In re Jordan

• Decision Date: 18 January 2000
• Docket Number: Adversary No. 99-1146.,Bankruptcy No. 91-12479.
• Citation: 276 B.R. 434
• Parties: In re Robert JORDAN and Lena Jordan. Equitable Life Assurance Company, Plaintiff, v. Union Planters Bank of Northeast Mississippi, National Association d/b/a Union Planters Bank of New Albany, Mississippi; and Lena Hoover Jordan, Defendants.
• Court: U.S. Bankruptcy Court — Northern District of Mississippi

276 B.R. 434

In re Robert JORDAN and Lena Jordan.

Equitable Life Assurance Company, Plaintiff, v. Union Planters Bank of Northeast Mississippi, National Association d/b/a Union Planters Bank of New Albany, Mississippi; and Lena Hoover Jordan, Defendants.

Bankruptcy No. 91-12479.

Adversary No. 99-1146.

United States Bankruptcy Court, N.D. Mississippi.

January 18, 2000.

B. Sean Akins, James W. Pannell, Ripley, MS, for debtors.

Joseph C. Gibbs, Clarksdale, MS, Roger H. McMillin, Jr., New Albany, MS, for creditors.

OPINION

DAVID W. HOUSTON, III, Bankruptcy Judge.

This proceeding was initiated by the filing of a complaint by the plaintiff, Equitable Life Assurance Company (Equitable Life) against the defendants, Union Planters Bank of Northeast Mississippi, National Association d/b/a Union Planters Bank of New Albany, Mississippi (collectively Union Planters), and Lena Hoover Jordan; appropriate responsive pleadings having been filed by the defendants; and the court, having considered same, hereby finds, orders, and adjudicates as follows, to-wit:

I.

The court has jurisdiction of the subject matter of and the parties to this adversary proceeding pursuant to 28 U.S.C. § 1334 and 28 U.S.C. § 157. This is a core proceeding as defined in 28 U.S.C § 157(b)(2)(A) and (B).

II.

This proceeding was initially commenced in the United States District Court for the Northern District of Mississippi as a result of the filing of an interpleader complaint by Equitable Life. The complaint sets forth a factual chronology which, for the most part, is undisputed. Edited excerpts, which provide an informative backdrop for this proceeding, are set forth hereinbelow in paragraphs A-O:

A. On or about January 13, 1983, Equitable Life issued a policy of life insurance to Robert N. Jordan with a face amount of $25,000.00, the same being policy # 83-111-676. The named beneficiary of this policy of insurance is the defendant, Lena Hoover Jordan.

B. On or about, October 28, 1986, Equitable Life issued a policy of life insurance to Robert N. Jordan with a face amount of $50,000.00, the same being policy # 86-094-073. The named beneficiary of this policy of insurance is the defendant, Lena Hoover Jordan.

C. On or about January 23, 1988, Equitable Life issued a policy of life insurance to Robert N. Jordan with a face amount of $100,000.00, the same being policy # 88-006-408. The named beneficiary of this policy of insurance is the defendant, Lena Hoover Jordan.

D. On or about January 20, 1986, Robert N. Jordan executed an assignment of contract of insurance, # 83-111-676, to First National Bank of Ripley, Mississippi.

E. On or about March 7, 1989, Robert N. Jordan executed an assignment of contract of insurance, # 86-094-073, to First National Bank of Ripley, Mississippi.

F. On or about April 20, 1989, Robert N. Jordan executed an assignment of contract of insurance, # 88-006-408, to First National Bank of Ripley, Mississippi.

G. An involuntary petition was filed against Robert and Lena Jordan on July 24, 1991. The Jordans subsequently confessed the petition and an order for relief was entered on August 27, 1991. The Jordans were granted a discharge in bankruptcy on December 17, 1991, and the case was closed on March 9, 1992.

H. The defendant, Union Planters, purchased. the assets of the First National Bank of Ripley, Mississippi, including the assignments of Equitable Life insurance policies 83-111-676, 86-094-073, and 88-006-408.

I. Robert N. Jordan died on or about July 1, 1998.

J. On July 22, 1998, Lena Hoover Jordan filed with Equitable Life a claim for benefits under the policies of insurance issued to Robert N. Jordan.

K. Through correspondence, dated October 9, 1998, Union Planters stated that it was not asserting any assignment rights with regard to policy # 83-111-676. Union Planters, through counsel, stated that "[Union Planters Bank] makes no claim as assignee or otherwise to policy number 83-111-676...."

L. On or about November 3, 1998, Equitable Life paid benefits to Lena Hoover Jordan in the total amount of $32,491.98, under the terms of policy # 83-111-676, in light of Union Planters' statement that it made no claim against the proceeds of that policy.

M. On November 11, 1998, Union Planters filed with Equitable Life a claim for benefits under the policies of insurance issued to Robert N. Jordan, 83-111-676, 86-094-073, and 88-006-408. Union Planters filed a claim for benefits under policy # 83-111-676, even though it had already stated through counsel that it was not asserting any claim with regard to those proceeds. Since the filing of its claim for benefits under these policies, Union Planters has continued to assert assignment rights to the proceeds of all three policies.

N. As to policies # 83-111-676, 86-094-073, and 88-006-408, Equitable Life asserted that it has no claim on the amounts of these policies and relinquished any further claims to said funds. Equitable Life, however, was presented with two separate claims to these funds and also was presented with a claim by Union Planters to pay funds already disbursed to Lena Hoover Jordan.

O. Equitable Life tendered into the registry of this court the remainder of the benefits owed under life insurance policies 86-094-073 and 88-006-408, which total $61,070.29 and $115,603.20, respectively. Although not required to pay interest under the policies, interest was prepaid on these policy benefits to reflect interest earned as of January 15, 1999.

Following the payment of the balances of the aforementioned insurance policies, totaling approximately $176,673.49, into the registry of The district court, and following a settlement between Equitable Life and Union Planters, an order was entered dismissing Equitable Life from the cause of action. Thereafter, the proceeding was transferred to this bankruptcy court for an adjudication as to the entitlement to the interpleaded insurance proceeds between Union Planters and Mrs. Jordan.

III.

To finance his sawmill business, Robert N. Jordan, during his lifetime, borrowed significant sums of money from First National Bank of Ripley, Mississippi, the predecessor in interest to the defendant, Union Planters. The loans were secured by the Jordans' homestead property, the sawmill property, sawmill equipment, accounts receivable, vehicles, and the assignment of the aforementioned three life insurance policies. In their bankruptcy schedules, Mr. and Mrs. Jordan indicated that they owed Union Planters the total sum of $358,544.85. After the liquidation of the collateral, excepting the life insurance policies, the debt was reduced to approximately $186,000.00 when the Jordans received their Chapter 7 discharge on December 17, 1991. At that time, Mr. Jordan had become disabled, and, in keeping with the terms of the policies, the accruing premiums were waived because of the disability. When the bankruptcy case was filed, the policies had cash surrender values totaling $14,046.43. However, the policies fully matured at the death of Mr. Jordan on July 1, 1998, long after the bankruptcy case had been closed.

As noted in the excerpts extracted from the complaint, Union Planters initially made no claim to the proceeds from policy # 83-111-676, so Equitable Life paid Mrs. Jordan these proceeds in the total sum of $32,491.68. Subsequently, Union Planters located the assignment applicable to this policy and asserted a claim against Equitable Life, contending that the proceeds had been erroneously paid to Mrs. Jordan. This dispute was settled between Union Planters and Equitable Life before this proceeding was transferred to this court, and Equitable Life was dismissed as a necessary party. The funds interpleaded by Equitable Life did not include any proceeds from policy # 83-111-676.

Neither Mrs. Jordan nor Union Planters addressed the aforesaid issue in the stipulation of facts, submitted on September 24, 1999, and they did not argue about the distribution of the proceeds from policy # 83-111-676 in their respective legal memoranda. Consequently, insofar as Mrs. Jordan and Union Planters are concerned, this court concludes that any dispute over the distribution of the proceeds from policy # 83-111-676 has not been appropriately raised before this court, and is, therefore, not ripe for adjudication.

Following a status conference, Mrs. Jordan filed a motion to amend her exemptions in order to appropriately assert her claim to the interpleaded funds. The parties agreed that the resolution of this motion would be dispositive of the remaining issues existing in this adversary proceeding. They indicated that no formal discovery was necessary, and that the court could decide the remaining questions based on the submission of the agreed stipulation of facts, noted hereinabove, as well as, the submission of written memoranda. All of this was timely accomplished by the parties.

IV.

The court first concludes that Mrs. Jordan has the right to amend her exemption claims. Since this bankruptcy case has now been reopened, this is clearly permitted by Rule 1009, Federal Rules of Bankruptcy Procedure. See also, Matter of Williamson, 804 F.2d 1355 (5th Cir.1986).

The second question focuses on which version of the exemption statute, applicable to life insurance proceeds, should apply to this proceeding....