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Estate of Mitchell v. Modern Woodmen of America

United States District Court, Northern District of Alabama, Southern Division

April 20, 2015

ESTATE OF TOM J. MITCHELL et al., Plaintiffs,
v.
MODERN WOODMEN OF AMERICA, Defendant.

MEMORANDUM OPINION

John E. Ott Chief United States Magistrate Judge

This case involves claims against defendant Modern Woodmen of America (“Modern Woodmen”) for breach of two insurance certificates insuring the life of Stephanie Mitchell. Before the court is Modern Woodmen’s motion for summary judgment seeking (1) a dismissal with prejudice of any remaining claims being asserted by Ryan and Tristan Allred against Modern Woodmen, and (2) a declaration that Modern Woodmen owes Ryan and Tristan nothing under the two insurance certificates. (Doc. 118). For the reasons set forth below, the court concludes that the motion is due to be granted.

FACTUAL AND PROCEDURAL HISTORY

In 2008, Modern Woodmen issued two insurance certificates insuring Stephanie Mitchell’s life. On April 22, 2008, Modern Woodmen issued Certificate No. 8227615 (the “First Certificate”) providing Stephanie with $1 million in life insurance coverage.[1] (Doc. 119 at p. 3, ¶ 1). In her application for the First Certificate, Stephanie designated Tom James Mitchell (her husband) as the principal beneficiary and Brittany Renee Allred (her daughter) as the contingent beneficiary. (Id. at pp. 3-4, ¶ 3). Although Stephanie subsequently designated Ryan and Tristan Allred (her sons) as contingent beneficiaries on June 25, 2008, she restored the original beneficiary designations on December 5, 2008, again designating Tom James Mitchell as the principal beneficiary and Brittany Allred as the (sole) contingent beneficiary. (Id. at pp.4-5, ¶ 5). She made no further changes to the beneficiary designations relating to the First Certificate. (Id. at p. 5, ¶ 7).

On August 26, 2008, Modern Woodmen issued Certificate No. 8248403 (the “Second Certificate”) providing Stephanie Mitchell with an additional $1 million in life insurance coverage. (Id. at p.6, ¶ 8). In her application for the Second Certificate, Stephanie designated Tom James Mitchell and Brittany Allred as principal beneficiaries and Ryan Keith Allred and Tristan Lee Allred as contingent beneficiaries. (Id. at p. 6, ¶ 9). On December 5, 2008, Stephanie changed the beneficiary designations, designating Tom James Mitchell as the sole principal beneficiary and Brittany Allred as the sole contingent beneficiary. (Id. at pp. 6-7, ¶ 11). She made no further changes to the beneficiary designations relating to the Second Certificate. (Id. at p. 7, ¶ 13).

On March 28, 2009, Stephanie Mitchell died from gunshot wounds to the head. Tom Mitchell submitted a claim for benefits under both the First Certificate and the Second Certificate. Because Stephanie’s death occurred within two years of the issuance of the certificates, Modern Woodmen conducted a claim review.

On April 14, 2010, after a year had passed with no payment of the claim, Tom Mitchell and Brittany Allred filed this action against Modern Woodmen for breach of the First and Second Certificates.[2] (Docs. 1, 4). Modern Woodmen answered the complaint and asserted a counterclaim seeking a declaratory judgment as to whether benefits are payable under either Certificate and, if so, to whom the benefits are owed. (Doc. 12).

By letter to Modern Woodmen dated July 1, 2011, counsel for Ryan and Tristan Allred gave notice that they were making a claim on behalf of Ryan and Tristan to “any insurance policy proceeds” related to the First and Second Certificates. (Doc. 28-1). After receiving the letter, Modern Woodmen filed a motion to add Ryan and Tristan as parties to this action because they were “claim[ing] an interest relating to the subject matter” of the action. (Doc. 28 at ¶ 2). The court granted the motion and on August 8, 2011, Modern Woodmen filed an amended counterclaim adding Ryan and Tristan as parties to the declaratory judgment claims.[3] (Doc. 29). In their answer to the amended counterclaim, Ryan and Tristan asserted that they were “the rightful beneficiaries of the insurance policy proceeds at issue” in the case. (Doc. 30 at ¶ 2).

STANDARD OF REVIEW

Pursuant to Rule 56 of the Federal Rules of Civil Procedure, Modern Woodmen has moved for a summary judgment on any remaining claims being asserted by Ryan and Tristan Allred in this action and on Modern Woodmen’s amended counterclaim insofar as it seeks a declaration that Modern Woodmen owes nothing to Ryan and Tristan under the First and Second Certificates. Under Rule 56, “[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). The party moving for summary judgment “always bears the initial responsibility of informing the district court of the basis for its motion, ” relying on submissions “which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); see also Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991); Adickes v. S.H. Kress & Co., 398 U.S. 144 (1970). Once the moving party has met its burden, the nonmoving party must “go beyond the pleadings” and show that there is a genuine issue for trial. Celotex Corp., 477 U.S. at 324. In its review of the evidence, the court views the evidence in the light most favorable to the non-movant. Stewart v. Booker T. Washington Ins., 232 F.3d 844, 848 (11th Cir. 2000). At summary judgment, “the judge’s function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986).

ANALYSIS

The crux of Modern Woodmen’s motion for summary judgment is that the undisputed evidence conclusively establishes that Ryan and Tristan Allred are not beneficiaries under either the First Certificate or the Second Certificate. Modern Woodmen argues that because Ryan and Tristan are not beneficiaries under either Certificate, they have no claims to assert against Modern Woodmen, which owes them nothing as a matter of law. The court agrees.

In their opposition to Modern Woodmen’s motion for summary judgment, Ryan and Tristan do not challenge Modern Woodmen’s evidence that they are not beneficiaries under the First and Second Certificates.[4] Instead, Ryan and Tristan point to a General Release and Common Interest Agreement (the “Common Interest Agreement”) they entered into with Tom Mitchell and Brittany Allred in July 2012. (Doc. 123 at ¶ 1; Doc. 124).[5] Under the Common Interest Agreement, Tom Mitchell, Brittany Allred, Ryan Allred, and Tristan Allred agreed that any proceeds recovered in this case would be divided among the four of them in a specified manner. (Doc. 124 at 6). Ryan and Tristan argue that “this agreed-upon distribution standing alone confers on [them] an interest in the proceeds of both policies and the proper standing to participate in trial proceedings as a party in this case.” (Doc. 123 at ¶ 1).

In support of their argument, Ryan and Tristan cite Sprint Commc’ns Co., L.P. v. APCC Servs., Inc., 554 U.S. 269, 285 (2008), for the proposition that “[l]awsuits by assignees, including assignees for collection only, are ‘cases and controversies of the sort traditionally amenable to, and resolved by, the judicial process.’” Ryan and Tristan, however, are not assignees of any claims against Modern Woodmen. As Ryan and Tristan themselves acknowledge, the Common Interest Agreement merely reflects an “agreed-upon distribution” of any proceeds recovered in this action; there is no assignment of claims anywhere in the Common Interest Agreement. In particular, ...


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