Liberty Life Ins. Co. v. Myers
| Decision Date | 11 February 2013 |
| Docket Number | No. CV 10-2024-PHX-JAT,CV 10-2024-PHX-JAT |
| Parties | Liberty Life Insurance Company, Plaintiff, v. Eric L. Myers, et al., Defendants. |
| Court | U.S. District Court — District of Arizona |
Pending before the Court is Plaintiff Liberty Life Insurance Company's ("Liberty Life") Motion for Partial Summary Judgment ("Motion"). (Doc. 228). Plaintiff has also filed a Statement of Facts in Support of their Motion. (Doc. 229).
On September 21, 2010, Liberty Life filed a Complaint against Defendants alleging six counts. (Doc. 1). Plaintiff's Motion requests summary judgment on three of the counts alleged in the Complaint against four defendants. Liberty Life requests summary judgment on its fraud claim against Defendant Eric L. Myers ("Eric") (Count Two, Doc. 1 at 11-15); on its unjust enrichment claim against Defendants Erin Sarah Stoloff ("Erin") and Kirsten Anne Ruggiano ("Kirsten") (Count Six, Doc. 1 at 19-20); and on its conversion claim against Defendant Donald D. Myers ("Donald") (Count Five, Doc. 1 at 18-19).
Eric has filed a Response (Doc. 250) opposing Plaintiff's Motion and an accompanying Statement of Facts (Doc. 250-1) and exhibits (Doc. 250-2; Doc. 250-3).Erin and Kirsten have filed a Response (Doc. 253) and a Statement of Facts in support (Doc. 254). Donald has also filed a Response (Doc. 251) opposing Plaintiff's Motion and a Statement of Facts in support (Doc. 252).
Finally, Liberty Life has filed a Reply (Doc. 261) and a Supplemental Statement of Facts (Doc. 262) and Exhibits (Doc. 262-1).
In 1989, Eric updated and increased the coverage on his life insurance policy with Liberty Life to $800,000. In June 1991, Eric attended a real estate conference in San Diego, California. Eric did not return to his home in Prescott, Arizona, following the conference. Following Eric's disappearance investigations were conducted by the San Diego Police Department and the Prescott Police Department, neither investigation turned up any sign of Eric or what happened to him. Donald also hired a private investigator to find Eric or evidence of what happened to him and Donald's investigator was also unable to find anything regarding Eric.
After disappearing Eric began using the aliases Chaz Olsen and Chaz Lung to conceal his identity. After two years without hearing from Eric, in 1993, Donald applied to the Maricopa County Superior Court to be named the special conservator of Eric's life insurance policy in order to rename the beneficiaries of the policy as Erin and Kirsten. Eric's life insurance policy was then changed by Donald and Erin and Kirsten were named the beneficiaries. In 1996, with no evidence of Eric's survival, Donald petitioned the Maricopa County Superior Court to issue a presumptive death certificate. In 1997, a presumptive death certificate was issued by the State of Arizona. In March 1997, Donald submitted a claim of death to Liberty Life requesting Plaintiff pay the Death Benefit Proceeds ("Proceeds") under Eric's life insurance policy. Liberty Life then hired its own investigator to investigate the claim. After investigating the claim, Liberty Life concluded that the available evidence demonstrated that Eric was dead.
In February 1998, Liberty Life paid $870,103.80 pursuant to the terms of Eric's policy equally to the Erin Myers Trust dated August 13, 1993 and the Kirsten MyersTrust dated August 13, 1993 (collectively the "Trusts"). Donald served as the trustee for the trusts. Until October 2, 2007, Donald disbursed the Proceeds from the Trusts to Erin and Kirsten pursuant to the terms of the trust agreement.
On October 2, 2007, Eric reappeared and made his presence known to Donald, Erin, and Kirsten. As of October 2, 2007, the Trusts contained $478,651. From the time Eric disappeared in 1991 until he reappeared in 2007, he had moved between Mexico, California, and British Columbia.
After Eric resurfaced, Donald communicated with Eric's former wife (Erin and Kirsten's mother) Anne R. Myers ("Anne"), who is an attorney, about any possible claim Liberty Life had to the remaining Proceeds. Erin also sent Donald emails requesting that he liquidate the remaining funds in Trusts to her and Kirsten. On October 19, 2007, Donald came to the conclusion and told Anne in an email, "I think we are safe to give the girls their trust money." On January 25, 2008, Donald distributed all of the funds in the Trusts except for a small amount to cover taxes to Erin and Kirsten. On April 15, 2009, Donald distributed the remaining assets in the Trusts to Erin and Kirsten. On November 17, 2009, Eric expunged his Death Certificate with the Maricopa County Superior Court and at that time Liberty Life was notified for the first time that Eric was alive.
On September 21, 2010, Liberty Life filed this action. (Doc. 1).
Liberty Life's Motion requests summary judgment under Federal Rule of Civil Procedure 56(a) on three of the six counts alleged in the Complaint. (Doc. 228 at 1). Summary judgment is only appropriate when "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). "A party asserting that a fact cannot be or is genuinely disputed must support that assertion by . . . citing to particular parts of materials in the record," or by "showing that materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." Id. 56(c)(1)(A)&(B). Thus, summary judgment is mandated "against a party who fails tomake a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
Initially, the movant bears the burden of pointing out to the Court the basis for the motion and the elements of the causes of action upon which the non-movant will be unable to establish a genuine issue of material fact. Id. at 323. The burden then shifts to the non-movant to establish the existence of material fact. Id. The non-movant "must do more than simply show that there is some metaphysical doubt as to the material facts" by "com[ing] forward with 'specific facts showing that there is a genuine issue for trial.'" Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986) (quoting Fed. R. Civ. P. 56(e) (1963) (amended 2010)). In the summary judgment context, the Court construes all disputed facts in the light most favorable to the non-moving party. Ellison v. Robertson, 357 F.3d 1072, 1075 (9th Cir. 2004).
The mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-248 (1986). A material fact is any factual issue that might affect the outcome of the case under the governing substantive law. Id. at 248. A material fact is "genuine" if the evidence is such that a reasonable jury could return a verdict for the non-moving party. Id.
At the summary judgment stage, the trial judge's function is to determine whether there is a genuine issue for trial. There is no issue for trial unless there is sufficient evidence favoring the non-moving party for a jury to return a verdict for that party. Id. at 249-250. If the evidence is merely colorable or is not significantly probative, the judge may grant summary judgment. Id.
Liberty Life claims Eric committed fraud by intentionally disappearing and concealing his identity, which caused Liberty Life to pay a total of $870,103.80 in DeathBenefit Proceeds on a life insurance policy that Eric had taken out with Liberty Life prior to disappearing. (Doc. 1 at 11-15); (Doc. 228 at 2). Liberty Life asks the Court to grant summary judgment on this claim and seeks the full $870,103.80 as damages. (Doc. 228 at 2).
While the tort of fraud has been addressed by Arizona courts, the unique facts of this case have not been analyzed under a claim of fraud by prior Arizona courts.
In the absence of controlling statutory or case authority, Arizona courts generally follow the Restatement of the Law on a particular subject if its position, as applied to the claim at issue, "is logical, furthers the interests of justice, is consistent with Arizona law and policy, and has been generally acknowledged elsewhere." Ramirez v. Health Partners of S. Ariz, 972 P.2d 658, 665 (Ariz. Ct. App. 1998) (citing Ft. Lowell-NSS Ltd. P'ship v. Kelly, 800 P.2d 962 (Ariz. 1990); Cannon v. Dunn, 700 P.2d 502, 503 (Ariz. Ct. App. 1985)). Further, Arizona courts routinely look to guidance from courts of other states on matters of first impression. See, e.g., Tritschler v. Allstate Ins. Co., 144 P.3d 519, 527 (Ariz. Ct. App. 2006) (citing Hull v. DaimlerChrysler Corp., 99 P.3d 1026, 1028 (Ariz. Ct. App. 2004)).
Freeman v. Sorchych, 245 P.3d 927, 932 (Ariz. Ct. App. 2011), review denied (Aug. 31, 2011). Under Arizona law, "there are three distinct classes of fraud: misrepresentation, concealment, and non-disclosure." Wells Fargo Bank v. Ariz. Laborers, Teamsters & Cement Masons Local No. 395 Pension Trust Fund, 38 P.3d 12, 34 n. 22 (Ariz. 2002). "Arizona recognizes the tort of fraudulent concealment." Id. at 34 (citing Restatement (Second) of Torts § 550). Liberty Life contends Eric is liable for fraudulently concealing his survival. (Doc. 1 at 12); (Doc. 228 at 9); (Doc. 261 at 2).
As the Arizona Supreme Court explained, "[l]iability for fraudulent concealment occurs under § 550 of the Restatement (Second) of Torts and lies against a party to a transaction who by concealment or other action intentionally prevents the other from acquiring material information." Wells Fargo, 38 P.3d at 34 n. 22 (emphasis in original). Fraudulent concealment is not predicated on...
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