Penn Mut. Life Ins. Co. v. Camilly
| Citation | 410 F.Supp.3d 847 |
| Decision Date | 20 September 2019 |
| Docket Number | Case No. 1:18 CV 460 |
| Parties | The PENN MUTUAL LIFE INSURANCE COMPANY, Plaintiff, v. Patricia CAMILLY, et al., Defendants. |
| Court | U.S. District Court — Northern District of Ohio |
Brett K. Bacon, Frantz Ward, Cleveland, OH, for Plaintiff.
Jack W. Abel, Abel & Zocolo, Independence, OH, Larry D. Davie, Culhane Meadows - Chicago, Atlanta, GA, Craig P. Kvale, Rieth Antonelli & Raj, Cleveland, OH, for Defendants.
This matter is before the Court on cross motions for Summary Judgment filed by Defendants Patricia Camilly and Wells Fargo Bank, N.A. ("Wells Fargo"). (ECF # 48, 83). Both motions have been fully briefed and are ready for disposition. (ECF # 94, 95, 97, 98).1 Having reviewed the undisputed facts and applicable law, and having considered the arguments of the parties, the Court finds that Ms. Camilly's Motion for Summary Judgment should be DENIED, and Wells Fargo's Motion for Summary Judgment should be GRANTED in part and DENIED in part.
The Penn Mutual Life Insurance Company filed a Complaint in Interpleader to resolve competing claims for the proceeds of a life insurance policy that insured the life of Robert Howlett, who passed away on September 15, 2017. The policy provides a total death benefit in the amount of $1,750,467.20, plus accrued and accruing interest and earnings. Wells Fargo is named as the sole owner and beneficiary of the policy. Ms. Camilly, however, claims that she is entitled to all proceeds of the policy pursuant to the terms of a Separation Agreement ("Separation Agreement") she entered into with Mr. Howlett. That agreement was adopted by the Medina County Court of Common Pleas as part of their Decree of Divorce in April of 2014.
With regard to insurance, the Separation Agreement provided that Ms. Camilly be designated the sole and primary beneficiary of Mr. Howlett's Primerica Life insurance policy, number 0430762390; that ownership of that policy be transferred to Ms. Camilly; and, that Mr. Howlett continue to pay the premiums on that Primerica policy. (ECF # 48-2, Ex. A, § II G). There is no dispute that Mr. Howlett abided by all of these requirements, and that Ms. Camilly received the full benefit of this policy, in the amount of $225,000.00, upon his death.
The Separation Agreement further acknowledged that Mr. Howlett was also insured by the Penn Mutual Life Insurance Company, policy no. 8 152 180, and recognized that this policy "assigns to Dan Schindler an amount sufficient to satisfy [Mr. Howlett's] outstanding obligation for the purchase of The Swedish Solution, Inc.," a business that Mr. Howlett purchased from Mr. Schindler.3 Along with acknowledging the priority of the assignment to Mr. Schindler, the Separation Agreement required that Mr. Howlett "shall take any and all steps necessary to designate [Ms. Camilly] as the remainder beneficiary of said policy and following any divorce or other termination of the parties' marriage shall redesignate [Ms. Camilly] as the remainder beneficiary of said policy." (ECF # 48-2, Ex. A, § II G). There is no evidence that Mr. Howlett ever named or, following the divorce, redesignated Ms. Camilly as the residual beneficiary of the Penn Mutual Life Insurance policy, as the Separation Agreement required.
The paragraph immediately following this provision, states as follows:
In the event of [Mr. Howlett's] demise prior to satisfying his obligations hereunder, the net proceeds of any life insurance policy set forth herein shall be used to satisfy his obligations hereunder. In the event the Husband satisfies his obligations hereunder, he shall no longer be obligated to make the premium payments on said policy(s), and [Ms. Camilly] may continue to do so if she chooses. At no time shall [Mr. Howlett] be required to maintain insurance on his life in an aggregate death benefit amount in excess of his total obligation to [Ms. Camilly] hereunder of $1500.00 per month for 120 months, or as reduced by the payments he makes upon said obligation.
Except as provided above, both parties released each other from any and all rights each had or may have had "[a]s beneficiary in any trust or in any life or other type of insurance policy issued to the other." (ECF #48-2, Ex. A, § XI). Further they agreed that "neither party shall interfere with the use, ownership or disposition of any property now owned or hereafter acquired by the other." (ECF #48-2, Ex. A, § I). (ECF #48-2, Ex. A, § I).
On or about December 18, 2015, Mr. Howlett was diagnosed with Glioblastome Multiforme, a type of brain cancer
. On May 20, 2016, he married Wendy Clawson. (ECF #98, Ex. J, pg. 7). In June of 2017, he applied to sell the Penn Mutual policy to Magna Life Settlements for $1,280,000.00, by way of a viatical agreement. Magna Life agreed to the sale and then assigned its rights in the policy to Wells Fargo. On August 4, 2017, Mr. Howlett changed the beneficiary and owner of the Penn Mutual policy to Wells Fargo, as Securities Intermediary. (ECF #48-2, Ex. B, C).5 As part of this transaction, Mr. Howlett paid off his obligations to Mr. Schindler for the purchase of the Swedish Solution, Inc.. Ms. Camilly claims that Mr. Howlett was not competent to enter into the viatical sales agreement, or to agree to the accompanying change in beneficiary on the Penn Mutual policy.
Mr. Howlett passed away on September 15, 2017. Following Mr. Howlett's death, Penn Mutual received competing claims for the proceeds of the life insurance policy from Wells Fargo and Ms. Camilly. Penn Mutual filed a Complaint for Interpleader and deposited the funds with this Court pending resolution of these claims. During discovery, Dan Schindler, the prior owner of the Swedish Solution, and, originally, the primary beneficiary of the Penn Mutual policy, by way of an assignment, discovered that Ms. Camilly was seeking to invalidate the viatical sale. Because invalidation of the policy could conceivably result in a dispute over whether Mr. Schindler could keep the pay off he received from the proceeds of the sale, and because he had an assignment right to proceeds of the pre-sale policy, Mr. Schindler filed a Motion to Intervene, which the Court granted. (ECF # 79, 86).
Summary judgment is appropriate when the court is satisfied "that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FED. R. CIV. P. 56(c). The burden of showing the absence of any such "genuine issue" rests with the moving party:
[A] party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of ‘the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any,’ which it believes demonstrates the absence of a genuine issue of material fact.
Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (citing FED. R. CIV. P. 56(c) ). A fact is "material" only if its resolution will affect the outcome of the lawsuit. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Determination of whether a factual issue is "genuine" requires consideration of the applicable evidentiary standards. The court will view the summary judgment motion in the light most favorable to the party opposing the motion. Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).
Summary judgment should be granted if a party who bears the burden of proof at trial does not establish an essential element of their case. Tolton v. American Biodyne, Inc. , 48 F.3d 937, 941 (6th Cir. 1995) (citing Celotex , 477 U.S. at 322, 106 S.Ct. 2548 ). Accordingly, "[t]he mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient; there must be evidence on which the jury could reasonably find for the plaintiff." Copeland v. Machulis , 57 F.3d 476, 479 (6th Cir. 1995) (citing Anderson , 477 U.S. at 252, 106 S.Ct. 2505 ). Moreover, if the evidence presented is "merely colorable" and not "significantly probative," the court may decide the legal issue and grant summary judgment. Anderson , 477 U.S. at 249-50, 106 S.Ct. 2505 (citations omitted). In most civil cases involving summary judgment, the court must decide "whether reasonable jurors could find by a preponderance of the evidence that the [non-moving party] is entitled to a verdict." Id. at 252, 106 S.Ct. 2505. However, if the non-moving party faces a heightened burden of proof, such as clear and convincing evidence, it must show that it can produce evidence which, if believed, will meet the higher standard. Street v. J.C. Bradford & Co. , 886 F.2d 1472, 1479 (6th Cir. 1989).
Once the moving party has satisfied its burden of proof, the burden then shifts to the non-mover. The non-moving party may not simply rely on its pleadings, but must "produce evidence that results in a conflict of material fact to be solved by a jury." Cox v. Kentucky Dep't of Transp. , 53 F.3d 146, 149 (6th Cir. 1995). FED. R. CIV. P. 56(e) states:
When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of the adverse party's pleading, but the adverse party's response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial.
The Federal Rules identify the penalty for the lack of such a response by the nonmoving party as an automatic grant of summary judgment, where otherwise appropriate. Id.
Though parties must produce evidence in support of and in opposition to a motion for summary judgment, not all types of evidence are permissible. The Sixth Circuit has concurred...
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