Succession of Schimek, 061020 LACA4, 2019-CA-1069

Docket Nº2019-CA-1069
Opinion JudgePaula A. Brown Judge
Party NameSUCCESSION OF ROBERT ALFRED SCHIMEK, SR.
AttorneyLaura W. Plunkett Kathryn M. Knight Michael Q. Walshe, Jr. STONE PIGMAN WALTHER WITTMAN L.L.P. COUNSEL FOR APPELLANT William David Aaron, Jr. Carolyn W. Gill-Jefferson Dominic Joseph Gianna DeWayne L. Williams Anna A. Rainer AARON & GIANNA, PLC COUNSEL FOR APPELLEE Russell J. Stutes, III Russell ...
Judge Panel(Court composed of Judge Edwin A. Lombard, Judge Roland L. Belsome, Judge Paula A. Brown) BELSOME, J., CONCURS IN THE RESULT
Case DateJune 10, 2020
CourtCourt of Appeals of Louisiana

SUCCESSION OF ROBERT ALFRED SCHIMEK, SR.

No. 2019-CA-1069

Court of Appeals of Louisiana, Fourth Circuit

June 10, 2020

APPEAL FROM CIVIL DISTRICT COURT, ORLEANS PARISH NO. 2018-11837, DIVISION "B-1" Honorable Rachael Johnson

Laura W. Plunkett Kathryn M. Knight Michael Q. Walshe, Jr. STONE PIGMAN WALTHER WITTMAN L.L.P. COUNSEL FOR APPELLANT

William David Aaron, Jr. Carolyn W. Gill-Jefferson Dominic Joseph Gianna DeWayne L. Williams Anna A. Rainer AARON & GIANNA, PLC COUNSEL FOR APPELLEE

Russell J. Stutes, III Russell J. Stutes, Jr. STUTES & LAVERGNE, LLC COUNSEL FOR VANGUARD

(Court composed of Judge Edwin A. Lombard, Judge Roland L. Belsome, Judge Paula A. Brown)

BELSOME, J., CONCURS IN THE RESULT

Paula A. Brown Judge

This appeal arises from a contractual dispute. Appellants, the co-executors of the Succession of Robert Alfred Schimek, Sr., Denise Villeré Schimek, Planché Francois Villeré, and Ray Alan Schimek (the "co-executors"), and Appellee, Robert Alfred Schimek, Jr. ("Robert, Jr."), filed cross-motions for summary judgment seeking a determination of whether the Decedent's "Transfer on Death" ("TOD") beneficiary designation for his securities accounts set forth in contracts between the Decedent and brokerage companies-Vanguard and TD Ameritrade- was valid. The district court denied the co-executors' motion and granted Robert, Jr.'s, motion. The judgment on both motions was signed on December 17, 2019. From this judgment, the co-executors appeal. For the reasons that follow, the district court's judgment is affirmed.

FACTS/PROCEDURAL HISTORY

Robert Alfred Schimek, Sr. ("Dr. Schimek"), a physician and businessman, died on November 4, 2018, while domiciled in Orleans Parish, Louisiana. At the time of his death, Dr. Schimek was married1 to Denise Villeré Schimek ("Mrs. Schimek"). Dr. Schimek had two sons from a previous marriage, Robert, Jr., and Ray Alan Schimek ("Ray"), both of the age of majority. Dr. Schimek's Last Will and Testament (the "Will") was executed in 2013, in notarial form; the Will was presented to the trial court for filing, registry, and execution in accordance with law, and the co-executors of Dr. Schimek's succession were appointed.

At the time of his death, Dr. Schimek had securities accounts with Vanguard and TD Ameritrade. In 2017, while domiciled in Louisiana, Dr. Schimek transferred his securities account to Vanguard and entered a contract with Vanguard, the Vanguard Transfer on Death Agreement (the "Vanguard contract"). In the Vanguard contract, Dr. Schimek and Vanguard agreed that in the event of his death, fifty percent of the account would be transferred to Robert, Jr., and fifty percent would be transferred to Mrs. Schimek. Following Dr. Schimek's passing, Vanguard transferred the proceeds to the named beneficiaries as agreed.2

As to the TD Ameritrade securities account, no evidence was introduced. The co-executors allege TD Ameritrade froze Dr. Schimek's account pending resolution of this matter.

In November 2018, Dr. Schimek's succession was opened, and the co-executors were appointed. In June 2019, the co-executors filed a petition for a declaratory judgment seeking a judgment providing the following:

1. Transfer on Death ["TOD"] designations are invalid as a matter of Louisiana law to transfer the Securities Accounts outside of probate;

2. [Dr. Schimek's] designation of Vanguard account number ****5227; TD Ameritrade Account No. ****5492 . . . "Transfer on Death" accounts did not effect a valid transfer under Louisiana law of those accounts upon [Dr. Schimek's] death; and

3. The Co-Executors shall take possession of all funds in Vanguard account number ****5227; TD Ameritrade Account No. ****5492 . . . as of [Dr. Schimek's] date of death and deposit those funds into a Succession account for distribution in accordance with the terms of [Dr. Schimek's] last will and testament.[3]

In response, Robert, Jr., filed, in July 2019, a petition for intervention, and the district court granted Robert, Jr.'s, request. Following, the co-executors filed an amended petition for declaratory judgment naming Mrs. Schimek, Robert, Jr., Vanguard, and TD Ameritrade as defendants.

In August of 2019, the co-executors filed a motion for summary judgment on the grounds that Dr. Schimek's TOD beneficiary designations of the securities accounts were invalid as a matter of Louisiana law. No exhibits were attached to the summary judgment. In response, Robert, Jr., filed an opposition to the co-executors' motion for summary judgment. In addition, Robert, Jr., filed a cross-motion for summary judgment regarding only the Vanguard contract, praying that the district court declare:

1. the distribution of the proceeds of the Vanguard account, are governed by Pennsylvania, not Louisiana law [as per the agreement between Dr. Schimek and Vanguard];

2. that Vanguard's distribution of the proceeds of the Vanguard account, designated by Dr. Schimek to transfer on death to the named beneficiaries of said account, was proper;

3. that [Robert, Jr.] is the rightful owner of all proceeds of the Vanguard account that were transferred to him pursuant to the transfer on death designation made by Dr. Schimek; [and]

4. that the Amended Petition for Declaratory Judgment thereafter be dismissed with prejudice. . . .

In support of his motion for summary judgment, Robert, Jr., attached a letter from Dr. Schimek to Vanguard, 4 the Vanguard contract, and an affidavit by Robert, Jr.5

The co-executors responded with an opposition to Robert, Jr.'s, cross-motion for summary judgment and attached, as an exhibit, a copy of La. R.S. 9:1421, which addresses joint securities accounts. In addition, the co-executors filed a reply to Robert, Jr.'s, opposition to the co-executor's motion for summary judgment, and attached exhibits, including a copy of the Vanguard contract, an affidavit by Mrs. Schimek, and a blank TD Ameritrade contract.

A hearing on the motions for summary judgment was held on September 27, 2019. At the hearing, counsel for Robert, Jr., made several procedural objections: (1) the co-executor's opposition to Robert, Jr.'s, cross-motion for summary judgment was filed late; (2) the co-executor's reply was filed late; and (3) any exhibits attached to the co-executor's reply memorandum were prohibited under La. C.C.P. art. 966(B)(3). The district court allowed the co-executors to argue in opposition to Robert, Jr.'s, cross-motion for summary judgment, but prohibited reference to the exhibits attached to the co-executor's reply memorandum that included an affidavit by Mrs. Schimek, and a blank TD Ameritrade contract.

The district court granted Robert, Jr.'s, motion for summary judgment, finding that Pennsylvania law applied and the TOD designation of beneficiaries by Dr. Schimek in the Vanguard agreement was valid. In addition, the district court denied the co-executors' motion for summary judgment. The judgment was signed on December 17, 2019.[6] This appeal follows.

DISCUSSION

On appeal, the co-executors essentially assert two assigned errors. First, the co-executors contend that Robert, Jr., lacks standing. Second, the co-executors assert that the district court erred by denying the co-executors' motion for summary judgment and granting Robert, Jr.'s, motion for summary judgment. Particularly, they contend that the TOD designation of beneficiaries in the TD Ameritrade and Vanguard contracts are null and void and that the district court was errant in applying Pennsylvania law to the Vanguard contract.

Standing

The co-executors allege that Robert, Jr., a non-party to the Vanguard contract, lacks standing to enforce the performance of the contract; thus, he has no right to attempt to enforce the applicable choice-of-law provision in the Vanguard contract.7

Louisiana Code of Civil Procedure Article 681 provides, "[A]n action can be brought only by a person having a real and actual interest which he asserts." A third party beneficiary, such as Robert, Jr., has a right to demand performance of a contract when certain requirements are met. In Williams v. City of New Orleans, 15-0769, p. 7 (La.App. 4 Cir. 4/20/16), 193 So.3d 259, 264-65, this Court explained:

"A contracting party may stipulate a benefit for a third person called a third party beneficiary." La. C.C. art. 1978. "Under Louisiana law, such a contract for the benefit of a third party is commonly referred to as a 'stipulation pour autrui.'" Joseph v. Hosp. Serv. Dist. No. 2 of Par. of St. Mary, 05-2364, p. 7 (La.10/15/06), 939 So.2d 1206, 1211, quoting Paul v. Louisiana State Employees' Group Benefit Program, 99-0897, p. 5 (La.App. 1 Cir. 5/12/00), 762 So.2d 136, 140. . . .

The Louisiana Supreme Court held that there are three requirements for a stipulation pour autrui: "1) the stipulation for a third party is manifestly clear; 2) there is certainty as to the benefit provided the third party; and 3) the benefit is not a mere incident of the contract between the promisor and the promisee." Joseph, 05-2364, pp. 8-9, 939 So.2d at 1212. "The stipulation gives the third party beneficiary the right to demand performance from the promisor." La. C.C. art. 1981.

In the case sub judice, the stipulation was clearly for Robert, Jr., there was a certain benefit provided for Robert, Jr., a fifty percent share of Dr. Schimek's Vanguard securities account, and the benefit was the object of the contract. In addition, the benefit was transferred to Robert, Jr., at the time Robert, Jr., sought to intervene. As the requirements of a stipulation pour autrui were met, we find Robert Jr., has standing in this case to defend his benefit under the contract.

This claim lacks...

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