Volk v. Goeser

• Decision Date: 08 March 2016
• Docket Number: No. DA 14–0747.,DA 14–0747.
• Citation: 382 Mont. 382,367 P.3d 378,2016 MT 61
• Parties: Pamela Dee VOLK, individually and in her capacity as Conservator for RBV, a minor child, Plaintiff and Appellant, v. Valerie GOESER; Roy Donald Volk, Diane Nilson Volk and Saraya Roberson, as Co–Personal Representatives of the Estate of Roy Craig Volk, and Does 1 through 10, Defendants and Appellees, v. Saraya Roberson, Defendant and Appellant.
• Court: Montana Supreme Court

382 Mont. 382

367 P.3d 378

2016 MT 61

Pamela Dee VOLK, individually and in her capacity as Conservator for RBV, a minor child, Plaintiff and Appellant,

v.Valerie GOESER; Roy Donald Volk, Diane Nilson Volk and Saraya Roberson, as Co–Personal Representatives of the Estate of Roy Craig Volk, and Does 1 through 10, Defendants and Appellees,

v.Saraya Roberson, Defendant and Appellant.

No. DA 14–0747.

Supreme Court of Montana.

Submitted on Briefs Oct. 21, 2015.

Decided March 8, 2016.

For Appellant Pamela Dee Volk: Jason T. Holden, Dana A. Henkel, Faure Holden Attorneys at Law, P.C., Great Falls, Montana.

For Appellee Valerie Goeser: Roberta Anner–Hughes, Anner–Hughes Law Firm; Billings, Montana.

For Appellee and Cross–Appellant Saraya Roberson: Gregory J. Hatley, James A. Donahue, Derek J. Oestreicher, Davis, Hatley, Haffeman & Tighe, P.C.; Great Falls, Montana.

Justice MICHAEL E. WHEAT

delivered the Opinion of the Court.

¶ 1 Pamela Dee Volk appeals from the Summary Judgment Order of the Montana Eighth Judicial District Court granting summary judgment for Valerie Goeser. The District Court determined that a constructive trust should not be imposed on $2,306,103.13 of Roy Volk's life insurance proceeds for the benefit of his minor son, RBV, because Valerie Goeser was not unjustly enriched when she received Roy Volk's life insurance proceeds. We reverse the summary judgment and remand for further proceedings in accordance with this opinion.

ISSUE

¶ 2 Appellant raises one issue on appeal, which we address as follows:

¶ 3 Whether the District Court erred when it granted summary judgment to Valerie, and denied the imposition of a constructive trust on life insurance proceeds in favor of RBV, a minor child?

FACTUAL AND PROCEDURAL BACKGROUND

¶ 4 Roy Volk was married to Pamela Dee Volk in April 1996. The couple had a son, RBV, in the fall of 2000. On June 25, 2010, Roy filed a Petition for Dissolution of Marriage in the Montana Eighth Judicial District Court. On the same day, as part of the dissolution proceeding, the District Court issued the statutorily-mandated Summons and Temporary Restraining Order. The divorce proceedings lasted over a year and a half, ending with the court's hearing and dissolution of the marriage on December 21, 2011.

¶ 5 Roy and Pamela entered into a Marital Settlement Agreement ("MSA") on December 20, 2011. Several agreements were included as part of the MSA including a "Future Instruments" clause where Roy agreed "[h]usband shall execute a will naming his son as beneficiary of his estate, giving all of his assets to his son." This clause included Roy's agreement to leave all of his assets to RBV through a will that would be executed as a "future document." Attached to the MSA as exhibit A, was a list of assets and liabilities for each party where Roy indicated that "[h]usband's New York Life insurance policy" (Policy 936) was an asset. The MSA further provided that if either husband or wife failed to disclose an asset, "that finding is presented to be grounds for the Court, without taking into account the equitable division of the marital estate, to award the undisclosed asset to the opposing party...."

¶ 6 At the time of the divorce, Roy owned two term life insurance policies. The policies are New York Life Policy No. 46689799 ("Policy 799") with a benefit of $1,500,000; and New York Life Policy No. 76098936 ("Policy 936") with a benefit of $1,000,000. Policy 799 was not disclosed in the divorce; Pamela was the sole beneficiary, but she was not aware the policy existed. Roy disclosed Policy 936 in the divorce, and Pamela and Volk Sand and Gravel (Roy's business) were equal beneficiaries (50 percent to each) with a $200,000 collateral assignment to Stockman Bank. On July 15, 2010, while the restraining order was in effect, Roy changed the beneficiary designations on both policies and designated his sister, Valerie Goeser, as the new beneficiary.

¶ 7 Roy also had a daughter, Saraya Roberson. In June of 2005, Roy and Saraya's mother, Serena C. Roberson, entered into a Child Support Agreement pertaining to Saraya. That agreement contained a provision requiring Roy, within 30 days of the court's Order approving the agreement, to purchase a life insurance policy of $100,000 naming Saraya as the owner and sole beneficiary. The Child Support Agreement was approved and adopted by the Montana Eighth Judicial District Court on July 28, 2005. Roy never purchased the life insurance policy required by this Agreement, nor did Roy name Saraya as a beneficiary on any life insurance policy.

¶ 8 On April 30, 2012, just over four months after the divorce was final, Roy died unexpectedly at age 45. Roy did not have a will in place. Because Roy had changed his life insurance beneficiary designations in violation of the restraining order, Valerie received the life insurance proceeds from both policies in the total amount of $2,306,103.13. Valerie was shocked to learn upon Roy's death that she was the recipient of the two life insurance policies. Valerie invested the proceeds in a home and real property in Newport Beach, California.

¶ 9 After Roy's death, Pamela discovered that Valerie received the life insurance proceeds from Policy 936, due to Roy's change of beneficiary during the divorce. Pamela wrote Valerie to inquire about the policy and notify her of RBV's equitable claim. Valerie did not respond to the inquiry and Pamela subsequently sent a subpoena duces tecum to New York Life to determine how the policy benefit was dispersed. At that time she discovered the existence of the second life insurance policy, Policy 799, with the $1,500,000 benefit. Pamela also determined through discovery that she was the beneficiary on Policy 799 until Roy changed it to Valerie on July 15, 2010, while the restraining order was in effect. The New York Life records confirmed that both policies were paid to Valerie.

¶ 10 A probate was opened to settle Roy's estate. Pamela filed two creditor's claims in the probate on October 23, 2012. The first claim was on her behalf for payment Roy had agreed upon, and the second was on behalf of RBV for child support and health insurance costs totaling about $77,500. Roy's estate did not have sufficient funds to pay RBV's child support claim. On April 29, 2013, Pamela, on behalf of RBV, filed this action against Valerie and Roy Craig Volk's estate seeking a constructive trust over the insurance policy payouts for the benefit of RBV. The complaint named Saraya, as co-personal representative of Roy's estate, as a defendant. Pamela also filed two additional actions in April 2013 that are not part of this appeal: an action to reopen the dissolution for award of the policy proceeds due to violation of the restraining order, and another similar action to seek policy proceeds through the probate. While Valerie was notified of Pamela's equitable claim on RBV's behalf, she was not served in the dissolution or probate actions.

¶ 11 Judge Neill of the Montana Eighth Judicial District presided over all three of the actions tied to this case: Roy and Pamela's dissolution, the probate of Roy's estate, and here, Pamela's claims requesting a constructive trust for RBV. The three actions have significant overlap regarding parties, claims, and the equities of the case. This appeal arises out of the District Court's grant of summary judgment in Valerie's favor regarding Pamela's constructive trust claims for RBV.

¶ 12 Saraya filed a cross-appeal seeking imposition of a constructive trust for her benefit to fulfill the $100,000 liability. Subsequently, and by admission of both parties, Saraya and Pamela entered an agreement ("October Agreement") under which Pamela would pay Saraya's claim from RBV's constructive trust if RBV prevails on his claims against Valerie.

District Court Opinion

¶ 13 By May 2014, both parties moved for summary judgment. On May 16, 2014, Saraya sought leave from the District Court to file an Amended Answer and to assert cross-claims against Valerie. Several additional motions were made in the case, which were held in abeyance while the District Court considered the pending summary judgment motions. The District Court held hearings on both summary judgment motions. The court entered summary judgment in favor of Valerie on October 30, 2014. At that time the court also denied Saraya's motion for leave to amend. Pamela and RBV timely appealed on November 19, 2014. Saraya timely appealed on December 8, 2014.

¶ 14 The District Court granted summary judgment to Valerie on all claims. The court concluded that even though Roy had changed the beneficiary designation on both policies while the court's restraining order was still in effect, the case was different from this Court's decision in Briese v. Mont. Pub. Employees Ret. Bd., 2012 MT 192, 366 Mont. 148, 285 P.3d 550

, because Roy died after the divorce was final and the restraining order was lifted. The District Court reasoned the purpose of the restraining order is to maintain the status quo in regard to the parties' property so long as the dissolution action is pending—a purpose that terminates once the dissolution action is complete. The court further reasoned that once the restraining order was lifted, Roy would have been free to change the beneficiary at any time. The court found had he not changed the beneficiaries, Pamela still would have been removed as a beneficiary by operation of law under § 72–2–814, MCA. Under this analysis, the court concluded that equity did not require voiding Roy's changes to the beneficiaries because Roy made no further changes after the dissolution.

¶ 15 The court rejected Pamela's argument that because Roy disclosed Policy 936 as an asset in the MSA he considered his insurance policies to be assets and therefore intended RBV to be the beneficiary. The court found, however, that neither the MSA nor the stipulated final parenting plan made any mention of life insurance policies and the MSA only required that Roy create a will and name...