United States District Court, E.D. North Carolina, Southern Division
DEBRA J. DAVIS, Plaintiff,
STATE FARM LIFE INSURANCE COMPANY, Defendant.
W. FLANAGAN United States District Judge.
matter is before the court on the parties' cross-motions
for summary judgment, made pursuant to Federal Rule of Civil
Procedure 56. (DE 55, 61). In this posture, the issues raised
are ripe for ruling. For the reasons that follow,
plaintiff's motion is granted in part and denied in part
and defendant's motion is granted in part and denied in
is the alleged owner and beneficiary of a life insurance
policy (the “policy”) issued by defendant on Brad
Davis (the “insured”). Plaintiff initiated this
action in Superior Court of New Hanover County, North
Carolina on January 6, 2015, asserting claims against
defendant arising from defendant's management of the
policy. Specifically, plaintiff alleged that defendant
engaged in unfair and deceptive trade practices, in violation
of N.C. Gen. Stat. § 58-63-15(11) (“UDTPA”).
Plaintiff also sought declaratory judgment “that the
[p]olicy [o]wner and beneficiary may not be changed except
upon request from the [p]olicy [o]wner.” (DE 1-1 at 9).
removed the case on February 11, 2015, invoking this
court's diversity jurisdiction under 28 U.S.C.
§§ 1332 and 1446. Defendant then answered the
complaint and moved to dismiss plaintiff's claims
pursuant to Rule12(b)(6). In response, plaintiff filed her
first amended complaint, causing this court to deny
defendant's motion to dismiss as moot. Plaintiff's
amended complaint reiterated her prior claims and asserted a
breach of contract claim against defendant.
April 16, 2015, defendant answered plaintiff's amended
complaint and moved for judgment on the pleadings on
plaintiff's breach of contract and UDTPA claims. Before
the court could address defendant's motion, plaintiff
moved for leave to file a second amended complaint, which the
court granted over defendant's objection. At that time,
the court also denied defendant's motion for judgment on
the pleadings as moot.
August 24, 2015, plaintiff filed the instant second amended
complaint. The second amended complaint reasserts
plaintiff's UDTPA and breach of contract claims and
clarifies certain relevant facts, and amends her claim for
declaratory judgment. Plaintiff now seeks declaratory
judgment that she “is the [o]wner and beneficiary of
the [p]olicy, that [she] must be immediately restored as the
beneficiary of the [p]olicy, and that [she] may not be
removed as beneficiary of the [p]olicy without [her]
consent.” (DE 33 at 9). Plaintiff also seeks monetary and
compensatory damages, as well as trial by jury.
then renewed its motion for judgment on the pleadings,
seeking dismissal of plaintiff's breach of contract and
UDTPA claims. The court granted defendant's motion on
February 18, 2016, leaving plaintiff's claim for
declaratory judgment the sole remaining claim.
a period of discovery, defendant filed the instant motion for
summary judgment, accompanied by a memorandum of law in
support thereof and a statement of material
facts. (DE 55-57). In support of summary
judgment, defendant relies upon the policy, the marital
dissolution agreement between the insured and his former
spouse, the deposition of plaintiff, defendant's internal
policies, and correspondence between plaintiff and defendant
regarding the policy. Defendant contends that because the
insured failed to obtain consent of the policy's original
irremovable beneficiary, any subsequent change naming
plaintiff as owner and beneficiary are void. Defendant
requests that the court declare that Payton is the
irrevocable beneficiary of the policy and that the insured is
response, plaintiff filed a cross-motion for summary
judgment, accompanied by a memorandum of law in support
thereof and a statement of material facts. (DE 61-63).
Plaintiff relies on the policy to support summary judgment in
her favor. Plaintiff contends that because the insured
followed the procedure for changing the owner and beneficiary
as set forth in the policy, defendant had no authority to
remove her as such without her prior consent.
OF UNDISPUTED FACTS
March 16, 1998, the insured was ordered by the Circuit Court
of Shelby County, Tennessee, pursuant to a marital
dissolution agreement (“MDA”) between the insured
and his former spouse, Jennifer Davis, to obtain a life
insurance policy on himself with their daughter, Payton Davis
(“Payton”) listed as irrevocable
beneficiary. (DE 56 ¶ 1; DE 63 ¶ 1).
Pursuant to that order and the MDA, the insured obtained the
policy from defendant on March 28, 1999. (DE 33 ¶ 6).
The issued policy and accompanying endorsement designated the
insured as owner and Payton as the irrevocable beneficiary.
(DE 56 ¶ 2; DE 63 ¶ 2). Payton was a minor at that
time, so her grandmother, Nancy Davis (the
“trustee”), was designated as trustee. (DE 56
¶ 23; DE 63 ¶ 2). The policy reserves in the owner
the right to change the owner and/or beneficiary. (DE 33-1 at
January 14, 2010, the insured, while owner of the policy,
changed the policy's beneficiary from Payton to Jackson
Davis, the insured's son from his second wife. Neither
Payton nor the trustee consented to this change. (DE 56
¶ 6; DE 63 ¶ 5). After receiving the request,
defendant listed Jackson Davis as beneficiary of the
policy. (DE 56 ¶ 7). Thereafter, on May 9,
2011, the insured changed the policy's beneficiary from
Jackson Davis to plaintiff, his third wife. (DE 33 ¶
Defendant then listed plaintiff as beneficiary of the policy.
(DE 56 ¶ 5, 9; DE 63 ¶ 8, 12). In late 2012, the
insured changed the policy's owner from himself to
plaintiff, which defendant honored by listing plaintiff as
such on policy documents. (DE 33 ¶ 12). Neither Payton
nor the trustee consented to the ownership change. (DE 56
¶ 14; DE 63 ¶ 15).
in May 2014, defendant initiated internal review of the
policy and the insured's change of beneficiary requests.
(DE 56 ¶ 14; DE 63 ¶ 15-16). Defendant determined
that the change requests did not comport with its own
internal policies since the trustee did not consent to the
changes. (DE 56 ¶ 14; DE 63 ¶ 15-16). On its own
initiative, and without plaintiff's consent, defendant
took steps to revert the policy's beneficiary designation
back to Payton. (DE 56 ¶ 15-16; DE 63 ¶
18-21). At that time, defendant also