Filed: Jun. 03, 2016
Latest Update: Jun. 03, 2016
Summary: MEMORANDUM OPINION AND ORDER W. HAROLD ALBRITTON , Senior District Judge . I. Facts and Procedural History This cause is before the court on a Motion to Dismiss the Plaintiff's Complaint (Doc. #5), a Motion to Pay Policy Proceeds into Court (Doc. #6), a Motion to Appoint Guardian Ad Litem (Doc. #14), and a Motion to Dismiss Counterclaim and Crossclaim/Third Party Complaint (Doc. #22). The The Plaintiff, Jennifer Davis, filed a Complaint in this case on February 17, 2016 in the Circuit Cou
Summary: MEMORANDUM OPINION AND ORDER W. HAROLD ALBRITTON , Senior District Judge . I. Facts and Procedural History This cause is before the court on a Motion to Dismiss the Plaintiff's Complaint (Doc. #5), a Motion to Pay Policy Proceeds into Court (Doc. #6), a Motion to Appoint Guardian Ad Litem (Doc. #14), and a Motion to Dismiss Counterclaim and Crossclaim/Third Party Complaint (Doc. #22). The The Plaintiff, Jennifer Davis, filed a Complaint in this case on February 17, 2016 in the Circuit Cour..
More
MEMORANDUM OPINION AND ORDER
W. HAROLD ALBRITTON, Senior District Judge.
I. Facts and Procedural History
This cause is before the court on a Motion to Dismiss the Plaintiff's Complaint (Doc. #5), a Motion to Pay Policy Proceeds into Court (Doc. #6), a Motion to Appoint Guardian Ad Litem (Doc. #14), and a Motion to Dismiss Counterclaim and Crossclaim/Third Party Complaint (Doc. #22). The
The Plaintiff, Jennifer Davis, filed a Complaint in this case on February 17, 2016 in the Circuit Court of Montgomery County, Alabama. In the Complaint she brings claims for fraudulent misrepresentation (Count I), fraudulent suppression (Count II), negligent and/or wanton appointment, training, or monitoring of employees and/or agents (Count III), negligent and/or wanton misrepresentation of material facts (Count IV), breach of contract (Count V), and bad faith failure to pay policy proceeds (Count VI).
The Defendant, North American Company for Life and Health Insurance ("North American"), filed a notice of removal on March 29, 2016. This court exercises subject matter jurisdiction pursuant to 28 U.S.C. §1332 and §1441.
On April 4, 2016, the Defendant filed a Partial Answer and Counter Claim/Cross Claim Complaint of Interpleader.
The claims and counter and cross claims arise out of an insurance dispute. Matthew Davis was married to Jennifer Davis and had a $250,000 life insurance policy which named Jennifer Davis as beneficiary. Matthew Davis and Jennifer Davis divorced and the Final Decree of Divorce provided that the parties shall maintain life insurance in the amount of at least $500,000 with their minor children named as beneficiaries. After Matthew Davis's death, Jennifer Davis requested that the life insurance proceeds be paid to her. The Defendant, North American, sent correspondence requesting information but did not pay the insurance proceeds. Jennifer Davis filed suit, and North American has requested that the court allow it to pay the policy proceeds into court, and appoint a Guardian ad Litem.
The Defendant, in its Motion to Dismiss, seeks to dismiss the Plaintiff's claims, and the Plaintiff seeks to dismiss the Defendant's Counter and Cross Claim and opposes the appointment of a Guardian ad Litem.
II. DISCUSSION
Jennifer Davis takes the position that the Counterclaim and Crossclaim/Third Party Complaint should be dismissed because as a matter of Alabama law, a divorce decree cannot affect a beneficiary designation in an insurance policy. Jennifer Davis argues that North American has refused in bad faith to pay the life insurance proceeds and its attempt at interpleader has no support under Alabama law, relying on Walden v. Walden, 686 So.2d 345 (Ala. Civ. App. 1969).
Under Alabama law, a beneficiary named in a life insurance policy is entitled to the proceeds of that policy, whether the beneficiary is a spouse, relative, or stranger. Walden, 686 So. 2d at 346. If a former spouse is named as the sole beneficiary, a divorce alone will not strip the beneficiary of his or her rights to the proceeds. Id. However, a divorce decree may under certain facts, i.e. incorporating the policy or addressing the designation of beneficiaries, effectuate a change of beneficiary. See McKinnis v. McKinnis, 564 So.2d 451, 452 (Ala. Civ. App. 1990) (the insured's ex-wife, rather than the named beneficiary, was entitled to proceeds where the divorce decree incorporated the life insurance policy).
In Posey v. Prudential Ins. Co. of Am., the insured at the time of his divorce had in effect the life insurance policy at issue in the case. 383 So.2d 849, 850-51 (Ala. Civ. App.). The divorce decree required the insured to designate the insured's son "as the irrevocable beneficiary of all of his life insurance." Id. However, at the time of his death, the insured's niece was the named beneficiary under the policy. Id. The court held the insured's son, rather than the named beneficiary, was entitled to the proceeds, reasoning that the change in beneficiary after the divorce decree was in violation of the decree, and did not establish superior rights in the new beneficiary. Id.
Based on the court's review of Alabama law, the court does not find the issue presented regarding the interplay of the divorce decree and insurance beneficiary in this case to be as clear cut as Jennifer Davis has argued. Because the divorce decree contemplates life insurance beneficiaries who are minors, the court agrees that it is necessary to appoint a Guardian ad Litem to represent the interest of the minors in this case. And, the court concludes that the insurance proceeds should be paid into court. See USAA Life Ins. Co. v. Culver, No. 2:15CV309-WHA, 2015 WL 5918752, at *4 (M.D. Ala. Oct. 8, 2015) (finding an adequate showing of a bona fide fear of exposure to multiple claims by diverse claimants had been made for interpleader). The court declines to address at this time, however, what legal effect, if any, payment into court of the proceeds has on any claims against North American already asserted by Jennifer Davis.
Accordingly, it is hereby ORDERED as follows:
1. The Motion to Pay Policy Proceeds and Interest into Court (Doc. #10) is GRANTED, and the Clerk of Court shall accept for deposit a check for the proceeds of the North American policy on the life of Matthew Davis, Policy #LW500005765, plus interest, to be tendered by North American Company for Life and Health Insurance within fourteen (14) days of this order, to be deposited and maintained in an interest-bearing account previously approved for such purposes, there to abide the judgment of this court.
2. The Motion to Appoint Guardian Ad Litem (Doc. # 14) is GRANTED and Ashley Penhale, Esq. of the firm Copeland, Franco, Screws & Gill, 444 S. Perry Street, Montgomery, AL 36104, is hereby appointed Guardian Ad Litem to represent J.D. and M.D., minors, and to defend the interests of the minors in this suit. The clerk is DIRECTED to serve a copy of this Order on Ms. Penhale and all parties and Ms. Penhale is DIRECTED to file a Notice of Appearance.
3. The Motion to Dismiss for Failure to State a Claim (Doc. #5) and a Motion to Dismiss Counterclaim and Crossclaim/Third Party Complaint (Doc. #22) are DENIED without prejudice to being refiled after the Guardian Ad Litem files a Notice of Appearance in this case.
CIVIL APPEALS JURISDICTION CHECKLIST
1. Appealable Orders: Courts of Appeals have jurisdiction conferred and strictly limited by statute:
(a) Appeals from final orders pursuant to 28 U.S.C. § 1291: Only final orders and judgments of district courts, or final orders of bankruptcy courts which have been appealed to and fully resolved by a district court under 28 U.S.C.§ 158, generally are appealable. A final decision is one that "ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." Pitney Bowes, Inc. v. Mestre, 701 F.2d 1365, 1368 (11th Cir. 1983). A magistrate judge's report and recommendation is not final and appealable until judgment thereon is entered by a district court judge. 28 U.S.C. § 636(c).
(b) In cases involving multiple parties or multiple claims, a judgment as to fewer than all parties or all claims is not a final, appealable decision unless the district court has certified the judgment for immediate review under Fed.R.Civ.P. 54(b). Williams v. Bishop, 732 F.2d 885, 885-86 (11th Cir. 1984). A judg ment which resolves all issues except matters, such as attorneys' fees and costs, that are collateral to the merits, is immediately appealable. Budinich v. Becton Dickinson & Co., 486 U.S. 196, 201, 108 S.Ct. 1717, 1721-22, 100 L.Ed.2d 178 (1988); LaChance v. Duffy's Draft House, Inc., 146 F.3d 832, 837 (11th Cir. 1998).
(c) Appeals pursuant to 28 U.S.C. § 1292(a): Appeals are permitted from orders "granting, continuing, modifying, refusing or dissolving injunctions or refusing to dissolve or modify injunctions . . ." and from "[i]nterlocutory decrees . . . determining the rights and liabilities of parties to admiralty cases in which appeals from final decrees are allowed." Interlocutory appeals from orders denying temporary restraining orders are not permitted.
(d) Appeals pursuant to 28 U.S.C. § 1292(b) and Fed.R.App.P. 5: The certification specified in 28 U.S.C. § 1292(b) must be obtained before a petition for permission to appeal is filed in the Court of Appeals. The district court's denial of a motion for certification is not itself appealable.
(e) Appeals pursuant to judicially created exceptions to the finality rule: Limited exceptions are discussed in cases including, but not limited to: Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546, 69 S.Ct. 1221, 1225-26, 93 L.Ed. 1528 (1949); Atlantic Fed. Sav. & Loan Ass'n v. Blythe Eastman Paine Webber, Inc., 890 F.2d 371, 376 (11th Cir. 1989); Gillespie v. United States Steel Corp., 379 U.S. 148, 157, 85 S.Ct. 308, 312, 13 L.Ed.2d 199 (1964).
2. Time for Filing: The timely filing of a notice of appeal is mandatory and jurisdictional. Rinaldo v. Corbett, 256 F.3d 1276, 1278 (11th Cir. 2001). In civil cases, Fed.R.App.P. 4(a) and (c) set the following time limits:
(a) Fed.R.App.P. 4(a)(1): A notice of appeal in compliance with the requirements set forth in Fed.R.App.P. 3 must be filed in the district court within 30 days after the entry of the order or judgment appealed from. However, if the United States or an officer or agency thereof is a party, the notice of appeal must be filed in the district court within 60 days after such entry. THE NOTICE MUST BE RECEIVED AND FILED IN THE DISTRICT COURT NO LATER THAN THE LAST DAY OF THE APPEAL PERIOD — no additional days are provided for mailing. Special filing provisions for inmates are discussed below.
(b) Fed.R.App.P. 4(a)(3): "If one party timely files a notice of appeal, any other party may file a notice of appeal within 14 days after the date when the first notice was filed, or within the time otherwise prescribed by this Rule 4(a), whichever period ends later."
(c) Fed.R.App.P. 4(a)(4): If any party makes a timely motion in the district court under the Federal Rules of Civil Procedure of a type specified in this rule, the time for appeal for all parties runs from the date of entry of the order disposing of the last such timely filed motion.
(d) Fed.R.App.P. 4(a)(5) and 4(a)(6): Under certain limited circumstances, the district court may extend the time to file a notice of appeal. Under Rule 4(a)(5), the time may be extended if a motion for an extension is filed within 30 days after expiration of the time otherwise provided to file a notice of appeal, upon a showing of excusable neglect or good cause. Under Rule 4(a)(6), the time may be extended if the district court finds upon motion that a party did not timely receive notice of the entry of the judgment or order, and that no party would be prejudiced by an extension.
(e) Fed.R.App.P. 4(c): If an inmate confined to an institution files a notice of appeal in either a civil case or a criminal case, the notice of appeal is timely if it is deposited in the institution's internal mail system on or before the last day for filing. Timely filing may be shown by a declaration in compliance with 28 U.S.C. § 1746 or a notarized statement, either of which must set forth the date of deposit and state that first-class postage has been prepaid.
3. Format of the notice of appeal: Form 1, Appendix of Forms to the Federal Rules of Appellate Procedure, is a suitable format. See also Fed.R.App.P. 3(c). A pro se notice of appeal must be signed by the appellant.
4. Effect of a notice of appeal: A district court loses jurisdiction (authority) to act after the filing of a timely notice of appeal, except for actions in aid of appellate jurisdiction or to rule on a timely motion of the type specified in Fed.R.App.P. 4(a)(4).
