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Metropolitan Life Insurance Co. v. Gicana

United States District Court, C.D. California

April 3, 2018




         Plaintiff-in-Interpleader Metropolitan Life Insurance Company (“MetLife”) filed the instant Action due to Defendants-in-Interpleader Bambi Gicana (“Gicana”) and Araceli Maloney's (“Maloney”) competing claims to funds from the AT&T Group Life Insurance Program (the “Plan”). See Compl., ECF No. 1. The Plan is an employee welfare benefit plan governed by the Employee Retirement Income Security Act of 1974 (“ERISA”), sponsored by AT&T, and funded by a group life insurance policy issued by MetLife. Id. ¶ 6. Currently before the Court is Gicana's Motion for Summary Judgment as to Interpled Funds and/or Retirement Benefits (“Motion”) [45]. Having reviewed all papers submitted pertaining to this Motion, the Court NOW FINDS AND RULES AS FOLLOWS: the Court GRANTS in part and DENIES in part Gicana's Motion.

         I. BACKGROUND

         A. Factual Background [1]

         After AT&T hired Efren Molina Martinez (“Decedent”) on October 31, 1998, Decedent enrolled in the Plan for basic life insurance coverage. Gicana's Statement of Undisputed Facts (“SUF”) ¶¶ 1-3, ECF No. 49-1. He also acquired a 401(k) retirement plan with AT&T, which is governed by ERISA. Id. ¶¶ 78-79. On March 3, 2005-before their marriage on March 25, 2005-Decedent and Gicana executed a prenuptial agreement, a copy of which Decedent provided to his sister, Maloney, since she was going to be the executor of his estate and trustee of his trust. Id. ¶¶ 11-14. The prenuptial agreement states that “[a]ny contributions made by any employer to any retirement plans . . . shall remain the separate property of the party for whose benefit such contributions were made, ” but “[t]his Agreement shall not preclude one spouse from bequeathing or devising property to the other by will executed after the date of this Agreement, nor shall it constitute a Waiver of such a bequest or devise.” Gicana's Ex. Volume 1 (“Gicana's Vol. 1”), Ex. 5 (“Prenup.”) at ¶¶ 4, 8, ECF No. 51.

         On April 24, 2013, Decedent executed the following: his pour-over will, naming Maloney as executor of his estate; his original trust, naming Gicana as first successor trustee and Maloney as second successor trustee; and his durable general power of attorney, naming Maloney as attorney-in-fact. SUF ¶¶ 15-16, 18, 20-21. Maloney received copies of these documents. Id. ¶¶ 17, 19, 22.

         On October 16, 2014, Decedent was diagnosed with cancer of the spine. Id. ¶ 5. He started radiation on October 28, 2014 and chemotherapy on November 28, 2014. Id. ¶ 6.

         Decedent amended his trust on February 17, 2015. Id. ¶ 29. Through this amendment, Decedent named Maloney as first successor trustee. Gicana's Vol. 1, Ex. 12 (“2/17/15 Tr. Am.”) at ¶ 2C. He also required that, upon his death, the trustee would collect the life insurance policy proceeds payable to the trust, as well as the required minimum distribution amounts from retirement accounts, including 401(k) benefits. Id. ¶¶ 3M-3N. Those proceeds were to fund the gifts of $240, 000 each to Decedent's son and Gicana. Id. ¶ 6F(2)-(3).

         On February 23, 2015, Maloney designated herself as beneficiary of Decedent's life insurance. SUF ¶ 65[2]; Compl., Ex. B. Decedent's 401(k) beneficiary designation lists Decedent's name but Maloney's address. SUF ¶ 82; see Maloney Dep. 87:14-88:11. Maloney made both of these designations through Decedent's account. See SUF ¶¶ 55-56, 62-65, 81. Gicana and Maloney dispute whether the designations should have been in Maloney's personal or trustee capacity. It is undisputed that without a designation, all Plan proceeds would have passed entirely to Gicana under AT&T's default rules concerning spouses. Gicana's Ex. Volume 2 (“Gicana's Vol. 2”), Ex. 18 at 22, ECF No. 52.

         Decedent revoked the $240, 000 gift to his son and disinherited him entirely by a trust amendment dated November 11, 2015. Maloney's Ex. Volume 1 (“Maloney's Vol. 1”), Ex. 3, ECF No. 60-1. He then revoked the $240, 000 gift to Gicana by a January 30, 2016 trust amendment. Id., Ex. 4. On February 3, 2016, Decedent bequeathed a piece of real property to his son by another trust amendment. Id., Ex. 5.

         Due, in part, to metastatic adenocarcinoma of the spine, Decedent passed away on March 15, 2016. SUF ¶ 7. The following day, Maloney submitted a life insurance claim form statement to MetLife, seeking Decedent's life insurance proceeds of $79, 000. Id. ¶ 8; Gicana's Request for Judicial Notice (“RJN”), Ex. 42, ECF No. 48. On May 26, 2016, Gicana submitted a rival claim to MetLife for said proceeds. SUF ¶ 9; RJN, Ex. 43. With respect to the 401(k) benefits, Maloney has been receiving the minimum required distributions since Decedent's death but has not been using those distributions for trust purposes or expenses. SUF ¶¶ 83-84; Maloney Dep. 60:6-15.

         B. Procedural Background

         On November 8, 2016, MetLife filed its Complaint-in-Interpleader [1]. Gicana and Maloney subsequently answered and asserted causes of action. The Court dismissed MetLife from the Action on April 28, 2017.

         In Gicana's Crossclaim [24] against Maloney, Gicana alleges Maloney is liable for fraud in the inception, conversion, undue influence, breach of fiduciary duty, and fraud. However, in Gicana's Motion, she only argues that Maloney breached her fiduciary duty when she designated herself as beneficiary under the Plan.[3]See Gicana's Mot. for Summ. J. (“Mot.”) 24:15-25:5, ECF No. 46. Maloney's Counterclaim [26] is for a declaration that Maloney is the legal owner of the interpled funds.

         Gicana filed the instant Motion [45] on January 31, 2018. Maloney timely opposed [59], [4] and Gicana timely replied [63].


         A. Legal Standard

         Federal Rule of Civil Procedure 56(a) states that a “court shall grant summary judgment” when “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.” A fact is “material” for purposes of summary judgment if it might affect the outcome of the suit, and a “genuine” issue exists if the evidence is such that a reasonable fact-finder could return a verdict for the nonmovant. Anderson, 477 U.S. at 248. The evidence, and any inferences based on underlying facts, must be viewed in the light most favorable to the nonmovant. Twentieth Century-Fox Film Corp. v. MCA, Inc., 715 F.2d 1327, 1328-29 (9th Cir. 1983). In ruling on a motion for summary judgment, the court's function is not to weigh the evidence, but only to determine if a genuine issue of material fact exists. Anderson, 477 U.S. at 255.

         B. Analysis

         1. Gicana's Request for Judicial Notice Gicana requests the Court take judicial notice of the Complaint and the following exhibits to the Complaint: (1) Decedent's death certificate; (2) Maloney's life insurance claim statement; (3) Gicana's rival claim statement; (4) the summary description of the Plan; and (5) the spousal consent form. Since the Complaint and its exhibits are part of this Court's record, the Court GRANTS Gicana's request ...

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