Thrivent Fin. for Lutherans v. Strojny

• Decision Date: 09 August 2012
• Docket Number: Civil Action No. 11–11011–JLT.
• Citation: 882 F.Supp.2d 260
• Parties: THRIVENT FINANCIAL FOR LUTHERANS, Plaintiff, v. Michelle STROJNY et. al., Defendants.
• Court: U.S. District Court — District of Massachusetts

882 F.Supp.2d 260

THRIVENT FINANCIAL FOR LUTHERANS, Plaintiff,

v.Michelle STROJNY et. al., Defendants.

Civil Action No. 11–11011–JLT.

United States District Court, D. Massachusetts.

Aug. 9, 2012.

Hannah S. Symonds, Jay P. Symonds, Peri K. Agulnek, Wilson Elser Moskowitz Edelman & Dicker, LLP, Boston, MA, for Plaintiff.

Joseph J. Czerwonka, Czerwonka & Bunk, Fall River, MA, James P. Hoban, Bowditch & Dewey LLP, Worcester, MA, for Defendants.

MEMORANDUM AND ORDER

TAURO, District Judge.

I. Introduction

Plaintiff in this interpleader action is an insurance company that issued a life insurance policy to Decedent, Paul Monroe, with a death benefit in the amount of $75,000 and an Annuity. Plaintiff alleges that there are conflicting claims to the death benefit from the policies and asks the court to determine the proper beneficiaries. Currently before the court are Plaintiff's Motion for Summary Judgment [# 30], Defendants Strojny and LaBlue's Motion to Vacate Final Decree of Interpleader [# 31, # 32], Defendant Metz's Motion for Summary Judgment [# 33], and two Motions to Strike [# 67, # 70].

II. BackgroundA. Factual Background

Plaintiff Thrivent Financial for Lutherans (“Thrivent”) is a fraternal benefit society.¹ Thrivent issued a Universal Life Insurance Policy (the “Life Policy”) to Decedent, Paul Monroe (“Monroe”), in the amount of $75,000 on January 5, 1984.² At that time, Monroe designated his estate as the policy beneficiary.³ On May 1, 1989, Thrivent also issued a Flexible Premium Annuity Contract (the “Annuity”) to Monroe, designating Monroe's mother as his beneficiary.⁴ In 1995, Monroe changed the beneficiaries of both his Life Policy and Annuity, naming his father, Harold Monroe, as the primary beneficiary, and his cousin, Allison A. Metz, as the secondary beneficiary on both policies.⁵ Harold Monroe died in 1998.⁶

In September 2002, Monroe sent a Request for Change of Beneficiary to Thrivent designating Defendants Strojny and LaBlue as primary beneficiaries of the Life Policy and Annuity, listing them each as “friend.” ⁷ Thrivent initially processed Monroe's request.⁸ In a letter dated October 18, 2002 (“October 2002 letter”), however, Thrivent notified Monroe that “friend” was not an eligible beneficiary under Thrivent's by-laws, and therefore the designation of Defendants Strojny and LaBlue was invalid.⁹ The October 2002 letter also included information about how Monroe could designate his estate as the policies' beneficiary to ensure that his friends received his death benefit.¹⁰ Thrivent enclosed partially completed forms for that purpose.¹¹ The October 2002 letterfurther explained that the previously designated beneficiaries—Harold Monroe and Allison Metz—would remain in place until Monroe submitted another change of designation form. ¹² There is no dispute that Monroe received the October 2002 letter, ¹³ or that Monroe did not submit the forms to properly change his beneficiary to allow his friends to collect his death benefit.¹⁴

Monroe died on December 20, 2010.¹⁵ At the time of his death, the benefit payable under the Life Policy totaled $59,917.21 and the amount payable under the Annuity totaled $30.29.¹⁶ After Monroe's death, Thrivent sent claims kits to Defendants Strojny and LaBlue.¹⁷ On December 29, 2010, a Thrivent representative, Kris Ristau, called both Defendants Strojny and LaBlue to explain that the kits had been sent in error.¹⁸ Ms. Ristau notified Strojny and LaBlue that they were not proper beneficiaries under the policy and, therefore, would not receive any death benefits from either the Life Policy or Annuity.¹⁹ As a courtesy, Thrivent honored the funeral home assignments executed by Defendants Strojny and LaBlue in the amount of $1,795.²⁰

In January, 2011, Defendants Strojny and LaBlue, through counsel, appealed internally Thrivent's determination that they were not proper beneficiaries.²¹ In February, 2011, Thrivent affirmed its determination that Defendants Strojny and LaBlue were not proper beneficiaries and notified them of its decision by letter.²² In March, 2011, counsel for Defendants Strojny and LaBlue notified Thrivent that they disagreed with its determination.²³

In May, 2011, Thrivent received an executed claim package from Defendant Metz. ²⁴ Thrivent claims no title to, or interest in, the benefits under Monroe's Life Policy or Annuity,²⁵ but it asserts that it is unable to determine the proper beneficiary of the policies and is concerned about exposing itself to multiple liability should it pay the policy to any defendant.²⁶ Thrivent requests that the court determine the proper beneficiary of the policies and discharge any and all liability related to the Life Policy and Annuity proceeds except to the party or parties entitled to the benefit.²⁷B. Procedural Background

Thrivent filed its Complaint in Interpleader in June, 2011. In July of that year, Defendants Strojny and LaBlue filed a number of Counterclaims [# 4, # 5] against Thrivent. On August 11, 2011, Plaintiff filed a Motion for Entry of Final Decree of Interpleader [# 9]. This court subsequently entered a Final Decree of Interpleader [# 11], granting Plaintiff's motion. On December 1, 2011, Thrivent filed a Motion for Summary Judgment [# 30] on the counterclaims of Defendants Strojny and LaBlue. That same day, Defendant Metz filed a Motion for Summary Judgment [# 33] against Thrivent, and Defendants Strojny and LaBlue filed Motions to Vacate the Final Decree of Interpleader [# 31, # 32]. In February, 2012, Thrivent and Defendant Metz each filed a Motion to Strike [# 67, # 70]. All pending motions are currently before the court.

III. DiscussionA. Legal Standard

I. Summary Judgment

The motions for summary judgment currently before the court are governed by Fed.R.Civ.P. 56(e). Pursuant to the Rule, the Court will grant a motion for summary judgment “against a party who fails to make a showing sufficient to establish the existence of an element essential to the party's case, and on which that party will bear the burden of proof at trial.” ²⁸ The facts, and inferences drawn from them, are viewed in light most favorable to the non-moving party, here, Defendants Strojny and LaBlue.²⁹ In the First Circuit, “[s]ummary judgment is appropriate only if the record ... reflects that no genuine issue of material fact exists and that the moving party or parties are entitled to judgment as a matter of law.” ³⁰

II. Rules Governing Thrivent as a Beneficent Society

As a preliminary matter, Thrivent, as a beneficent society, is governed by Mass. Gen. Laws ch. 176 § 1 et seq.³¹ Pursuant to section 23 of the statute, a benefit society has to provide each member with a certificate stating the amount of beneficent the society provides.³² The certificate, along with the by-laws of the society and any amendments, form the agreement between the society and its members.³³ Any changes to the society's charter, articles of incorporation, constitution, or by-laws governthe agreement as if they had been in force since its inception. ³⁴

B. Defendants Strojny and LaBlue's Counterclaims

I. Standing

The court must first determine whether Defendants Strojny and LaBlue have standing to bring their counterclaims against Thrivent. ³⁵ “To meet the standing requirements of Article III, ‘[a] plaintiff must allege personal injury fairly traceable to the defendant's allegedly unlawful conduct and likely to be redressed by the requested relief.’ ” ³⁶ Under Massachusetts law, in an action that would have survived if commenced by a decedent during his lifetime, only an executor or administrator of an estate has standing to bring claims on behalf of a decedent.³⁷

In the present case, Defendants Strojny and LaBlue do not have standing to bring their counterclaims against Thrivent. Defendants assert their counterclaims on Monroe's behalf.³⁸ Claims brought on behalf of a decedent are governed by Mass. Gen. Laws 230 § 1, and must be brought by an executor or administrator of the decedent's estate.³⁹ The claims must also be of the type that would have survived if brought by the decedent during his lifetime.⁴⁰ Defendants Strojny and LaBlue are not, and do not claim to be, Monroe's executors or administrators as is required to assert claims on Monroe's behalf.⁴¹ Because Defendants Strojny and LaBlue are not executors or administrators of Monroe's estate, they do not have standing to bring these counterclaims as a matter of law.⁴² Independent of the court's standing analysis, Defendants' counterclaims are without merit and fail as a matter of law under Rule 56. In light of the concerns raised in Defendants Strojny and LaBlue's Motions to Vacate Final Decree of Interpleader [# 31, # 32], the court addresses the merits of each counterclaim in turn.

II. Breach of Fiduciary Duty

Under Massachusetts law, there is nothing in the relationship between the insured and the insurer that “creates a heightened duty of disclosure.” ⁴³ Relationships between an insurance company and an insured are not typically understood to be fiduciary in nature,⁴⁴ and an insurer, therefore, does not owe its insured a fiduciary duty “absent ‘special circumstances of assertion, representation and reliance.’ ” ⁴⁵

Typically, courts find that there is a fiduciary duty where the facts of the case present a special circumstance, such as a continuing relationship between the agent and the insured, or where there is reliance by the insured on the insurer's agent for advice and guidance on the insured's policies. ⁴⁶ Finally, even in cases where courts have found a fiduciary duty, an insurer does not have a duty to ensure that the policy holder understands the terms of his policy.⁴⁷

In McCue v. Prudential Ins. Co. of America and Bicknell, Inc. v. Havlin, the Massachusetts Supreme Judicial Court, and the Massachusetts Appeals Court, respectively, found a duty existed between the insurance company and the insured because the insurance agent improperly advised the insured about his coverage...