Tonkovich v. Crown Life Ins. Co.

• Decision Date: 21 June 2005
• Docket Number: No. ED 85238.,ED 85238.
• Citation: Tonkovich v. Crown Life Ins. Co., 165 S.W.3d 210 (Mo. 2005)
• Parties: Melanie Platt TONKOVICH, f/k/a Melanie Ann Molasky, and Jonas Denos, f/k/a Jonas Molasky, Appellants, v. CROWN LIFE INSURANCE CO., and Canada Life Assurance Co., Respondents.
• Court: Missouri Supreme Court

165 S.W.3d 210

Melanie Platt TONKOVICH, f/k/a Melanie Ann Molasky, and Jonas Denos, f/k/a Jonas Molasky, Appellants, v. CROWN LIFE INSURANCE CO., and Canada Life Assurance Co., Respondents.

No. ED 85238.

Missouri Court of Appeals, Eastern District, Division Three.

June 21, 2005.

COPYRIGHT MATERIAL OMITTED

Burton Newman, David Perney, Mark E. Goodman, Jerome S. Kraus, St. Louis, MO, for appellant.

Steven H. Schwartz, Jeffrey R. Baron, Jack B. Spooner, St. Louis, MO, for respondent.

NANNETTE A. BAKER, Judge.

Melanie Tonkovich and Jonas Denos (collectively, "Heirs") filed a claim alleging that Crown Life Insurance, Co. and Canada Life Assurance Co. ("Insurance Companies") wrongfully paid insurance proceeds to Allan Molasky as trustee for the A & G Trust. The trial court determined that there were no genuine issues of material fact and that the insurance companies were entitled to summary judgment. It denied Heirs' motion for summary judgment and granted Insurance Companies' motion for summary judgment. Heirs appeal.

Background

Mark Molasky died intestate on January 29, 1990. Melanie Tonkovich and Jonas Denos were his only children and the only heirs to the estate of their father. Crown Life Insurance Co. and Canada Life Assurance, Co. insured the life of Mark Molasky ("Insured") for $5 million dollars under a life insurance policy ("the 552 Policy"). The policy was originally owned by Molasky Enterprises, Ltd. ("Molasky Ltd."). Molasky Ltd. was the sole owner and beneficiary. On September 9, 1977, Molasky Ltd. transferred 100 percent ownership rights to Melanjo Investment, Inc.¹ ("Melanjo") and designated Melanjo as the sole beneficiary of the policy. Allan Molasky, Insured's father, ("Allan") and Marti Ellen Rose, Insured's sister, ("Marti") were the sole directors of Melanjo. Allan was president and Marti was the sole shareholder. Melanjo, Allan, Marti and Insured's Mother, Gloria Molasky ("Gloria") paid the premiums on the 552 Policy. The premiums averaged approximately $150,000 per year, totaling over $2.5 million throughout the life of the policy. Insured and Heirs were never owners nor were they designated beneficiaries of the 552 policy. In addition, they did not pay any premiums on the policy.

On August 1, 1983, Melanjo executed a trust document known as the A & G Trust ("1983 Trust"). The trustees and primary beneficiaries of the 1983 Trust were Allan, Marti and Gloria. The trust document was signed by Allan, as president of Melanjo. Allan, Marti and Gloria signed as trustees. At the time the trust document was executed, no property was identified or placed in the trust. On January 28, 1985 Melanjo executed a Crown Life Policy Title Request ("Title Request") and transferred 80% ownership in the 552 Policy to the 1983 Trust. The Title Request also designated the 1983 Trust as a beneficiary of 80 percent of the policy proceeds.² No contingent beneficiary was named. Marti and Allan signed the Policy Title Request as trustees. On August 1, 1989 Melanjo, through Marti and Gloria, named the 1983 Trust contingent owner and contingent beneficiary of another life insurance policy ("755 Policy") which also insured the life of Mark Molasky. The 1983 Trust accepted cash dividends on the 552 Policy from 1985 through 1990. These dividends were used to pay part of the policy premiums on both policies.

Insured died on January 29, 1990. On February 1, 1990, Allan filed a death claim with Crown Life on the 552 Policy and signed it as co-trustee of the 1983 Trust. Crown Life paid $3.2 million to the "A & G Trust" as beneficiary of the 552 Policy. This was 80 percent of the net death benefits of the 552 Policy. The Insurance Companies did not require this request to be made under oath and did not request a copy of the 1983 Trust to confirm that the trust existed. In 1990 Allan opened a bank account in the name of the 1983 Trust, using the trust's federal tax identification number. He deposited the death benefits into that account. On February 7, 1990, Marti Ellen Rose executed a document entitled the "A & G Trust Dated February 7, 1990" ("1990 Trust"). In 1998, Melanie Platt Tonkovich filed suit against Allan, seeking an accounting relating to the 1983 Trust, ("the accounting suit"). Crown Life was not a party to that case. During discovery of the accounting suit, the depositions of Allan and Howard Wittner, ("Wittner") attorney for Allan and Melanjo, were taken. Wittner also filed an affidavit. In 2003, Heirs filed this action against Crown Life.

In Heirs' first point relied on, they contend that the trial court erred in granting Insurance Companies' motion for summary judgment because a genuine issue of material fact exists with respect to the manner in which the contract disposes of the insurance proceeds in the event that the A & G Trust is nonexistent. Heirs, in their second point, contend that the trial court erred in granting summary judgment to Insurance Companies because the evidence demonstrates that the 1983 Trust did not exist at the time of the death of Insured and the insurance contract did not provide a contingent beneficiary. Lastly, Heirs assert that the trial court erred in not entering summary judgment for Heirs because the 1983 Trust did not exist at the time of death of the Insured and the insurance contract did not provide a contingent beneficiary. We will address Heirs' second point first because it is dispositive. We affirm.

Standard of Review

Review of a grant of summary judgment is de novo. ITT Comm'l Fin. Corp. v. Mid-Am. Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993). The Court will review the record in the light most favorable to the party against whom judgment was entered. Id. Additionally, the party against whom summary judgment was entered is entitled to all reasonable inferences from the record. Hertel ex rel. Hertel v. Nationsbank N.A., 37 S.W.3d 408, 410 (Mo.App. E.D.2001). However, the facts set forth in support of a party's motion will be taken as true unless contradicted by the non-movant's response. ITT Comm'l Fin. Corp., 854 S.W.2d at 376.

A party is entitled to summary judgment where there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. Rule 74.04.³ To demonstrate that summary judgment is proper, a defending party may present facts negating any element of the plaintiff's cause of action, show the non-movant has not, or cannot, produce evidence of the existence of any of those elements, or show there is no genuine issue of fact necessary to support the defending party's affirmative defenses. ITT Comm'l Fin. Corp., 854 S.W.2d at 381. Once the defending party has made a prima facie showing, the burden shifts to the plaintiff to set forth specific facts, by affidavit, deposition, or otherwise, showing the existence of a genuine issue of fact. Id.

A "genuine issue" is a real, non-frivolous dispute that exists where the record contains competent, material evidence that two plausible, but contradictory accounts of essential facts in the case. Ackerman Buick, Inc. v. Gen. Motors Corp., 66 S.W.3d 51, 54 (Mo.App. E.D.2001). Only those factual disputes that might affect the outcome of the case under the applicable law are considered "material" for purposes of summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A "genuine issue" is a dispute that is real and not merely argumentative, imaginary, or frivolous. Ackerman Buick, Inc., 66 S.W.3d at 54. If the trial court's judgment is sustainable on any ground as a matter of law, even one different than that posited in the motion for summary judgment, the judgment should be sustained. ITT Comm'l Fin. Corp., 854 S.W.2d at 387-88.

Existence of the 1983 Trust

Heirs contend that the trial court erred in granting Insurance Companies' motion for summary judgment because the 1983 Trust did not exist at the time Insured died and the insurance contract did not provide a contingent beneficiary. Insurance Companies claim that the trust was valid under the Missouri Insurance Trust Statute, Section 456.030⁴ and that Melanjo had the specific intent to create the trust.

To establish a valid, enforceable express trust, there must be (1) a beneficiary, (2) a trustee, (3) a trust res so sufficiently described or capable of identification that title thereto can pass to the trustee, (4) actual delivery, assignment or conveyance of legal title to the corpus to the trustee. Atl. Nat. Bank of Jacksonville, Fla., v. St. Louis Union Trust Co., 357 Mo. 770, 211 S.W.2d 2, 5 (1948); Estate of Harvey v. Luther Coll., 802 S.W.2d 585, 588 (Mo.App. W.D.1991). The evidence necessary to establish the validity of a trust, "must be clear and convincing and so full and demonstrative as to remove from the mind ... any reasonable doubt with respect thereto." Bank of Jacksonville, 211 S.W.2d at 5.

Heirs first claim that the 1983 Trust is not valid because it was improperly funded. Heirs argue that no property was transferred to the trustees to be held in trust and thus the trust is invalid. However, the Missouri legislature enacted Section 456.030, the life insurance trust statute, in 1983. This statute states, in relevant part:

Proceeds of life insurance policies heretofore made payable to a trustee or trustees named as beneficiary or hereafter to be named beneficiary under an inter vivos trust shall be paid directly to the trustee or trustees and held and disposed of by the trustee or trustees as provided in the trust agreement or declaration of trust in writing made and in existence on the date of death of the insured, whether or not such trust or declaration of trust is amendable or revocable or both, or whether it may have been amended, and notwithstanding the reservation of any or all rights of ownership under the insurance policy or annuity contract; subject, however, to a valid assignment of any part of the proceeds. It is not necessary to the...