Bennett v. Bennett-Harper

• Decision Date: 17 November 2011
• Docket Number: CAUSE NO.: 2:10-CV-247-PRC
• Parties: VIVIAN M. BENNETT, Third-Party Plaintiff, v. LYNDA BENNETT-HARPER, Third-Party Defendant. VIVIAN M. BENNETT, Cross Claimant, v. BREONNA E. AGNEW, Cross Defendant.
• Court: U.S. District Court — Northern District of Indiana

VIVIAN M. BENNETT, Third-Party Plaintiff,

v.LYNDA BENNETT-HARPER, Third-Party Defendant.

VIVIAN M. BENNETT, Cross Claimant,

v.BREONNA E. AGNEW, Cross Defendant.

CAUSE NO.: 2:10-CV-247-PRC

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF INDIANA HAMMOND DIVISION

Dated: November 17, 2011

OPINION AND ORDER

This matter is before the Court on a Motion for Summary Judgment [DE 44], filed by Third-Party Plaintiff/Cross Claimant Vivian M. Bennett on August 9, 2011. For the reasons set forth in this Opinion, the Court grants in part and denies in part the motion.

PROCEDURAL BACKGROUND

Midland National Life Insurance Company ("Midland National") filed its Complaint for Interpleader Relief against Breonna E. Agnew ("Ms. Agnew") and Vivian M. Bennett ("Mrs. Bennett") with this Court on June 18, 2010. That same date, Chief Judge Philip P. Simon granted Midland National's motion for leave to deposit its admitted liability in the amount of $46,192.36 with the Clerk of Court.

On August 23, 2010, Ms. Agnew filed an Answer to the Complaint. She also filed a Counterclaim for Declaratory Relief and Request for Hearing on the Merits against Midland National.

On September 13, 2010, Midland National filed an Answer to Ms. Agnew's Counterclaim.

On September 17, 2010, Mrs. Bennett filed an Answer to Midland National's Complaint for Interpleader Relief, a Crossclaim against Ms. Agnew, and a Third-Party Complaint against Lynda Bennett-Harper ("Ms. Bennett-Harper"). In the Crossclaim/Third-Party Complaint Mrs. Bennett alleges that Ms. Bennett-Harper and Ms. Agnew colluded in an attempt to obtain the proceeds of Sylvester Bennett, Jr.'s ("Mr. Bennett") life insurance policy, that Ms. Bennett-Harper breached her fiduciary duty as the attorney-in-fact under the Power of Attorney executed by Mr. Bennett, and that Ms. Bennett-Harper acted in bad faith and dishonestly. Mrs. Bennett seeks a finding that she is the proper beneficiary under the Policy and an award of attorney fees and costs, compensatory damages, and punitive damages.

Ms. Agnew and Ms. Bennett-Harper (jointly "Defendants") filed a response to Mrs. Bennett's Crossclaim and Third-Party Complaint on October 6, 2010.

On July 11, 2011, Chief Judge Simon granted Midland National's motion for a final decree of interpleader and dismissed Midland National from the present lawsuit, with prejudice, including dismissal of Ms. Agnew's Counterclaim against Midland National.

Mrs. Bennett, as Cross Claimant and Third-Party Plaintiff, filed the instant Motion for Summary Judgment on August 9, 2011, a Brief in Support, and the Insurance Claim File. Ms. Agnew and Ms. Bennett-Harper filed a joint response in opposition on September 7, 2011. Mrs. Bennett filed a reply brief on October 5, 2011.

The parties filed forms of consent to have this case assigned to a United States Magistrate Judge to conduct all further proceedings and to order the entry of a final judgment in this case. Therefore, this Court has jurisdiction to decide this case pursuant to 28 U.S.C. § 636(c).

MATERIAL FACTS

Midland National is a corporation organized and incorporated in the State of Iowa and has its principal place of business in South Dakota. Mr. Bennett was a resident of Hazelwood, Missouri. At all relevant times, Mrs. Bennett, the Cross Claimant/Third-Party Plaintiff, was a citizen and resident of Portage, Indiana. At all relevant times, Ms. Bennett-Harper, the Third-Party Defendant, was a citizen and resident of Hazelwood, Missouri. Ms. Agnew, the Cross Defendant, is a citizen and resident of St. Louis County, Missouri. Ms. Bennett-Harper is Mr. Bennett's daughter from a previous marriage and is the step-daughter of Mrs. Bennett.

On February 21, 1986, Continental Western Life Insurance Company issued Policy No. 287727, insuring Mr. Bennett with a $100,000 death benefit. At the date of issue, the primary beneficiary of the policy was Mr. Bennett's wife, Mrs. Bennett. Midland National subsequently assumed Continental Western Life Insurance Company's Policy No. 287727 and renumbered it as Midland National's life insurance policy No. 1700852162 ("Policy").

On December 21, 2007, the Policy's death benefit was decreased to $50,000. The total amount of life insurance proceeds at issue is $46,192.36, which represents the $50,000 life insurance policy death benefit minus an outstanding policy loan of $5455.18, plus interest in the amount of $1647.54.

On September 29, 2009, Mr. Bennett executed a General Durable Power of Attorney for Sylvester Bennett, appointing his daughter Ms. Bennett-Harper as his attorney-in-fact. The Power of Attorney provides that both Mr. Bennett and Ms. Bennett-Harper were residents of Missouri at the time. The Power of Attorney provides that it is a "Durable Power of Attorney with general powers in reliance upon and in accordance with the provisions of the Durable Power of AttorneyLaw of Missouri." Pl. Reply, Exh., p. 1. The Power of Attorney then specifically enumerates fifteen "express subjects or purposes with respect to which my attorney-in-fact is authorized to act:"

1. To receive into her possession any and all items of personal property and effects that may be recovered from or about my person by any hospital, police agency, or any other person at the time of any illness or disability.

2. To deposit funds into or withdraw funds from any account which I have at any financial institution, and to sign or endorse in my name any documents or instruments to effect such deposits or withdrawal.

3. To deposit funds into or to withdraw funds from any annuity, pension, or individual retirement account which I own or in which I have an interest.

4. To buy, sell, endorse, transfer, or borrow against any shares of stock, treasury notes, bonds, or securities.

5. To purchase, agree to purchase, mortgage, encumber, sell, agree to sell, convey, agree to convey, quit claim or otherwise dispose of any personal or real property, and to sign all documents and contracts necessary to effectuate same.

6. To apply for government and insurance benefits.

7. To do all acts necessary to prepare and file income tax returns as they are due.

8. To ask, demand, sue for, recover, collect and receive all sums of money, debts, dues, accounts, legacies, bequests, interest, dividends, annuities, and demands as are now or shall hereafter become due, owing, payable, or belonging to me and to take all lawful actions to recover same, and to compromise and to give discharges for the same.

9. To enter into any safe deposit box rented by me or hereafter rented by me or for me or on my behalf, for the purpose of depositing therein or withdrawing therefrom any personal property, jewelry, money, documents, papers or securities, or other similar items.

10. To borrow money on my behalf, and to secure such loans with the deposit of collateral, security agreements or mortgages, and to execute necessary notes, mortgages, deeds of trust, assignments and other instruments required in conjunction with any such loans.

11. To employ, retain, hire, and pay for from my funds, and discharge, when necessary, an attorney at law, for counsel, advice, representation, and litigation, when necessary for discharge of powers and authority granted to my attorney-in-fact by this document.

12. To hire and pay for from my funds the services of professional advisors, including, but not limited to, physicians, accountants and investment counselors, on my behalf and for my welfare.

13. To substitute and appoint from time to time a sub-attorney or sub-attorneys and said sub-attorney or sub-attorneys to have the same or, at the option of said attorney, more limited powers than the attorney-in-fact hereby appointed.

14. To execute all necessary instruments and to perform all necessary acts required for the execution and implementation of the foregoing powers.

15. To make any [sic] all decisions regarding healthcare, medical treatment, ventilators, and feeding tubes in the event I become incapacitated.

Id. The Power of Attorney further provides that it shall be governed by and construed in accordance with the laws of the State of Missouri.

Mr. Bennett, who suffered from peripheral T-cell lymphoma, was hospitalized in January 2010 at Barnes-Jewish Hospital in St. Louis, Missouri.

On January 18, 2010, Ms. Bennett-Harper submitted a beneficiary change request to Midland National, changing the primary beneficiary to herself and requesting to receive 100% of the proceeds from Mr. Bennett's life insurance Policy. Also on January 18, 2010, Ms. Bennet-Harper sent the Durable Power of Attorney form signed on September 29, 2009, naming Ms. Bennett-Harper as Mr. Bennett's attorney-in-fact.

On January 19, 2010, Ms. Bennett-Harper submitted another beneficiary change request to Midland National. This time, Ms. Bennett-Harper requested that the primary beneficiary be changed to her daughter, Ms. Agnew, and requested that Ms. Agnew would receive 100% of the proceeds from Mr. Bennett's life insurance Policy.

On January 20, 2010, Midland National sent Mr. Bennett a letter confirming receipt of the change request made by Ms. Bennett-Harper.

On January 22, 2010, Mr. Bennett died at Barnes-Jewish Hospital in St. Louis, Missouri.

Subsequently, Ms. Agnew filed a "Proof of Death Claimant's Statement" to Midland National dated March 30, 2010, submitting proof of Mr. Bennett's death and claiming her interest in the Policy proceeds. On April 27, 2010, Midland National sent a letter to Ms. Agnew, advising that Midland National was unable to continue processing her claim due to a review of the beneficiary change signed on January 19, 2010, by Ms. Bennett-Harper. Midland National wrote:

We have advised her (Ms. Bennett-Harper) that it is our understanding that under the Missouri Statute regarding Durable Power of Attorney, she has the authority to act only on the specific subjects or purposes expressed in the power of attorney. Therefore, since the right to change the beneficiary was not expressly listed, the beneficiary

...