IN THE MATTER OF THE ESTATE OF MARIE V. HARMON, Deceased, JOHN A. WALKER, Appellant/Cross-Appellee.
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IN THE COURT OF APPEALS OF IOWA
No. 7-091 / 06-1274
Filed March 28, 2007
IN THE MATTER OF THE ESTATE OF
MARIE V. HARMON, Deceased,
JOHN A. WALKER,
Appellant/Cross-Appellee.
________________________________________________________________
Appeal from the Iowa District Court for Story County, Timothy J. Finn,
Judge.
Co-executors of the Estate of Marie V. Harmon appeal and cross-appeal
the district court’s declaratory judgment ruling regarding two annuity contracts.
REVERSED AND REMANDED.
Richard O. Parker of Parker Law Firm, Nevada, for appellant/crossappellee.
Samantha J. Kain of Handley, Block, Lamberti, Zinno & Gocke, P.C.,
Ankeny, for appellee/cross-appellant.
Craig Hastings of Clark & Hastings, Ames, for the Estate of Marie
Harmon.
Brian J. Humke, Ames, for American Investors Life Insurance Co., Inc.
Heard by Vogel, P.J., and Vaitheswaran and Eisenhauer, JJ.
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VAITHESWARAN, J.
Co-executors of an estate disagree on who should receive the proceeds of
two annuity contracts. In a declaratory judgment ruling, the district court awarded
the proceeds of one to the estate and the proceeds of the other to a nephew.
We reverse and remand.
I. Background Facts and Proceedings
Marie Harmon died on June 5, 2003. Her nephew, John A. Walker, was
named co-executor of her estate, along with her niece, Doris M. Benson.
At the time of her death, Marie owned three annuities.
Walker and
Benson disagreed on the proper distribution of two of the three annuities. A
declaratory judgment was sought, “directing distribution of [American] Investors
Life Annuity Policy No. 218426 and Life Investors Annuity Policy No. 010100Y130920.”
The parties stipulated to the pertinent facts. Following a hearing, Benson
attached additional evidence to her post-trial brief. Walker moved to strike this
evidence and the district court granted the motion. Based on the stipulated facts,
the court ruled that the estate was the owner of the American Investors annuity
and John Walker was entitled to the Life Investors annuity payments. After the
court ruled on a post-trial motion, Walker appealed and Benson cross-appealed.
II. Scope of Review
The parties disagree on the proper scope of review, with Walker arguing it
is for corrections of errors at law, and Benson arguing for de novo review. We
review declaratory judgment actions according to how they were tried in the
district court.
Owens v. Brownlie, 610 N.W.2d 860, 865 (Iowa 2000).
We
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examine the pleadings, the relief sought, and the nature of the case. Junkins v.
Branstad, 421 N.W.2d 130, 131 (Iowa 1988).
The application for declaratory judgment sought a declaration of rights
under two insurance contracts. This is typically a law action. American Family
Mut. Ins. Co. v. Peterson, 679 N.W.2d 571, 574 (Iowa 2004). Additionally, the
district court ruled on evidentiary objections, suggesting the case was tried at
law. See Harrington v. University of N. Iowa, 726 N.W.2d 363, 365 (Iowa 2007).
For these reasons, we conclude our review is on error. Okoboji Camp Owners
Co-Op v. Carlson, 578 N.W.2d 652, 653-54 (Iowa 1998).
III. Analysis
A. American Investors Life Insurance Company Annuity
The American Investors policy listed Harmon as the owner of the
American policy, Walker as the annuitant, and the Estate of Marie V. Harmon as
the beneficiary. The annuity carried a maturity date of April 18, 2000.
In ruling for the estate, the district court relied on a clause in the general
provisions on ownership. That clause is as follows:
If an Owner who is a natural person dies during the Annuitant’s
lifetime, the Contingent Owner (named in the application), if any,
will become the Owner. If there is no Contingent Owner, ownership
will pass to the estate of the Owner.
As there was no contingent owner, the court concluded ownership passed to the
estate.
Walker contends the district court should, instead, have looked to the lead
paragraph of the policy and the annuity provision in the policy.
The lead
paragraph states that American Investors “will pay to the annuitant a monthly
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annuity commencing on the Maturity Date in accordance with the annuity
provision as provided in the policy.” The annuity provision states:
If the Annuitant is living on the Maturity Date, the Total
Accumulated Value will be applied to provide a 10 Year Certain and
Life Annuity to the Annuitant, unless an optional type of Annuity is
selected during the lifetime of the Annuitant and prior to the
Maturity Date.
Walker maintains that, under this provision, he should have received the total
accumulated value as of the maturity date of April 18, 2000. He specifically
argues he “is entitled to a lump sum payment for the accrued arrearage in
monthly annuity payments and then continued monthly annuity payments for the
ten years certain and life period.”
Benson counters that the maturity date of the policy is actually April 18,
2010, rather than April 18, 2000. In support of this position, she relies on one of
the documents attached to her post-trial brief.
This document suggests the
Benson sought to extend the maturity date of the policy to April 18, 2010.
However, as noted, the district court granted Walker’s motion to strike the
document. The court pointed out that the letter was not offered at the hearing.
Additionally, the court stated the policy was unambiguous, rendering resort to
extrinsic evidence unnecessary to determine intent.
To the extent Benson
challenges the court’s ruling on the motion, we conclude there was no abuse of
discretion, as the letter was not cited in the stipulated facts or offered at the
hearing. Cf. Bradbury v. Chicago, R.I. & P. Ry. Co., 149 Iowa 51, 65, 128 N.W.
1, 6 (1910) (holding court did not abuse discretion in sustaining motion to strike
amendment to answer filed after evidence was adduced and sustaining motion to
strike other evidence).
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Benson also maintains that Walker’s “course of conduct” was inconsistent
with a maturity date of 2000. She notes that American Investors did not establish
Walker as the annuitant in 2000 or at any time thereafter and did not begin
making payments to him. In her view, these actions support her contention that
the policy’s maturity date was extended. This argument, while facially appealing,
requires us to consider evidence outside the record. Consistent with the policy,
the stipulated facts list the maturity date as 2000. Additionally, the stipulated
facts make no reference to the cited “course of conduct” or any efforts to modify
the maturity date.
Examining only the policy language and the stipulated facts, we agree with
Walker that the policy matured on April 18, 2000, he was the listed annuitant, and
he was entitled to payment under the policy. Walker concedes that “the total
accumulated value of the contract on April 18, 2000, was not determined by the
evidence.” Although he contends we may calculate the amount due based on
the minimum value set forth in the contract, we believe Benson and the district
court should have an opportunity to adduce evidence, if necessary, and consider
the amount of any judgment. Accordingly, we reverse and remand for entry of
judgment in an amount to be determined by the district court, consistent with this
opinion.
B. Life Investors Insurance Company of America Annuity
The Life Investors policy listed Harmon as the owner, Walker as the
annuitant, Harmon as the primary beneficiary, and the Estate of John A. Walker
as the contingent beneficiary. The annuity’s maturity date was August 15, 2014.
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The district court concluded Walker was entitled to receive all annuity
payments under this policy based on the language of the policy’s “payee”
provision. That provision listed the order of payment and listed “the annuitant” as
the first payee.
Benson argues that the payee provision is not triggered until the “Annuity
Commencement Date” which, in this case, is August 15, 2014. She asserts that
the applicable provision is that pertaining to a “successor owner” of the policy.
This provision states:
A successor owner can be named in the application, or in a notice
you sign which gives us the facts that we need. The successor
owner will become the new owner when you die, if you die before
the annuitant. If no successor owner survives you and you die
before the annuitant, your estate will become the new owner.
(Emphasis added).
A successor owner was not named in the application.
Therefore, in Benson’s view, the estate is the owner of the annuity.
We agree with Benson that the payee provision was not triggered. We
also agree with her that, under the “successor owner” provision, the estate
became the owner.
We turn to Benson’s argument concerning the method of distribution.
Benson maintains that “the only option under the contract is to pay out the Cash
Value within five years of Ms. Harmon's death.” Because Walker and the district
court have not had an opportunity to consider this argument, we again believe it
is more appropriate to remand this matter. Accordingly, we reverse and remand
for entry of judgment in favor of the estate in an amount to be determined by the
district court, consistent with this opinion.
REVERSED AND REMANDED.
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