Prudential Ins. Co. of Am. v. Kulik, Case No. 3:12-CV-625-J-99TJC-JRK
| Decision Date | 31 July 2013 |
| Docket Number | Case No. 3:12-CV-625-J-99TJC-JRK |
| Parties | THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, Plaintiff, v. CHRISTINA KULIK, as Personal Representative of the ESTATE of RAQUELL LYNCH; CHRISTINA KULIK as Personal Representative of the Estate of K.L. (a minor); VICTORIA LYNN LYNCH Defendants. |
| Court | U.S. District Court — Middle District of Florida |
The Prudential Insurance Company of America originally filed this Complaint in Interpleader to resolve a dispute between two competing claims for life insurance policy benefits following the murder of two individuals covered by Servicemembers' Group Life Insurance ("SGLI"). At issue is whether SGLI death benefits should be paid to the sole remaining named beneficiary of the Policy, Victoria Lynn Lynch, or to the personal representative of the victims' estates, Christina Kulik. While Prudential, as stakeholder, has deposited the insurance proceeds and been dismissed as a named party (Doc. 48), the dispute between Victoria Lynch and Christina Kulik remains. Before this Court are Kulik's Motion for Summary Judgment and three memoranda in support of Kulik's Motion. (Docs. 10, 36, 45.)
Prudential provides group life insurance benefits to the United States Department of Veterans Affairs for servicemembers under the Servicemembers' Group Life Insurance Act ("SGLIA"), 38 U.S.C. § 1965, et seq. (Doc. 1 at ¶ 7.) This policy also provides coverage on the lives of servicemembers' spouses and dependent children, who are automatically insured through the servicemember's policy.1 The servicemember can list primary and contingent beneficiaries for the servicemember's coverage. The servicemember is the automatic beneficiary of his spouse's and dependent children's coverage. If the servicemember dies or is disqualified from receiving proceeds before payment on a spouse's or dependent child's policy is due, the proceeds are paid to the beneficiary entitled to receive payment on the servicemember's own SGLI policy.2
The Policy at issue here only expressly names Servicemember Kip Lynch as the insured, but his wife, Raquell Lynch ("Raquell"), and their eight month old daughter, K.L., are automatically insured. Kip Lynch designated Raquell as the principal beneficiary of the SGLI Coverage. (Exhibit D.) (Doc. 1 at ¶ 18.) He designated his sister, Victoria Lynch, as the sole contingent beneficiary. (Exhibit D.) (Doc. 1 at ¶ 18.) Kip Lynch is assumed to be a beneficiary of the SGLI Coverage on Raquell's and K.L.'s lives.
On April 26, 2010, in Anchorage, Alaska, Kip Lynch shot and killed both Raquell and K.L. As a result, the Policy's death benefits for Raquell and K.L. became due and payable in the total amount of one hundred ten thousand dollars ($110,000.00). (Doc. 1 at ¶¶ 10, 11.) Kip Lynch was convicted of the murders of Raquell and K.L. and was thereby disqualified from receiving the benefits under the terms of the Policy3 and under both Alaska law4 and Florida law.5 (Exhibit C.) (Doc. 1 at ¶¶ 12, 14.) Because Kip Lynch wasdisqualified, the next beneficiary in line to receive the decedents' benefits is the person entitled to receive Kip Lynch's benefits. See supra note 2. As the primary beneficiary under Kip's policy, Raquell, is deceased, the next eligible beneficiary is the contingent beneficiary, Victoria Lynch.
On May 26, 2010, Christina Kulik, Raquell's mother, became the Personal Representative of the estates of Raquell and K.L., who both died intestate. (Exhibits G & H.) (Doc. 1.) (Exhibits K & L.) (Doc. 10-1.) On March 9, 2011, Victoria Lynch made a claim for the Policy's benefits as the contingent beneficiary of the Policy. (Exhibits E & F.) (Doc. 1.) On June 3, 2011, Kulik made a competing claim for the benefits as Personal Representative. (Exhibits I & J.) (Doc. 1.) Prudential then filed this Complaint in Interpleader. (Doc. 1.)
Kulik submitted three Memoranda of Facts and Law seeking to eliminate Victoria Lynch's interest in the benefits. (Docs. 10, 36, 45.) Victoria Lynch has proceeded mostly pro se6 and has submitted a letter to the Court indicating that she should receive the benefits because she was childhood friends with Raquell and regularly babysat K.L. (Doc. 27.)
Kulik's memoranda of law fail to address the relevant SGLI Regulations pertaining to issuance of the Policy benefits. (Neither has Lynch provided any assistance.) Instead, Kulik relies on Florida law and argues that because under Florida's Slayer Statute Kip Lynch is legally deemed to have predeceased Raquell and K.L., Raquell's and K.L.'s estates are entitled to the Policy's benefits rather than the contingent beneficiary named in the Policy.7 Kulik also argues that Florida's Slayer Statute should exclude Victoria Lynch from receiving the benefits based on the crimes of her brother, Kip. However, under both the SGLI Regulations and Florida law, Victoria Lynch remains entitled to the benefits.
Courts have long applied the principle that "no person shall be permitted to benefit from the consequences of his or her wrongdoing" to disqualify murderers from inheriting from their victims, whether the inheritance is through a will, an intestacy statute, or a lifeinsurance policy. Prudential Insurance Company of America v. Athmer, 178 F.3d 473, 475-76 (7th Cir. 1999) (citing Mutual Life Ins. Co. v. Armstrong, 117 U.S. 591, 600 (1886); Riggs v. Palmer, 115 N.Y. 506 (N.Y. 1889); Swietlik v. United States, 779 F.2d 1306 (7th Cir. 1985)). The SGLI Regulations adopt this common law slayer's rule and extend its reach to the slayer's family members who are not also related to the victim by blood, adoption, or marriage. According to 38 C.F.R. § 9.5(e)(1) and (e)(2)(i), anyone convicted of intentionally and wrongfully killing the decedent is not entitled to the decedent's SGLI proceeds.8 In addition, under § 9.5(e)(1) and (e)(2)(iii) a member of the family of a slayer "who is not related to the decedent by blood, legal adoption, or marriage" is also not entitled to the decedent's SGLI proceeds. Section 9.1(l) defines a "member of the family" who would be disqualified under § 9.5(e)(1) and (e)(2)(iii) as someone with one of the following relationships to the slayer: spouse; biological, adopted, or step child; biological, adoptive, or step parent; biological, adopted, or step sibling; or biological, adoptive, or step grandparent or grandchild. Under § 9.5(e)(4)(i), once a slayer (or slayer's family member) is disqualified, payment is made to the next eligible listed beneficiary, then to the widow or widower (and so on, in the same order as prescribed by 38 U.S.C. § 1970(a)).
The term "related by marriage" is not defined in the SGLI Regulations.9 Black's LawDictionary defines "in-law" as "a relative by marriage." Florida courts have interpreted the term "related by marriage" to include sibling-in-law relationships. See Gilligan v. Liberty Mut. Ins. Co., 265 So. 2d 543, 545 (Fla. 4th DCA 1972) (); Sharpe v. Sharpe, 695 So. 2d 1302, 1304 (Fla. 5th DCA 1997) (). Furthermore, outside of statutory interpretation, courts refer to siblings-in-law as being "related by marriage." See, e.g., Dill v. Allen, 488 F.3d 1344, 1352 (11th Cir. 2007) ().10
Under the SGLI Regulations, Kip Lynch's family members are precluded from receiving the benefits unless they are related to decedents Raquell and K.L by "blood, legal adoption, or marriage." While Victoria Lynch is not related to Raquell by blood or legal adoption, she is related to Raquell by marriage, as they are sisters-in-law. Victoria Lynch is also related to K.L. since she is her aunt by blood. Thus, Victoria Lynch falls within the safe harbor created by § 9.5(e)(2)(iii) for individuals who, while related to the slayer, are also related to the decedent. As the only contingent beneficiary listed, she is the next eligible beneficiary under 38 C.F.R. § 9.5(e)(4) and should receive the benefits.
Even if the SGLI Regulations did not apply, the result under Florida law would be the same. Kulik argues that 1) because Florida's Slayer Statute treats the killer as having predeceased the decedent, the benefits pass to the intestate estate, and 2) Florida's Slayer Statute not only precludes Kip Lynch from benefitting from the murder but also extends to disqualify his sister from receiving the benefits. Florida case law does not support Kulik's interpretation of the Slayer Statute. When the slayer is treated as having predeceased the victim, insurance proceeds pass to the next beneficiary in line, not the estate, and Floridacourts have not extended the Slayer Statute to family members of the killer.
Kulik argues that because Kip Lynch is deemed to have predeceased Raquell and K.L., Raquell's and K.L.'s estates are entitled to the death benefits. Kulik relies on Fla. Stat.§ 732.802(1) which states that:
A surviving person who unlawfully and intentionally kills or participates in procuring the death of the decedent is not entitled to any benefits under the will or under the Florida Probate Code, and the estate of the decedent passes as if the killer had predeceased the decedent. Property appointed by the will of the decedent to or for the benefit of the killer passes as if the killer had predeceased the decedent.
732.802(3) states that:
A named...
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