Pulliam v. Alfa Ins. Co., 2016–CA–00603–COA

• Decision Date: 30 January 2018
• Docket Number: NO. 2016–CA–00603–COA,2016–CA–00603–COA
• Citation: 238 So.3d 620
• Parties: C.D. PULLIAM, Appellant v. ALFA INSURANCE COMPANY and Angela Nance, Appellees
• Court: Mississippi Court of Appeals

238 So.3d 620

C.D. PULLIAM, Appellant

v.ALFA INSURANCE COMPANY and Angela Nance, Appellees

NO. 2016–CA–00603–COA

Court of Appeals of Mississippi.

January 30, 2018

ATTORNEY FOR APPELLANT: ROBERTA LYNN HAUGHTON

ATTORNEYS FOR APPELLEES: RICHARD SHANE MCLAUGHLIN, MICHAEL EARL PHILLIPS, NICOLE H. MCLAUGHLIN, JACOB O. MALATESTA

BEFORE LEE, C.J., WILSON AND WESTBROOKS, JJ.

WILSON, J., FOR THE COURT:

¶ 1.Annie Patterson was the owner and primary beneficiary of a $50,000 life insurance policy that insured the life of her nephew and ward, Christopher Nance.Annie designated Christopher's biological mother, Angela Nance, as the policy's contingent beneficiary.After Annie died, her father, C.D. Pulliam, attempted to make himself an owner and beneficiary of the policy.When Christopher died about a year later, a dispute arose as to whether C.D. or Angela was entitled to the proceeds of the policy.

¶ 2.The insurer, Alfa Insurance Co., filed an interpleader complaint to resolve the dispute and deposited the proceeds of the policy with the court.C.D. filed counterclaims against Alfa, alleging negligence and other tortious conduct in connection with his attempt to make changes to the policy.The chancery court eventually ruled that (1) Alfa was entitled to interplead all potential claimants under the policy and to be discharged from liability under the policy; (2) C.D.'s counterclaims should be "dismissed as moot"; and (3) Angela was entitled to the proceeds of the policy as its beneficiary.For the reasons that follow, we find no error and affirm as to the first and third issues, but we hold that C.D. permissibly filed counterclaims in this interpleader action and that those counterclaims should not have been "dismissed as moot."Accordingly, we affirm in part and reverse and remand in part for further proceedings consistent with this opinion.

FACTS AND PROCEDURAL HISTORY

¶ 3.In September 2008, the Clay County Chancery Court appointed Annie Patterson general guardian of her nephew, Christopher Nance, who was then fourteen years old.Christopher's mother, Angela Nance, joined in Annie's petition for the guardianship.In November 2008, Alfa issued a $50,000 life insurance policy on the life of Christopher.Annie was the owner and primary beneficiary of the policy, and Angela was listed as the contingent beneficiary of the policy.Annie paid all premiums on the policy until her death on April 30, 2013.The policy provides that "upon the death of the owner, ownership and control of the policy ... shall pass to the estate of the deceased owner."

¶ 4.Annie was survived by her father, C.D. Pulliam, and siblings, Otis Pulliam and Willie Mae Townsend.No estate was ever opened for Annie.In October 2013, C.D. and Otis provided Alfa with an affidavit stating that they and Willie Mae were Annie's heirs.In addition, Otis completed an Alfa "Change of Ownership" form that purported to make Otis the owner of the policy, C.D. the contingent owner, Otis and C.D. the primary beneficiaries, and Willie Mae a contingent beneficiary.C.D. alleges that agents or employees of Alfa filled out the form and documentation and directed them to sign.C.D. also alleges that he paid all premiums on the policy after Annie's death.

¶ 5.Christopher died on November 16, 2014.The record contains a letter dated November 17, 2014, that is addressed to Annie and states as follows: "This is your notification that your recent policy change request has been closed as incomplete."The record is unclear as to what prompted this letter, which is dated only one day after Christopher's death but more than one year after Annie died and C.D. and Otis originally attempted to make changes to the policy.According to Alfa, the original attempted policy change was "closed as incomplete" because, in October 2013, Otis and C.D. had "incorrectly filled out a single owner form" rather than a form for multiple owners.As noted above, however, C.D. alleges that agents/employees of Alfa prepared the forms for him and Otis to sign.

¶ 6.On January 23, 2015, Alfa filed an interpleader complaint in the Clay County Chancery Court"to determine the proper beneficiary or beneficiaries of the ... policy."Alfa named C.D., Otis, Willie Mae, and Angela as defendants.Alfa stated that C.D. and Otis claimed that they were entitled to the proceeds of the policy as the primary beneficiaries.Alfa also stated that Angela had "not yet filed a claim" but might be entitled to the proceeds, "as she was named the contingent beneficiary by Annie ... when the policy was purchased."Alfa stated that it had "not been able to determine which of [them was] legally entitled to the proceeds."Alfa also filed a motion, which the court granted, to deposit $50,578.46 with the court pursuant to Mississippi Rule of Civil Procedure 22.

¶ 7. C.D. filed an answer and countercomplaint against Alfa.C.D. claimed that he was entitled to the proceeds of the policy, and he asserted counterclaims against Alfa for breach of contract, breach of the duty of good faith and fair dealing, negligence, gross negligence, bad faith failure to adjust and pay an insurance claim, tortious breach of contract, and punitive damages.C.D.'s countercomplaint generally alleged, among other things, that he had paid all premiums on the policy after Annie's death, that Alfa's agents or employees had filled out the change-of-ownership forms for him, and that any mistake in making the change of ownership and designation of new beneficiaries was the result of Alfa's tortious conduct.Angela sent a two-page pro se letter to the judge, which the clerk filed and docketed as her answer to Alfa's complaint.The docket reflects that Otis and Willie Mae were served, but neither answered the complaint or otherwise participated in the litigation.

¶ 8.Alfa answered C.D.'s countercomplaint and then filed a motion for summary judgment.In its motion for summary judgment, Alfa argued that it was entitled to summary judgment on its interpleader complaint because it had deposited the proceeds of the policy with the court.However, Alfa did not directly address C.D.'s counterclaims.The court held a hearing on the motion and granted Alfa's motion for summary judgment.The court's order stated that C.D.'s countercomplaint was "dismissed as moot."Angela appeared pro se at the summary judgment hearing, and the court advised her that she might want to hire an attorney to protect her interest in the litigation.

¶ 9. C.D. filed a notice of appeal from the court's order.However, Alfa filed a motion to dismiss the appeal.Alfa argued that the chancery court's order was not a final, appealable judgment because the chancellor did not finally adjudicate ownership of the interpled funds or certify the order as final pursuant to Mississippi Rule of Civil Procedure 54(b).A panel of the Supreme Court granted Alfa's motion and dismissed the appeal.Pulliam v. Alfa Ins. , No. 2015–TS–01147(Dec. 17, 2015).

¶ 10.While the first appeal was pending, Angela retained counsel and filed a motion for summary judgment claiming ownership of the interpled funds as the rightful beneficiary of the policy.The chancery court subsequently granted Angela's motion for summary judgment and entered a final judgment finding that Angela was the beneficiary of the policy and that she was entitled to the proceeds because C.D. and Otis lacked authority to change the ownership and beneficiaries of the policy following Annie's death.

¶ 11. C.D. filed a timely notice of appeal from the final judgment.He identifies two issues on appeal: (1) whether the chancery court erred by "granting summary judgment to [Alfa] and dismissing [his] counterclaim" and (2) whether the chancery court erred in granting summary judgment and "awarding the interpled funds to Angela."

ANALYSIS

¶ 12.We review a chancery court's grant or denial of summary judgment de novo.Miss. Dep't of Revenue v. Hotel & Rest. Supply , 192 So.3d 942, 945 (¶ 5)(Miss.2016).A party is entitled to summary judgment if the record shows that there is no genuine issue of material fact and that the party is entitled to a judgment as a matter of law.M.R.C.P. 56(c).We review the summary judgment record in the light most favorable to the nonmoving party.Thomas v. ChevronU.S.A. Inc. , 212 So.3d 58, 60 (¶ 7)(Miss.2017).However, the nonmoving party"may not rest upon the mere allegations or denials of his pleadings, but his response, by affidavits or as otherwise provided in [ Mississippi Rule of Civil Procedure 56 ], must set forth specific facts showing that there is a genuine issue for trial."M.R.C.P. 56(e)."To withstand summary judgment, the party opposing the motion must present sufficient proof to establish each element of each claim."Morton v. City of Shelby , 984 So.2d 323, 330 (¶ 17)(Miss. Ct. App.2007).

I. Interpleader and C.D.'s Counterclaims Against Alfa

¶ 13.Mississippi Rule of Civil Procedure 22 permits a plaintiff to file a complaint for interpleader and join as defendants"[p]ersons having claims against the plaintiff ... when their claims are such that the plaintiff is or may be exposed to double or multiple liability."M.R.C.P. 22(a)."Any party seeking interpleader ... may deposit with the court the amount claimed, ... and the court may thereupon order such party discharged from liability as to such claims and the action shall continue as between the claimants of such money ...."M.R.C.P. 22(b).Interpleader protects a stakeholder subject to competing claims to identifiable funds "from being obligated to determine at his peril which claimant has the better claim."M.R.C.P. 22 cmt."[A]nd, when the stakeholder himself has no interest in the fund, [interpleader] forces the claimants to contest what essentially is a controversy between them without embroiling the stakeholder in the litigation over the merits of the respective claims."Id."The primary test for determining the propriety of interpleading the adverse claimants and...