Equitable Life Assur. Soc. of the U.S. v. McKay

• Decision Date: 08 November 1988
• Docket Number: No. 86-3614,86-3614
• Parties: The EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES, Plaintiff, and Carolyn McKay, a Washington resident, Defendant-Appellant, v. Harlan David McKAY, Jr., Dana Williford, and Marjorie N. McKay, as guardian for Sean Michael McKay, Oregon residents, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 221

861 F.2d 221

The EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES, Plaintiff, and Carolyn McKay, a Washington resident, Defendant-Appellant, v. Harlan David McKAY, Jr., Dana Williford, and Marjorie N.

McKay, as guardian for Sean Michael McKay, Oregon

residents, Defendants-Appellees.

No. 86-3614.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Sept. 9, 1987.

Decided Nov. 8, 1988.

James A. Trujillo, Bellevue, Wash., for defendant-appellant.

Daniel E. McCabe, Aloha, Or., for defendants-appellees.

Appeal from the United States District Court for the District of Oregon.

Before WRIGHT, WALLACE and PREGERSON, Circuit Judges.

PREGERSON, Circuit Judge:

The Equitable Life Assurance Society of the United States ("Equitable Life") brought this interpleader action to determine the beneficiary of two life insurance policies purchased by the decedent, David McKay. The United States District Court for the District of Oregon granted summary judgment in favor of McKay's children and against his widow, Carolyn McKay, on the ground that the Washington Deadman's Statute, Wash.Rev.Code Ann Sec. 5.60.030 (West Supp.1988), ¹ required the exclusion of all testimony favorable to Carolyn McKay. Carolyn McKay appeals. We affirm in part and reverse in part.

On January 21, 1988, we issued an Opinion and Order setting forth the history of this case. Equitable Life Assurance Soc'y v. McKay, 837 F.2d 904 (9th Cir.1988). Briefly, the relevant legal background is as follows. We determined that the United States District Court for the District of Oregon was required to apply Washington substantive law and Oregon procedural law to resolve the case. The district court applied the Washington Deadman's Statute to exclude the only testimony that could have raised triable issues of fact. Id. at 905.

Our Opinion and Order noted that a decision to affirm or reverse the district court's grant of summary judgment turns first on whether, under Oregon law, the Washington Deadman's Statute is substantive or procedural. If the Washington statute is substantive, then the district court properly used it to exclude testimony favorable to Carolyn McKay because the court was required to apply Washington substantive law. If the Washington statute is procedural, then the district court erred in using it to exclude the testimony in question because the court should have applied Oregon procedural law. Until the issue of admissibility was resolved, we were not in a position to decide whether the testimony favorable to Carolyn McKay would have raised triable issues of fact. Id. at 905-06.

Neither Washington courts, Oregon courts, nor the Ninth Circuit had ruled on whether a deadman's statute is substantive or procedural. We therefore decided to certify the question to the Oregon Supreme Court pursuant to Oregon's Uniform Certification of Questions of Law Act, Or.Rev.Stat. Secs. 28.200 to .255 (1987). Id. at 906.

The Oregon Supreme Court held that the Washington Deadman's Statute is procedural under Oregon law. Equitable Life Assurance Soc'y v. McKay, 306 Or. 493, 760 P.2d 871 (1988). The Court noted that the Restatement (Second) of Conflict of Laws states that

A court usually applies its own local law rules prescribing how litigation shall be conducted even when it applies the local law rules of another state to resolve other issues in the case.

306 Or. at 497, 760 P.2d 871 (quoting Restatement (Second) of Conflict of Laws Sec. 122 (1969)) (emphasis added). There are two reasons underlying this rule. First, it would be a burden on the forum state's court to apply another forum's rules of judicial administration. Second, parties are unlikely to have relied on the rules of judicial administration in shaping their conduct. "Thus, while the forum state has an interest in its own administration of justice, states with substantive policy regarding the obligations of the parties are unlikely to expect the procedural rules of their own courts to be followed in another state's forum." 306 Or. at 497, 760 P.2d 871; see also Restatement (Second) of Conflict of Laws Sec. 122 comment a.

The Oregon Supreme Court then observed that rules governing the admissibility of evidence generally are viewed as relating to the administration of justice. 306 Or. at 498, 760 P.2d 871. Section 137 of the Restatement (Second) of Conflict of Laws states that,

The local law of the forum determines what witnesses are competent to testify and the considerations that may affect their credibility.

Id. (quoting Restatement (Second) of Conflict of Laws Sec. 137). On this basis, the Oregon Supreme Court concluded that evidentiary statutes, such as the Washington Deadman's Statute, are procedural rather than substantive. 306 Or. at 498, 760 P.2d 871. The Oregon Supreme Court's holding is consistent with other decisions in this area.

In Hortman v. Henderson, 434 F.2d 77 (7th Cir.1970), the Seventh Circuit applied the Illinois Deadman's Statute in a case filed in Illinois in which Missouri law controlled. The court thereby implied that a deadman's statute is procedural and not substantive law. The court stated:

While the substantive law of the State of Missouri was controlling on the district court in the trial, the matter of competency of the witness to testify has to be determined under the rules of evidence applied in the courts of general jurisdiction of the state in which the United States court is held.

Id. at 80. Because it applied Missouri substantive law, the court clearly applied the Illinois Deadman's Statute as a procedural rule of the forum state in which the district court sat. See also Cervantes v. Time, Inc., 464 F.2d 986, 989 n. 5 (8th Cir.1972) ("Missouri seemingly adheres to the generally accepted principle that the admissibility of evidence is governed by the law of the State where the testimony is to be heard."), cert. denied, 409 U.S. 1125, 93 S.Ct. 939, 35 L.Ed.2d 257 (1973); Turbyfill v. International Harvester Co., 486 F.Supp. 232, 235 (E.D.Mich.1980) (the admissibility of evidence is a procedural question).

Pursuant to the Oregon Supreme Court's answer to our certified questions, Oregon law, rather than the Washington Deadman's Statute, should have governed the admissibility of the testimony favorable to Carolyn McKay. There is no doubt that under Oregon law the testimony in question would have been admitted. The Oregon Supreme Court stated that "Oregon has adopted a liberal standard for determining who may testify." Equitable 306 Or. at 498, 760 P.2d 871. Under the Oregon Evidence Code,

Except as provided in ORS 40.310 to ORS 40.335, any person who, having organs of sense can perceive, and perceiving can make known the perception to others, may be a witness.

Or.Rev.Stat. Sec. 40.310 (1987). The testimony of Carolyn McKay and the decedent's insurance agent, Michael Gajadhar, met this standard. Assuming the testimony should have been admitted, we now discuss whether a material issue of fact remains for trial.

In determining whether to grant summary judgment "the judge's function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 2511,...