Gander v. Gander

• Decision Date: 12 January 2001
• Docket Number: No. 00-2173,00-2173
• Citation: 250 F.3d 606
• Parties: (8th Cir. 2001) CHRISTIAN LEE GANDER AND MELISSA RENEE GANDER, APPELLEES, v. HAROLD RAY GANDER, ET AL., APPELLEES, v. ANTHONY LIVOTI, JR., P.A., AND LAIRD MCMAHEN, APPELLANTS. Submitted:
• Court: U.S. Court of Appeals — Eighth Circuit

Page 606

250 F.3d 606 (8th Cir. 2001)

CHRISTIAN LEE GANDER AND MELISSA RENEE GANDER, APPELLEES, v. HAROLD RAY GANDER, ET AL., APPELLEES, v. ANTHONY LIVOTI, JR., P.A., AND LAIRD MCMAHEN, APPELLANTS.

No. 00-2173

UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT

Submitted: January 12, 2001

Filed: May 14, 2001

Appeal from the United States District Court for the Eastern District of Missouri

[Copyrighted Material Omitted] Before Loken and Heaney, Circuit Judges, and Bataillon, ¹ District Judge.

Bataillon, District Judge

Appellants, Anthony Livoti, Jr., and Laird McMahen, appeal from the district court's findings in favor of Appellees, Christian and Melissa Gander. After careful review of the record, we affirm the district court. Jurisdiction is invoked pursuant to 29 U.S.C. 1144(a), ERISA 514(a).

Facts

A decree of dissolution was entered in 1988 between Harold and Deborah Gander, parents to Christian and Melissa Gander. Paragraph 10 of the Separation Agreement contained a clause that required Harold Gander to maintain a policy of insurance on Deborah. That clause stated:

Respondent [Harold Gander] agrees to keep in force a $75,000 insurance policy on his life with Petitioner [Deborah Gander] as sole beneficiary. Respondent agrees to keep in force a $2,500.00 life insurance policy on the life of each minor child with Petitioner as beneficiary.

In 1992 the agreement was modified. Both Deborah and Harold agreed that the insurance money would be held in trust for their two children, Melissa and Christian Gander. That modification as set forth in Articles 8 and 9 states:

Petitioner [Deborah Gander] agrees that any and all sums received from the $75,000.00 life insurance policy in effect on Respondent's [Harold Gander's] life shall be held in trust for the benefit of the parties' children, Melissa Renee Gander and Christian Lee Gander, and said sums are to be used for the equal benefit of the children. Any and all such sums remaining after the youngest child reaches the age of 25 shall be divided equally between the children. Petitioner agrees to provide a yearly accounting to Bruce Edward Gander, Respondent's brother, for how any and all such sums are expended. Respondent shall provide to Petitioner proof of insurance and beneficiary designation within 15 days of this agreement.

Respondent recognizes and releases Petitioner from any liability and responsibility should the $75,000.00 life insurance policy presently in effect be cancelled through no fault of Respondent; provided, however, that Respondent shall exercise any available right to continue said life insurance and keep it in effect (including, but not limited to, any COBRA rights.)

Harold Gander was an employee of Barnes Jewish Christian Center. ITT Hartford was the policyholder for Barnes Jewish Christian Center. Harold Gander maintained a life insurance policy through his employer with ITT Hartford in the amount of $75,000.00.

However, on or about June 20, 1996, Harold Gander assigned his rights in the policy to Anthony Livoti. This agreement, known as a viatical agreement or viatication, resulted in a payment of cash to Harold Gander. ²

On July 2, 1996, Livoti named Laird McMahen as a beneficiary under this policy. Also, on June 20, 1996, Christian Gander signed a release/consent to permit the change of beneficiary. Harold Gander signed a release on behalf of his minor daughter, Melissa Gander. The validity of these releases will be discussed herein. On May 27, 1998, Melissa and Christian Gander filed suit asking for a declaration of their rights under the insurance policy.

The district court ordered that plaintiffs, Christian and Melissa Gander, are the sole joint beneficiaries of the ITT Hartford Policy No. OGL-205634 and would receive the entire proceeds of said policy upon the death of their father, Harold Gander. Further, the district court ordered that any and all documents which conflict with its court order regarding the sole joint ownership by Christian and Melissa Gander of the policy in question are void and unenforceable. The district court further awarded attorney's fees and costs.

Discussion

A. District Court Hearing

During a status hearing, both parties agreed to submit the case to the court on the basis of the briefs and affidavits. However, after reviewing the same, the court chose to order a hearing and to allow Deborah Gander to testify as a witness on the issue of intent with regard to both the 1988 and 1992 decree/modification. The district court allowed this evidence because it determined that the settlement agreement was ambiguous.

Livoti and McMahen contend that the district court erred in holding an evidentiary hearing once the parties agreed to submit the case on the basis of briefs and affidavits. They argue that fairness dictates that the court enforce the agreement of the parties to so submit the case. Christian and Melissa Gander argue that the court has discretionary authority pursuant to Fed. R. Civ. P. 16(a) to order the hearing.

The law is clear that stipulations of law are not binding on the court. Sanford's Estate v. Comm'r. of IRS, 308 U.S. 39, 51 (1939); Harbor Ins. Co. v. Essman, 918 F.2d 734, 738 (8th Cir. 1990); Minneapolis Brewing Co. v. E. B. Merritt, 143 F. Supp. 146, 149 (D.N.D. 1956). However, stipulations by the parties regarding questions of fact are conclusive. Burstein v. United States, 232 F.2d 19, 23 (8th Cir. 1956). Trial courts are bound by the facts established by the stipulation. Id. Valid stipulations are controlling and conclusive, and courts must enforce them. Id.; 83 C.J.S., Stipulations, 12, p. 30. Courts cannot make contrary findings. H. Hackfield & Co. v. United States, 197 U.S. 442, 447 (1905). It appears that the parties agreed that they would submit affidavits and briefs to the court. However, nothing is set forth in the record before us that would indicate that a stipulation of facts exists. There might have been some tacit agreement at the status conference, but there is no record of what the parties stipulated to in terms of the facts of this case. Consequently, we find that there exists no stipulation that would be binding on the district court so as to preclude the taking of additional evidence.

B. Extrinsic Evidence

Livoti and McMahen argue that the settlement agreement and 1992 modification were unambiguous, so no extrinsic evidence was needed. Parole evidence, they argue, was inappropriate in this case. They contend that the 1992 modification did not require Harold to name Melissa and Christian as beneficiaries under the policy. Instead, they argue, the settlement agreement required that the policy be maintained for the benefit of the ex-wife, Deborah, not the children. Melissa and Christian Gander argue that Deborah Gander's testimony on intent was permissible, as the contract was clearly ambiguous. Paglin v. Saztec International, Inc., 834 F. Supp. 1184, 1192 (W.D. Mo. 1993).

The district court concluded that the language of the settlement agreement and the decree of modification were ambiguous on the issue of whether the documents require Harold Gander to maintain the $75,000.00 life insurance policy with his children as the beneficiaries. Like the district court, we conclude that an ambiguity exists. The settlement agreement clearly stated that Deborah Gander was to be the beneficiary. However, the decree of modification lists Deborah Gander as beneficiary, but requires that Deborah Gander use the proceeds for the benefit of the children. She is required to account for all monies spent to Harold Gander's brother, Bruce Gander. We agree that under these circumstances extrinsic evidence is permissible. John Morrell & Co. v. Local Union 304A, 913 F.2d 544, 551 (8th Cir. 1990) (extrinsic evidence cannot be used to contradict intentions of the parties, but it can be used to demonstrate the ambiguity).

The district court ordered a hearing and allowed Deborah Gander to testify as to the parties' intentions in these agreements. She testified that under the decree of modification, it was the intention of Harold Gander to make the children the beneficiaries of the life insurance proceeds. Harold's brother was to oversee the accounting and assure that both children were treated equally. Deborah Gander was no longer a beneficiary under the policy, which is further substantiated by the elimination of the maintenance payments to her as set forth in the 1992 modification. We agree with the district court that the language of the 1992 modification of decree and the testimony of Deborah Gander support an interpretation that the beneficiaries under this modification were intended to be Christian and Melissa Gander.

C. Specific Policy of Insurance

The Appellants next argue that there exists no evidence identifying a "specific" policy of insurance that Harold Gander was required to maintain on his two children. Melissa and Christian Gander argue that Deborah Gander specifically testified that the policy was for their benefit, and the only policy Harold Gander maintained was the one through his work at Barnes Jewish Christian Center.

Livoti and McMahen argue that the requirement of a "general policy of insurance" is not sufficient to establish a vested right in the policy on Melissa and Christian. Prudential Insurance v. Gibson 421 S.W.2d 26, 33 n.3 (Mo. Ct. App. 1967). Because we have concluded that extrinsic evidence was permissible in this case, it was also permissible for the district court to determine which policy flowed to the benefit of Melissa and Christian Gander. Principal Mutual Life Ins. Co. v. Karney, 5 F. Supp. 2d 720, 729-39 (E.D. Mo. 1998). Deborah Gander testified that the only policy in effect at the time of the settlement agreement was the one through Harold Gander's employment; that the insurance and trust were created for the children, Christian and Melissa; and that Christian and Melissa were to be the beneficiaries of this policy. No...