State Farm Life Insurance Company v. Tidmore et al

Filing 35

MEMORANDUM OPINION and ORDER- Deft Robin Inez Wright's Motion for Summary Judgment (Doc 28 ) is DENIED; A pretrial conference will be set by separate order. Signed by Magistrate Judge Staci G Cornelius on 9/27/16. (MRR, )

FILED
2016 Sep-27 AM 09:17
U.S. DISTRICT COURT
N.D. OF ALABAMA

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
WESTERN DIVISION
STATE FARM LIFE INSURANCE
COMPANY,
Plaintiff,
v.
BARBARA TIDMORE and
ROBIN INEZ WRIGHT,
Defendants.

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Case No.: 7:14-cv-00657-SGC

MEMORANDUM OPINION AND ORDER1
Plaintiff, State Farm Life Insurance Company, commenced this action by
filing a complaint for statutory interpleader against defendants, Barbara Tidmore
and Robin Inez Wright. (Doc. 1). The complaint alleges Tidmore and Wright
have competing claims to proceeds payable under a life insurance policy issued to
their late mother, Annie Mae Williams. (Doc. 1 at 2). Because State Farm was
unable to determine the proper primary beneficiary of the policy, it paid into court
all policy proceeds and moved to be dismissed and discharged. (Id.; Doc. 16). The
undersigned granted State Farm’s motion on June 5, 2014. (Doc. 18). Presently
pending is Wright’s Motion for Summary Judgment. (Doc. 28). The motion has

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The parties have consented to magistrate judge jurisdiction pursuant to 28 U.S.C. § 636(b).
(Doc. 13).

been fully briefed and is ripe for adjudication. (Docs. 29-34). As explained below,
the motion is due to be denied.
I.

BACKGROUND AND UNDISPUTED FACTS
Williams was born in 1925 and had at least four daughters: Robin Inez

Wright, Pauline Lovett Hale, Betty Thomas, and Barbara Tidmore. (Doc. 1 at 20;
Doc. 29 at 1-2). On September 2, 1995, Williams purchased life insurance from
State Farm Insurance Company in the amount of $10,000, naming Wright as
primary beneficiary and Hale as successor on September 4, 2007. (Doc. 1 at 4-12,
19). In January 2008, Williams saw Dr. Kamal Raisani, who diagnosed her with
“dementia with mood disorder." (Doc. 30-1 at 27). In March 2008, Dr. Raisani
diagnosed Williams with “dementia with depression.” (Doc. 30-1 at 25).
On February 9, 2012, Hale filed a petition in the Probate Court of Sumter
County, Alabama, seeking appointment of a guardian and conservator for her
mother. Hale's petition alleged Williams was incapacitated due to dementia and
other health problems. (Doc. 30-3 at 2-4). At the time Hale filed the petition,
Williams lived in Livingston, Alabama on the same street as Tidmore. (Id. at 2-3).
On February 16, 2012, the probate court appointed a guardian ad litem for
Williams and set the petition for hearing on April 27, 2012. (Doc. 30-3 at 8). On
February 24, 2012, the probate court issued orders appointing Dr. Gene Alldredge
to perform an examination of Williams’s condition and appointing the Sumter
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County Department of Human Resources to evaluate Williams. (Doc. 30-3 at 6,
12). In an April 23, 2012 letter to the probate court, Dr. Alldredge noted Williams
suffered from dementia but stated “as a general internist [he was] uncertain if she
[was] competent to handle her financial affairs . . . .” (Doc. 30-2 at 26). Dr.
Alldredge suggested psychiatric consultation or neuropsychological testing would
be helpful in making a competency determination. (Id.). The briefs do not reflect
whether the additional testing was ever completed.
On March 21, 2012, DHR visited Williams's home and interviewed her.
(Doc. 30-3 at 14). Tidmore was also present. (Id.). Williams told the social
worker that Tidmore managed her financial affairs and took care of her. (Id.).
However, when the social worker interviewed Hale on March 22, 2017, Hale stated
that "she manage[d] her mother's finances and [had been doing so] for quite some
time." (Id. at 15). Based on its investigation, DHR recommended that the probate
court appoint a guardian and conservator. (Doc. 30-3 at 16).
On the morning of April 27, 2012—the day of Williams’s hearing—Tidmore
and one of her sisters went with Williams to a State Farm office, where Williams
executed a change of beneficiary form. (Doc. 30 at 10-11, 37). The form changed
the primary beneficiary from Wright to Tidmore and changed the secondary
beneficiary from Hale to Thomas. (Doc. 30 at 36-37). During her deposition in
this matter, the State Farm agent who witnessed Williams execute the change of
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beneficiary form testified that Tidmore "made the initial conversation" and "talked
for her mother to some extent." (Doc. 30 at 13). Tidmore supplied the information
regarding the new beneficiaries' names and ages. (Doc. 30 at 21).2 The agent
asked Williams if she wanted to execute the form, and Ms. Williams said "yes"
before signing. (Doc. 30 at 13).
On July 12, 2012, the probate court appointed Hale as Williams's Guardian
and Hiram Patrenos as Williams's Conservator. (Doc. 30-3 at 19, 21). Williams
passed away on October 26, 2013. (Doc. 1 at 20).
During his deposition in this matter, Dr. Raisani—who initially diagnosed
Williams with dementia, but had not seen her since 2008—testified,
“hypothetically in dementia, it is progressive. However, when you change
beneficiaries, it is generally not a very complex process.” (Doc. 30-1 at 14). In
contrast, Dr. Raisani noted “generally when people have dementia, they are more
susceptible . . . to elements of coercion.” (Id.). Dr. Raisani further noted that
dementia patients' cognitive functions do not generally improve and their memory
problems are more likely to persist, even with medication.

(Id. at 16).

Additionally, Dr. Raisani testified that, during one visit, Williams's family

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The change of beneficiary form is a fill-in-the-blank form. (Doc. 30 at 37). Aside from the
beneficiaries' names, ages, and relationship to the insured, the only operative information is the
method of settlement. (Id.). Here, the form includes a check-mark indicating that the proceeds
should be paid in one sum. (Id.).
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members reported she had entered into a service contract with DirecTV but she had
no memory of signing the contract and no understanding of its terms. (Id. at 12).
During his deposition in this matter, Dr. Alldredge testified it was more
likely than not that Williams’s dementia would have worsened over the four-year
period following her initial diagnosis. (Doc. 30-2 at 21). However, when asked
whether it was probable that Williams was incompetent when he examined her on
April 23, 2012, Dr. Alldredge stated he "was uncertain" and "didn't know." (Doc.
30-2 at 17). When pressed, Dr. Alldredge testified he thought "it was somewhat
more likely that she was competent than incompetent." (Id.).
II.

STANDARD OF REVIEW
Under Rule 56(a) of the Federal Rules of Civil Procedure, summary

judgment is proper "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." "Rule
56(c) mandates the entry of summary judgment, after adequate time for discovery
and upon motion, against a party who fails to make a showing sufficient to
establish the existence of an element essential to that party's case, and on which
that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 447 U.S.
317, 322 (1986). The moving party bears the initial burden of proving the absence
of a genuine issue of material fact. Id. at 323. The burden then shifts to the nonmoving party, who is required to "go beyond the pleadings" to establish that there
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is a "genuine issue for trial." Id. at 324. (citation and internal quotation marks
omitted). A dispute about a material fact is genuine "if the evidence is such that a
reasonable jury could return a verdict for the nonmoving party." Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
The court must construe the evidence and all reasonable inferences arising
from it in the light most favorable to the non-moving party. Adickes v. S.H. Kress
& Co., 398 U.S. 144, 157 (1970); see also Anderson, 477 U.S. at 255 (all
justifiable inferences must be drawn in the non-moving party's favor). Any factual
disputes will be resolved in the plaintiff's favor when sufficient competent
evidence supports the plaintiff's version of the disputed facts.

See Pace v.

Capobianco, 283 F.3d 1275, 1276-78 (11th Cir. 2002) (a court is not required to
resolve disputes in the non-moving party's favor when that party's version of the
events is supported by insufficient evidence). However, "mere conclusions and
unsupported factual allegations are legally insufficient to defeat a summary
judgment motion." Ellis v. England, 432 F.3d 1321, 1326 (11th Cir. 2005) (per
curiam) (citing Bald Mtn. Park, Ltd. v. Oliver, 836 F.2d 1560, 1563 (11th Cir.
1989)). Moreover, "[a] mere 'scintilla' of evidence supporting the opposing party's
position will not suffice; there must be enough of a showing that the jury could
reasonably find for that party." Walker v. Darby, 911 F.2d 1573, 1577 (11th Cir.
1990) (citing Anderson, 477 U.S. at 252).
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III.

DISCUSSION
Wright’s Motion for Summary Judgment asserts two interrelated arguments.

First, Wright argues Williams lacked the capacity to execute the change of
beneficiary form. (Doc. 29 at 3). Next, Wright contends Williams executed the
change of beneficiary form due to Tidmore's undue influence.

(Id.).

Each

argument is addressed in turn.
A.

Lack of Capacity

Under Alabama law, if an insured executes a change of beneficiary form
while “mentally incompetent, such attempted change is ineffective . . . and the
original beneficiary has such a substantial interest as would justify an action to
prevent or annul such a change.” Ex parte Estelle, 982 So. 2d 1086, 1088-89 (Ala.
2007) (quoting McRee v. Russell, 194 So. 827, 828 (Ala. 1940)). A contract may
not be avoided due to mental incapacity “unless it is shown that the incapacity was
of such a character that, at the time of execution, ‘the person had no reasonable
perception or understanding of the nature and terms of the contract’ or the
incapacity was accompanied by, inter alia, undue influence.” Lloyd v. Jordan, 544
So. 2d 957, 959 (Ala. 1989) (quoting Williamson v. Matthews, 379 So. 2d 1245,
1247 (Ala. 1980)) (citation omitted).
Here, Wright has introduced evidence that Willaims's mental state was in
decline at the time she executed the change of beneficiary form on April 27, 2012.
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In 2008, Dr. Raisani diagnosed Williams with dementia with mood disorder and
dementia with depression. Dr. Raisani testified that dementia patients generally do
not improve, even with medication. However, Dr. Raisani had not seen Williams
since 2008 and did not express an opinion regarding her mental capacity on April
27, 2012.
In the months leading up to the change of beneficiary form, the guardianship
proceedings were underway in Sumter County.

In conjunction with those

proceedings, Dr. Alldredge noted that Williams suffered from dementia and stated
he was uncertain whether she was capable of handling her financial affairs. Dr.
Alldredge suggested further specialized evaluation to determine Williams's
capacity, but apparently that testing never occurred. Dr. Alldredge testified that it
was more likely that Williams's dementia would have worsened during the four
years between her diagnosis and the beneficiary change. However, Dr. Alldredge
also testified it was more likely than not that Williams was competent to execute
the change of beneficiary form.

Of course, ultimately, on July 12, 2012—

approximately two and a half months after the beneficiary change—the probate
court appointed a guardian and a conservator for Williams.
The foregoing will make compelling trial evidence. However, drawing all
factual inferences in favor of Tidmore, there are genuine issues of material fact
regarding Williams's mental capacity. While the doctors that examined Williams
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expressed doubts about her mental capacity, neither opined that she was
incompetent at the time she executed the change of beneficiary form.
Additionally, while Williams was ultimately declared incompetent in probate
court, this decree came after the time in question.

Accordingly, Wright's motion

for summary judgment is due to be denied to the extent it alleges Williams lacked
the capacity to execute the change of beneficiary form.
B.

Undue Influence

Under Alabama law, a former beneficiary of a life insurance policy may
assert a claim for undue influence regarding a change of beneficiary. Ex parte
Estelle, 982 So. 2d at 1089-90. In the context of a will, the Alabama Supreme
Court has held that a plaintiff claiming undue influence must demonstrate:
(1) that a confidential relationship existed between a favored
beneficiary and the testator; (2) that the influence of or for the
beneficiary was dominant and controlling in that relationship; and (3)
that there was undue activity on the part of the dominant party in
procuring the execution of the will.
Furrow v. Helton, 13 So. 3d 350, 353-54 (Ala. 2008) (quoting Clifton v. Clifton,
529 So. 2d 980, 983 (Ala. 1988)). Moreover, where a plaintiff claiming undue
influence presents substantial evidence in support of the required elements,
Alabama common law "raises a presumption of undue influence and casts upon the
beneficiary the burden of repelling such presumption when the transaction is
assailed." Wolfe v. Thompson, 235 So. 2d 878, 882 (Ala. 1970). Where the
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presumption attaches, the beneficiary must demonstrate the “transaction was fair,
just, and equitable in every respect.” Id. at 882-83.
As to the first requirement, the relationship between a parent and child is
confidential.

Chandler v. Chandler, 514 So. 2d 1307, 1308 (Ala. 1987).

Additionally, Alabama courts have defined a “favored beneficiary” as “[o]ne who,
in the circumstances of the particular case, has been favored over others having
equal claim to the testator's bounty." Pirtle v. Tucker, 960 So. 2d 620, 629 (Ala.
2006) (quoting Cook v. Morton, 1 So. 2d 890, 892 (Ala. 1941)). Here, it is
undisputed that Tidmore is a favored beneficiary and that she and Williams shared
a confidential relationship.
As to the second and third requirements, a plaintiff claiming undue influence
must show that the favored beneficiary was the dominant party who actively
interfered in the execution of the document.

As explained by the Alabama

Supreme Court in the context of a will contest:
"This activity must be in procuring the execution of the will and more
than activity and interest referable to a compliance with or obedience
to the voluntary and untrammeled directions of the testatrix.” Johnson
v. Howard, 21, 181 So. 2d 85, 90 (1965) (emphasis added).
“Undue activity in the procurement or execution of a will may
be proved by circumstantial evidence.” Pirtle, 960 So. 2d at 631
(quoting Allen v. Sconyers, 669 So. 2d 113, 117 (Ala. 1995)).
However, “a court does ‘not look at individual facts or evidence in
isolation in determining whether the evidence supports [this] element
of undue influence.’” 960 So. 2d at 632. “Evidence proving that
there was undue activity on the part of the named beneficiary in
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procuring the execution of the will is crucial to the determination of
the existence of undue influence.” Wall v. Hodges, 465 So. 2d 359,
363 (Ala. 1984) (emphasis added).
Circumstances evidencing undue activity in the procurement or
execution of a will are those where a beneficiary
was active in and about the execution and preparation of
said will such as the initiation of the proceedings for the
preparation of the will, or participation in such
preparation, employing the draftsman, selecting the
witnesses, excluding persons from the testatrix at or
about the time of the execution of the will, concealing the
making of the will after it was made, and the like....
Reed v. Shipp, 308 So. 2d 705, 708 (1975) (quoting . . . Lewis v.
Martin, 98 So. 635, 647 (1923).
McGee v. McGee, 91 So. 3d 659, 664–65 (Ala. 2012) (punctuation and parallel
citations omitted; alterations incorporated).
Here, the undisputed facts establish that Tidmore resided on the same street
as Williams and kept her company.

There is a dispute concerning who handled

Williams's finances during the time in question. Williams told DHR that Tidmore
handled her finances and took care of her. However, Hale told DHR that she
managed Williams's financial affairs and had done so for some time. Accordingly,
it is not clear whether Tidmore was the dominant party here. It is also undisputed
that Tidmore accompanied Williams to the State Farm office and provided the
information necessary to complete the change of beneficiary form: (1) the names

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and ages of the beneficiaries; (2) the beneficiaries' relationship to the insured; and
(3) the method of payment.
Wright has not submitted direct evidence of undue influence in this case.
Taken in the light most favorable to Tidmore, the circumstantial evidence
establishes that Tidmore participated in completing the change of beneficiary form
at a time when Williams's mental capacitiy was declining.

However, in the

circumstances of this case and under the summary judgment standard, this single
piece of circumstantial evidence is insufficient to establish the presumption of
undue influence.

As with the issue of capacity, testimony and documents

concerning undue influence will make compelling evidence at trial, particularly the
timing of the relevant events. However, under the confines of Rule 56, Wright is
not entitled to judgment as a matter of law.
IV.

CONCLUSION
Because there are genuine disputes of material fact regarding undue

influence and Williams's capacity at the time she executed the change of
beneficiary form, Wright’s Motion for Summary Judgment is DENIED. A pretrial
conference will be set by separate order.
DONE this 27th day of September, 2016.

______________________________
STACI G. CORNELIUS
U.S. MAGISTRATE JUDGE
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