Opinion
NO. 2021 CA 1215.
12-22-2022
Adrian Michael SIMM, Jr., Individually and as the Independent Executor of the Succession of James Timothy Simm v. AMERIPRISE FINANCIAL, INC., Ameriprise Financial Services, Inc., Riversource Life Insurance Company, and Jacqueline Cornett Simm.
Lewis O. Unglesby , Lance C. Unglesby , Jordan L. Bollinger , Jamie F. Gontarek , Baton Rouge, Louisiana, Counsel for Plaintiff/Appellant Adrian M. Simm, Jr., Individually and as the Independent Executor of the Succession of James Timothy Simm. Stephen D. Marx , Metairie, Louisiana, Counsel for Defendant/Appellee Jacqueline Cornett Simm. BEFORE: WHIPPLE, C.J., McCLENDON, WELCH, THERIOT, AND HOLDRIDGE JJ.
Lewis O. Unglesby , Lance C. Unglesby , Jordan L. Bollinger , Jamie F. Gontarek , Baton Rouge, Louisiana, Counsel for Plaintiff/Appellant Adrian M. Simm, Jr., Individually and as the Independent Executor of the Succession of James Timothy Simm.
Stephen D. Marx , Metairie, Louisiana, Counsel for Defendant/Appellee Jacqueline Cornett Simm.
BEFORE: WHIPPLE, C.J., McCLENDON, WELCH, THERIOT, AND HOLDRIDGE JJ.
Per Curiam.
Adrian Michael Simm, Jr., individually and as the independent executor of the Succession of James Timothy Simm, appeals a judgment that: granted summary judgment in favor of James' ex-wife, Jacqueline Cornett Simm; declared Jacqueline to be the beneficiary of three individual retirement accounts ("IRAs") and one annuity account; denied Adrian's two motions for summary judgment with regard to the four accounts; and dismissed, with prejudice, Adrian's claims against Jacqueline. Each member of this panel of five judges has conducted a de novo review of the motions for summary judgment, and a majority opinion on the merits could not be reached. However, a majority of the members of this panel concur, as detailed hereinbelow, that the judgment of the trial court should be affirmed in part and reversed in part, and that summary judgment in favor of Adrian should be rendered in part.
See La. Const. Art. V, § 8 (B) (providing that with respect to judgments of the courts of appeal, "[a] majority of the judges sitting in a case shall concur to render judgment," but that "in civil matters only, when a judgment of a district court ... is to be modified or reversed and one judge dissents, the case shall be reargued before a panel of at least five judges prior to rendition of judgment, and a majority shall concur to render judgment").
BACKGROUND
James and Jacqueline were married in 1986. They did not have any children, and they subsequently divorced on May 20, 2015. Shortly after their divorce, on June 9, 2015, James and Jacqueline entered into a partial community property settlement with regard to the former matrimonial domicile—James received the home and Jacqueline received the sum of $280,000.00. On that same date, June 9, 2015, James executed his last will and testament ("the will"), wherein he bequeathed his entire estate to his niece, Gretchen Lauren Simm, and to his four nephews—Adrian, Alexander Pharo Simm, Andrew Joseph Simm, and Jonathan Patrick Simm. James also appointed Adrian as the executor of his succession. On August 15, 2017, James executed an olographic codicil, leaving his house (the former matrimonial domicile) to Jacqueline.
James and Jacqueline subsequently entered into a partition and division of community property agreement, which was signed by Jacqueline on December 18, 2018, and by James on January 3, 2019 ("the partition agreement"). Pertinent herein, the partition agreement provided:
JAMES ... does hereby set over, grant, bargain, exchange, assign, deliver, convey[,] and transfer unto JACQUELINE... all of his right[,] title[,] and interest that he now has or might have, including in and to the following described properties, to-wit:
...
2. Any and all financial accounts in the name of JACQUELINE ..., including[,] but not limited to the accounts divided by the parties prior to entering into this agreement, namely:
a. Ameriprise Achiever Circle Elite acct. no. xxxx 3 001
b. RiverSource Variable University Life Insurance acct. no. xxxx xxxx 7 004
c. Ameriprise Brokerage Account, acct. no. xxxx 1 133
d. Columbia Funds acct. no. xxxx xxx 270
...
5. One-half of the RiverSource Retirement Advisor Variable Annuity in the name of JAMES ... account # 0930066212075004; and
...
JACQUELINE ... does hereby set over, grant, bargain, exchange, assign, deliver, convey[,] and transfer unto
JAMES ... all of her right[,] title[,] and interest that she now has or might have in and to the following described properties, to-wit:
...
2. Any and all financial accounts in the name of JAMES ..., including[,] but not limited to the accounts divided by the parties prior to entering into this agreement, namely:
a. Ameriprise Achiever Circle Elite acct. no. xxxx 3 001
b. RiverSource Variable University Life Insurance acct. no. xxxx xxxx 7 004
c. Ameriprise Brokerage Account, acct. no. xxxx xxxx 1 133
d. Columbia Funds acct. no. xxxx xxx 270
5. One-half of the RiverSource Retirement Advisor Variable Annuity in the name of JAMES ... account # 0930066212075004; ...
James died on September 20, 2019, and he had no surviving spouse or children at the time of his death. James' will was subsequently probated and, in accordance therewith, Adrian was confirmed as the testamentary independent executor of James' succession.
During the process of administering James' succession, Adrian learned that Jacqueline was considered the beneficiary of some of James' IRAs and an annuity account with Ameriprise and/or its subsidiary companies, including RiverSource Life Insurance Company. These accounts were: Ameriprise IRA Brokerage account ending in 04691133 ("Account 1"); Inherited Ameriprise IRA (Roth Conversion Beneficial IRA) account ending in 29712133 ("Account 2"); RiverSource Retirement Advisor Variable Annuity account ending in 12075004 ("Account 3"); RiverSource Life Insurance Policy, with an unknown account number ("Account 4"); and Ameriprise Strategic Portfolio Service Advisor IRA account ending in 55149133 ("Account 5").
Adrian's claims against Jacqueline with regard to Account 4 were voluntarily dismissed, with prejudice, on April 30, 2021. As such, there are no pending issues with regard to Account 4.
Account 1, Account 2, and Account 3 were opened during James and Jacqueline's marriage. Account 1, opened in December 2003, set forth the following beneficiary designation: "Spouse if Living, if not Living, Lawful Children With Rights of Survivorship. Beneficiary is: Owner's spouse, `Jacqueline C. Simm,' if living." Account 2, opened in May 2013, set forth the following beneficiary designation: "Spouse if Living, if not Lawful Children with Rights of Survivorship." "Beneficiary is: Jacqueline Simm." Account 3, opened in July 2000, set forth that the "Beneficiary is: Annuitant's designated spouse, if living, if not, the beneficiaries are the living, lawful children of the annuitant and they will receive equal shares of the proceeds[,]" and it further set forth that "Spouse's Name" was "Jacqueline C. Simm."
Account 5 was opened on June 7, 2019, after James and Jacqueline's divorce and the partition agreement. Account 5 indicated that "[James'] Marital Status" was "Divorced." With regard to the "Beneficiary/Transfer on Death Designation," Account 5 provided "Apply Existing IRA Plan Beneficiary" and that "If the Plan does not exist, Beneficiary will be defaulted to the default Beneficiary Provision as Outlined In `Your Guide to IRAs...."'
On December 6, 2019, Adrian commenced these proceedings by filing a petition for damages and declaratory judgment against Ameriprise Financial, Inc., Amerprise Financial Services, Inc., RiverSource Life Insurance Company, and Jacqueline. Adrian brought the action on behalf of James' succession and on behalf of all of the universal heirs including, himself, Alexander, Andrew, Jonathan, and Gretchen. In the petition, Adrian claimed that the beneficiary designations of Jacqueline were invalid, ineffective, and null and void, and that the proceeds of those account belonged to the estate of James. Therefore, he sought declaratory judgment to that effect, as well as damages from the defendants.
Adrian's claims against Ameriprise Financial, Inc. were dismissed on the basis of lack of personal jurisdiction pursuant to a judgment signed by the trial court on July 21, 2020. Additionally, Adrian voluntarily dismissed his claims, with prejudice, against Ameriprise Financial Services, Inc. and RiverSource Life Insurance Company pursuant to an order signed by the trial court on January 11, 2021.
Thereafter, Adrian filed two motions for summary judgment against Jacqueline, and Jacqueline filed a motion for summary judgment and a re-stated motion for summary judgment against Adrian. Adrian's first motion for summary judgment related to Account 1, Account 2, and Account 3, and his second motion for summary judgment related to Account 5. Jacqueline's motion for summary judgment and re-stated motion for summary judgment related to Account 1, Account 2, Account 3, and Account 5.
In Adrian's first motion for summary judgment (Account 1, Account 2, and Account 3), he contended that the undisputed material facts established that Jacqueline had no interest in those accounts because (1) she disclaimed, waived, and/or transferred all of her right title and interest in those accounts to James pursuant to the partition agreement; and (2) James' account agreements expressly provided that Minnesota law would apply to any dispute concerning the accounts, and pursuant to Minnesota law, i.e., Minn. Stat. § 524.2-804(1), the dissolution of a marriage immediately revoked any beneficiary designation made by an individual to the former spouse. Thus, Adrian maintained that he was entitled to judgment as a matter of law declaring that Jacqueline was not the beneficiary of Account 1, Account 2, and Account, 3, and that the proceeds of those accounts belonged to James' estate.
In support of his first motion for summary judgment, Adrian submitted the affidavit of his attorney, W. Brett Mason, with the following exhibits attached thereto: a copy of the judgment of divorce between James and Jacqueline; a copy of the partial community property settlement between James and Jacqueline; a copy of James' will that was entered for probate in his succession; and copies of a portion of documents produced by Ameriprise, which were in response to a request for production of documents, which included the Ameriprise Brokerage Client Agreement, the Your Guide to IRAs, and the Your Guide to Roth IRAs that were issued by Ameriprise to James. Adrian also submitted a copy of the partition agreement.
In Adrian's second motion for summary judgment (Account 5), he maintained that the undisputed material facts established that Jacqueline had no interest in that account because she disclaimed, waived, and/or transferred all of her right title and interest in that account pursuant to their partition of community property; and (2) the beneficiary designation for Account 5 was invalid. Thus, Adrian maintained that he was entitled to judgment as a matter of law declaring that Jacqueline was not the beneficiary of Account 5 and that the proceeds of that account belonged to James' estate.
In support of his motion for summary judgment on Account 5, Adrian submitted the affidavit of his attorney, W. Brett Mason, with the following attachments thereto: a copy of the judgment of divorce between James and Jacqueline; a copy of the partition agreement; a copy of Ameriprise's response to a request for production of documents; and a portion of the documents produced by Ameriprise, which included copies of the beneficiary designations, the Ameriprise Brokerage Client Agreement, the Your Guide to IRAs, and the Your Guide to Roth IRAs issued by Ameriprise to James.
In Jacqueline's motion for summary judgment and re-stated motion for summary judgment, she maintained that the undisputed material facts established that she was the beneficiary of Account 1, Account 2, Account 3, and Account 5 and that she was entitled to summary judgment in her favor as declaring her to be the beneficiary of those four accounts and to the dismissal of Adrian's claims against her. In support of her motion for summary judgment, Jacqueline submitted: the affidavit of Charles L. Simmons, who was James' Ameriprise financial advisor from March 2019 until James' death; and the affidavit of her attorney, Stephen D. Marx, with a copy of Ameriprise's response to request for production of documents and copies of the documents produced by in response thereto. In support of Jacqueline's re-stated motion for summary judgment, she submitted a copy of the judgment of divorce; a copy of the partial community property settlement between her and James; the affidavit of her attorney Stephen D. Marx, with Ameriprise's responses to request for production of documents and copies of some of the documents produced in response thereto; and another affidavit of Charles L. Simmons with the Contact Report attached thereto.
All three motions for summary judgment were heard by the trial court on April 26, 2021. After the hearing, the trial court granted the motion for summary judgment filed by Jacqueline as to Account 1, Account 2, Account 3, and Account 5 and declared Jacqueline to be the beneficiary of the assets in those accounts. The trial court further denied the two motions for summary judgment filed by Adrian and dismissed, with prejudice, the claims of Adrian against Jacqueline. The trial court signed a judgment in accordance with its ruling on May 3, 2021, and it is from this judgment that Adrian appeals.
On appeal, Adrian contends that the trial court erred in: (1) determining that the partition agreement between Jacqueline and James had no effect on Jacqueline's rights as the beneficiary to the disputed accounts and no effect on the ownership of the death benefits; (2) determining that Minnesota law did not apply to the account agreements so as to revoke any designation of Jacqueline as the surviving spouse beneficiary as to Account 1, Account 2, and Account 3; and (3) determining that Jacqueline was the beneficiary of Account 5, because Jacqueline was not specifically named or identified as beneficiary in the beneficiary designation document for that account.
SUMMARY JUDGMENT
A motion for summary judgment is a procedural device used when there is no genuine issue of material fact for all or part of the relief prayed for by a litigant. Murphy v. Savannah, 2018-0991 (La. 5/8/19), 282 So.3d 1034, 1038 (per curiam). After an opportunity for adequate discovery, a motion for summary judgment shall be granted if the motion, memorandum, and supporting documents show there is no genuine issue as to material fact and that the mover is entitled to judgment as a matter of law. La. C.C.P. art. 966(A)(3). The only documents that may be filed in support of or in opposition to the motion are pleadings, memoranda, affidavits, depositions, answers to interrogatories, certified medical records, written stipulations, and admissions. La. C.C.P. art. 966(A)(4). However, the court shall consider any documents filed in support of or in opposition to the motion for summary judgment to which no objection is made. La. C.C.P. art. 966(D)(2).
The burden of proof on a motion for summary judgment rests with the mover. La. C.C.P. art. 966(D)(1). Nevertheless, if the mover will not bear the burden of proof at trial on the issue that is before the court on the motion for summary judgment, the mover's burden on the motion does not require him to negate all essential elements of the adverse party's claim, action, or defense, but rather to point out to the court the absence of factual support for one or more elements essential to the adverse party's claim, action, or defense. La. C.C.P. art. 966(D)(1).
Appellate courts review evidence de novo under the same criteria that govern the trial court's determination of whether summary judgment is appropriate. Leet v. Hospital Service District No. 1 of East Baton Rouge Parish, 2018-1148 (La. App. 1st Cir. 2/28/19), 274 So.3d 583, 587. Thus, appellate courts ask the same questions: whether there is any genuine issue of material fact and whether the mover is entitled to judgment as a matter of law. Id.
MERITS OF APPEAL
Accounts 1, 2, and 3
For different reasons and rationales, a majority of the five judges on this panel concur that as to Account 1, Account 2, and Account 3, Jacqueline was not entitled to summary judgment in her favor declaring her to be the beneficiary of those three accounts and that Adrian was entitled to summary judgment in his favor declaring the estate of James to be the beneficiary of those accounts. Therefore, those portions of the May 3, 2021 judgment of the trial court are reversed and summary judgment is granted in favor of Adrian, declaring the estate to be the beneficiary of Account 1, Account 2, and Account 3.
Judge McClendon, Judge Welch, and Judge Holdridge concur in the result of this ruling. Chief Judge Whipple and Judge Theriot dissent from this portion of the ruling and would affirm that portion of the judgment.
Account 5
For different reasons and rationales, a majority of the five judges on this panel concur, that as to Account 5, Jacqueline was not entitled to summary judgment declaring her to be the beneficiary of that account. Therefore, that portion of the May 3, 2021 judgment of the trial court is reversed.
Chief Judge Whipple, Judge Theriot, and Judge Holdridge concur in the result of this ruling. Judge McClendon and Judge Welch dissent from this portion of the ruling and would affirm that portion of the judgment.
For different reasons and rationales, a majority of the five judges of this panel concur, that as to Account 5, Adrian was not entitled to summary judgment in his favor declaring the estate of James to be the beneficiary of Account 5. Therefore, that portion of the May 3, 2021 judgment of the trial court is affirmed. DECREE
Judge McClendon, Judge Welch, and Judge Holdridge concur in the result of this ruling. Chief Judge Whipple and Judge Theriot dissent from this portion of the ruling and would reverse that portion of the judgment and render summary judgment in favor of Adrian declaring the estate of James to be the beneficiary of Account 5.
The May 3, 2021 judgment of the trial court is reversed insofar as it: (1) denied the first motion for summary judgment filed by Adrian Michael Simm, Jr., individually and as the independent executor of the Succession of James Timothy Simm; (2) granted the motion for summary judgment filed Jacqueline Cornett Simm; (3) declared Jacqueline Cornett Simm to be the beneficiary of the assets in Account 1 (the Ameriprise IRA Brokerage account ending in 04691133), Account 2 (the Inherited Ameriprise IRA (Roth Conversion Beneficial IRA) account ending in 29712133), Account 3 (the RiverSource Retirement Advisor Variable Annuity account ending in 12075004), and Account 5 (the Ameriprise Strategic Portfolio Service Advisor IRA account ending in 55149133); and (4) dismissed all the claims of Adrian Michael Simm, individually and as the independent executor of the Succession of James Timothy Simm, against Jacqueline Cornett Simm.
Summary judgment is granted in favor of Adrian Michael Simm, Jr., individually and as the independent executor of the Succession of James Timothy Simm, and against Jacqueline Cornett Simm, declaring that the estate of James Timothy Simm is the beneficiary of the assets in Account 1 (the Ameriprise IRA Brokerage account ending in 04691133), Account 2 (the Inherited Ameriprise IRA (Roth Conversion Beneficial IRA) account ending in 29712133), and Account 3 (the RiverSource Retirement Advisor Variable Annuity account ending in 12075004).
The May 3, 2021 judgment of the trial court is affirmed insofar as it denied the second motion for summary filed by Adrian Michael Simm, Jr., individually and as the independent executor of the Succession of James Timothy, with respect to the assets in Account 5 (the Ameriprise Strategic Portfolio Service Advisor IRA account ending in 55149133).
This matter is remanded to the trial court for further proceedings with respect to Account 5 (the Ameriprise Strategic Portfolio Service Advisor IRA account ending in 55149133).
All costs of this appeal are assessed equally to the plaintiff/appellant, Adrian Michael Simm, Jr., individually and as the independent executor of the Succession of James Timothy, and the defendant/appellee, Jacqueline Cornett Simm.
AFFIRMED IN PART, REVERSED IN PART, RENDERED IN PART, AND REMANDED.
McClendon, J., concurs in part and dissents in part for reasons assigned.
Holdridge, J., concurs with reasons.
Welch, J., concurs in part and dissents in part and assigns reasons.
Theriot, J., concurs in part and dissents in part and assigns reasons.
Whipple, J., in part and dissent in part for reasons assigned by J. Theriot.
HOLDRIDGE, J., concurring.
I respectfully concur in the result that the summary judgment rendered by the trial court in favor of Jacqueline as to Account 1 and Account 3 should be reversed and summary judgment as to those accounts should be granted in favor of Adrian, declaring that the estate of James Simm is the beneficiary of those accounts. In the partition agreement that divided the community property between James and Jacqueline, Jacqueline transferred all of her right, title, and interest that she had into Accounts 1 and 3 to James, including any "interest that she now has or might have in and to" the accounts in question. It is clear that at the time Jacqueline signed the partition agreement, she gave up all ownership interests that she had in those accounts at that time as well as any interests that she may have in the future. While La. R.S. 9:2449(A) states that "benefits payable by reason of death from an individual retirement account ... shall be paid as provided in the individual retirement account agreement to the designated beneficiary of the account," the statute does not say that a designated beneficiary to the account cannot give up her ownership rights as beneficiary. In the partition agreement, Jacqueline transferred all of her current and future interests in Accounts 1 and 3 to James. One of her future interests in the accounts would be as a beneficiary. If she wanted to retain her right as a beneficiary, she could have reserved those rights in the partition agreement. Even if we follow La. R.S. 9:2449 to its illogical conclusion, Jacqueline as the beneficiary would be paid the benefits and then would have to turn them over to the owner of the benefits, which would be the estate of James Simm. Since Jacqueline gave up any and all of her ownership interests, I agree that summary judgment should be granted as to Accounts 1 and 3 in favor of Adrian, declaring the estate of James Simm as the owner of said benefits.
I respectfully concur in the result that the summary judgment rendered by the trial court in favor of Jacqueline as to Account 2 should be reversed and summary judgment as to Account 2 should be granted in favor of Adrian declaring that the estate of James Simm is the beneficiary of those accounts.
I concur as to that part of the per curiam opinion that affirms the trial court's denial of the second motion for summary judgment in favor of Adrian as to Account 5. I find that there are questions of law and fact that preclude the granting of a summary judgment in favor of Jacqueline or Adrian as to Account 5. Summary judgment is rarely appropriate for determination of such facts as intent. See Broyles v. Ducote, 2021-0852 (La. App. 1 Cir. 6/14/22), 343 So.3d 902, 910. In this case, the intent of James is in question as well as whether either party is entitled to judgment as a matter of law since it is unclear as to what law would apply. I would deny the motions for summary judgment and remand to the trial court for further proceedings on this issue.
WELCH, J., concurring in part and dissenting in part.
I concur in the result that the May 3, 2021 judgment of the trial court should be reversed insofar as it: granted summary judgment in favor of Jacqueline and declared her to be the beneficiary of the assets in Account 1, Account 2, and Account 3; reversed insofar as it denied Adrian's first motion for summary judgment; and that summary judgment should be granted in favor of Adrian, declaring the estate of James to be the beneficiary of the assets in Account 1, Account 2, and Account 3. I also concur that the judgment should be affirmed insofar as it denied Adrian's second motion for summary judgment. However, I disagree that May 3, 2021 judgment should be reversed insofar as it granted summary judgment in favor of Jacqueline, declared her to be the beneficiary of the assets in Account 5 and would affirm that portion of the judgment.
As to the summary of judgment with respect to the beneficiary designation of Account 1, Account 2, and Account 3, Adrian argued that Jacqueline waived all of her right, title, and interest in any of James' financial accounts pursuant to the partition agreement between James and Jacqueline. He also argued that, pursuant to James' account agreements with Ameriprise, that Minnesota law applied to the determination of this issue, and that under Minnesota law—Minn. Stat. § 524.2-804(1) —James' designations of Jacqueline as the beneficiary of Account 1, Account 2, and Account 3 were revoked upon their divorce. He further argued that under the account agreements, which govern Account 1, Account 2, and Account 3, if no beneficiary was designated at the time of James' death, the beneficiary was deemed to be James' estate. Thus, Adrian claimed that he was entitled to summary judgment, declaring James' estate to be the beneficiary of the assets in Account 1, Account 2, and Account 3.
On the other hand, Jacqueline argued that the partition agreement between her and James was merely a division of the ownership of community assets and that she released only her rights as a co-owner to the assets received by James in that agreement—not her rights as the designated beneficiary of those accounts. She further argued that the issue of the beneficiary designation was governed by Louisiana law, and pursuant to Louisiana law—La. R.S. 9:2449 and the jurisprudence interpreting same—the assets or benefits in Account 1, Account 2, and Account 3 must be paid to her—the named or designated beneficiary of those accounts.
In determining whether summary judgment is appropriate herein, the applicable substantive law must first be determined. See Berard v. L-3 Communications Vertex Aerospace, LLC, 2009-1202 (La. App. 1st Cir. 2/12/10), 35 So.3d 334, 340 n.1i writ denied, 2010-0715 (La. 6/4/10), 38 So.3d 302 ("[a] judgment granting or denying summary judgment is necessarily based upon the initial determination of the substantive law applicable to the issues, as it is only in the context of that applicable substantive law that any issues of material fact can be ascertained"); Bryant v. Premium Food Concepts, Inc., 2016-0770 (La. App. 1st Cir. 4/26/17), 220 So.3d 79, 82, writ denied, 2017-0873 (La. 9/29/17), 227 So.3d 288 ("[b]ecause it is the applicable substantive law that determines materiality, whether a particular fact in dispute is material can be seen only in light of the substantive law applicable to this case"). Furthermore, determining the proper choice-of-law to be applied to an issue is a question of law, which this Court reviews de novo. See Ross and Wallace Paper Products, Inc. v. Team Logistics, Inc., 2019-0196 (La. App. 1st Cir. 7/8/20), 308 So.3d 346, 352, writ denied, 2020-00989 (La. 11/4/20), 303 So.3d 641. Based on my de novo review, I find that Minnesota law governs this dispute concerning the beneficiary of Account 1, Account 2, and Account 3. Further, it also governs the dispute concerning the beneficiary of Account 5, addressed hereinbelow.
The Ameriprise Brokerage Client Agreement ("the Agreement") between James and Ameriprise contained a choice-of-law provision, expressly providing as follows:
25. Governing Law. THIS AGREEMENT AND ITS ENFORCEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF MINNESOTA WITHOUT GIVING EFFECT TO IT CHOICE OF LAW OR CONFLICTS OF LAW PRINCIPLES, UNLESS SUPERSEDED BY FEDERAL LAW OR STATUTE; AND SHALL COVER INDIVIDUALLY AND COLLECTIVELY ALL BROKERAGE ACCOUNTS WHICH YOU MAY OPEN OR REOPEN WITH US ... INCLUDING OUR SUBSIDIARIES AND AFFILIATES...."
The Agreement also provided that "[t]his Agreement, along with the Application(s) and any other documents you have signed, constitutes the entire Agreement between you and us." It further provided that "[t]his Agreement and its terms, as modified by us from time to time shall be binding upon your heirs, successors, executors, beneficiaries, administrators and assigns." (Emphasis added). In the account applications signed by James, he "acknowledge[ed] that [he] received and "agree[d] to be bound by the terms of `Your Guide to IRAs' and `Your Guide to Roth IRAs.'" Those guides provided that, with respect to the "Governing Law," that "This Agreement and the duties and obligations of Custodian [(Ameriprise)] shall be construed, administered[,] and enforced according to the laws of the State of Minnesota, except as superseded by federal law or statute."
Thus, James' account agreements with Ameriprise unequivocally provide that Minnesota law governs the agreements, their enforcement, as well as Ameriprise's duties and obligations under the agreements, and further, that those agreements are binding on James "heirs, ... executors, [and] beneficiaries," which are the parties involved in this suit—Adrian, the executor of James' estate, Jacqueline the purported beneficiary of James' accounts, and to the universal heirs of James under his will.
Under Louisiana law, it is generally acceptable for contracting parties to make a choice-of-law that will govern the agreement between them. O'Hara v. Globus Medical, Inc., 2014-1436 (La. App. 1st Cir. 8/12/15), 181 So.3d 69, 80, writ denied, 2015-1944 (La. 11/30/15), 182 So.3d 939. Under La. C.C. art. 3540, that choice-of-law will be given effect, except to the extent that law contravenes the public policy of the state whose law would otherwise be applicable under La. C.C. art. 3537.
Louisiana Civil Code article 3540 provides that "[a]ll ... issues of conventional obligations [other than formal validity and capacity of the parties] and are governed by the law expressly chosen or clearly relied upon by the parties, except to the extent that law contravenes the public policy of the state whose law would otherwise be applicable under Article 3537."
Under La. C.C. art. 3537, which is set forth hereinbelow, generally, Louisiana law would be applicable, as all of the accounts at issue were opened in Louisiana, James and Jacqueline were domiciled in Louisiana when the accounts were opened, and James was domiciled in the Louisiana when he died. However, that does not end the inquiry when there is a choice-of-law provision in a contract. Rather, the more specific provision of La. C.C. art. 3540 must be considered and it must be determined whether the law chosen, i.e., Minnesota law, contravenes the public policy of the state whose law is applicable under La. C.C. art. 3547, i.e., Louisiana.
Louisiana Civil Code article 3537 provides:
Except as otherwise provided in this Title, an issue of conventional obligations is governed by the law of the state whose policies would be most seriously impaired if its law were not applied to that issue.
That state is determined by evaluating the strength and pertinence of the relevant policies of the involved states in the light of: (1) the pertinent contacts of each state to the parties and the transaction, including the place of negotiation, formation, and performance of the contract, the location of the object of the contract, and the place of domicile, habitual residence, or business of the parties; (2) the nature, type, and purpose of the contract; and (3) the policies referred to in Article 3515, as well as the policies of facilitating the orderly planning of transactions, of promoting multistate commercial intercourse, and of protecting one party from undue imposition by the other.
Pertinent to the dispute herein, the Minnesota law that is applicable is Minn. Stat. § 524.2-804, which provides, in pertinent part:
Subdivision 1. Revocation upon dissolution. Except as provided by the express terms of a governing instrument... executed prior to the dissolution or annulment of an individual's marriage, a court order, a contract relating to the division of the marital property made between individuals before or after their marriage, dissolution, or annulment, or a plan document governing a qualified or nonqualified retirement plan, the dissolution or annulment of a marriage revokes any revocable:
(1) disposition, beneficiary designation, or appointment of property made by an individual to the individual's former spouse in a governing instrument[.]
* * *
Subd.2. Effects of revocation. Provisions of a governing instrument are given effect as if the former spouse died immediately before the dissolution or annulment.
In Sveen v. Melin, ___ U.S. ___, 138 S.Ct. 1815, 201 L.Ed.2d 180 (2018), the United States Supreme Court addressed whether this particular statute, Minn. Stat. § 524.2-804, violated the Contracts Clause of the Constitution of the United States, and in doing so analyzed the purpose and underlying public policy considerations of the statute. The Supreme Court noted that Minn. Stat. § 524.2-804 provided a default rule for divorce that if one spouse has made the other the beneficiary of a life insurance policy or similar asset, their divorce automatically revokes that beneficiary designation on the theory that the spouse would want that result, i.e., he or she would not want their former spouse to benefit from his or her insurance policy or other similar asset; but if the spouse does not want that result, he may rename the ex-spouse as beneficiary. Id., ___ U.S. ___, 138 S.Ct. at 1817-1818, 1823.
In analyzing the public policy behind the statute, the Supreme Court noted that changes in society and divorce rates led a majority of the states to enact laws governing the revocation of wills or testamentary bequests on divorce, which were based on the prevailing idea that "the average Joe does not want his ex-inheriting what he leaves behind." Id. ___ U.S. ___, 138 S.Ct. at 1819. Over time, many states extended their revocation-on-divorce statutes from "wills to `will substitutes' such as revocable trusts, pension accounts, and life insurance policies." Id. In doing so, "[t]he underlying idea was that the typical decedent would no more want his former spouse to benefit from his pension plan or life insurance than to inherit under his will," that "a former spouse ... was not likely to be its desired recipient," and that "a decedent's failure to change his beneficiary probably resulted from `inattention,' not `intention.'" Id. ___ U.S. ___, 138 S.Ct. at 1819.
In holding that the statute did not violate the Constitution's Contracts Clause, the Supreme Court found that this statute furthered, rather than impaired or undermined, the policyholder's (or decedent's) intent with respect to a life insurance policy or other similar asset, by providing the default rule for revocation, because the failure to change the beneficiary was likely the result of neglect rather than choice, thus honoring the intent of the contracting party to care about the beneficiary term. Id. ___ U.S. ___, 138 S.Ct. at 1823. The Supreme Court also found that the policyholder (decedent) could "reverse the effect of the Minnesota statute with the stroke of a pen." Id. The Supreme Court went on to explain that "[t]he law puts in place a presumption about what [a spouse] wants after divorcing," "[b]ut if the presumption is wrong, the [spouse] may overthrow it... by the simple act of sending a change-of-beneficiary form ... [o]r if he wants to commit himself forever, like Ulysses binding himself to the mast, he may agree to a divorce settlement continuing his ex-spouse's beneficiary status," which "restores his former spouse to the position she held before the divorce—and in so doing, cancels the state law's operation." Id. Stated differently, "File a form and the statutory default rule gives way to the original beneficiary designation." Id.
Louisiana has not enacted a statute similar to that of Minnesota providing for the revocation of a beneficiary designation upon divorce. However, Louisiana has established a public policy with respect to beneficiaries of IRAs and annuities (the accounts at issue herein)—beneficiaries of IRAs and annuities are included in the exceptions to the general rule that property owned by a decedent at death must pass to heirs via succession. See La. R.S. 9:2449 and La. R.S. 9:912(B); Succession of Angus, 54,180 (La. App. 2nd Cir. 1/12/22), 333 So.3d 555, 560. More specifically, Louisiana law mandates that the beneficiary of an IRA "shall be paid as provided in the [IRA] agreement to the designated beneficiary of the account" and that "the lawful beneficiary, assignee, or payee ... of an annuity contract shall be entitled to the proceeds." See La. R.S. 9:2449(A) and La. R.S. 22:912(B).
Thus, although Louisiana does not have a revocation of beneficiary upon divorce statute, given the public policy considerations of Minn. Stat. § 524.2-804, as enunciated by the United States Supreme Court in Sveen, I do not believe that the choice-of-law provision in the controlling agreements herein contravenes the public policy of Louisiana. To the contrary, Louisiana's public policy is furthered by upholding the choice-of-law provision in the account agreements, as Louisiana's public policy directs that IRA and annuity beneficiary payments be made in accordance with the account agreements. In this case, the account agreements direct that Minnesota law governs the agreement, its enforcement, as well as Ameriprise's duties and obligations under the agreement. Thus, with respect to determining the appropriate beneficiary of Account 1, Account 2, Account 3, and Account 5, Minnesota law, applies.
After applying Minn. Stat. § 524.2-804 to the material facts which are not genuinely disputed, I find that Jacqueline failed to establish that she was entitled to summary judgment declaring that she was the beneficiary of the assets in Account 1, Account 2 and Account 3. For the same reasons, I find that Adrian established that he was entitled to summary judgment declaring that the estate of James was deemed to be the beneficiary of the assets in Account 1, Account 2, and Account 3.
The agreements governing James' accounts provided that, the "Depositor may designate, by delivery of a form provided by or acceptable to Custodian ... a beneficiary... to receive the balance in the Account in the event of the death of the Depositor" and that "if at the time of the Depositor's death[,] there is no designation of beneficiary then in effect, the beneficiary shall be deemed to be the Depositor's surviving spouse, if any" and "[i]f there is no surviving spouse, then the beneficiary shall be deemed to be the Depositor's estate."
Account 1, Account 2, and Account 3 were opened during James and Jacqueline's marriage, and on each of these accounts, Jacqueline, as James's spouse, was designated as the beneficiary. Jacqueline and James did not have any children and a judgment of divorce was entered on May 20, 2015. On that date, May 20, 2015, by operation of Minnesota law, the designation of Jaqueline as the beneficiary of those accounts was revoked. Although James was entitled, under Minnesota law, to re-designate Jacqueline as the beneficiary of the accounts after the divorce, James undertook no effort to do so in the manner required by the account agreements. James died on September 20, 2019, and he had no surviving spouse or children at the time of his death. Therefore, under the account agreements, James' estate is deemed to be the beneficiary of the assets of Account 1, Account 2, and Account 3.
We note that the affidavit of Charles Simmons, James' Ameriprise financial advisor, insofar as he states that James told him that he wanted to keep Jacqueline as the designated beneficiary of these three accounts, constitutes hearsay. Without addressing whether such statement constitutes inadmissible hearsay, as argued by Adrian to the trial court, we find that such oral statement alone is insufficient to re-designate Jaqueline as a beneficiary in the manner required by the governing account agreements, as set forth above.
Having determined that Minnesota law is applicable, that the beneficiary designations of Jacqueline on Account 1, Account 2, and Account 3 were revoked, and that the estate is the beneficiary of the assets in those accounts, it is not necessary to address whether the issue of whether Jacqueline's waiver of her right, title, and interest in James' financial accounts in the partition agreement included her right to be designated as a beneficiary of those accounts.
Accordingly, the judgment of the trial court should be reversed insofar as it granted summary judgment in favor of Jacqueline and declared her to be the beneficiary of the assets in Account 1, Account 2, and Account 3; reversed insofar as it denied Adrian's first motion for summary judgment; and summary judgment should be granted in favor of Adrian, declaring the estate of James to be the beneficiary of the assets in Account 1, Account 2, and Account 3.
As to the summary judgment with respect to the beneficiary designation of Account 5, Adrian again argued that the undisputed material facts established that Jacqueline had no interest in that account because she disclaimed, waived, and/or transferred all of her right title and interest in that account pursuant to their partition agreement; he also argued that the beneficiary designation for Account 5 was invalid because there was no beneficiary specifically designated by name. Thus, Adrian claimed that he was entitled to judgment as a matter of law declaring that Jacqueline was not the beneficiary of the proceeds for Account 5 and that the beneficiary of the assets in Account 5 was deemed to be James' estate.
In Jaqueline's motion for summary judgment and re-stated motion for summary judgment, she maintained that the undisputed material facts established that she was the beneficiary of Account 5. She argued that the partition agreement was executed prior to the date that James opened account 5; therefore, it had no effect on the beneficiary designation of Account 5. She also claimed that James designated her as the beneficiary of Account 5 because she was the existing IRA plan beneficiary, which was further supported by the affidavit of Charles Simmons, James' financial advisor.
First, with respect to the arguments the partition agreement, I find that it had no effect on Account 5. The undisputed material facts establish that this account was opened on June 7, 2019, after the parties were divorced and after they executed the partition agreement; therefore, that asset was not a community asset that could be partitioned or included in that agreement. However, to the extent that Account 5 was a financial account in the name of James that could be contemplated and included in the partition agreement, the partition agreement was a division of the ownership of community assets; Jacqueline did not release her rights, if any, as the designated beneficiary of those accounts. Indeed, there is a difference between the ownership of community funds in an IRA (which can be partitioned) and the right to those funds as its designated beneficiary, even after as partition of that asset. See Minvielle v. Dupuy, 93-1835 (La. App. 1st Cir. 6/24/94), 638 So.2d 1186, 1187-1189.
Next, with respect the designation of beneficiary, the beneficiary of Account 5 is listed as, "Apply Existing IRA Plan Beneficiary" and that "If the Plan does not exist, Beneficiary will be defaulted to the default Beneficiary Provision as outlined in `Your Guide to IRAs....'" (R605). The "Your Guide to IRAs" states that "[i]f at the time of the Depositor's death there is no designation of beneficiary then in effect, the beneficiary shall be deemed to be the Depositor's surviving spouse, if any. If there is no surviving spouse, then the beneficiary shall be deemed to be the Depositor's estate." (R752). As pointed out by Adrian, James did not have a surviving spouse at the time of his death, James and Jacqueline divorced on May 20, 2015, and James never remarried before his death on September 20, 2019. (R896) Thus, Adrian submits that the undisputed evidence establishes that James did name a beneficiary, did not have a surviving spouse at the time of his death, and thus, the beneficiary is deemed to be James' estate under the account agreements
However, we note that the financial advisor listed on the account agreement for Account 5 is Charles Lee Simmons. (R603). Jacqueline introduced two affidavits of Charles Simmons in support of her motion for summary judgment, and Adrian objected, asserting that the affidavits were inadmissible.
The only documents that may be filed in support of or in opposition to a motion for summary judgment are pleadings, memoranda, affidavits, depositions, answers to interrogatories, certified medical records, written stipulations, and admissions. La. C.C.P. art. 966A(4). Affidavits offered in support of or in opposition to a motion for summary judgment must be made on personal knowledge and must show affirmatively that the affiant is competent to testify to the matters stated therein. La. C.C.P. art. 967(A); see Schexnaildre v. State Farm Mutual Automobile Insurance Company, 2015-0272 (La. App. 1st Cir. 11/9/15), 184 So.3d 108, 116. Personal knowledge encompasses only those facts that the affiant saw, heard, or perceived with his own senses; however, a witness is permitted to draw reasonable inferences from his personal observations. Griffin v. Design/Build Associates, Inc., 2018-1720 (La. App. 1st Cir. 5/31/19), 278 So.3d 399, 404.
In Charles Simmons' first affidavits, he stated that he was a financial advisor for Ameriprise from July 1991 through July 2020, that James was his client from March 2019 to until his death in September 2019, and that he was James' financial advisor when James opened Account 5. He further stated that he never personally met James after he became his financial advisor, but that he spoke with James about opening Account 5 and emailed James the application for Account 5, Charles Simmons further stated that James filled out and signed the application for Account 5, and that James advised him that he was designating Jacqueline as the beneficiary of the account and that he wanted to keep Jacqueline as the designated beneficiary on his other accounts. (R306) Charles Simmons' also stated that James funded Account 5 with transfers of assets from two separate IRAs, both of which designated Jacqueline as the beneficiary. A previously set forth, the beneficiary designation for Account 5 provides: "Apply Existing IRA Plan Beneficiary."
As asserted by Adrian, I agree that the statements made in Charles Simmons' affidavits that he wanted Jacqueline to be beneficiary of account 5 and that he wanted to keep Jacqueline as the beneficiary of the other accounts constitute hearsay. See La. C.E. art. 801(C). Further, those statements do not fall under any of the exceptions to the hearsay rule. See La. C.E. art. 803 and 804. Therefore, those statements are not admissible, should not have been considered by the trial court, and cannot be considered by this Court on appeal. See La. C.E. art. 802. Nonetheless, assuming arguendo that those statements were admissible, Charles Simmons' statements that James wanted Jacqueline to be the beneficiary of Account 5 (and to remain the beneficiary of the other accounts) is insufficient to name Jacqueline as the beneficiary of the accounts in the manner required by the account agreements.
However, I believe that Charles Simmons' statements that James funded Account 5 with transfers of assets from two separate IRAs, both of which designated Jacqueline as the beneficiary were admissible, as those statements were made based on Charles Simmons personal knowledge as James' financial advisor. Thus, this Court can consider those statements. After considering those statements, as well as the other evidence offered by Jacqueline in support of her motion for summary judgment, I find that there is no genuine issue of material fact that she was ascertainable as the designated beneficiary for Account 5, and thus was entitled to summary judgment declaring her to be the beneficiary of Account 5.
For the reasons previously set forth, I believe that Minnesota law is applicable. Although Account 5 was established after the divorce of the parties and Minn. Stat. § 524.2-804(1) does not apply directly to Account 5, Charles Simmons stated that the funds of Account 5 came from the transfer of assets from two separate IRAs, both of which designated Jacqueline as the beneficiary. As to those underlying separate IRAs that designated Jacqueline as the beneficiary, Minn. Stat. § 524.2-804(1) would have applied to revoke the designation of Jacqueline as the beneficiary of those accounts upon the divorce of James and Jacqueline. However, as noted above, while Minn. Stat. § 524.2-804(1) provides a default rule for revocation of the beneficiary designation on divorce—if the spouse does not want that result, he may re-name ex-spouse as beneficiary, thus reinstating the original beneficiary designation.
On the Account 5 beneficiary designation, it was indicated that James was divorced, the beneficiary was listed as "Apply Existing IRA Plan Beneficiary," and Jacqueline's identity as the existing IRA plan beneficiary of the two underlying IRAs that were combined into Account 5 was established. Although the beneficiary designations of Jacqueline for the underlying IRAs that were combined into Account 5 would have been revoked by operation of Minnesota law, James' post-divorce beneficiary designation for Account 5, which is ascertainable as Jacqueline, constitutes a re-naming, re-designation, or re-instatement of Jacqueline as the beneficiary of Account 5 under Minnesota law. For this reason, James' estate cannot be deemed the beneficiary of Account 5 by default. Therefore, I find that there are no genuine issues of material fact with respect to the beneficiary designation of Account 5 and that Jacqueline was entitled to summary judgment as a matter of law declaring her to be the beneficiary of the assets in that account. Accordingly, I disagree that the May 3, 2021 judgment of should be reversed insofar as it granted summary judgment in favor of Jacqueline and declared Jacqueline to be the beneficiary of the assets in Account 5. I would affirm those portions of the judgment, as well as the portion of the judgment denying Adrian's second motion for summary judgment.
Thus, I respectfully concur in part and dissent in part.
THERIOT, J., concurring in part and dissenting in part.
I concur with the majority in finding that, as to Account 5, Jacqueline was not entitled to summary judgment declaring her to be the beneficiary of that account. However, I disagree with the majority's finding that, as to Account 5, Adrian was not entitled to summary judgment in his favor declaring the estate of James to be the beneficiary of Account 5. Further, I disagree with the majority's finding that Jacqueline was not entitled to summary judgment in her favor declaring her to be the beneficiary of Account 1, Account 2, and Account 3 and that Adrian was entitled to summary judgment in his favor declaring the estate of James to be the beneficiary of those accounts.
Regarding Account 1, Account 2, and Account 3, Adrian argued that the "Partition and Division of Community Property with Assumption of Liabilities and Settlement of All Claims" agreement executed by Jacqueline and James precluded Jacqueline's rights as the beneficiary to the disputed accounts and the ownership of the death benefits. Louisiana law mandates that benefits of IRAs be paid to the designated beneficiary according to the account agreement. Minvielle v. Dupuy, 638 So.2d 1186, 1188 (La. App. 1st Cir. 6/24/94), writ denied, 1994-1959 (La. 11/4/94), 644 So.2d 1060. Louisiana Revised Statutes 9:2449 provides, in pertinent part,
A. Any benefits payable by reason of death from an individual retirement account established in accordance with the provisions of 26 U.S.C. 408, as amended, shall be paid as provided in the individual retirement account agreement to the designated beneficiary of the account. Such payment shall be a valid and sufficient release and discharge of the account holder for the payment or delivery so made and shall relieve the trustee, custodian, insurance company or other account fiduciary from all adverse claims thereto by a person claiming as a surviving or former spouse or a successor to such a spouse.
B. The provisions of this Section shall apply even when the decedent designates a beneficiary by last will and testament.
This statutory language clearly provides for the payment to be made according to the account agreement. In the case of Minvielle v. Dupuy, 638 So.2d 1186, Mary Dupuy and Lovelace Dupuy, Jr. were married. During the marriage, Lovelace Dupuy maintained an IRA. They divorced, and a consent judgment partitioning the community was signed. Pursuant to the consent judgment, Mary Dupuy was to receive $40,483.79 from the funds in Lovelace Dupuy's IRA, to be transferred into a separate IRA. The balance of the funds in the original IRA, $67,483.78, remained in Lovelace Dupuy's IRA. Lovelace Dupuy's IRA listed the beneficiary designations as "Nobby T. Dupuy-Wife" and "Kenneth Paul Dupuy." The form went on to provide that one-half of the total account was to go to Mr. Dupuy's wife and one-half was to go to Mr. Dupuy's four children. Lovelace Dupuy then died. The IRA funds were divided according to the consent judgment, and $40,483.79 was distributed to Mary Dupuy. The remainder of the funds were later disbursed per the beneficiary designation. The children of Lovelace Dupuy sued Mary Dupuy for return of the funds. Minvielle, 638 So. 2d at 1187. The First Circuit held that Mary Dupuy, the ex-spouse, was entitled to benefits pursuant to her designation as the beneficiary of Lovelace Dupuy's IRA, despite the status designation of "wife," and despite the fact that Lovelace Dupuy had signed a community property settlement entitling the wife to a portion of the funds in the IRA. Minvielle, 638 So. 2d at 1188.
James contracted with Ameriprise to distribute, upon the occasion of his death, the funds in Account 1, Account 2, and Account 3 to Jacqueline. Account 1 states that the "Beneficiary is: Owner's spouse, Jacqueline C. Simm, if living." Account 2 states that the "Beneficiary is: Jacqueline Simm." Account 3 states that the "Beneficiary is: Annuitant's designated spouse, if living, if not, the beneficiaries are the living, lawful children of the annuitant and they will receive equal shares of the proceeds." Account 3 further indicates, "Spouse's Name[:] Jacqueline C. Simm." Benefits from an IRA are owned by the named beneficiary; and, in the instant case, pass directly to Jacqueline. See Minvielle, 638 So. 2d at 1189. The language of the agreement is clear and the identity of the beneficiary is definite as to Account 1, Account 2, and Account 3.
Furthermore, the status designation, spouse, does not affect Jacqueline's designation as the beneficiary of Account 1, Account 2, or Account 3. Misnomer of the person named as beneficiary does not defeat her designation if the identity of the person is clear. Minvielle, 638 So. 2d at 1189. The improper or incorrect designation does not affect Jacqueline's right to the benefits, since it is the individual named as beneficiary and not the description of her relationship to the deceased which controls. Accordingly, I find that Jacqueline is the correct beneficiary for Account 1, Account 2, and Account 3.
Adrian further argued that Minnesota law applies to Account 1, Account 2, and Account 3 under the "Ameriprise Brokerage Client Agreement." The "Ameriprise Brokerage Client Agreement" states, "This Agreement, along with the Application(s) and any other documents you have signed, constitutes the entire Agreement between you and us[,]" and "This Agreement and its terms, as modified by us from time to time shall be binding upon your heirs, successors, executors, beneficiaries, administrators and assigns." The "Ameriprise Brokerage Client Agreement" further states,
25. Governing Law. THIS AGREEMENT AND ITS ENFORCEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF MINNESOTA WITHOUT GIVING EFFECT TO ITS CHOICE OF LAW OR CONFLICTS OF LAW PRINCIPLES, UNLESS SUPERSEDED BY FEDERAL LAW OR STATUTE; AND SHALL COVER INDIVIDUALLY AND COLLECTIVELY ALL BROKERAGE ACCOUNTS WHICH YOU MAY OPEN OR REOPEN WITH US, OR WHICH MAY BE INTRODUCED TO US, INCLUDING OUR SUBSIDIARIES AND AFFILIATES, THROUGH THE COURTESY OF THE AFOREMENTIONED INTRODUCING BROKER.
Adrian asserted that the document titled "Your Guide to IRAs" also requires the lawsuit to be decided under the law of Minnesota. "Your Guide to IRAs" states, "(12) Governing Law[,] This Agreement and the duties and obligations of Custodian in connection with the Account, shall be construed, administered and enforced according to the laws of the State of Minnesota, except as superseded by federal law or statute." "`Custodian' means Ameriprise Trust Company, a trust company incorporated under the state of Minnesota, or any successor thereto[.]"
Under Louisiana law, it is generally acceptable for contracting parties to make a choice of state law that will govern the agreement between them. Succession of Angus, 54,180 (La. App. 2nd Cir. 1/12/22), 333 So.3d 555. I agree with the trial court in its finding that Minnesota law would apply to a dispute between James and Ameriprise, but it does not apply to the dispute between the estate and the designated beneficiary. The "Ameriprise Brokerage Client Agreement" is binding between James and Ameriprise and James' heirs, successors, executors, beneficiaries, administrators and assigns and Ameriprise. The agreement is not binding between James' estate and the designated beneficiary of the accounts. Adrian, individually and as the Independent Executor of the Succession of James Timothy Simm, sued Jacqueline, alleging that she is not entitled to be the beneficiary of James' accounts because she is his ex-spouse and she signed a community property agreement.
Louisiana Civil Code article 3537 provides, in part, "[e]xcept as otherwise provided in this Title, an issue of conventional obligations is governed by the law of the state whose policies would be most seriously impaired if its law were not applied to that issue." In reviewing a choice of law issue, a court's first task is to determine which jurisdictions have meaningful contacts to the dispute. See La. C.C. art. 3537. Specifically, to determine if a jurisdiction has meaningful contacts to the dispute, we must consider the place of negotiation, formation, and performance of the contract, the location of the object of the contract, and the place of domicile, habitual residence, or business of the parties. See La. C.C. art. 3537.
Account 1, Account 2, and Account 3 were all formed in Louisiana. Account 1 states that the application was signed by James in Louisiana, the signature line for Account 2 indicates "LA" as the state, and Account 3 states that the agreement was signed in Baton Rouge, Louisiana. Further, both parties are domiciled in Louisiana, and the decedent was domiciled in Louisiana when he died. Minnesota does not have an interest in its laws being applied to a dispute between Adrian, individually and as the Independent Executor of the Succession of James Timothy Simms, and Jacqueline. However, Louisiana does have an interest in its laws being applied since it has meaningful contacts to the dispute. See La. C.C. art. 3537.
For the reasons above, I disagree with the majority's finding that Jacqueline was not entitled to summary judgment in her favor declaring her to be the beneficiary of Account 1, Account 2, and Account 3 and that Adrian was entitled to summary judgment in his favor declaring the estate of James to be the beneficiary of those accounts.
Regarding Account 5, Adrian argued that Jacqueline is not the proper beneficiary. James opened Account 5 on June 7, 2019, which was after James and Jacqueline were divorced. The beneficiary of Account 5 is listed as, "Apply Existing IRA Plan Beneficiary." The advisor listed on the account agreement is Charles Lee Simmons. Jacqueline introduced two affidavits of Mr. Simmons at the hearing on the motion for summary judgment, and Adrian objected, asserting that the affidavits contain inadmissible hearsay.
Affidavits offered in support of or in opposition to a motion for summary judgment must be made on personal knowledge and must show affirmatively that the affiant is competent to testify to the matters stated therein. La. C.C.P. art. 967A; Schexnaildre v. State Farm Mutual Automobile Insurance Company, 2015-0272, pp. 14-15 (La. App. 1st Cir. 11/9/15), 184 So.3d 108, 116. Personal knowledge encompasses only those facts that the affiant saw, heard, or perceived with his own senses; however, a witness is permitted to draw reasonable inferences from his personal observations. Griffin v. Design/Build Associates, Inc., 2018-1720 (La. App. 1st Cir. 5/31/19), 278 So.3d 399, 404.
In his affidavit, Mr. Simmons indicated that he was a financial advisor for Ameriprise Financial Services, Inc. from July 1991 through July 2020; James was his client from March 2019 to September 2019; he was James' financial advisor when James opened Account 5; he never personally met James after he became his financial advisor; he spoke with James about opening Account 5; he emailed James the application for Account 5; James filled out and signed the application; James advised him that he was designating Jacqueline as the beneficiary of the account; and James advised him that he wanted to keep Jacqueline as the designated beneficiary on his other accounts. In the second affidavit, Mr. Simmons indicated that James funded Account 5 with transfers of assets from two separate IRAs, both of which designated Jacqueline as the beneficiary. Mr. Simmons' affidavits were made on personal knowledge since they are limited to what Mr. Simmons saw, heard, or perceived, and the affidavits do not contain inadmissible hearsay as asserted by Adrian.
While Mr. Simmons' affidavits are admissible for the purpose of summary judgment, Mr. Simmons' assertion that James wanted Jacqueline to be the beneficiary of Account 5 is not sufficient to name Jacqueline as the beneficiary to that account. Louisiana law has mandated that benefits of IRAs be paid to the designated beneficiary according to the account agreement. Minvielle, 638 So.2d at 1188. Louisiana Revised Statutes 9:2449 provides, in pertinent part, "[a]ny benefits payable by reason of death from an individual retirement account established in accordance with the provisions of 26 U.S.C. 408, as amended, shall be paid as provided in the individual retirement account agreement to the designated beneficiary of the account."
Unlike Account 1, Account 2, and Account 3, Account 5 does not clearly identify Jacqueline as the designated beneficiary. The beneficiary for Account 5 is listed as "Apply Existing IRA Plan Beneficiary." The account agreement states, "If the Plan does not exist, Beneficiary will be defaulted to the default Beneficiary Provision as Outlined in `Your guide to IRAs-IRA Disclosure.'" "Your Guide to IRAs" states that "[i]f at the time of the Depositor's death there is no designation of beneficiary then in effect, the beneficiary shall be deemed to be the Depositor's surviving spouse, if any. If there is no surviving spouse, then the beneficiary shall be deemed to be the Depositor's estate." James did not have a surviving spouse at the time of his death. James and Jacqueline divorced on May 20, 2015, and James never remarried before his death on September 20, 2019. I find that since James did not have a surviving spouse at the time of his death, the beneficiary is deemed to be James' estate under the account agreement. See La. R.S. 9:2449.
Therefore, I concur with the majority in finding that, as to Account 5, Jacqueline was not entitled to summary judgment declaring her to be the beneficiary of that account. However, I disagree with the majority's finding that, as to Account 5, Adrian was not entitled to summary judgment in his favor declaring the estate of James to be the beneficiary of Account 5. Thus, I respectfully concur in part and dissent in part.
HOLDRIDGE, J., concurring.
I respectfully concur in the result that the summary judgment rendered by the trial court in favor of Jacqueline as to Account 1 and Account 3 should be reversed and summary judgment as to those accounts should be granted in favor of Adrian, declaring that the estate of James Simm is the beneficiary of those accounts. In the partition agreement that divided the community property between James and Jacqueline, Jacqueline transferred all of her right, title, and interest that she had into Accounts 1 and 3 to James, including any "interest that she now has or might have in and to" the accounts in question. It is clear that at the time Jacqueline signed the partition agreement, she gave up all ownership interests that she had in those accounts at that time as well as any interests that she may have in the future. While La. R.S. 9:2449(A) states that "benefits payable by reason of death from an individual retirement account ... shall be paid as provided in the individual retirement account agreement to the designated beneficiary of the account," the statute does not say that a designated beneficiary to the account cannot give up her ownership rights as beneficiary. In the partition agreement, Jacqueline transferred all of her current and future interests in Accounts 1 and 3 to James. One of her future interests in the accounts would be as a beneficiary. If she wanted to retain her rights as a beneficiary, she could have reserved those rights in the partition agreement. Even if we follow La. R.S. 9:2449 to its illogical conclusion, Jacqueline as the beneficiary would be paid the benefits and then would have to turn them over to the owner of the benefits, which would be the estate of James Simm. Since Jacqueline gave up any and all of her ownership interests, I agree that summary judgment should be granted as to Accounts 1 and 3 in favor of Adrian, declaring the estate of James Simm as the owner of said benefits.
I respectfully concur in the result that the summary judgment rendered by the trial court in favor of Jacqueline as to Account 2 should be reversed and summary judgment as to Account 2 should be granted in favor of Adrian declaring that the estate of James Simm is the beneficiary of those accounts.
I concur as to that part of the per curiam opinion that affirms the trial court's denial of the second motion for summary judgment in favor of Adrian as to Account 5. I find that there are questions of law and fact that preclude the granting of a summary judgment in favor of Jacqueline or Adrian as to Account 5. Summary judgment is rarely appropriate for determination of such facts as intent. See Broyles v. Ducote, 2021-0852 (La. App. 1 Cir. 6/14/22), 343 So.3d 902, 910. In this case, the intent of James is in question as well as whether either party is entitled to judgment as a matter of law since it is unclear as to what law would apply. I would deny the motions for summary judgment and remand to the trial court for further proceedings on this issue.
McClendon, J., concurring in part and dissenting in part.
I respectfully concur in the result reversing the trial court's grant of summary judgment in favor of Jacqueline, which declared her to be the beneficiary for Account 1, Account 2, and Account 3. Additionally, I would grant Adrian's cross motion for summary judgment declaring the estate of James to be the beneficiary on those accounts. The Ameriprise Brokerage Client Agreement provided that the Agreement and its terms were binding on James's heirs, executors, and beneficiaries. Further, the governing law provision of the Agreement stated that the Agreement and its enforcement were to be governed by the laws of the state of Minnesota and were to cover all brokerage accounts that James opened. The trial court found that while under the terms of the Brokerage Agreement, Minnesota law would apply to a dispute between James and Ameriprise, said application would not extend to disputes between the estate and a beneficiary, such as Jacqueline. The court reasoned that Minnesota law applied only to disputes between the customers, i.e., between James and Ameriprise, the company that was administering the brokerage agency.
Even were I to agree with the trial court and find that the governing law provision in the Brokerage Agreement does not mandate the application of Minnesota law to the dispute between James's estate and Jacqueline, the documents "Your Guide to IRAs" and "Your Guide to Roth IRAs" contain broader language than that of the Brokerage Agreement. Specifically, the guides to IRAs and Roth IRAs provide that the duties and obligations of the custodian are to be construed, administered, and enforced according to the laws of the state of Minnesota. In the Brokerage Agreement, James acknowledged that he received, read, and agreed to abide by the terms of the applicable guide to IRAs. Clearly, the duty to pay proceeds to a beneficiary would fall within the obligations of the custodian of the account and thus be controlled by the applicable guide to IRAs. Therefore, Minnesota law would be the governing law for the duties and obligations of Ameriprise as to Account I, Account 2, and Account 3. Further, Minnesota law automatically revokes a beneficiary designation to a spouse upon divorce, unless otherwise expressly provided. It is undisputed that there was no such express provision by the decedent and that the designation of Jacqueline as the beneficiary on these accounts occurred prior to James and Jacqueline's divorce. Accordingly, the designation of Jacqueline as a beneficiary was revoked under the provision of Minnesota law, and James's estate became the beneficiary of the assets of Account 1, Account 2, and Account 3.
However, with regard to Account 5, I disagree with the majority and would find that Jacqueline is entitled to summary judgment in her favor declaring her to be the designated beneficiary. Accordingly, I would affirm the trial court's judgment as to this account. Account 5 was opened after the divorce between James and Jacqueline. Therefore, the provision in Minnesota law, regarding the revocation of a beneficiary upon divorce, does not apply to Account 5. Further, Jacqueline was the beneficiary on the two prior self-directed IRA accounts that were combined into one managed account as Account 5, following James and Jacqueline's divorce. Accordingly, it is clear that James wished to designate Jacqueline as the beneficiary for Account 5, when he provided as the beneficiary designation: "Apply Existing IRA Plan Beneficiary." Therefore, because Jacqueline is the designated beneficiary for Account 5, and said designation occurred after the divorce, the proceeds from Account 5 would not fall within James's estate and would be payable to Jacqueline.
For these reasons, I respectfully concur in part and dissent in part.