Transamerica Life Ins. Co. v. Moore
| Docket Number | Civil Action 4:22-CV-00340 |
| Decision Date | 31 May 2023 |
| Parties | TRANSAMERICA LIFE INSURANCE COMPANY, Plaintiff, v. HOLLY L. MOORE and JEFFREY H. SIMPSON, Defendants. |
| Court | U.S. District Court — Eastern District of Texas |
Pending before the Court are Defendant Holly L. Moore's Motion for Partial Summary Judgment that Holly Moore is the Primary Beneficiary of the Subject Transamerica Life Insurance Policy (Dkt. #26)[1]and Defendant Jeffrey H. Simpson's Motion for Summary Judgment (Dkt. #27). Having considered the motions and the relevant pleadings, the Court finds that Defendant Holly L. Moore's Motion for Partial Summary Judgment (Dkt. #26) should be GRANTED, and that Defendant Jeffrey H. Simpson's Motion for Summary Judgment (Dkt. #27) should be DENIED.
At the heart of this interpleader action is a dispute involving competing claims to the proceeds of a life insurance policy. Defendants Holly L. Moore (“Moore”) and Jeffrey H. Simpson (“Simpson”) each claim entitlement to the proceeds of a life insurance policy issued by Transamerica Life Insurance Company (“Transamerica”) to Ian J. Simpson (the “Decedent”).
Faced with these competing claims, Transamerica sought interpleader relief from the Court. Both Moore and Simpson now request that the Court decide their respective rights to the proceeds of the Transamerica policy held by the Decedent.
In February 2018, the Decedent purchased Transamerica term life insurance policy No. 6600424765 (the “Policy”) which provided $100,000 in coverage (Dkt. #26, Exhibit 1-A). At the time that he purchased the Policy, the Decedent identified himself as single, and he was engaged to marry Moore later that fall (Dkt. #26, Exhibit 1-B). The Decedent designated Moore, his then-fiancee, as the primary beneficiary of the Policy and Simpson, his father, as the Policy's contingent beneficiary (Dkt. #26, Exhibit 1-B).[2]
The Decedent and Moore were married in September 2018-over six months after Transamerica issued the Policy to the Decedent (Dkt. #26, Exhibit 1-C). During their marriage, the Decedent did not change his designation of Moore as the primary beneficiary of the Policy, nor did he re-designate her as the primary beneficiary after she became his wife (Dkt. #26 at p 4).
In January 2021, the Decedent and Moore divorced (Dkt. #27, Exhibit 2). Their divorce decree, issued by the 303rd Judicial District Court in Dallas County, Texas (the “Divorce Decree”), allocated to Decedent “[a]ll policies of life insurance (including cash values)” insuring his life and to Moore “[a]ll polices of insurance (including cash values)” insuring her life (Dkt. #27, Exhibit 2). The Divorce Decree did not specifically identify the Policy as an asset of the marital estate that was subject to division (Dkt. #27, Exhibit 2). After their divorce, the Decedent did not change his designation of Moore as the primary beneficiary of the Policy (Dkt. #26 ¶ 6).
On May 2, 2021, Decedent Ian J. Simpson died unexpectedly (Dkt. #27, Exhibit 3). After Decedent's death, Moore submitted a claim to Transamerica for the Policy proceeds based on her status as the primary beneficiary of the Policy (Dkt. #26 ¶ 7). Transamerica rejected Moore's claim, finding that her status as the Policy's primary beneficiary was revoked by operation of law under § 9.301 of the Texas Family Code (Dkt. #26, Exhibit 1-G). On the same day that it formally denied Moore's claim, Transamerica sent a letter to Simpson informing him of his beneficiary status and instructing him on how to make a claim to the Policy proceeds (Dkt. #26, Exhibit 1-H). In January 2022, Simpson submitted his own claim to the entirety of the Policy proceeds (Dkt. #1 ¶ 11).
In the face of these competing claims, Transamerica initiated this interpleader action under 28 U.S.C. § 1335 and Federal Rule of Civil Procedure 22 on April 25, 2022 (Dkt. #1). On May 31, 2022, both Moore and Simpson filed answers to Transamerica's interpleader complaint, which confirmed their competing claims to the Policy's death benefit (Dkt. #6; Dkt. #9).
Transamerica then filed a motion for interpleader relief (Dkt. #13), which the Court granted on January 26, 2023 (Dkt. #32). In its Memorandum Opinion and Order granting Transamerica's motion for interpleader relief, the Court found that the requirements for interpleader have been met and directed Transamerica to deposit the Policy proceeds and any applicable interest, less $11,707 in attorneys' fees and costs, into the registry of the Court (Dkt. #32).
On November 18, 2022, both Moore and Simpson filed their respective motions for summary judgment (Dkt. #26; Dkt. #27). Likewise, both parties filed their respective responses on December 9, 2022 (Dkt. #29; Dkt. #30), and Moore filed a reply to Simpson's response on December 16, 2022 (Dkt. #31).
Interpleader-whether “statutory interpleader” under 28 U.S.C. § 1335 or “rule interpleader” under Federal Rule of Civil Procedure 22-affords a party (known as a stakeholder) 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. 7 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1704 (3d ed. 2001); Tittle v. Enron Corp., 463 F.3d 410, 423 (5th Cir. 2006) (). A district court has broad powers in an interpleader action. Rhoades v. Casey, 196 F.3d 592, 600 (5th Cir. 1999). In the Fifth Circuit, “interpleader statutes and rules are liberally construed to protect the stakeholder from the expense of defending twice,” and even the mere threat of multiple and vexatious future litigation provides sufficient basis for interpleader. See, e.g., In re Bohart, 743 F.2d 313, 325 (5th Cir. 1984).
Interpleader actions generally proceed in two stages. Rhoades, 196 F.3d at 600. First, the ourt decides whether the requirements for interpleader have been met by determining if the stakeholder has established that there is a single fund at issue and that there are adverse claimants to that fund. Id. If the requirements for interpleader are satisfied, the court must then proceed to the second stage and “make a determination of the respective rights of the claimants.” Rhoades, 196 F.3d at 600. If there is no issue of material fact regarding entitlement to the fund, the second stage may be adjudicated though summary judgment. Id. Because the Court has already determined that interpleader is proper here, it begins its analysis at the second stage.
The purpose of summary judgment is to isolate and dispose of factually unsupported claims or defenses. Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986). Summary judgment is proper under Rule 56(a) of the Federal Rules of Civil Procedure “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” FED. R. CIV. P. 56(a). A dispute about a material fact is genuine when “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby Inc., 477 U.S. 242, 248 (1986). Substantive law identifies which facts are material. Id. The trial court must resolve all reasonable inferences in favor of the party opposing the motion for summary judgment. Connors v. Graves, 538 F.3d 373, 376 (5th Cir. 2008).
The party seeking summary judgment bears the initial burden of informing the court of its motion and identifying “depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials” that demonstrate the absence of a genuine issue of material fact. FED. R. CIV. P. 56(c)(1)(A); Celotex, 477 U.S. at 323. If the movant bears the burden of proof on a claim or defense for which it is moving for summary judgment, it must come forward with evidence that establishes “beyond peradventure all of the essential elements of the claim or defense.” Fontenot v. Upjohn Co., 780 F.2d 1190, 1194 (5th Cir. 1986). Where the nonmovant bears the burden of proof, the movant may discharge the burden by showing that there is an absence of evidence to support the nonmovant's case. Celotex, 477 U.S. at 325; Byers v. Dall. Morning News, Inc., 209 F.3d 419, 424 (5th Cir. 2000).
Once the movant has carried its burden, the nonmovant must “respond to the motion for summary judgment by setting forth particular facts indicating there is a genuine issue for trial.” Byers, 209 F.3d at 424 (citing Anderson, 477 U.S. at 248-49). A nonmovant must present affirmative evidence to defeat a properly supported motion for summary judgment. Anderson, 477 U.S. at 257. Mere denials of material facts, unsworn allegations, or arguments and assertions in briefs or legal memoranda will not suffice to carry this burden. Rather, the Court requires “significant probative evidence” from the nonmovant to deny a motion for summary judgment. Armour v. Knowles, 512 F.3d 147, 153 (5th Cir. 2007). The Court must consider all the evidence but “refrain from making any credibility determinations or weighing the evidence.” Turner v. Baylor Richardson Med. Ctr., 476 F.3d 337, 343 (5th Cir. 2007).
The parties' cross-motions for summary judgment present the Court with three interrelated issues: (1) whether the...
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