Standard Insurance Company v. Harnett et al
OPINION: Default judgment is entered against Defendants Michael J. Harnett, Brooke Kletzli, and Kellen Kletzli, and they are not entitled to any of the interpleaded funds. The Clerk is DIRECTED to disburse the interpleaded funds as follows: the Clerk shall (1) issue a check to Marquita L. Harnett in the amount of $23,444.44; and (2) issue a check to Christina Weiprecht in the amount of $5,555.56. (SEE WRITTEN OPINION.) Entered by Judge Sue E. Myerscough on 11/6/2017. (GL, ilcd)
Monday, 06 November, 2017 02:33:10 PM
Clerk, U.S. District Court, ILCD
IN THE UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF ILLINOIS
STANDARD INSURANCE COMPANY,
MICHAEL J. HARNETT, BROOKE
KLETZLI, KELLEN KLETZLI,
CHRISTINA WEIPRECHT, and
MARQUITA L. HARNETT,
SUE E. MYERSCOUGH, U.S. District Judge.
This cause is before the Court on the Complaint for
Interpleader filed by Standard Insurance Company (Standard).
Having reviewed the relevant documents, the Court distributes the
interpleaded funds to Marquita L. Harnett in the amount of
$23,444.44 and to Christina Weiprecht in the amount of $5,555.56.
A default judgment is entered against the remaining defendants.
In March 2017, Standard filed this statutory interpleader
action pursuant to 28 U.S.C. § 1335 naming as defendants Michael
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J. Harnett, Brooke Kletzli, Kellen Kletzli, Christina Weiprecht, and
Marquita L. Harnett. Because many of the parties share the same
last name, the Court will refer to each party by his or her first
Standard deposited $29,000 in insurance proceeds with the
Clerk of the Court and sought discharge. The only defendants who
have appeared and participated in this action are Marquita, the
decedent’s daughter, and Christina, the decedent’s granddaughter,
who has appeared, without objection, through Vicky McCoy, who is
Christina’s agent pursuant to a power of attorney.
On October 16, 2017, this Court discharged and dismissed
Standard from this action. See Opinion (d/e 17). The Court also
issued an Entry of Default against Defendants Michael, Brooke, and
Kellen. See d/e 16, 17, 18. The Court advised Michael, Brooke,
and Kellen that the Court would enter a default judgment against
each of them within 14 days of the date of the Entry of Default
unless he or she could show good cause for setting aside the Entry
of Default. None of these defendants has filed a response. Based
on the information available to the Court, none of these defendants
is a minor, incompetent, or a member of the military.
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An interpleader action generally proceeds in two stages. First,
the Court determines whether interpleader is warranted. Second,
the Court resolves the merits of the claims. Aaron v. Mahl, 550
F.3d 659, 663 (7th Cir. 2008). This Court previously found that
interpleader was warranted. See Opinion (d/e 17). The Court will
now resolve the merits of the claims.
Standard issued a Group Life Insurance Policy to the
Albuquerque Public Schools on January 1, 2012. The Policy
provided life insurance coverage to eligible employees of the
Albuquerque Public Schools, including the decedent, Vesta Harnett.
Vesta retired from employment with the Albuquerque Public
Schools in 1991, 24 years before her death on September 17, 2015.
Several years prior to her death, Vesta moved from Albuquerque to
Springfield, Illinois. Upon Vesta’s death, her lawful beneficiary or
beneficiaries were eligible for life insurance benefits, which included
a Basic Life Insurance Benefit of $4,000 and an Additional Life
Insurance Benefit of $25,000. The total benefit of $29,000 is
referred to as the “Life Benefit.”
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On July 22, 2015, Vesta named her son, Michael, as her agent
in an Illinois Statutory Short Form Power of Attorney For Property.
Within three days, and pursuant to the power of attorney, Michael
changed Vesta’s prior beneficiary designation to provide Michael
with 100% of the Life Benefit.
However, under Illinois law, the agent under a power of
attorney does not have the ability to change beneficiaries unless the
power of attorney document specifically provides that he or she can
do so. See 755 ILCS 45/3-4 (explaining the powers granted in the
statutory short form power of attorney for property and noting that
the agent does not have the power to change any beneficiary);
Estate of Nicholls, 2011 IL App (4th) 100871, ¶¶ 24-26, 960 N.E.2d
78, 82-83 (Ill. App. Ct. 2011) (providing that the general grant of
power in a power of attorney is insufficient to authorize the agent to
change beneficiaries). Because the power of attorney form did not
give Michael the authority to change the beneficiary designation,
the last beneficiary designation by Vesta, which was made on June
15, 2011, remains in effect.
The 2011 beneficiary designation divides the $4,000 Basic Life
Insurance Benefit equally between Vesta’s children, Michael and
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Marquita. The 2011 beneficiary designation divides the $25,000
Additional Life Insurance Benefit between Michael and Marquita
(one-third each), and between Vesta’s four grandchildren, Christina,
Kellen, Brooke, and Sean Kletzli1 (one-twelfth each).
Only Marquita and Christina have appeared in this action and
made any claim to the proceeds. Therefore, the Court treats the
non-appearing defendants as deceased under the Policy and divides
the insurance proceeds pursuant to the 2011 beneficiary
designation. The entire $4,000 Basic Life Insurance Benefit is
awarded to Marquita. See Policy at 28 (d/e 1-2) (providing that, if
two or more beneficiaries are named in a class, and only one
survives, the total benefits will be paid to the surviving beneficiary).
The $25,000 Additional Life Insurance Benefit is divided as
follows: (1) Marquita receives the 1/3 provided to her in the 2011
beneficiary designation: $ 8,333.33; (2) Christina receives the 1/12
provided to her in the 2011 beneficiary designation: $ 2,777.78; and
(3) the remaining $13,888.89 is divided between Marquita and
Standard did not name Sean Kletzli as a defendant in this case because,
upon Standard’s information and belief, Sean died in a motorcycle accident in
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Christina in proportionate shares2 such that Marquita receives
$11,111.11 and Christina receives $2,777.78. See Policy at 28
(applying the following where two or more beneficiaries are named
in a class: “If you provide for unequal shares in a class, and two or
more Beneficiaries in that class survive, we will pay each surviving
Beneficiary his or her designated share. Unless you provide
otherwise, we will then pay the share(s) otherwise due to any
deceased Beneficiary(ies) to the surviving Beneficiaries pro rata
based on the relationship that the designated percentage or
fractional share of each surviving Beneficiary bears to the total
shares of all surviving Beneficiaries.”).
For the reasons stated, default judgment is entered against
Defendants Michael J. Harnett, Brooke Kletzli, and Kellen Kletzli,
and they are not entitled to any of the interpleaded funds. The
Clerk is DIRECTED to disburse the interpleaded funds as follows:
the Clerk shall (1) issue a check to Marquita L. Harnett in the
Marquita’s proportionate share is four times that of Christina’s share (4/12
compared to 1/12). Therefore, the Court awarded 80% of the remaining funds
to Marquita and 20% of the remaining funds to Christina.
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amount of $23,444.44; and (2) issue a check to Christina Weiprecht
in the amount of $5,555.56. THIS CASE IS CLOSED.
ENTER: November 6, 2017
FOR THE COURT:
s/Sue E. Myerscough
SUE E. MYERSCOUGH
UNITED STATES DISTRICT JUDGE
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