Conseco Life Ins. Co. v. Williams

• Decision Date: 03 September 2010
• Docket Number: No. 09-2869.,09-2869.
• Citation: 620 F.3d 902
• Parties: CONSECO LIFE INSURANCE COMPANY, Plaintiff-Appellee, v. Eric WILLIAMS, individually and in his capacity as executor of the Estate of Nikki Williams, Deceased, Defendant-Appellant, Ellen Buckley, Defendant-Appellee, Harold Williams, Defendant-Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

620 F.3d 902

CONSECO LIFE INSURANCE COMPANY, Plaintiff-Appellee,

v. Eric WILLIAMS, individually and in his capacity as executor of the Estate of Nikki Williams, Deceased, Defendant-Appellant,Ellen Buckley, Defendant-Appellee,Harold Williams, Defendant-Appellant.

No. 09-2869.

United States Court of Appeals,Eighth Circuit.

Submitted: June 16, 2010.

Filed: Sept. 3, 2010.

Guy Randolph Satterfield, argued, Little Rock, AR, for Plaintiff-Appellee.

Christopher O. Parker, argued, Richard L. Ramsay, on the brief, Little Rock, AR, for Defendant-Appellant.

Before MELLOY, HANSEN, and SMITH, Circuit Judges.

SMITH, Circuit Judge.

Conseco Life Insurance Company (“Conseco”) issued a life insurance policy (“policy”) to Niki Williams ¹ (“Niki”), who died following a battle with cancer. Niki's sister, Ellen Buckley, the named beneficiary, and Niki's sons, Eric and Harold Williams (collectively, “appellants”), the prior beneficiaries, both claimed the proceeds of the policy. Conseco interpled the $100,000 insurance proceeds pending the district court's ² resolution of the dispute. Buckley claimed that she, using a power of attorney, ultimately named herself beneficiary of the policy at Niki's behest. The appellants denied this and claimed that Buckley used undue influence to procure the policy change. Both sides filed cross summary judgment motions. The district court granted Buckley's motion based on witness affidavits, the record, and the holding of Primerica Life Ins. Co. v. Watson, 362 Ark. 54, 207 S.W.3d 443 (2004). The appellants appeal, arguing that the district court abused its discretion in applying the Primerica hearsay exception to allow certain affidavits to come in as evidence to determine Niki's intent and erred in granting summary judgment while material disputed facts remain. For the reasons stated below, we affirm.

I. Background

On August 15, 1994, Niki applied for a life insurance policy with Conseco, requesting $100,000 and naming her sons Eric Williams (“Eric”) and Harold Williams as primary beneficiaries of the policy. Niki subsequently developed breast cancer and underwent treatment from October 2005 through the beginning of March 2006. Following her discharge from the hospital Niki lived with Eric until March 28, 2006. On March 28, following a disagreement between Eric and Niki, Eric returned Niki to the house that she owned with her boyfriend. Niki lived at her house in April 2006. Sometime in early May, Niki was briefly hospitalized and upon release Niki lived at Buckley's house until Niki's death on June 18, 2006.

Prior to Niki's death, Buckley and Niki took several steps ultimately designed to change the beneficiary of Niki's policy from the appellants to Buckley. First, Buckley asked Niki's insurance agent, Jarvis Thorn, for instructions on how to properly change the beneficiary designation. Conseco subsequently sent Buckley a change in ownership form. Niki, however, allegedly had limited use of her extremities and could not sign the form. Conseco would not permit the insurance forms to be signed with an “X.” On the advice of Conseco, Niki executed a power of attorney (POA) in favor of Buckley. This POA allowed Buckley to change the ownership of the policy, which then empowered Buckley to change the beneficiary designation of the policy from her nephews to herself.

Niki executed the POA naming Buckley as her attorney-in-fact on May 13, 2006. Buckley's daughter, Sherita Smith, and Dr. William L. Rutledge witnessed Niki's execution of the POA. Buckley, using this POA, then changed the ownership of the policy from Niki to herself on May 19, 2006. Conseco received the change of ownership form on May 24, 2006, and subsequently approved the change in writing. On June 5, 2006, Buckley, as owner of the policy, then changed the beneficiary designation from the appellants to Buckley. Conseco received the change-in-beneficiary form on June 7, 2006, and later approved the change.

On June 18, 2006, Niki died. On July 17, 2006, Conseco received a claim from Buckley for the proceeds of the policy. Conseco also received a written demand from the appellants not to pay Buckley the proceeds. By letter dated August 8, 2006, Conseco informed Buckley that the current beneficiary of record on the insurance policy was not valid under Arkansas law, citing Arkansas Code Annotated § 28-68-410. ³ Buckley contends Conseco relied upon this statute in error, however, because Buckley did not use her POA to make herself beneficiary; rather, she used the POA to change ownership, which is permitted under Arkansas law. Then, as owner, she properly changed the beneficiary.

According to Buckley, before her death Niki expressed to several people her desire to change the policy beneficiary designation from the appellants to Buckley. In support of her summary judgment motion, Buckley submitted three affidavits-from Robert McGruder, Shelton Pitre, and Thorn-to support Buckley's contention that Niki desired the change in beneficiary.

According to his affidavit, Pitre (Niki's boyfriend) stated that the appellants “were very neglectful to their mother and had treated her dismissive [sic] for many years.” He stated that Buckley was Niki's only sibling and that Niki told him “that she wanted to name Ellen Buckley as beneficiary of her life insurance policy and that under no circumstances were her sons, Eric Williams and Harold Williams, to receive any of this money.” Pitre also stated that Niki told him that Eric “had become irate and very angry with her because she was not going to change her will to make him beneficiary so Eric dropped her off at her house with her clothes in a garbage bag.” Pitre testified that the appellants were notified that Niki was near death and yet neither came to see her before she died.

Similarly, McGruder, who represented that he had known Niki for many years, asserted in his affidavit that Niki expressly stated to him that she was embarrassed about the way the appellants had treated her for many years. Niki told McGruder that she had tried to live with Eric following her discharge from the hospital in March 2006 but that Eric constantly badgered her to change her will and to sign over all her property to her sons. McGruder stated that he always told Niki not to tell the appellants that she intended to change her policy beneficiary for fear of them becoming angry and retaliating against her. McGruder reported that Niki told him that Eric became irate and very angry about her not changing her will. McGruder testified that Eric took her in his car over to her house and dropped her off with her clothes in a garbage bag. Finally, McGruder stated that after the March 2006 incident with Eric, Niki called and told him “that she for sure was going to change the beneficiary on her life insurance [policy] to Ellen Buckley.”

Thorn's affidavit stated that he recalls having a conversation with Niki in April 2006 and that she requested that her beneficiary be changed on her policy to Buckley “because her son had given her many problems and did not take care of her.” Thorn testified that Niki's voice was well known to him and that she sounded alert and intelligent at the time she made the declaration.

The appellants moved for summary judgment on grounds that the POA does not state that Niki intended, or even knew, that Buckley would acquire Niki's $100,000 insurance proceeds and that absent express intention an agent may not utilize her position for her personal benefit in a substantially gratuitous transfer.

Buckley filed a cross motion for summary judgment with the supporting affidavits of Thorn, Pitre, and McGruder attached. Buckley argued that she changed ownership of Niki's policy to herself using the POA according to the express wishes of Niki. Once she obtained ownership of the policy, Buckley contended, she named herself beneficiary of the policy not as an agent of Niki but in her own capacity as owner of the policy, which is not prohibited by law.

The district court granted Buckley's motion for summary judgment finding that-based in part on the affidavits-Niki intended to change the beneficiary and there was no evidence of overreaching; the appellants failed to meet Buckley's proof with proof because mere suspicions were not evidence; the appellants' rebuttal was illogical; and there was no evidence that Niki was incompetent.

II. Discussion

On appeal, the appellants argue that the district court erred in granting summary judgment to Buckley for two primary reasons. First, the appellants contend that the district court abused its discretion by admitting and crediting the affidavits that Thorn, Pitre, and McGruder submitted. The appellants argue that these affidavits are impermissible parol evidence and therefore not competent evidence to overcome Buckley's presumption of overreaching beyond a reasonable doubt. The appellants seek to distinguish the holding in Primerica, which addressed the issue of whether such parol evidence may be admitted. See 207 S.W.3d at 447-48. The parties disagree sharply about the precise meaning of the Primerica holding.

Buckley asserts that the holding of Primerica is directly on point and controlling. Relying upon that holding, Buckley asserts that Niki made statements to many people indicating her intention to change the beneficiary designation from her sons to Buckley, as evidenced by the admissible affidavits. Buckley contends that the district court properly admitted the statements that Niki made indicating her intention to change her life insurance policy as a hearsay exception pursuant to Primerica. Second, the appellants argue that disputed facts remain, making summary judgment improper.

We review summary judgment motions de novo. Johnson v. AT & T Corp., 422 F.3d 756, 760 (8th Cir.2005). “Summary judgment is proper if the evidence, viewed in the light most favorable to the nonmoving party, demonstrates that no genuine issue of material fact exists and the moving pa...