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UNUM Life Insurance Company of America v. Painter

September 3, 2009

UNUM LIFE INSURANCE COMPANY OF AMERICA, A MAINE CORPORATION, PLAINTIFF,
v.
LARRY PAINTER, AN INDIVIDUAL; LEONARD ERMATINGER, AN INDIVIDUAL; AND RYAN PAINTER, AN INDIVIDUAL, DEFENDANTS.



MEMORANDUM AND ORDER

This matter is before the court on the motions of defendants/cross-defendants LARRY PAINTER and RYAN PAINTER ("the Painters") to dismiss a cross-claim pursuant to Federal Rule of Civil Procedure ("FRCP") 12(b)(6) and to strike a portion of the cross-claimant's answer pursuant to FRCP 12(f)(2). Leonard Ermatinger, the defendant/cross-claimant, opposes the Painters' motions. For the reasons set forth below, the Painters' motions are DENIED.

BACKGROUND

Plaintiff UNUM Life Insurance Company of America ("UNUM") instituted this interpleader action concerning the group life insurance proceeds of the deceased, Jacqueline Painter ("Jacqueline"). (Compl., filed March 17, 2009.) The complaint names as defendants Ermatinger and the Painters. (Id.) Ermatinger, the decedent's father, alleges that he is the sole heir of Jacqueline's estate. (Ermatinger Answer & Cross-cl. ("Cross-cl."), filed July 8, 2009, at 4.) The complaint identifies Larry Painter as the primary beneficiary of Jacqueline's policy and Ryan Painter as the contingent beneficiary. (Compl. ¶ 10.)

Larry Painter married Jacqueline on December 30, 1983. (Cross-cl. at 4.) Ryan Painter is Larry Painter's son and was Jacqueline's step-son. (Id.) Larry Painter filed for dissolution of marriage in 1994. (Id.)

In 1995, Jacqueline began working for Con-Way Transportation ("Con-Way"). (Id.) She was insured under an UNUM group life insurance policy ("Policy") issued to Con-Way. (Compl. ¶ 9.) On September 18, 1995, she designated Larry Painter as the primary beneficiary of the Policy and Ryan Painter as the contingent beneficiary of the Policy. (Id. at ¶ 10.)

Ermatinger alleges that Larry Painter and Jacqueline entered into a Marital Settlement Agreement ("Agreement") on April 29, 1996 and May 1, 1996, which was incorporated into a Judgment of Dissolution on July 3, 1996 by the Superior Court of Sacramento. (Cross-cl. at 4-5.) In the Agreement, Ermatinger alleges that the parties "waive[d] and renounce[d] any and all rights to inherit the estate of the other at the other's death." (Id. at 5.) The purpose of the Agreement was to "resolve all property and other rights of each party against the person or property of the other in all respects." (Id.) The Agreement, Ermatinger asserts, is binding on the "respective legatees, devisees, heirs, executors, administrators, assignees and successors in interest of the parties." (Id. at 6.)

Jacqueline died intestate on February 16, 2008. (Cross-cl. at 6.) Con-Way allegedly notified UNUM of Jacqueline's passing and identified Larry Painter as the primary beneficiary of the Policy and Ryan Painter as the contingent beneficiary of the Policy. (Compl. ¶ 13.) UNUM instituted this interpleader action after Ermatinger's attorney notified UNUM that Ermatinger would contest the Painters' designations as the beneficiaries of the Policy. (Id. at ¶¶ 16, 20.)

Ermatinger claims that the Agreement and Judgment of Dissolution constitute a waiver of Larry Painter's rights to the life insurance proceeds that is also binding on Ryan Painter. (Cross-Cl. at 6.) Ermatinger seeks declaratory relief, finding him the sole owner of the life insurance proceeds based on his status as Jacqueline's only heir. (Id. at 7.) Ermatinger also seeks attorney fees and costs in addition to sanctions against the Painters and their counsel of record for "pursuing bad faith claims and frivolous litigation." (Id.)

The Painters now move to dismiss Ermatinger's cross-claim on the following grounds: (1) California law, specifically Section 5000 of the California Probate Code, excludes insurance proceeds from a decedent's estate; (2) the Agreement does not incorporate any reference to life insurance policies; and (3) the cross-claim against Ryan Painter fails because Ryan Painter was not a party to the Agreement and thus could not have waived his interest as a contingent beneficiary of the Policy. (Painters' Mem. Mot. Dismiss ("Painters' Mem"), filed July 27, 2009, at 3-4.)

The Painters also move to strike Ermatinger's denial "that Larry Painter or Ryan Painter have any right to said insurance proceeds" from paragraph 10 of Ermatinger's answer on the ground that Ermatinger has not stated a sufficient defense to UNUM's allegation that Jacqueline designated the Painters as beneficiaries of the Policy. (Painters' Mem. at 6.)

STANDARDS

1. Motion To Dismiss For Failure To State A Claim

On a motion to dismiss, the allegations of the complaint must be accepted as true. Cruz v. Beto, 405 U.S. 319, 322 (1972). The court is bound to give the plaintiff the benefit of every reasonable inference to be drawn from the "well-pleaded" allegations of the complaint. Retail Clerks Int'l Ass'n v. Schermerhorn, 373 U.S. 746, 753 n.6 (1963). Thus, the plaintiff need not necessarily plead a particular fact if that fact is a reasonable inference from facts properly alleged. See id.

Nevertheless, it is inappropriate to assume that the plaintiff "can prove facts which it has not alleged or that the defendants have violated the . . . laws in ways that have not been alleged." Associated Gen. Contractors of Calif., Inc. v. Calif. State Council of Carpenters, 459 U.S. 519, 526 (1983). Moreover, the court "need not assume the truth of legal conclusions cast in the form of factual allegations." United States ex rel. Chunie v. Ringrose, 788 F.2d 638, 643 n.2 (9th Cir. 1986). Indeed, "[t]hreadbare recitals of the elements of a cause of action, supported by mere ...


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