Scott, et al v. Washington Interpleader MN Life termed per funds deposited. C Scott, T Micou, L Scott, A Hudson, K Scott and W Scott changed to Plts #29 - #38 and #46 Default Judgments for C Scott and T Micou, No. 6:2017cv02016 - Document 63 (N.D. Iowa 2018)
Court Description: ORDER denying in its entirety 58 Motion for Partial Summary Judgment. Signed by Chief Magistrate Judge CJ Williams on 6/20/2018. (skm)
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Scott, et al v. Washington Interpleader MN L...nd &#035;46 Default Judgments for C Scott and T Micou Doc. 63 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF IOWA EASTERN DIVISION LORI SCOTT; ANNIE HUDSON; KELLY SCOTT; and WILLIAM SCOTT, No. 17-CV-2016 CJW ORDER Plaintiffs, vs. SUSIE SCOTT WASHINGTON, Defendant. ________________________________ SUSIE SCOTT WASHINGTON, Cross Claimant/Counter Plaintiff, vs. LORI SCOTT; ANNIE HUDSON; KELLY SCOTT; and WILLIAM SCOTT, Cross Defendants/Counter Defendants.1 ____________________ TABLE OF CONTENTS I. Procedural History ............................................................................. 2 II. Factual History .................................................................................. 3 III. Applicable Law ................................................................................. 5 1 Although Susie Scott Washington is not a co-defendant with the cross defendants/counter defendants, and the cross claimant designation is therefore unusual, this procedural abnormality is ex”‘ained in the Pr“cedura‘ Hist“ry secti“n, infra. Dockets.Justia.com IV. Discussion ....................................................................................... 6 A. Declaratory Judgment ..................................................................... 6 B. Tortious Interference with Expected Inheritance ..................................... 9 V. Conclusion ..................................................................................... 12 This matter is before the Court on Lori Scott, Annie Hudson, Kelly Scott, and Wi‘‘ia’ Sc“tt s (c“‘‘ective‘y ”‘aintiffs ) M“ti“n f“r Partia‘ Su’’ary Judg’ent. (D“c. 58). Plaintiffs seek summary judgment as to their action for declaratory relief and seek su’’ary judg’ent as t“ ‘iabi‘ity, da’ages, and att“rneys fees and c“sts “n their c‘ai’ for tortious interference with inheritance. (Doc. 58, at 1). Plaintiffs do not seek summary judgment on the punitive damages portion of their tortious interference claim. (Id.). Defendant Susie Scott Washington timely filed her resistance t“ ”‘aintiffs motion. (Doc. 62). I. PROCEDURAL HISTORY This case began as an interpleader action with Todd Micou, Cynthia Scott, and all parties reflected in the case style named as defendants. (Doc. 2). On April 12, 2017, Susie Scott Washington ( defendant ) brought a cross claim against Cynthia Scott, Todd Micou, Lori Scott, Annie Hudson, Kelly Scott, and William Scott. (Doc. 14). Cynthia Scott and Todd Micou failed to make an appearance, and a default judgment was ultimately entered against them, in their capacities as both defendants and cross defendants. (Docs. 38, 46, 57). On August 14, 2017, Lori Scott, Annie Hudson, Kelly Scott, and William Scott were substituted as plaintiffs in this case, and the interpleader plaintiff was terminated. Defendant s cr“ss c‘ai’ was unres“‘ved at the ti’e the ”‘aintiffs were substituted. On September 21, 2017, defendant brought a counterclaim against plaintiffs. (Doc. 51). This counterclaim appears to be the same, in all material respects, as the previously filed 2 and, as of yet, unresolved cross claim. Further, it appears that defendant brought the counterclaim only because plaintiffs amended their complaint, which prompted defendant to amend her answer and replead her claims. (Docs. 50-51). In short, it appears to the Court that defendant s cr“ss c‘ai’ and her c“unterc‘ai’ sh“u‘d be viewed as “ne and the same, although the counterclaim would reflect an updated version of the cross claim. The Court has not been called upon to resolve the issue of these multiple claims existing by different names, however, and the Court will not presently do so. As such, defendant s cr“ss c‘ai’ exists independently of her counterclaim and the parties are, therefore, properly styled above. II. FACTUAL HISTORY This case has a complex factual background, and the Court finds it unnecessary to discuss many of the factual nuances presented. Further, the parties disagree as to many of the facts. It is agreed, h“wever, that Bennie Sc“tt, Jr. ( Bennie Sc“tt ) was c“vered under a life insurance policy and, upon his death on January 30, 2017, the life insurance benefits became payable. (Docs. 58-2, at 1-2; 62-1, at 1). At the ti’e “f Bennie Sc“tt s death, the beneficiary designation for the policy reflected defendant as the beneficiary of the policy. (Id.). This beneficiary designation was made on January 22, 2017, and no prior beneficiary designations had been made. (Id.). In the absence of the January 22, 2017 beneficiary designation, the proceeds of the policy would, by default, be payable to Bennie Sc“tt s chi‘dren bef“re his sib‘ings. (D“cs. 58-2, at 3; 62-1, at 1). Defendant is Bennie Sc“tt s sister, whi‘e ”‘aintiffs are Bennie Sc“tt s chi‘dren. (Docs. 58-2, at 1-2; 62-1, at 1). The parties agree that had the January 22, 2017 designati“n n“t been ’ade, Bennie Sc“tt s chi‘dren w“u‘d be entit‘ed t“ the ‘ife insurance proceeds. (Docs. 58-2, at 3; 62-1, at 1). Plaintiffs, collectively, and defendant each argue that they are entitled to the life insurance proceeds. Defendant argues that she is entitled to the proceeds because she was the designated beneficiary. Plaintiffs, however, 3 argue that the beneficiary designation was invalid because Bennie Scott was allegedly not mentally competent to sign the form on January 22, 2017, and the designation was the result of defendant either fraudu‘ent‘y fa‘sifying Bennie Sc“tt s signature, or exercising undue influence over Bennie Scott to the point of coercing Bennie Scott into signing the form. (Doc. 50, at 4). Further, plaintiffs suggested to the life insurance company that Cynthia Sc“tt, a defau‘ting ”arty, was Bennie Sc“tt s intended beneficiary. (Id.). Plaintiffs brought an action against defendant for declaratory relief and for tortious interference with expected inheritance. (Doc. 50). In their request for declaratory relief, ”‘aintiffs ask this C“urt t“ enter a dec‘arat“ry judg’ent that they are the beneficiaries under the policy, and that [defendant has] no entitlement to the [life insurance] benefits and order that the benefits be paid to [p‘aintiffs]. (D“c. 50, at 5). P‘aintiffs c‘ai’ f“r tortious interference is premised on the notion that defendant acted wrongfully. (Id., at 6-7). If defendant committed no wrongful act—i.e., if defendant did not fraudulently ”r“cure Bennie Sc“tt s signature on the beneficiary designation form—plaintiffs tortious interference claim must fail. Defendant s c“unterc‘ai’ “n‘y requests that the C“urt enter a dec‘arat“ry judg’ent in her favor; the counterclaim contains no other claims. (Doc. 51, at 5). In support of her request f“r a dec‘arat“ry judg’ent, defendant a‘‘eges that she is the s“‘e na’ed beneficiary “f the ‘ife insurance ”“‘icy and that none of the plaintiffs are entitled to proceeds from the life insurance policy. (Id.). Defendant therefore requests that the Court enter a declaratory judgment finding that defendant is the sole beneficiary of the ‘ife insurance ”“‘icy and that [”]‘aintiffs have n“ right, tit‘e[,] “r c‘ai’ t“ such benefits. (Id.). Unlike plaintiffs, however, defendant has not moved for summary judgment on any part of her counterclaim. 4 III. APPLICABLE LAW Su’’ary judg’ent is a””r“”riate when the ’“vant sh“ws that there is n“ genuine dispute as to any material fact and the movant is entitled to judgment as a matter “f ‘aw. FED. R. CIV. P. 56(a). A ’“vant ’ust cite t“ ”articu‘ar ”arts “f ’ateria‘s in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations, . . . admissions, interrogatory answers, or other materia‘s. FED. R. CIV. P. 56(c)(1)(A); see Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A‘ternative‘y, a ”arty ’ay sh“w[ ] that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence t“ su””“rt the fact. FED. R. CIV. P. 56(c)(1)(B). A fact is ’ateria‘ if it ’ight affect the “utc“’e of the suit under the governing law . . .. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) (citation omitted). An issue “f ’ateria‘ fact is genuine if it has a rea‘ basis in the rec“rd, Hartnagel v. Norman, 953 F.2d 394, 395 (8th Cir. 1992) (citati“n “’itted), “r when a reas“nab‘e jury c“u‘d return a verdict f“r the n“n’“ving ”arty “n the questi“n, Wood v. DaimlerChrysler Corp., 409 F.3d 984, 990 (8th Cir. 2005) (internal quotation marks and citation omitted). Evidence that presents only s“’e ’eta”hysica‘ d“ubt as t“ the ’ateria‘ facts, Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986), “r evidence that is ’ere‘y c“‘“rab‘e “r n“t significant‘y ”r“bative, Anderson, 477 U.S. at 249-50, does not make an issue of fact genuine. In sum, a genuine issue of ’ateria‘ fact requires sufficient evidence su””“rting the c‘ai’ed factua‘ dis”ute that it require[s] a jury “r judge t“ res“‘ve the ”arties differing versi“ns “f the truth at tria‘. Id. at 249 (internal quotation marks omitted). The ”arty ’“ving f“r su’’ary judg’ent bears the initia‘ res”“nsibi‘ity “f informing the district court of the basis for its motion and identifying those portions of the rec“rd which sh“w a ‘ack “f a genuine issue. 5 Hartnagel, 953 F.2d at 395. Once the moving party has met this burden, the nonmoving party must go beyond the pleadings and by depositions, affidavits, or other evidence designate specific facts showing that there is a genuine issue for trial. See Mosley v. City of Northwoods, Mo., 415 F.3d 908, 910 (8th Cir. 2005). In determining whether a genuine issue of material fact exists, courts must view the evidence in the light most favorable to the nonmoving party, giving that party the benefit of all reasonable inferences that can be drawn from the facts. Tolan, 134 S. Ct. at 1863; Matsushita, 475 U.S. at 587-88 (citation omitted); see also Reed v. City of St. Charles, Mo., 561 F.3d 788, 790 (8th Cir. 2009) (stating that in ruling on a motion for summary judgment, a court ’ust view the facts in a ‘ight ’“st fav“rab‘e t“ the n“nmoving party—as ‘“ng as th“se facts are n“t s“ b‘atant‘y c“ntradicted by the rec“rd . . . that n“ reas“nab‘e jury c“u‘d be‘ieve the’ ) (a‘terati“n in “rigina‘) (qu“ting Scott v. Harris, 550 U.S. 372, 380 (2007)). A c“urt d“es n“t weigh the evidence “r atte’”t t“ deter’ine the credibi‘ity “f the witnesses. Kammueller v. Loomis, Fargo & Co., 383 F.3d 779, 784 (8th Cir. 2004) (citati“n “’itted). Rather, a c“urt s functi“n is t“ determine whether a dispute about a material fact is genuine . . .. Quick v. Donaldson Co., Inc., 90 F.3d 1372, 1376-77 (8th Cir. 1996). IV. A. DISCUSSION Declaratory Judgment Although defendant has not moved for summary judgment and the Court therefore need n“t address the factua‘ basis f“r defendant s c‘ai’, the C“urt finds it he‘”fu‘ t“ d“ s“. By discussing the factua‘ basis f“r defendant s c‘ai’ a‘“ngside the factua‘ bases for ”‘aintiffs c‘ai’s, the C“urt may more easily explain why a genuine dispute of material fact exists such that summary judgment is inappropriate. The Court notes that there seem to be a number of factual disputes, many of which may be material. Any one of these disputed material facts, however, will defeat 6 ”‘aintiffs ’“ti“n f“r su’’ary judg’ent. The C“urt wi‘‘ thus discuss “n‘y the ’atter “f whether Bennie Scott signed the change of beneficiary form himself. The Court will discuss this fact, as opposed to others, because this is the predicate fact upon which the claims at issue rest, and this fact ’ight affect the “utc“’e “f the suit under the governing law. Anderson, 477 U.S. at 248. This fact is material as to the requests for declaratory judgment because plaintiffs request that the Court find that they are the rightful beneficiaries under the life insurance policy. Defendant requests that the Court make the same finding as to defendant. Who the rightful beneficiary is depends on whether the change of beneficiary was validly executed. This, in turn, depends on whether Bennie Scott signed the change of beneficiary form.2 In support of their motion for summary judgment, plaintiffs offer the deposition testi’“nies “f defendant and “f Mary A‘exander, wh“ a””ears t“ be Bennie Sc“tt s d“ub‘e first cousin. (See 61, at 14). T“ the best “f the C“urt s understanding, ”‘aintiffs take the position that because the testimonies present certain inconsistencies, Bennie Scott could not have signed the change of beneficiary form. (Doc. 58-1, at 2-4). More specifically, plaintiffs allege that the deponents disagree as to whether defendant was sitting at the f““t “f Bennie Sc“tt s bed when defendant handed the change “f beneficiary f“r’ t“ Bennie Sc“tt, “r whether defendant wa‘ked int“ Bennie Sc“tt s r““’ and wa‘ked directly to Bennie Scott without sitting down. (Doc. 58-1, at 2-3). Plaintiffs further allege that the deponents each testified differently as to whether Bennie Scott used a supporting surface, such as a magazine, beneath the change of beneficiary form to support the paper while Bennie Scott signed it. (Id., at 4). These inconsistencies, along with a slight date discrepancy, lead plaintiffs to conclude that Mary Alexander must have perjured herself. (Id., at 2). 2 The Court does not understand the parties to be arguing that anyone other than Bennie Scott could validly execute the form. 7 Mary Alexander also appears to have offered a letter in su””“rt “f defendant s claim that Bennie Scott signed the form. (Doc. 61, at 14). Plaintiffs argue, however, that this letter is fraudulent. (Doc. 58-1, at 2). This argument is not well articulated, but t“ the best “f the C“urt s understanding, ”‘aintiffs argue that because Mary Alexander allegedly perjured herself, the letter is fraudulent, and, therefore, there can be no doubt that Bennie Scott did not sign the form. (Id.). Plaintiffs have also offered a report by their handwriting expert, in which the ex”ert “”ines that there is a str“ng ”r“babi‘ity that Bennie Scott did not sign the signature Bennie Scott on the beneficiary designation and change f“r’. (D“c. 61, at 64). These facts, individually and together, plaintiffs argue, ”‘ain‘y suggest that Bennie [Scott] did not sign the form, and therefore Plaintiffs are entit‘ed t“ the ‘ife insurance ”r“ceeds. (Id., at 4). Plaintiffs, as the movants, are tasked with demonstrating that there is no genuine dispute. Hartnagel, 953 F.2d at 395. Plaintiffs have failed to do so. First, plaintiffs expert witness opined that there is a str“ng probability that Bennie Sc“tt did n“t sign the form (Doc. 61, at 64), while defendant maintains that Bennie Scott did sign the form (see Doc. 62-3, at 18). In “”ining that there is “n‘y a str“ng ”r“babi‘ity that Bennie Sc“tt did n“t sign the f“r’, ”‘aintiffs ex”ert witness i’”‘icit‘y “”ined that there is some probability that Bennie Scott did sign the form. The Court must view the facts in the light most favorable to defendant. Tolan, 134 S. Ct. at 1863. Such a view leads the Court to conclude that Bennie Scott could have signed the form, which is consistent with defendant s ”“siti“n that Bennie Sc“tt did sign the f“r’. Plaintiff could argue that the record so blatantly contradicts this conclusion that a reasonable factfinder could not find in favor of defendant. See Reed, 561 F.3d at 790. The Court, however, disagrees with this proposition. The record contains evidence both that Bennie Sc“tt did sign the f“r’ and that Bennie Sc“tt did n“t sign the f“r’. P‘aintiffs argument that minor inconsistencies between the testimonies of defendant and of Mary 8 Alexander render it impossible for Bennie Scott to have signed the form is unconvincing. Were the C“urt t“ ad“”t ”‘aintiffs argu’ent, the C“urt w“u‘d be required t“ weigh the testimonies of defendant and of Mary Alexander, and the Court would have to determine whether each deponent is credible. The Court is not empowered to make such credibility determinations at the summary judgment stage. Kammueller, 383 F.3d at 784. Further, even if the Court found both witnesses to lack credibility on certain issues, such as the minor inconsistencies plaintiffs turn to, this credibility determination would not necessarily be applicable to every issue to which defendant and Mary Alexander testified. In other words, the Court could find a witness credible on one issue, but not credible on another issue. Likewise, the Court is not in a position to determine whether Mary Alexander perjured herself and, even if she did perjure herself, the Court could still find Mary Alexander credible on the issue of whether Bennie Scott signed the change of beneficiary form. The Court is therefore unab‘e t“ acce”t ”‘aintiffs ”r“”“siti“n that they are entit‘ed to summary judgment as a factual matter, based on the assertion that Bennie Scott could not have signed the change of beneficiary form. The Court is unable to conclude, at this stage, whether Bennie Scott signed the change of beneficiary form himself and, therefore, the issue sh“u‘d be decided by the factfinder at tria‘. P‘aintiffs ’“ti“n f“r su’’ary judgment as to declaratory relief is denied. B. Tortious Interference with Expected Inheritance Plaintiffs next seek partial summary judgment as to liability and damages on their tortious interference with expected inheritance claim. The parties disagree as to whether Iowa law or federal law governs the tortious interference claim. (See Docs. 58-1, at 7; 62, at 9). The Court, however, need not determine which body of law governs. In support of their motion, plaintiffs urge that Iowa law governs and provide a detailed discussion of why defendant should be considered to have been in a confidential 9 relationship with Bennie Scott under Iowa law. (Doc. 58-1, at 5-6). This confidential re‘ati“nshi”, ”‘aintiffs argue, shifts the burden t“ defendant t“ ”rove by clear, satisfactory, and convincing evidence that she acted in good faith throughout the transacti“ns and Bennie acted free‘y, inte‘‘igent‘y, and v“‘untari‘y. (D“c. 58-1, at 6 (emphasis, citations, internal quotation marks, and alterations omitted)). Plaintiffs argue that defendant is unable to meet this burden because defendant cannot produce evidence sh“wing Bennie Sc“tt s true intenti“ns and ”‘aintiffs are, theref“re, entit‘ed t“ ”artia‘ summary judgment on their tortious interference claim. The C“urt s discussi“n “f whether Bennie Sc“tt signed the change “f beneficiary form is equally applicable here. The parties agree that absent a beneficiary designation, plaintiffs would have been entitled to the proceeds of the life insurance policy. (Docs. 58-2, at 3; 62-1, at 1). Plaintiffs urge that this amounts to an expectancy interest. (Doc. 58-1, at 7-8). Plaintiffs further argue that defendant interfered with that expectancy interest by exerting undue influence over Bennie Scott to persuade him to designate defendant as the beneficiary of the life insurance policy. (Id.). Without reaching the question of which body of law governs, the Court finds that ”‘aintiffs have fai‘ed t“ sh“w that defendant is inca”ab‘e “f ”r“ving by c‘ear, satisfactory, and convincing evidence that she acted in good faith throughout the transacti“ns and Bennie acted free‘y, inte‘‘igent‘y, and v“‘untari‘y. (Id., at 6 (emphasis and alterations omitted) (quoting Jackson v. Schrader, 676 N.W.2d 599, 605 (Iowa 2004)). Plaintiffs contend that defendant bears this heavy burden. At the summary judgment stage, however, plaintiffs bear the burden of proving that defendant is incapable of meeting this burden at trial. In failing to point to any evidence in the record in support of their proposition that defendant cannot meet this burden, plaintiffs have failed to meet their own. In short, there is a genuine issue of material fact as to whether Bennie Scott signed the form of his own volition. Because, on this record, the factfinder could find 10 that Bennie Scott signed the form of his own volition, without anyone improperly interfering, ”‘aintiffs ’“ti“n f“r ”artia‘ su’’ary judg’ent as t“ their t“rti“us interference claim is denied.3 Even if the Court were to conclude that a factfinder could not find that Bennie Scott freely signed the form, summary judgment would still be inappropriate. Assuming, in arguendo, that Iowa law governs this issue and that the burden would therefore shift to defendant upon a showing that defendant enjoyed a confidential relationship with Bennie Scott, summary judgment still would not be warranted because plaintiffs have failed to show that defendant was in a confidential relationship with Bennie Scott. Plaintiffs assert that defendant had a relationship based on trust and confidence for their wh“‘e ‘ives. P‘aintiffs su””“rt f“r this ”r“”“siti“n, h“wever, is ‘i’ited t“ acti“ns taken in the twenty-five days prior to Bennie Sc“tt s death. (See Doc. 58-1, at 5). The Supreme Court of Iowa has held: A confidential relationship arises whenever a continuous trust is reposed by one person in the skill and integrity of another, and so it has been said that all the variety of relations in which dominion may be exercised by one person fall within the genera‘ ter’ c“nfidentia‘ re‘ati“n. Mendenhall v. Judy, 671 N.W.2d 452, 455 (Iowa 2003). Although Bennie Scott and defendant may have had a lifelong relationship that was based on trust, plaintiffs have only produced evidence showing that this relationship led Bennie Scott to rely on Defendant has n“t br“ught a ’“ti“n seeking dis’issa‘ “f ”‘aintiffs t“rti“us interference c‘ai’. In defendant s resistance, h“wever, defendant states: P‘aintiffs state ‘aw c‘ai’s f“r t“rti“us interference with expected inheritance are . . . preempted by federa‘ ‘aw and ’ust be dis’issed. (Doc. 62, at 15). Although this statement indicates that defendant is seeking dismissal of the tortious interference claim, defendant has not brought such a motion. To the extent defendant believes such a motion is somehow inferred, it is denied without prejudice. It is equally unclear whether ”‘aintiffs t“rti“us interference c‘ai’ is intended t“ have been br“ught under federa‘ ‘aw or state law, and the Court will not presently address this issue, or whether the claim itself is proper. 3 11 defendant in the last several weeks of his life. Plaintiffs simply have not produced evidence sh“wing that this re‘ati“nshi” “f trust and c“nfidence existed ”ri“r t“ this time. (See Doc. 58-1, at 5). The Supreme Court of Iowa opined that a confidential relationship could arise fr“’ continuous trust. Mendenhall, 671 N.W.2d at 455 (emphasis added). It is possible that defendant had such a relationship with Bennie Scott. The Court, however, has not been presented with sufficient information to make such a determination. Plaintiffs have presented facts that could indicate that Bennie Scott trusted defendant and that such trust was c“ntinu“us within the ’eaning “f Mendenhall. The inquiry the Court must make, however, is so fact intensive that the Court cannot properly reach a conclusion on the record before it. In other words, there is a genuine issue of material fact as to whether Bennie Scott and defendant had such a confidential relationship that it would shift the burden of proof to defendant. As such, the Court finds that plaintiffs have not met their burden of establishing the existence of a confidential relationship sufficiently at this stage to merit summary judgment on their behalf. V. CONCLUSION F“r the af“re’enti“ned reas“ns, ”‘aintiffs M“ti“n f“r Partia‘ Su’’ary Judg’ent is denied in its entirety. IT IS SO ORDERED this 20th day of June, 2018. __________________________________ C.J. Williams Chief United States Magistrate Judge Northern District of Iowa 12
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