Harrell v. Cederberg

• Decision Date: 09 September 2020
• Docket Number: Civil File No. 19-251 (MJD/ECW)
• Parties: BRIAN HARRELL, Plaintiff, v. MICHAEL D. CEDERBERG, DAVID CEDERBERG, and BRUCE HARRELL, Defendants.
• Court: U.S. District Court — District of Minnesota

BRIAN HARRELL, Plaintiff, v. MICHAEL D. CEDERBERG, DAVID CEDERBERG,and BRUCE HARRELL, Defendants.

Civil File No. 19-251 (MJD/ECW)

UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA

September 9, 2020

MEMORANDUM OF LAW & ORDER

Francis J. Rondoni and Elizabeth C. Henry, Chestnut Cambronne PA, Counsel for Plaintiff.

Scott S. Payzant and Ryan R. Dreyer, Morrison, Sund PLLC, Counsel for Defendants.

I. INTRODUCTION

This matter is before the Court on Plaintiff Brian Harrell's Motion for Summary Judgment. [Docket No. 27] The Court heard oral argument on July 8, 2020.

The Court was hoping for a settlement in this matter to avoid a family feud; however, those efforts were unsuccessful, and the law is clear. There is no legal or equitable basis for the Court to intervene to alter a clear, valid insurance contract based on speculation about the insured's later changed intent. Therefore, the Court grants summary judgment for Plaintiff.

II. BACKGROUND

A. Factual Background

1. Marriage of Georgia and Michael Cederberg

Defendant Michael Cederberg married Decedent Georgia Cederberg in 1999 or 2000. (Rondoni Decl., Ex. A, Michael Cederberg Dep. 20.) At that time, Michael Cederberg had a son, Defendant David Cederberg, from a previous marriage, who lived in Germany. (Id. 20.) In approximately 2002, Michael Cederberg and Decedent had a daughter, Julia Cederberg. (Id. 20-21.)

2. The Policy

In 2003, Decedent, then a resident of Minnesota, procured a $500,000 life insurance policy from Farmers New World Life Insurance Company ("Farmers Policy"). (Compl. ¶ 8; Ans. ¶ 1.) Decedent met with her insurance agent, Marion Shoemaker, Jr., in Minnesota and signed the insurance application in Minnesota. (Rondoni Decl., Ex. B, Shoemaker Dep. 32, 36.) Decedent named her brother, Plaintiff Brian Harrell, as the sole primary beneficiary and her daughter, Julia Cederberg, as the contingent beneficiary for the Farmers Policy. (ShoemakerDep. 29-33; Compl. ¶ 9; Counterclaim ¶ 20.) Plaintiff was Julia Cederberg's godfather. (M. Cederberg Aff. ¶ 3.) Michael Cederberg was with Decedent when she met with insurance agent Shoemaker to take out the Farmers Policy and was aware that Decedent named Plaintiff as the primary beneficiary. (Rondoni Decl., Ex. A, M. Cederberg Dep. 45.)

At the time Decedent designated Plaintiff as her primary beneficiary, she "[a]bsolutely" knew what she was doing, and her mind was clear; she was not pressured by anyone to make the decision; and she did not appear to be intoxicated in any way. (Rondoni Decl., Ex. B, Shoemaker Dep. 31.) Decedent was "very articulate, very educated, very astute in so many different ways, and she never spoke without being completely thoughtful about what she was gonna say." (Payzant Aff., Ex. B, Shoemaker Dep. 22.) "She knew exactly what she wanted." (Id.) Decedent did not tell Shoemaker why she wanted to buy insurance at that time, but she did "tell [him] - like, a lot of questions we're looking for is what's the purpose of the insurance and that was to take care of her children." (Id.) Decedent told Shoemaker that she was choosing her brother as the primary beneficiary but did not tell Shoemaker why she was choosing himbeyond saying "that she wanted to make sure her kids were taken care of and that she had it all worked out. Or something like that." (Id. 23.)

Decedent never discussed the Farmers Policy with Plaintiff, and he did not know he was the beneficiary until he was contacted by the insurance company after her death. (Rondoni Decl., Ex. D, Brian Harrell Dep. 57.)

Decedent took care of all of the bill payments in her family, so she paid all of the premiums on the Farmers Policy out of her joint accounts with Michael Cederberg. (M. Cederberg Aff. ¶ 4.)

3. Georgia Cederberg's Conversations with Family Members

In approximately 2007, Michael and Georgia Cederberg had another daughter, G.C. (Payzant Aff., Ex. A, M. Cederberg Dep. 21.)

Michael Cederberg got into an argument with Plaintiff's girlfriend during Thanksgiving in 2016 or 2017, and Michael Cederberg refused to apologize. After that date, Michael Cederberg and Plaintiff no longer communicated. (M. Cederberg Dep. 40-43.) Decedent "was very disappointed" in her husband for failing to forgive Plaintiff. (Id. 43.) Decedent continued to have a relationship with Plaintiff but was sensitive to her husband and knew that he did not get along with Plaintiff. (Id. 44.)

In 2016, Decedent found out that she cancer. (Rondoni Decl., Ex. A, M. Cederberg Dep. 23.) She did not talk to her husband about life insurance policies, finances, or estate planning; the only thing she said to him was "things will be better off when she's gone." (Id. 44.) She also told him that she had spoken to her brother, Bruce Harrell, about helping Michael Cederberg manage his finances and life insurance proceeds because "she was worried that [Michael Cederberg] wouldn't be able to handle it." (Id. 47, 49.) However, there were no trusts set up, and Michael Cederberg cannot think of any reason why they were not set up. (Id. 49.) Bruce Harrell testified that Decedent never discussed a trust with him. (Rondoni Decl., Ex. E, Bruce Harrell Dep. 52-53.) Decedent never discussed changing the beneficiaries on the life insurance policies with her husband; nor was he aware of her taking any steps to attempt to do so. (M. Cederberg Dep. 46-47.)

In 2017, Decedent told Bruce Harrell that she had two life insurance policies, worth $500,000 each, and that Michael Cederberg was the beneficiary on both policies. (Payzant Aff., Ex. D, Bruce Harrell Dep. 49.) Decedent talked to Bruce Harrell about being the executor of her estate, so he assumed that she had a will. (Rondoni Decl., Ex. E, Bruce Harrell Dep. 52.) She mentioned having themoney go into two trusts for her daughters, with Bruce Harrell as a trustee or as an executor to her will, but he told her that Michael Cederberg could handle the money if Bruce Harrell connected him with the right advisors. However, no trust document was prepared, and Bruce Harrell surmised that she must have changed her mind. (Id. 56.) Decedent never talked to Bruce Harrell about changing the beneficiary designation on her life insurance policies, and he has no knowledge that she made any attempt to change the beneficiary designation on any life insurance policy. (Id. 64.)

Decedent's step-daughter-in-law, Alicia Cederberg, opines that Decedent "made it clear that she expected all of her life insurance proceeds to benefit her husband, Michael Cederberg, as well as her daughters, Julia and [G.C.]. Although Alicia Cederberg averred in her affidavit that Decedent "specifically told [Alicia Cederberg] that she had life insurance policies with U.S. Bank and Farmers," (Payzant Aff., Ex. E, Alicia Cederberg Aff. ¶ 4), Alicia Cederberg clarified in her later deposition that Decedent did not mention the Farmers Policy currently at issue, "that was after she had passed we found out. I do believe she had told me about U.S. Bank because that was her current employer." (Rondoni Decl., Ex. F., A. Cederberg Dep. 54-55).

4. Notes Found on Georgia Cederberg's iPhone

Georgia Cederberg died on October 1, 2018. (A. Cederberg Aff. ¶ 2.) Although, after procuring the Farmers Policy, she did contact and meet with her insurance agent on other matters such as obtaining life insurance for her husband, she never contacted her insurance agent or the insurer to express any intent to change her beneficiary designation on the Farmers Policy. (Rondoni Decl., Ex. B, Shoemaker Dep. 36-37.)

After Decedent's death, Alicia Cederberg found the following notes on Decedent's iPhone:

Trust

Bruce exec

Successor?

Update all bank accounts and properties Paid

Amy backup for [g] if mike passes or becomes incapacitated she would be paid monthly minimum of $2000 month depending on expenses till [g] is in college or on her own

$30k for wedding to Julia and [G]

College/ room and Board/ books paid plus

$500 paid per month when in college to each girl for other expenses

$20k to each for college graduation bonus

Finra?

All debts under mike including collections to be negotiated on pd

All debts under Cederberg trucking to be paid

Up to $40k for new vehicles for mike, Julia and [G]

$40k for David

Remaining funds to be invested by Bruce to someone he trusts goal of $500k so any monthly payments are paid from these fundsPayout to Bruce for managing?

Monthly to mike of ? for current bills or current cost to live ?

Bills paid by trust? Direct tv, Verizon, Polk Burnett, Siren tel, Netflix, insurance jensen Sundquist. Approx $1000

Property taxes paid on primary residence and 40 acres by trust annually

Mikes life insurance to be paid by trust farmers

Upon mikes death all expenses paid from trust and any remaining funds once girls have graduated college and weddings to be paid out as below.

Primary residence - put in trust? Deeded to julia?

40 acres put in trust?

If mike has life insurance at that point that will be included in balance.

Equally to David, Julia and [G].

(Payzant Aff., Ex. E, Alicia Cederberg Aff., Ex. A.)

After Decedent passed away, Michael Cederberg told Bruce Harrell that Michael Cederberg was named as the beneficiary on one of Decedent's life insurance policies and Plaintiff was named as the beneficiary on the Farmers Policy. (Rondoni Decl., Ex. E, Bruce Harrell Dep. 67.) Bruce Harrell suggested that he talk to Plaintiff to "see if [Plaintiff] would be willing to sign [the proceeds] over somehow." (Id. 68.) Bruce Harrell contacted Plaintiff and told him that Bruce Harrell thought that Plaintiff's designation as primary beneficiary was a mistake and that Decedent had told him that both of her life insurance policies were going to her husband and daughters. (Id. 69.) Bruce Harrell said:"[I]f I were to talk to Ryan [Michael Cederberg's attorney] about putting something together to sign it over, you know, would you be okay with that." (Id. 69-70.) Plaintiff responded: "[Y]es, let's figure out what we need to do." (Id. 70.)

On October 30,...