Rawlings, Jr. v. the John Hancock Mutual Life Insurance Co.

• Decision Date: 02 November 2001
• Docket Number: 00-03191
• Citation: 78 S.W.3d 291
• Parties: ARTHUR L. RAWLINGS, JR. v. THE JOHN HANCOCK MUTUAL LIFE INS. CO., et al.Assigned on Briefs
• Court: Tennessee Court of Appeals

ARTHUR L. RAWLINGS, JR. v THE JOHN HANCOCK MUTUAL LIFE INS. CO., et al.

No. M2000-03191-COA-R3-CV

Assigned on Briefs August 2, 2001

IN THE COURT OF APPEALS OF TENNESSEE AT NASHVILLE

Filed November 2, 2001

Appeal from the Circuit Court for Davidson County, No. 99C-2393

Carol Soloman, Judge

This appeal involves a dispute between a decedent's estranged husband and brother over the proceeds of a $12,000 life insurance policy. When he discovered that his deceased wife had removed him as the beneficiary of her policy, the husband filed suit in the Circuit Court for Davidson County seeking to invalidate the change of beneficiary form. Following a bench trial, the trial court found that the decedent lacked the capacity to change the beneficiary on her life insurance policy and that the decedent's brother had procured the change through undue influence. Accordingly, the trial court awarded the decedent's husband the proceeds of her life insurance policy as well as $350 that his brother-in-law had removed from a joint account using a power of attorney he obtained from the decedent. We have determined that the evidence does not support the trial court's conclusion that the decedent lacked capacity to change the beneficiary of her life insurance policy and that the decedent's husband never asserted an undue influence claim in the trial court. Accordingly, we reverse the judgment and remand the case with directions to award the proceeds of the life insurance policy to the decedent's brother.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court

Reversed and Remanded

William C. Koch, Jr., J., delivered the opinion of the court, in which William B. Cain and Patricia J. Cottrell, JJ., joined.

Alan C. Housholder, Nashville, Tennessee, for the intervenor appellant, Darden Holt.

Larry L. Roberts and Audrey Lee Anderson, Nashville, Tennessee, for the appellee, Arthur L. Rawlings, Jr.

OPINION

I.

Arthur Rawlings and Eleanor Rawlings were married in February 1946. Throughout most of their marriage, Mr. Rawlings worked for Genesco, and Ms. Rawlings worked for the Nashville Electric Service. This dispute revolves around a $12,000 life insurance policy Ms. Rawlings obtained in 1961 through her employer. She originally named Mr. Rawlings as the sole beneficiary of this policy.

Ms. Rawlings was an alcoholic and struggled with her addiction throughout her adult life. She was finally forced to retire from the Nashville Electric Service, and in 1984 she broke her hip while inebriated. Diagnostic x-rays of this injury revealed twenty-seven other fractures from previous falls. Ms. Rawlings did not recover from this injury; she was discharged from the hospital to the first of several nursing homes where she spent the rest of her life.

One year later, Ms. Rawlings's mother died. With Ms. Rawlings confined to a nursing home, Mr. Rawlings served as the executor of his mother-in-law's will. During the probate proceeding, a dispute arose with Darden Holt, Ms. Rawlings's brother who lived in Texas. Mr. Holt eventually successfully contested the will. This dispute left Ms. Rawlings quite angry with Mr. Holt. While Ms. Rawlings and Mr. Holt continued to communicate, their relationship became strained. Ms. Rawlings disinherited Mr. Holt in her 1988 will specifically because of the will contest. Thereafter, Ms. Rawlings and Mr. Holt reconciled, and Mr. Holt visited his sister two or three times a year between 1988 and 1998.

Ms. Rawlings was admitted to the Bordeaux Hospital in May 1994. Mr. Rawlings continued to visit her there three to four times per week except when the weather limited his ability to travel. Ms. Rawlings's mental acuity began to slip as the years went on, and in November 1997 she was diagnosed with senile dementia and depression. She went through periods of confusion, and she was uncommunicative much of the time. By August 1998, Ms. Rawlings's world consisted only of her room at the Bordeaux Hospital. Her severe arthritis restricted her mobility. She was unable to get out of bed, turn over, or bathe and groom herself without assistance. She was on occasion able to feed herself, but usually she required assistance for this activity as well.

In August 1998, Mr. Rawlings told Ms. Rawlings that he wanted a divorce. This news upset Ms. Rawlings. During one of Mr. Holt's visits in October 1998, Ms. Rawlings told him about Mr. Rawlings's plans to divorce her and asked for his help. Mr. Holt agreed to help and began visiting his sister more frequently. In November 1998, Ms. Rawlings, with her brother's assistance, took several steps to separate herself from Mr. Rawlings. On November 9, 1998, she told the nursing staff that she desired legal assistance in the divorce proceeding and that she desired to change the address where her social security checks were being delivered. On November 11, 1998, Ms. Rawlings gave Mr. Holt her power of attorney. The following day, Mr. Holt used the power of attorney to change the address where her pension checks were being sent, and Ms. Rawlings signed a change of beneficiary form naming Mr. Holt as the beneficiary on her life insurance policy. Finally, on November 23, 1998, Ms. Rawlings executed a new will naming Mr. Holt as her executor and the sole beneficiary of her estate. Thereafter, Mr. Holt returned to his home in Texas, but not before making arrangements to forward all of Ms. Rawlings's mail to him and using the power of attorney to withdraw $350 from a joint account Ms. Rawlings maintained with Mr. Rawlings.

Mr. Rawlings continued to visit Ms. Rawlings even after he told her he wanted a divorce. Eventually, they agreed to an uncontested divorce, but Ms. Rawlings insisted that Mr. Holt review and approve the marital dissolution agreement. Mr. Rawlings had not filed for divorce by the time Ms. Rawlings died on July 20, 1999. Soon after Ms. Rawlings's death, Mr. Rawlings contacted the John Hancock Life Insurance Company to obtain the proceeds of Ms. Rawlings's life insurance policy. Only then did he learn that he was no longer the named beneficiary of Ms. Rawlings's life insurance policy.

In August 1999, Mr. Rawlings filed suit in the Circuit Court for Davidson County against the John Hancock Life Insurance Company and the Nashville Electric Service seeking the $12,000 proceeds from Ms. Rawlings's life insurance policy on two grounds that Ms. Rawlings was not competent in November 1998 to change the beneficiary on her life insurance policy and that the change had been procured by fraud. Mr. Holt intervened in the suit to defend his sister's action. All parties other than Messrs. Rawlings and Holt were dismissed after the death benefits from the insurance policy were paid into court. Following a bench trial, the trial court determined that Ms. Rawlings lacked the mental capacity in November 1998 to change the beneficiary on her life insurance policy or to execute a power of attorney and that Mr. Holt had exerted undue influence over her to obtain these two documents. Accordingly, on November 30, 2000, the trial court filed a memorandum and order awarding the $12,000 death benefit to Mr. Rawlings and directing Mr. Holt to return the $350 he had removed from the Rawlings' joint account in November 1998. The trial court also awarded Mr. Rawlings $1,557.50 in discretionary costs. Mr. Holt has appealed.

II.

The Standard of Review

We turn first to the proper standards of review for the issues presented in this appeal. Because this is an appeal from a decision made by the trial court itself following a bench trial, the now familiar standard in Tenn. R. App. P. 13(d) governs our review. This rule contains different standards for reviewing a trial court's decisions regarding factual questions and legal questions.

With regard to a trial court's findings of fact, we will review the record de novo and will presume that the findings of fact are correct "unless the preponderance of the evidence is otherwise." We will also give great weight to a trial court's factual findings that rest on determinations of credibility. In re Estate of Walton, 950 S.W.2d 956, 959 (Tenn. 1997); B & G Constr., Inc. v. Polk, 37 S.W.3d 462, 465 (Tenn. Ct. App. 2000). However, if the trial judge has not made a specific finding of fact on a particular matter, we review the record to determine where the preponderance of the evidence lies without employing a presumption of correctness. Ganzevoort v. Russell, 949 S.W.2d 293, 296 (Tenn. 1997).

Tenn. R. App. P. 13(d)'s presumption of correctness requires appellate courts to defer to a trial court's findings of fact. Fell v. Rambo, 36 S.W.3d 837, 846 (Tenn. Ct. App. 2000); Taylor v. Trans Aero Corp., 924 S.W.2d 109, 112 (Tenn. Ct. App. 1995). Because of the presumption, an appellate court is bound to leave a trial court's finding of fact undisturbed unless it determines that the aggregate weight of the evidence demonstrates that a finding of fact other than the one found by the trial court is more probably true. Estate of Haynes v. Braden, 835 S.W.2d 19, 20 (Tenn. Ct. App. 1992) (holding that an appellate court is bound to respect a trial court's findings if it cannot determine that the evidence preponderates otherwise). Thus, for the evidence to preponderate against a trial court's finding of fact, it must support another finding of fact with greater convincing effect.

The presumption of correctness in Tenn. R. App. P. 13(d) applies only to findings of fact, not to conclusions of law. Accordingly, appellate courts review a trial court's resolution of legal issues without a presumption of correctness and reach their own independent conclusions regarding these issues. Johnson v. Johnson, 37 S.W.3d 892, 894 (Tenn. 2001); Nutt v. Champion Int'l Corp., 980 S.W.2d 365, 367 (Tenn. 1998); Hicks v. Cox, 978 S.W.2d 544, 547 (Tenn. Ct. App. 1998); McCormick v. Aabakus, Inc., ___ S.W.3d ___, ___, 2000 WL 1473915, at *1 (Tenn. Sp. Workers Comp. Panel 2000).

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