Ellis v. Jackson National Life Insurance Company et al

Filing 5

MEMORANDUM OPINION AND ORDER granting 1 MOTION for Temporary Restraining Order; that Dft, its officers, agents, servants, employees, and attorneys and those persons in active concert or participation with Dft are RESTRAINED from paying out the proc eeds of the annuity policy at issue in this action; that Dft shall notify the court in writing on or before 12/22/2011, at 9:00 am, whether it will pay the proceeds of the policy into the court; that this temporary restraining order shall expire four teen days from its date of entry unless on or before 12/27/2011, at 9:00 am, good cause is shown by Plf for a further extension or unless by that same date Dft consents that it may be extended for a longer period; that on or before 12/22/2011, at 9:0 0 am, Dft shall file a response to the 1 motion for a preliminary injunction, as further set out; Plf is DIRECTED to serve Dft with a copy of this Order and to provide Dft's facsimile number to the Clerk of the Court today. Signed by Chief Judge William Keith Watkins on 12/15/2011, at 12:36 pm. (wcl, )

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
NORTHERN DIVISION
BARBARA ELLIS,

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) CASE NO. 2:11-CV-1064-WKW
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Plaintiff,
v.
JACKSON NATIONAL LIFE
INSURANCE CO.,
Defendant.

MEMORANDUM OPINION AND ORDER
Before the court is Plaintiff Barbara Ellis’s Motion for Temporary Restraining
Order. (Doc. # 1.) For the reasons to follow, the motion is due to be granted and the
temporary restraining order will be entered without notice to Defendant Jackson
National Life Insurance Company.
I. BACKGROUND
On December 14, 2011, Plaintiff filed a Verified Complaint based upon
diversity jurisdiction, see 28 U.S.C. § 1332(a). The Verified Complaint and attached
exhibits establish that Plaintiff and John C. Ellis Jr. (“Mr. Ellis”) at one time were
married, but at the time of Mr. Ellis’s death on October 21, 2011, were divorced. At
the time of his death, Mr. Ellis had an insurance annuity policy (“policy”) issued by
Defendant. (Compl. ¶ 4.)

Previously, in April 2009, Mr. Ellis named Plaintiff as a beneficiary of the
policy and designated her to receive 66 percent of the policy proceeds, which in total
exceeds $1 million. (Compl. ¶ 5, Ex. 1.) Plaintiff’s last communication with Mr.
Ellis was on January 17, 2011, at which time Mr. Ellis confirmed to Plaintiff that she
remained the primary beneficiary of his policy. (Compl. ¶ 6.) That was soon to
change, however.
On March 11, 2011, two of Mr. Ellis’s daughters, Janet Gordon and Elizabeth
Hanson, filed a Complaint for Letters of Conservatorship in the Chancery Court of
Harrison County, Mississippi. In that complaint, filed in the state where Mr. Ellis
resided, the daughters alleged that, “due to his [then-]present mental and physical
condition,” Mr. Ellis was “incapable of caring for himself or managing his own
affairs.” (Compl. for Letters of Conservatorship, Ex. 3.) The complaint was
supported by two statements from Mr. Ellis’s physicians. On March 28, 2011, the
Chancery Court of Harrison County declared Mr. Ellis physically and mentally
incapable of caring for himself, and on April 20, 2011, the chancery court issued Ms.
Gordon and Ms. Hanson Letters of Conservatorship. (Compl. ¶ 8.)
Approximately a month after Mr. Ellis’s death, on November 17, 2011,
Plaintiff forwarded Defendant a letter and attached a copy of the form making her a
beneficiary of Mr. Ellis’s policy. Defendant acknowledged receipt of her letter on
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November 22, 2011. (Compl. ¶ 10.) By letter, dated December 6, 2011, and received
by Plaintiff on December 12, 2011, however, Defendant informed Plaintiff that its
“legal department ha[d] reviewed the file,” and that Defendant would “pay the named
beneficiaries, unless [it] receive[d] a court order to the contrary within ten days.”
(Compl., Ex. 8.)
Based upon the December 6, 2011 letter, Plaintiff called Defendant’s claims
department and learned that she was no longer a beneficiary on the policy. (Compl.
¶ 13.) On December 14, 2011, at 1:30 p.m., having been retained as counsel by
Plaintiff on that same date, Jim L. DeBardelaben called Defendant and requested to
speak with a representative in Defendant’s legal department, but was told that he
would have to fax a letter first and that there would be a minimum of a three-hour
delay before he would know if a representative in the legal department would speak
with him. (DeBardelaben Aff. 1.) Mr. DeBardelaben attests that, based upon time
constraints and with the ten-day deadline quickly approaching, it is unlikely that he
will be able to “resolve this matter before the funds are paid out.” (DeBardelaben
Aff. 1.) Because Defendant’s letter is dated December 6, 2011, it appears that the
ten-day period will expire on December 16, 2011, and that on that date, Defendant
will disburse the proceeds of the policy to the third-party beneficiaries.

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Plaintiff does not know when she was removed as a beneficiary or by whom.
(Compl., Ex. A.) In this action, she alleges that the “removal of her as a beneficiary
was made in an improper, wrongful and fraudulent manner and will cause her to
suffer immediate, irreparable and permanent detriment and harm.” (Compl. ¶ 14.)
Plaintiff moves for a temporary restraining order “to prohibit Defendant from
distributing the proceeds of” Mr. Ellis’s policy “to any named beneficiary until a
determination can be made as to who are the proper and legitimate beneficiar[ies]
after an appropriate inquiry is conducted.” (Compl. at 4.)
II. STANDARD OF REVIEW
“A temporary restraining order protects against irreparable harm and preserves
the status quo until a meaningful decision on the merits can be made.” Schiavo ex rel.
Schindler v. Schiavo, 403 F.3d 1289, 1297 (11th Cir. 2005). A temporary restraining
order may be issued without notice only if
(A) specific facts in an affidavit or a verified complaint clearly show that
immediate and irreparable injury, loss, or damage will result to the
movant before the adverse party can be heard in opposition; and
(B) the movant’s attorney certifies in writing any efforts made to give
notice and the reasons why it should not be required.
Fed. R. Civ. P. 65(b)(1). Additionally, the elements that apply to a motion for
preliminary injunction also govern the issuance of a temporary restraining order. See
Parker v. State Bd. of Pardons & Paroles, 275 F.3d 1032, 1034–35 (11th Cir. 2001).
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These four elements are “(1) a substantial likelihood of success on the merits, (2) a
threat of irreparable injury, (3) that [movant’s] own injury would outweigh the injury
to the nonmovant, and (4) that the injunction would not disserve the public interest.”
Tefel v. Reno, 180 F.3d 1286, 1295 (11th Cir. 1999). The movant bears the burden
of establishing entitlement to a temporary restraining order. See Parker, 275 F.3d
at 1034.
III. DISCUSSION
As set out in its December 6, 2011 letter, Defendant has stated its intention to
pay out the proceeds of Mr. Ellis’s policy to third-party beneficiaries on December
16, 2011, absent a court order halting payment. Plaintiff seeks to maintain the status
quo until she can ascertain the identity of those beneficiaries and whether Plaintiff is
entitled to a portion of the proceeds of the policy.
On this unique record, a temporary restraining is warranted. Plaintiff has
complied with the procedural requirements of Rule 65(b) for issuing a temporary
restraining order without notice to Defendant. The complaint has been verified, and
immediate and irreparable injury has been shown, as discussed below. Moreover,
counsel for Plaintiff has certified his efforts to notify Defendant and has provided
sufficient reasons why notice should not be required.

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Plaintiff also has demonstrated the four elements required for temporary
injunctive relief. First, Plaintiff has submitted a beneficiary form, which appears
valid on its face and which demonstrates that she is a beneficiary of 66 percent of the
policy proceeds. (Compl., Ex. 1.) If Plaintiff is able to prove that Mr. Ellis did not
sign a form changing the beneficiaries and omitting her as a designated beneficiary
or that he did so at a time when he was not mentally competent to do so, then Plaintiff
has a substantial likelihood of success on the merits. Second, if a temporary
restraining order is not entered, payment of the policy proceeds to third persons prior
to an adjudication of Plaintiff’s rights could render recovery of the policy proceeds
difficult, if not impossible, should it ultimately be determined that Plaintiff is a proper
beneficiary under the policy. Plaintiff has sufficiently demonstrated that this threat
of injury is irreparable. The threat of injury also is imminent, as tomorrow is the date
that Defendant has indicated it will pay the proceeds of the policy to the third-party
beneficiaries. Third, the alleged injury to Plaintiff would outweigh any injury to
Defendant, the non-movant, as this suit is in the nature of an interpleader action and
Defendant appears to have little at stake in this proceeding. Fourth, the public
interest will not be disserved by a temporary delay in the payment of the policy
proceeds.

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Generally, security is required when a temporary restraining order issues. See
Fed. R. Civ. P. 65(c). This is not the typical case, however, in that, as stated, this
action bears resemblance to an interpleader action. If Defendant elects to pay the
proceeds into the court and go forward in the nature of an interpleader action, then
posting security will not be required. Defendant will be given an opportunity to
respond before the issue of security is resolved.
IV. ORDER
Accordingly it is ORDERED that Plaintiff’s Motion for Temporary
Restraining Order (Doc. # 1) is GRANTED.
It is further ORDERED that Defendant, its officers, agents, servants,
employees, and attorneys and those persons in active concert or participation with
Defendant are RESTRAINED from paying out the proceeds of the annuity policy at
issue in this action.
It is further ORDERED that Defendant shall notify the court in writing on or
before December 22, 2011, at 9:00 a.m., whether it will pay the proceeds of the
policy into the court.
It is further ORDERED that this temporary restraining order shall expire
fourteen days from its date of entry unless on or before December 27, 2011, at 9:00

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a.m., good cause is shown by Plaintiff for a further extension or unless by that same
date Defendant consents that it may be extended for a longer period.
It is further ORDERED that on or before December 22, 2011, at 9:00 a.m.,
Defendant shall file a response to the motion for a preliminary injunction (Doc. # 1)
and therein also address the issue of necessary and indispensable parties.
Plaintiff is DIRECTED to serve Defendant with a copy of this Order and to
provide Defendant’s facsimile number to the Clerk of the Court today. Thereafter,
the Clerk of the Court is DIRECTED to fax to Defendant a copy of this Order.
DONE this 15th day of December, 2011, at 12:36 p.m.

/s/ W. Keith Watkins
CHIEF UNITED STATES DISTRICT JUDGE

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