Beltway also alleges that it “paid all premiums on the insurance policy.” Id. ¶ 9.

Mr. Williams died in February 2020, and Mr. Moore never modified the Policy to name a different beneficiary. Id. ¶ 10. Beltway asserts in its Second Amended Complaint that this was due to Mr. Moore's ignorance of the fact that Mr. Williams was named the beneficiary in the first place, and that Mr. Moore believed until his death that Beltway was the beneficiary that would receive the Policy's proceeds. Id. Beltway claims that it continued to pay the premiums on the Policy following Mr. Williams's death because Beltway also believed that it, and not Mr. Williams, was the named beneficiary. Id. Beltway alleges that it “would have changed the name of the beneficiary following Williams's death had Beltway [] understood it needed to do so.” Id.

Mr. Moore died on November 2, 2020, and “the remaining shareholder of Beltway Paving made a claim for payment of the insurance policy proceeds.” SAC ¶ 11. Pruco responded to Beltway's claim by explaining “that the [P]olicy benefits would be paid to the Estate because Williams was identified as the beneficiary and he predeceased Moore.” Id. Indeed, the Policy, which was attached as an Exhibit to both Motions to Dismiss, provides that if no beneficiary “survives the insured, [Pruco] will pay in one sum to the Insured's estate.” Policy at 9.

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Beltway alleges that “despite requests, Pruco has refused to pay the [P]olicy benefits as intended.” SAC ¶ 13. Instead, Pruco “paid the proceeds of the insurance policy ($1,000,000.00) to the Estate on or about February 2021.” Id. ¶ 14. Beltway asserts that “Pruco wrongfully [paid] the policy benefits to the Estate of Timothy Moore” and that the benefits instead “should have been paid to Beltway Paving as intended by all.” Id.

Beltway filed a claim against Mr. Moore's Estate in the Circuit Court for Osceola County, Florida, where the Estate is probated, on or about March 16, 2021. Id. ¶ 15. Defendant Lisa M. Moore, the personal representative of the Estate objected to Beltway's claim. Id. ¶ 16.

Beltway filed this action on February 1, 2021. In it, Beltway seeks a declaration from the Court that Beltway is “the owner and beneficiary and the sole entity/individual entitled to receive the policy's death benefits.” SAC ¶ 17. Alternatively, Beltway seeks equitable relief on the theory that the Estate was unjustly enriched by its receipt of the Policy's proceeds.

Additional facts will be supplied below as needed.

STANDARD OF REVIEW

The Defendants move to dismiss this action for lack of subject-matter jurisdiction under Fed.R.Civ.P. 12(b)(1), lack of personal jurisdiction under Fed.R.Civ.P. 12(b)(2), and for failure to state a claim upon which relief can be granted under Fed.R.Civ.P. 12(b)(6).^[2];[3]

The plaintiff bears the burden of providing subject matter jurisdiction when a defendant moves to dismiss under Rule 12(b)(1). Evans v. B.F. Perkins Co., a Div. of Standex Int'l Corp.,

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166 F.3d 642, 647 (4th Cir. 1999). In such cases, the pleadings constitute “mere evidence” regarding subject-matter jurisdiction, and the Court “may consider evidence outside the pleadings without converting the proceeding to one for summary judgment.” Id. (quoting Richmond, Fredericksburg & Potomac R. Co. v. United States, 945 F.2d 765, 768 (4th Cir. 1991)). The Court should grant a Rule 12(b)(1) motion to dismiss “only if the material jurisdictional facts are not in dispute and the moving party is entitled to prevail as a matter of law.” Id.

Under Rule 12(b)(2), the ultimate burden is on the plaintiff to prove personal jurisdiction by a preponderance of the evidence. Mylan Lab'ys, Inc. v. Akzo, N.V., 2 F.3d 56, 60 (4th Cir. 1993). Where, as here, “the district court decides a pretrial personal jurisdiction dismissal motion without an evidentiary hearing, the plaintiff need prove only a prima facie case of personal jurisdiction.” Id. “In deciding whether the plaintiff has proved a prima facie case of personal jurisdiction, the district court must draw all reasonable inferences arising from the proof, and resolve all factual disputes, in the plaintiff's favor.” Id.

Rule 12(b)(6) provides for “the dismissal of a complaint if it fails to state a claim upon which relief can be granted.” Velencia v. Drezhlo, Civil Action No. RDB-12-237, 2012 WL 6562764, at *4 (D. Md. Dec. 13, 2012). This rule's purpose “‘is to test the sufficiency of a complaint and not to resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses.'” Id. (quoting Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir. 2006)). To that end, the Court bears in mind the requirements of Rule 8, Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009) when considering a motion to dismiss pursuant to Rule 12(b)(6). Specifically, a complaint 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), and must state “a plausible claim for relief,” as “[t]hreadbare recitals of the elements of a cause of

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action, supported by mere conclusory statements, do not suffice,” Iqbal, 556 U.S. at 678-79. See Velencia, 2012 WL 6562764, at *4 (discussing standard from Iqbal and Twombly). “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.” Iqbal, 556 U.S. at 663.

In reviewing a Motion to Dismiss under Rule 12(b)(6), this Court must “accept as true all well-pleaded facts in a complaint and construe them in the light most favorable to the plaintiff.” Wikimedia Found. v. Nat'l Sec. Agency, 857 F.3d 193, 208 (4th Cir. 2017). Significantly, a court cannot “favor[ ] its perception of the relevant events over the narrative offered by the complaint, thereby recasting ‘plausibility' into ‘probability.'” Id.

DISCUSSION

Both Defendants move to dismiss Beltway's Second Amended Complaint primarily on jurisdictional grounds. They both argue that the Court lacks in rem jurisdiction over the Estate because it is located in Florida, and that the Court lacks personal jurisdiction over the Estate because it is probated in Florida and because neither the Estate nor Ms. Moore on the Estate's behalf have conducted any business in Maryland that would confer personal jurisdiction in this Court. For the reasons explained below, I agree that there is no in rem jurisdiction in this case. I do find, however, that the Court has personal jurisdiction over Mr. Moore's Estate and therefore deny the Defendants' Motions to Dismiss.

I. This Court does not have in rem jurisdiction over the Estate.

Beltway asserts in its Second Amended Complaint that the Court “has in rem jurisdiction of the subject insurance policy and its proceeds as the insurance policy was issued in the state of Maryland, to an owner who at the time resided and transacted business in the state of Maryland,

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with premiums paid by a company operating in the state of Maryland, with an intended beneficiary that operated in the State of Maryland.” SAC ¶ 3. Beltway misunderstands how in rem jurisdiction operates.

Whether a court has in rem jurisdiction over disputed property is a simple question. Kortobi v. Kass, 957 A.2d 1128, 1132 (Md.App. 2008), aff'd, 978 A.2d 247 (Md. 2009). “To exercise in rem jurisdiction over a res, the court must have the res within its jurisdiction.” R.M.S. Titanic, Inc. v. The Wrecked & Abandoned Vessel, 435 F.3d 521, 529 (4th Cir. 2006). Here, the res in question is the proceeds of the Policy, which the parties do not dispute were paid to the Estate in Florida. Because the res at issue in this case in not within the Court's territorial jurisdiction, the Court lacks in rem jurisdiction to adjudicate the parties' rights with respect to the Policy proceeds.

II. Personal jurisdiction

The Defendants argue next that the Court lacks personal jurisdiction over Mr. Moore's Estate. The Defendants reason that Beltway has not alleged “that the Estate has any contacts with Maryland” or “that any of the Estate business was performed on behalf of the Estate in Maryland.” Estate MTD at 5; Pruco MTD at 6 (adopting the Estate's...