Opinion
Civ. No. 00-1067, SECTION "C" (5)
May 30, 2000
ORDER AND REASONS
Before the Court is Defendant Diana James's Motion for Summary Judgment. For the reasons explained below, the Court DENIES summary judgment.
I. FACTS
On April 7, 2000, Plaintiff Sun Life Assurance Company of Canada ("Sun Life") filed this interpleader action under Fed.R.Civ.P. 22 to determine the rightful beneficiary of the proceeds of a life insurance policy issued by Sun Life on the life of Melvin Richardson ("Melvin"). Sun Life at that time also deposited the full proceeds of the policy, $104,000. in the Court's registry to be distributed properly after this matter is concluded. In its Complaint in Interpleader, Sun Life identified three potential claimants to the insurance proceeds and named them as defendants in this action. The three defendants are: Sheila Richardson ("Sheila"), Melvin's wife; Shirley Ann Richardson ("Shirley"), Melvin's sister; and Diana James ("Diana"), Melvin's friend and the named beneficiary in the policy. See Rec. Doc. 1.
The Clerk of Court issued summons to each defendant on April 12, 2000. See Rec. Doc. 2. Diana filed an answer, see Rec. Doc. 3, and then filed the instant motion for summary judgment claiming the proceeds of the policy in which she is named as the sole beneficiary. Thereafter Sheila also filed an answer, see Rec. Doc. 5, along with a memorandum in opposition to the instant motion for summary judgment. In her opposition memorandum, Sheila offers evidence that Melvin did attempt to execute a third group insurance application redesignating Sheila as the sole beneficiary of his Sun Life life insurance policy. As alleged, Melvin properly completed the required forms and promptly submitted them to his employer, Highlines Construction Company ("Highlines"). However, Highlines then somehow failed to transfer the forms to Sun Life properly. The change of beneficiary was therefore never accomplished, leaving Diana as the sole named beneficiary at the time of Melvin's death.
Sheila has also filed a third-party complaint against Highlines for its allegedly negligent failure to provide Sun Life with the change of beneficiary forms. See Rec. Doc. 9.
II. ANALYSIS
A. Standard of Review
A district court can grant a motion for summary judgment only when the "`pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.'" Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986) (quoting Fed.R.Civ.P. 56 (c)). When considering a motion for summary judgment, the district court "will review the facts drawing all inferences most favorable to the party opposing the motion." Reid v. State Farm Mutual Automobile Ins. Co., 784 F.2d 577, 578 (5th Cir. 1986). The court must find "[a] factual dispute . . . [to be] `genuine' if the evidence is such that a reasonable jury could return a verdict for the nonmoving party . . . [and a] fact . . . [to be] `material' if it might affect the outcome of the suit under the governing substantive law." Beck v. Somerset Technologies, Inc., 882 F.2d 993, 996 (5th Cir. 1989) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986)).
"If the moving party meets the initial burden of showing that there is no genuine issue of material fact, the burden shifts to the non-moving party to produce evidence or designate specific facts showing the existence of a genuine issue for trial." Engstrom v. First National Bank of Eagle Lake, 47 F.3d 1459, 1462 (5th Cir. 1995) (citing Celotex, 477 U.S. at 322-24, 106 S.Ct. at 2552-53, and Fed.R.Civ.P. 56(e)). The mere argued existence of a factual dispute will not defeat an otherwise properly supported motion. See Anderson, 477 U.S. at 248, 106 S.Ct. at 2510. "If the evidence is merely colorable, or is not significantly probative," summary judgment is appropriate. Id. at 249-50, 106 S.Ct. at 2511 (citations omitted).
B. Discussion
Louisiana requires strict compliance with the terms of an insurance contract to effect a change of beneficiary. See American General Life Ins. Co. v. Fine, 944 F.2d 232, 234 (5th Cir. 1991), and cases cited by note 5 therein. Where the insured does "substantially all that lay within his power to do to effect a change of beneficiary," even though the beneficiary is not altered before the insured's death, the insured's strict compliance with the policy's terms will be sufficient. Bland v. Good Citizens Mut. Ben. Ass'n, 64 So.2d 29, 34 (La.Ct.App. 1st Cir. 1953) (undated application for membership designating new beneficiary and signed by insured held sufficient to change beneficiary). See also Philadelphia Life Ins. Co. v. Whitman, 484 So.2d 266 (La.Ct.App. 3d Cir. 1986) (insured's signature on completed questionnaire revoking previous beneficiary and naming new beneficiary satisfied policy's requirements where policy required no specific form for change of beneficiary). Furthermore, where an insured properly complies with his insurer's requirements for changing a beneficiary but the insurer's internal procedures fail to effect the change, the internal glitch will not nullify the insured's actions. See Woodmen of the World Life Ins. Soc'y v. Hymel, 544 So.2d 664, 670 (La.Ct.App. 3d Cir.) (completed application signed by insured satisfied policy's requirements where policy required no specific change of beneficiary form), writ denied, 551 So.2d 629 (La. 1989).
But cf. New York Life Ins. Co. v. Deshotel, Civ. Act. 94-3278, 1995 WL 555584 (E.D. La. Sept. 15, 1995) (completed change of beneficiary form not received by insurer before insured's death was not sufficient to effect change because policy required that insurer receive change of beneficiary form), aff'd without opinion, 83 F.3d 419 (5th Cir. 1996).
While these Louisiana appellate cases may have used the language of substantial compliance, as Judge Wisdom noted in Fine, "they are, in fact, strict compliance cases." 944 F.2d at 234.
Melvin's Sun Life policy stated the following regarding "Change of Beneficiary:"
All nominations of Beneficiaries are revocable unless otherwise stated by the Employee in the form provided by Sun Life. Any request for change of Beneficiary must be made in a written form and will take effect as of the date the Employee signs and files the change with the Employer. If Sun Life has taken any action or made payment prior to receiving notice of that change, the change of Beneficiary will not affect any action or payment made by Sun Life. The consent of the Beneficiary is not required to change any Beneficiary.
Sheila's Mem. Supp. Summ. J., Ex. 6, at 46, ¶ D (emphasis added).
According to the evidence before the Court, Melvin strictly complied with Sun Life's requirements for changing beneficiaries. The only reason offered the Court for why the named beneficiary on the policy was not changed before Melvin's death is an apparent mishap within the internal procedures of Melvin's employer, Highlines. Because the policy here requires an insured to submit a change of beneficiary to his employer, the alleged failure here was a failure within the internal procedures established by Sun Life. Therefore, if the facts alleged by Sheila are in fact proven, Melvin's change of beneficiary would be in strict compliance with Sun Life's requirements. Accordingly, this Court could not nullify that change by awarding the benefits to Diana.
III. CONCLUSION
In any motion for summary judgment, as explained above, the Court must draw all inferences most favorable to the non-moving party. The preceding analysis demonstrates that a genuine issue of fact regarding the rightful beneficiary of Melvin's Sun Life policy remains and thus precludes this Court from granting summary judgment in favor of Diana at this time. Accordingly, IT IS ORDERED that Defendant Diana James's Motion for Summary Judgment (Rec. Doc. 4) is hereby DENIED.
New Orleans, Louisiana, this 30th day of May 2000.