State Farm Life Ins. Co. v. Weber
| Decision Date | 28 September 2020 |
| Docket Number | Case No. 20-1008-DDC-JPO |
| Parties | STATE FARM LIFE INSURANCE COMPANY, Plaintiff, v. KERRY WEBER, individually and as personal representative of the ESTATE OF MICHAEL LEE JONES, KATHRYN JONES, & DOUGLAS JONES, Defendants. |
| Court | U.S. District Court — District of Kansas |
Plaintiff State Farm Life Insurance Company ("State Farm") brings this interpleader action to determine how to distribute proceeds from the life insurance policy of Michael Lee Jones (Doc. 1).1 Defendant Kathryn Jones has filed an Answer and Counterclaim (Doc. 13). State Farm filed an Answer to Ms. Jones's Counterclaim (Doc. 14) and filed a Motion for Judgment on the Pleadings (Doc. 15). State Farm also has filed a Motion to Deposit Funds and for Discharge (Doc. 16). For the reasons explained below, the court grants State Farm's motions.
The following facts come from State Farm's Complaint (Doc. 1) and the defendants—Ms. Weber and Ms. Jones—admit these facts in their respective answers. Ms. Weber admits all the following facts. Doc. 11 at 1 (Answer ¶ 1-2, 4). Ms. Jones admits the following facts from State Farm's Complaint, Doc. 13 at 1 , or fails to deny the facts stating they are "immaterial" to Ms. Jones's breach of contract claim, Doc. 13 at 1 . A denial must "fairly respond to the substance of the allegation," and simply stating the facts are "immaterial" does not constitute a denial under Fed. R. Civ. P. 8(b)(2). 5 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1264 (3d ed. 2004) (). A fact not specifically denied "will stand admitted and will not be at issue at trial," under Fed. R. Civ. P. 8(b)(6). Citizens Concerned for Separation of Church & State v. City & Cty. of Denver, 628 F.2d 1289, 1298 (10th Cir. 1980).
On June 10, 1992, State Farm issued a life insurance policy (the "Policy") to Michael Lee Jones. Doc. 1 at 3 (Compl. ¶ 3). The Policy insured Michael Lee Jones's life "in the face amount of $25,000.00 with a $25,000.00 term rider and paid up additions of $5,719.48." Id. (Compl. ¶ 8). The Policy designated Ms. Jones as beneficiary. Id. (Compl. ¶ 5). At the time, Kathryn Jones was Michael Lee Jones's spouse. Id. at 2 (Compl. ¶ 6). The Policy listed Michael Lee Jones's parents—Stevetta and Harold Jones—as successor beneficiaries. Id. at 3 (Compl. ¶ 6). Both Harold and Stevetta Jones predeceased Michael Lee Jones. Id. (Compl. ¶ 7).
Michael Lee and Kathryn Jones divorced in Oklahoma in 2013. Id. at 4 (Compl. ¶ 13); Doc. 1-1 (). The divorce Decree awarded Michael Lee Jones "'all the parties' right, title and/or interest in . . . 100% of his retirement, including, but not limited to . . . life insurance accounts . . . .'" Id. (Compl. ¶ 14) (quoting Doc. 1-1 at 3). The Decree also provided that Kathryn Jones would '"continue to pay the State Farm life insurance policies for both [Kathryn Jones] and [Michael Lee Jones]'" until Michael Lee Jones was '"financially able or when his family member is able to take over payments.'" Id. at 4-5 (Compl. ¶ 15) (quoting Doc. 1-1 at 4).
Michael Lee Jones died on March 2, 2019. Id. at 5 (Compl. ¶ 16). The Policy "was in full force and effect at the time of" his death. Id. (Compl. ¶ 17). On April 23, 2019, Ms. Jones submitted a life insurance claim to State Farm. Id. (Compl. ¶ 19). Then, on June 26, 2019, Kerry Weber submitted a life insurance claim to State Farm. Id. (Compl. ¶ 20). Ms. Weber is Michael Lee Jones's sister and personal representative of his estate. Id. at 2 (Compl. ¶¶ 9, 13).
Ms. Jones alleges the divorce and Ms. Weber's claim to the proceeds "are immaterial to plaintiff's contractual obligation to pay the life insurance proceeds to [Ms. Jones], the named beneficiary," because "under Kansas law where the contract was formed, created and executed," Ms. Jones has a right to the life insurance proceeds. Doc. 13 at 1 . She also alleges "[t]he expressed intent of Michael Lee Jones was to have State Farm pay all of his life insurance benefits to the person paying the life insurance premiums, Kathryn Jones." Doc. 13 at 2 . "State Farm accepted all premium payments from Kathryn Jones, knew that she was making them and knew that she was the named beneficiary." Id. at 2 .
Ms. Jones admits Michael Lee Jones was a resident of Oklahoma at the time of his death. Id. at 1 . State Farm asserts "Oklahoma law precludes [Ms. Jones] from being [a] named beneficiary under the Policy" because she and Michael were divorced.Doc. 1 at 5 (Compl. ¶ 4, 18) (citing 15 Okla. Stat. Ann. § 178). State Farm alleges that because Ms. Weber and Douglas Jones—Michael's siblings—also have asserted an interest in the Policy's proceeds, it "has been presented with competing claims for payment under the Policy." Id. (Compl. ¶¶ 21, 23). Ms. Jones does not deny these facts. She merely asserts that these facts are "immaterial to plaintiff's contractual obligation." Doc. 13 at 1 .
The court's analysis begins with State Farm's Motion for Judgment on the Pleadings (Doc. 15). Then the court turns to its Motion to Deposit Interpleader Funds (Doc. 16).
Fed. R. Civ. P. 12(c) provides "[a]fter the pleadings are closed—but early enough not to delay trial—a party may move for judgment on the pleadings." "A motion for judgment on the pleadings under Rule 12(c) is treated as a motion to dismiss under Rule 12(b)(6)." Atl. Richfield Co. v. Farm Credit Bank of Wichita, 226 F.3d 1138, 1160 (10th Cir. 2000). So, the legal standards that apply to Rule 12(b)(6) motions also apply to a Rule 12(c) motion.
Under Fed. R. Civ. P. 12(b)(6), a party may move to dismiss for failure to state a claim upon which relief can be granted against any pleading asserting a right to relief, including counterclaims. "In determining whether a counterclaim should be dismissed pursuant to Rule 12(b)(6), the court applies the same standards as applied in considering a motion to dismiss a complaint for failure to state a claim for relief." Jones v. Addictive Behavioral Change Health Grp., LLC, No. 16-02685-HLT, 364 F. Supp. 3d 1257, (D. Kan. Jan. 31, 2019); see United States ex rel. Duffy v. Lawrence Mem'l Hosp., No. 14-2256-SAC-JPO, 2016 WL 11627364 at *1 (D. Kan. Feb. 25, 2016) () (citing Smith v. United States, 561 F.3d 1090, 1097(10th Cir. 2009) ()).
To survive a motion to dismiss, a pleading "must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). When a party moves for judgment on the pleadings against a counterclaim, "[a]ll reasonable inferences from the pleadings are granted in favor of the non-moving party." Cessna Fin. Corp. v. JetSuite, Inc., 437 F. Supp. 3d 914, 919 (D. Kan. 2020) (citing Sanders v. Mountain Am. Fed. Credit Union, 689 F.3d 1138, 1141 (10th Cir. 2012)). "Under this standard, 'the complaint must give the court reason to believe that this [claimant] has a reasonable likelihood of mustering factual support for these claims.'" Carter v. United States, 667 F. Supp. 2d 1259, 1262 (D. Kan. 2009) (quoting Ridge at Red Hawk, L.L.C. v. Schneider, 493 F.3d 1174, 1177 (10th Cir. 2007)). Here, all facts in Ms. Jones's Answer and Counterclaim are taken as true and, as the non-moving party, all reasonable inferences are made in her favor.
Ms. Jones asserts a Counterclaim against State Farm, seeking to recover $56,086 in life insurance benefits, interest on the life insurance proceeds, and attorneys' fees. Doc. 13 at 3 (Answer and Countercl.). The Counterclaim alleges that State Farm's life insurance policy is a contract naming Ms. Jones as beneficiary. Id. at 2 . State Farm has breached that contract, she alleges, by refusing to pay all life insurance benefits to Ms. Jones. Id. at 2-3 . State Farm has moved for judgment on the pleadings against Ms. Jones's Counterclaim. Doc. 15.
"Interpleader is a statutory remedy that offers 'a party who fears being exposed to the vexation of defending multiple claims to a limited fund or property that is under his control a procedure to settle the controversy and satisfy his obligation in a single proceeding.'" In re Millennium Multiple Emp. Welfare Benefit Plan, 772 F.3d 634, 639 (10th Cir. 2014) (quoting 7 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1704 (3d ed. 2001)). Counterclaims are appropriate where "an interpleaded defendant 'asserts that the stakeholder is independently liable to him . . . .'" Genomatica, Inc. v. Icelandic Genomic Ventures Holding, S.A.R.L., No. 3:12-cv-0268-GPC-BGS, 2013 WL 1186919, at *6 (S.D. Cal. Mar. 21, 2013) ). "Certainly when the stakeholder is an interested party and when one of the claimants asserts that the stakeholder is independently liable to that claimant, the interposition of a counterclaim is appropriate." 7 Charles Alan Wright, Arthur R. Miller, & Mary Kay Kane, Federal Practice and Procedure § 1715 (3d ed. 2019).
State Farm asserts the courts should...
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