Hardy v. Hardy

• Citation: 942 N.E.2d 838
• Decision Date: 22 June 2011
• Docket Number: No. 51A01–1005–PL–248.,51A01–1005–PL–248.
• Parties: Phyllis HARDY, Alax Ketih Furnish, and Megan Jessica Furnish, by next friend Phyllis Hardy, Appellants,v.Mary Jo HARDY, Appellee.
• Court: Court of Appeals of Indiana

942 N.E.2d 838

Phyllis HARDY, Alax Ketih Furnish, and Megan Jessica Furnish, by next friend Phyllis Hardy, Appellants,

v.Mary Jo HARDY, Appellee.

No. 51A01–1005–PL–248.

Court of Appeals of Indiana.

Jan. 25, 2011.Transfer Granted June 22, 2011.

Benjamin L. Niehoff, Andrews Harrell Mann Carmin & Parker, P.C., Bloomington, IN, Attorney for Appellants.Brad L. Rigby, Rigby Law Office, Huntingburg, IN, Attorney for Appellee.

OPINION

BROWN, Judge.

Phyllis Hardy, Alax ¹ Furnish, and Megan Furnish, by next friend Phyllis Hardy, (collectively, the “Plaintiffs”) appeal the trial court's grant of Mary Jo Hardy's motion for summary judgment and the court's denial of their motion for summary judgment. The Plaintiffs raise two issues, which we revise and restate as whether the court erred in granting Mary Jo's motion for summary judgment and in denying the Plaintiffs' motion for summary judgment. We affirm.

The relevant facts as designated by the parties follow. Carlos and Phyllis Hardy were married on December 28, 1967. Carlos worked at NSWC Crane and had a life insurance policy with Federal Employees' Group Life Insurance (“FEGLI”) through his employer.²

On February 5, 1998, the Ripley Circuit Court entered a decree of dissolution of marriage. The decree stated:

IT IS FURTHER ORDERED BY THE COURT that Carlos Hardy shall maintain the Met Life Insurance Policy which has been held during the marriage. Phyllis Hardy and the parties' grandchildren shall each be designated as equal beneficiaries of the policy. Phyllis Hardy shall continue to maintain the life insurance which she has held during the marriage.... Neither party shall change any of the life insurance coverage on either policy.

Appellants' Appendix at 47. The decree also incorporated a Property Settlement Agreement which stated in part:

IT IS FURTHER STIPULATED AND AGREED BETWEEN THE PARTIES that Carlos Hardy shall maintain the Met Life Insurance Policy which has been held during the marriage. Phyllis Hardy and the parties' grandchildren shall each be designated as equal beneficiaries of the policy. Phyllis Hardy shall continue to maintain the life insurance which she has held during the marriage. Carlos Hardy and the parties' grandchildren shall each be named equal beneficiaries of that policy. Neither party shall change any of the life insurance coverage on either policy.

Id. at 50. The MetLife policy mentioned in the Property Settlement Agreement was actually the FEGLI policy.³

On September 29, 2000, Carlos and Mary Jo were married. On October 4, 2000, Carlos designated Mary Jo as the named beneficiary on his FEGLI policy by submitting a Designation of Beneficiary form. On September 17, 2007, the Martin Circuit Court entered a decree of dissolution of the marriage between Carlos and Mary Jo. The decree incorporated a Contract and Agreement, which stated:

9. LIFE INSURANCE: That each of the parties hereto shall be awarded any and all life insurance policies which he or she has securing his or her own respective life. That each party shall execute any documents necessary to remove his or her name as beneficiaries from each other's respective life insurance policies.

Id. at 56.

Carlos died on August 9, 2008. At that time, Carlos and Phyllis had two grandchildren: Alax Furnish and Megan Furnish. The insurance coverage of the FEGLI policy totaled $98,000.00. Mary Jo was the named beneficiary on the policy.

On January 7, 2009, the Plaintiffs filed a Complaint for Declaratory Judgment/Constructive Trust over Insurance Proceeds. On June 4, 2009, the Plaintiffs filed a motion for summary judgment and argued that the doctrines of waiver and estoppel prevented any recovery by Mary Jo. On July 2, 2009, Mary Jo filed a counter-motion for summary judgment and argued that the Federal Employees' Group Life Insurance Act (“FEGLIA”) preempted state law. Mary Jo also argued that the Plaintiffs could not be granted the full proceeds of the policy and that they could not rely upon Mary Jo's dissolution decree because they were not parties to the contract or intended beneficiaries.

On April 26, 2010, the court granted Mary Jo's motion for summary judgment and denied the Plaintiffs' motion for summary judgment. Specifically, the court found that federal law preempted state law and that FEGLIA barred the creation of a constructive trust and seizure of the life insurance proceeds or any portion thereof from Mary Jo. The court also found that there was no just reason for delay and expressly directed entry of “final judgment as to any and all issues addressed and resolved herein pursuant to Trial Rule 58 of the Indiana Rules of Procedure, all in favor of [Mary Jo] and against the Plaintiffs....” Id. at 17.

Mary Jo argues that “there is no evidence that the proceeds of the policy have been paid” and “[s]ince there is no corpus, there is no subject matter for the case, and the case is not ripe for review.” Appellee's Brief at 23. We observe that the Indiana Supreme Court has held that Indiana trial courts possess two kinds of “jurisdiction.” K.S. v. State, 849 N.E.2d 538, 540 (Ind.2006). “Subject matter jurisdiction is the power to hear and determine cases of the general class to which any particular proceeding belongs. Personal jurisdiction requires that appropriate process be effected over the parties.” Id. The Court also held that “[o]ther phrases recently common to Indiana practice, like ‘jurisdiction over a particular case,’ confuse actual jurisdiction with legal error, and we will be better off ceasing such characterizations.” Id. To the extent that Mary Jo argues that this case is not ripe for review, we observe that “[r]ipeness relates to the degree to which the defined issues in a case are based on actual facts rather than on abstract possibilities, and are capable of being adjudicated on an adequately developed record.” Ind. Dep't of Envtl. Mgmt. v. Chem. Waste Mgmt., Inc., 643 N.E.2d 331, 336 (Ind.1994). In ruling on a ripeness challenge, we must consider “the fitness of the issues for judicial decision' and ‘the hardship to the parties of withholding court consideration.’ ” Rene ex rel. Rene v. Reed, 726 N.E.2d 808, 822 (Ind.Ct.App.2000) (quoting Pacific Gas & Elec. Co. v. State Energy Res. Conserv. & Dev. Comm'n, 461 U.S. 190, 201, 103 S.Ct. 1713, 1720, 75 L.Ed.2d 752 (1983)). Here, it is undisputed that Carlos had a FEGLI life insurance policy, that Carlos died on August 9, 2008, and that the insurance coverage of the FEGLI policy totaled $98,000.00. Consequently, we conclude that the case is ripe for review.

The issue is whether the trial court erred in granting Mary Jo's motion for summary judgment and in denying the Plaintiffs' motion for summary judgment. Summary judgment is appropriate only where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Ind. Trial Rule 56(c); Mangold ex rel. Mangold v. Ind. Dep't of Natural Res., 756 N.E.2d 970, 973 (Ind.2001). All facts and reasonable inferences drawn from those facts are construed in favor of the nonmovant. Mangold, 756 N.E.2d at 973. Our review of a summary judgment motion is limited to those materials designated to the trial court. Id. We must carefully review a decision on summary judgment to ensure that a party was not improperly denied his day in court. Id. at 974. A party moving for summary judgment bears the initial burden of showing no genuine issue of material fact and the appropriateness of judgment as a matter of law. Monroe Guar. Ins. Co. v. Magwerks Corp., 829 N.E.2d 968, 975 (Ind.2005). If the movant fails to make this prima facie showing, then summary judgment is precluded regardless of whether the non-movant designates facts and evidence in response to the movant's motion. Id.

The fact that the parties make cross-motions for summary judgment does not alter our standard of review. Hartford Acc. & Indem. Co. v. Dana Corp., 690 N.E.2d 285, 291 (Ind.Ct.App.1997), trans. denied. Instead, we must consider each motion separately to determine whether the moving party is entitled to judgment as a matter of law. Id. The entry of specific findings and conclusions does not alter the nature of a summary judgment which is a judgment entered when there are no genuine issues of material fact to be resolved. Rice v. Strunk, 670 N.E.2d 1280, 1283 (Ind.1996). In the summary judgment context, we are not bound by the trial court's specific findings of fact and conclusions of law. Id. They merely aid our review by providing us with a statement of reasons for the trial court's actions. Id.

The Plaintiffs argue in general that the court erred in granting Mary Jo's motion for summary judgment because FEGLIA does not preempt their claims. Specifically, the Plaintiffs argue that they “are entitled under state law to share the insurance proceeds equally” and that “[t]he state's interest in enforcing settlement agreements and divorce decrees does not conflict with the federal interest at issue in FEGLIA, which involves administrative efficiency....” Appellants' Brief at 11–12. The Plaintiffs argue that “[w]hile federal courts including Metropolitan Life Insurance Co. v. Christ, 979 F.2d 575, 578 (7th Cir.1992), cited by the trial court, have held that way, the vast majority of state courts addressing this very issue have found otherwise, and have concluded that an equitable claim for constructive trust and in some instances other claims under state law are not preempted by FEGLIA.” Id. at 12–13. Mary Jo argues that Plaintiffs' “neglect to mention unanimous holdings of federal courts in similar situations, holding that FEGLIA does indeed preempt state law.” Appellee's Brief at 7.

Initially, we address the general rules of federal preemption. The Supremacy Clause, which provides in relevant part that the laws of the United States “shall be the supreme Law of the Land ... any Thing in the Constitution or Laws of any State to the Contrary notwithstanding,” U.S....