New York Life Insurance and Annuity Corporation v. Ramsey et al
Filing
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MEMORANDUM OPINION: William Ramsey's motion for summary judgment [R. 21 ] is Denied; and the estate's motion for summary judgment [R. 34 ] is Granted. Signed by District Judge Pamela L Reeves on 6/3/15. (JBR)
UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TENNESSEE
NORTHERN DIVISION AT KNOXVILLE
New York Life Insurance and
Annuity Corporation,
Plaintiff,
v.
The Estate of Willie A. Ramsey,
by and through Quentin Ramsey, as
Executor, William Ramsey, and
Loudon Funeral Homes, Inc.,
Defendants.
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No.: 3:13-CV-636-PLR-CCS
MEMORANDUM OPINION
In this interpleader action, William Ramsey and the estate of Willie A. Ramsey dispute
who is entitled to the death benefits from Willie Ramsey’s annuity policy. After Willie Ramsey
passed away, New York Life identified competing claims for her death benefits, so it brought
this interpleader action and deposited the proceeds with the Court. The parties have filed cross
motions for summary judgment, each claiming to be the rightful beneficiary under the policy.
For the reasons discussed below, Mr. Ramsey’s motion for summary judgment will be denied
and the estate’s motion for summary judgment will be granted.
i.
While the parties disagree on a small number of minor facts, none of the relevant material
facts are in dispute. In 2005, New York Life issued an annuity policy to Willie A. Ramsey, the
annuitant, and her son William Ramsey as joint-owners. William and Willie filled out the
application as co-applicants and co-owners. In the application, the estate of Willie Ramsey was
designated as the sole primary beneficiary to the policy. They each signed the application.
Under the terms of the policy, ownership rights and privileges must be exercised jointly.
Accordingly, a change to the designated beneficiary would require both parties’ consent.
Several years after the policy was issued, New York Life notified Willie and William, as
joint-owners, that the estate of Willie A. Ramsey could not be the beneficiary under the jointlyowned contract “because we cannot determine whose estate will take precedence in the event of
a death of either or both owners.” Accordingly, New York Life informed them that it would
update the primary beneficiary under the policy to “surviving owner” unless both owners
completed and signed a provided form within 30 days. When 30 days elapsed without response,
New York Life sent a letter stating that it had changed its records to indicate the new beneficiary
designation of “surviving owner.”
Willie Ramsey wrote New York Life a few days later, stating that she “reject[s] the
decision . . . to make the changes of my beneficiary to the co-owner.” Willie demanded that
New York Life change the beneficiary back to her estate. William Ramsey was not copied on
this letter. New York Life acquiesced to Willie’s demand, and updated its records to designate
the estate of Willie Ramsey as the primary beneficiary. Willie Ramsey passed away about five
months later. William Ramsey and the executory of the estate each filed claims with New York
Life, claiming to be the legal beneficiary under the policy.
ii.
Summary judgment under Rule 56 of the Federal Rules of Civil Procedure 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.” Fed. R. Civ. P. 56(a). The moving party bears the
burden of establishing that no genuine issues of material fact exist. Celotex Corp. v. Cattrett,
477 U.S. 317, 330 n.2 (1986); Moore v. Philip Morris Co., Inc., 8 F.3d 335, 339 (6th Cir. 1993).
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All facts and inferences to be drawn therefrom must be viewed in the light most favorable to the
nonmoving party. Matsushita Elec. Indus. Co. Ltd v. Zenith Radio Corp., 475 U.S. 574, 587
(1986); Burchett v. Keifer, 301 F.3d 937, 942 (6th Cir. 2002). Courts may not resolve genuine
disputes of fact in favor of the movant. Tolan v. Cotton, 134 S.Ct. 1861, 1863 (2014) (vacating
lower court’s grant of summary judgment for “fail[ing to] adhere to the axiom that in ruling on a
motion for summary judgment, the evidence of the nonmovant is to be believed, and all
justifiable inferences are to be drawn in his favor”) (internal quotations and citations omitted).
Once the moving party presents evidence sufficient to support a motion under Rule 56,
the nonmoving party is not entitled to a trial merely on the basis of allegations. Celotex, 477
U.S. at 317. To establish a genuine issue as to the existence of a particular element, the
nonmoving party must point to evidence in the record upon which a reasonable finder of fact
could find in its favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The genuine
issue must also be material; that is, it must involve facts that might affect the outcome of the suit
under the governing law. Id.
iii.
There are two change-of-beneficiary designations at issue in this case. First, the Court
considers whether New York Life’s decision to change the beneficiary from Willie Ramsey’s
estate to the surviving owner was valid. If it was an invalid change, then the estate is the proper
beneficiary, and the Court’s inquiry is at an end. On the other hand, if it was a valid change, the
Court must consider whether Willie Ramsey’s subsequent, unilateral demand that New York
Life re-designate her estate as the beneficiary was effective or not.
Under Tennessee law, the interpretation of a contract “is a matter of law to be determined
by the court.” Capitol Indemnity Corp. v. Braxton, 24 F. App’x 434, 439 (6th Cir. 2001) (citing
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Davidson Hotel Co. v. St. Paul Fire & Marine Ins. Co., 136 F.Supp.2d 901, 905 (W.D. Tenn.
2001) (applying Tennessee law)). A party to a contract cannot modify the existing contract
unilaterally; and, “a modification of an existing contract cannot arise from an ambiguous course
of dealing between the parties from which diverse inferences might reasonably be drawn as to
whether the contract remained in its original form or was changed.” Balderacchi v. Ruth, 36
Tenn. App. 421, 424-25 (Tenn. Ct. App. 1952).
New York Life’s attempt to change the
beneficiary designation amounted to a unilateral attempt to modify an essential term of the
original contract. It did so without requiring the affirmative response of the owners.
Nothing in the policy gave New York Life the authority to change the designated
beneficiary. The reason New York Life gave for making the change—because “we cannot
determine whose estate will take precedence in the event of a death of either or both owners”—is
nonsense. There would never be any question of whose estate would take precedence. The only
estate designated under the policy was that of Willie A. Ramsey. Neither William Ramsey nor
William Ramsey’s estate ever stood to be a beneficiary under the policy, so it was impossible for
any ambiguity to exist as to whose estate would take precedence.
iv.
Because New York Life’s attempted modification to the annuity agreement, changing the
beneficiary from Willie Ramsey’s estate to “surviving owner,” was not authorized by the terms
of the contract, Willie Ramsey’s estate is the proper beneficiary under the policy. Accordingly,
there is no need to enquire into the effectiveness of Willie Ramsey’s subsequent demand that her
estate be restored as the beneficiary. William Ramsey’s motion for summary judgment [R. 21] is
Denied; and the estate’s motion for summary judgment [R. 34] is Granted.
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IT IS SO ORDERED.
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UNITED STATES DISTRICT JUDGE
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