
    STATE FARM LIFE INSURANCE COMPANY, Plaintiff, v. Elaina AVILA, Noah Avila, Christina Avila, and Katherine Cisper Avila, Defendants.
    4:17-cv-00366
    United States District Court, S.D. Iowa, Central Division.
    Signed June 22, 2018
    Brent D. Rosenberg, Graham Ervanian & Cacciatore, LLP, Kirk W. Schuler, Dorsey & Whitney LLP, Gary R. Fischer, Simpson Jensen Abels Fischer & Bouslog PC, Des Moines, IA, Christopher James Sherman, Pro Hac Vice, Payne & Jones Chtd, Michael Stuart Jones, Pro Hac Vice, Jones & McCoy, PA, Overland Park, KS, for Defendants.
    ORDER GRANTING DEFENDANTS ELAINA AVILA AND NOAH AVILA'S MOTION FOR SUMMARY JUDGMENT
    ROBERT W. PRATT, Judge Before the Court are Defendants Christina Avila and Katherine Cisper Avila's Motion for Summary Judgment (ECF No. 29) and Defendants Elaina Avila and Noah Avila's Motion for Summary Judgment (ECF No. 30), both filed on April 13, 2018. All Defendants filed responses to the respective motions on May 4, 2018. ECF Nos. 32, 33. The matter is fully submitted.
    I. FACTUAL AND PROCEDURAL BACKGROUND
    Plaintiff State Farm Insurance Company initiated this interpleader action to resolve competing claims to Ricardo Avila's $50,000 life insurance policy insured by State Farm. ECF No. 1. On December 21, 2017, this Court granted State Farm's Motion for Interpleader Deposit, ECF No. 17, and State Farm posted a $46,716.55 bond on January 4, 2018, ECF No. 18. The Court dismissed State Farm from the action on January 29, 2018. ECF No. 25.
    Defendants are Ricardo's children and widow. ECF No. 29-1 ¶¶ 2, 4. Elaina and Noah are the children of Ricardo and his ex-wife, Bobbi Jo Hoch, f/k/a Bobbi Jo Avila. Id. ¶ 2. Christina is the daughter of Ricardo and Katherine. Id. ¶ 4. Ricardo was married to Katherine both before and following his marriage to Bobbi Jo; he and Katherine were married at the time of his death. Id.
    Ricardo purchased the disputed life insurance policy in 2001, during his marriage to Bobbi Jo. Id. ¶ 1. The policy named Bobbi Jo as the primary beneficiary with Elaina and Noah as the successor beneficiaries. ECF No. 30-1 ¶ 7. Ricardo and Bobbi Jo divorced in January 2008. Id. ¶ 9. The dissolution decree required both parties to maintain any and all life insurance policies insuring their lives at the time the decree was entered. Id. ¶ 11. It also required the parties to name Elaina and Noah as irrevocable beneficiaries of these policies. Id.
    In March 2008, Ricardo attempted to change beneficiaries under the policy to Christina as the primary beneficiary and Katherine as the successor beneficiary. ECF No. 29-1 ¶ 4; ECF No. 30-1 ¶ 12. The parties disagree about whether this change of beneficiary was valid. Elaina and Noah together claim that Ricardo was unable to change beneficiaries under the dissolution decree. ECF No. 30. Thus, they contend that this change of beneficiary is invalid and they are entitled to the proceeds. Id. Christina and Katherine contend the decree did not prevent Ricardo from changing beneficiaries, and therefore, Christina is entitled to the proceeds as the primary beneficiary. ECF No. 29 ¶ 5.
    II. SUMMARY JUDGMENT STANDARD
    The term "summary judgment" is something of a misnomer. See D. Brock Hornby, Summary Judgment Without Illusions , 13 Green Bag 2d 273 (Spring 2010). Although it "suggests a judicial process that is simple, abbreviated, and inexpensive," in reality the process is complicated, time-consuming, and expensive. Id. at 273, 281. The complexity of the process for determining whether summary judgment is appropriate, however, reflects the "complexity of law and life." Id. at 281. "Since the constitutional right to jury trial is at stake," judges must engage in a "paper-intensive and often tedious" process to "assiduously avoid deciding disputed facts or inferences" in a quest to determine whether a record contains genuine factual disputes that necessitate a trial. Id. at 281-82. Despite the seeming inaptness of the name and the desire for some in the plaintiffs' bar to be rid of it, the summary judgment process is well-accepted and appears to be "here to stay." Id. at 281. Indeed, "judges are duty-bound to resolve legal disputes, no matter how close the call." Id. at 287.
    "[S]ummary judgment is an extreme remedy, and one which is not to be granted unless the movant has established his right to a judgment with such clarity as to leave no room for controversy and that the other party is not entitled to recover under any discernible circumstances." Robert Johnson Grain Co. v. Chem. Interchange Co. , 541 F.2d 207, 209 (8th Cir. 1976). The purpose of summary judgment is not "to cut litigants off from their right of trial by jury if they really have issues to try." Poller v. Columbia Broad. Sys., Inc. , 368 U.S. 464, 467, 82 S.Ct. 486, 7 L.Ed.2d 458 (1962) (quoting Sartor , 321 U.S. at 627, 64 S.Ct. 724 ). Rather, it is designed to avoid "useless, expensive and time-consuming trials where there is actually no genuine, factual issue remaining to be tried." Anderson v. Viking Pump Div., Houdaille Indus., Inc. , 545 F.2d 1127, 1129 (8th Cir. 1976).
    Federal Rule of Civil Procedure 56(a) provides, "A party may move for summary judgment, identifying each claim or defense-or the part of each claim or defense-on which summary judgment is sought." Rule 56(a) mandates the entry of summary judgment upon motion after there has been adequate time for discovery "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." Summary judgment is proper when the record, viewed in the light most favorable to the nonmoving party and giving that party the benefit of all reasonable inferences, shows there is no genuine issue of material fact and the moving party is therefore entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(a) ; Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) ; Harlston v. McDonnell Douglas Corp. , 37 F.3d 379, 382 (8th Cir. 1994). A disputed issue is "genuine" when the evidence produced "is such that a reasonable jury could return a verdict for the nonmoving party." See Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A fact is considered "material" if it "might affect the outcome of the suit under the governing law." See id. "[T]he substantive law will identify which facts are material .... Factual disputes that are irrelevant or unnecessary will not be counted." Id.
    "In considering a motion for summary judgment the court does not weigh the evidence, make credibility determinations, or attempt to discern the truth of any factual issue." Great Plains Real Estate Dev., L.L.C. v. Union Cent. Life Ins. Co. , 536 F.3d 939, 944 (8th Cir. 2008) (quoting Morris v. City of Chillicothe , 512 F.3d 1013, 1018 (8th Cir. 2008) ). Rather, the court only determines whether there are any disputed issues concerning the existence of material facts and, if so, whether those disputes are genuine. See Anderson , 477 U.S. at 251-52, 106 S.Ct. 2505 ; see also Wilson v. Myers , 823 F.2d 253, 256 (8th Cir. 1987) ("Summary judgment is not designed to weed out dubious claims, but to eliminate those claims with no basis in material fact."). Summary judgment is appropriately entered against a party who has failed to make a showing sufficient to establish a genuine dispute as to the existence of an element essential to its case and upon which the party will bear the burden of proof at trial. See Celotex Corp. v. Catrett , 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).
    When a summary judgment motion is filed, the moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact based on the pleadings, depositions, answers to interrogatories, admissions on file, and affidavits, if any. See id. at 323, 106 S.Ct. 2548 ; Anderson , 477 U.S. at 248, 106 S.Ct. 2505. If the moving party has carried its burden, the nonmoving party must then go beyond its original pleadings and designate specific facts showing that there remains a genuine issue of material fact that needs to be resolved by a trial. See Fed. R. Civ. P. 56(c). This additional showing can be by affidavits, depositions, answers to interrogatories, or admissions in the record. Id. ; Celotex , 477 U.S. at 322-23, 106 S.Ct. 2548 ; Anderson , 477 U.S. at 257, 106 S.Ct. 2505. "[T]he mere existence of some alleged factual dispute between the parties will not defeat a motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson , 477 U.S. at 247-48, 106 S.Ct. 2505. Indeed, "[t]o survive a motion for summary judgment, the nonmoving party must substantiate his allegations with sufficient probative evidence [that] would permit a finding in [his] favor based on more than mere speculation, conjecture, or fantasy." Barber v. C1 Truck Driver Training, LLC , 656 F.3d 782, 801 (8th Cir. 2011) (second and third alterations in original) (quoting Putman v. Unity Health Sys. , 348 F.3d 732, 733-34 (8th Cir. 2003) ). Mere "self-serving allegations and denials are insufficient to create a genuine issue of material fact." Anuforo v. Comm'r , 614 F.3d 799, 807 (8th Cir. 2010).
    Courts do not decide whether to grant a motion for summary judgment by conducting a paper trial. Rather, a "district court's role in deciding the motion is not to sift through the evidence, pondering the nuances and inconsistencies, and decide whom to believe." Waldridge v. Am. Hoechst Corp. , 24 F.3d 918, 920 (7th Cir. 1994). In considering a motion for summary judgment, the court's task is merely to decide, based on the evidentiary record that accompanies the filings of the parties, whether there really is any genuine issue concerning a material fact that still requires a trial. See id. (citing Anderson , 477 U.S. at 249, 106 S.Ct. 2505 and 10 Charles A. Wright & Arthur R. Miller, Federal Practice & Procedure § 2712 (3d ed. 1998) ); see also Fed. R. Civ. P. 56(c)(3).
    III. CHOICE OF LAW
    In this dispute, subject-matter jurisdiction arises under diversity of citizenship. Therefore, the Court applies the forum state's choice-of-law rules.
    Klaxon Co. v. Stentor Elec. Mfg. Co. , 313 U.S. 487, 496, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). Iowa follows the Second Restatement's approach to life insurance policies. Section 192 provides: "[I]n the absence of an effective choice of law by the insured in his application," life insurance contracts are governed "by the local law of the state where the insured was domiciled at the time the policy was applied for." Lindstrom v. Aetna Life Ins. Co. , 203 N.W.2d 623, 628 (Iowa 1973) (quoting Restatement (Second) of Conflict of Laws § 192 cmt. a (Am. Law Inst. 1971) ). The commentary to the Restatement clarifies that section 192"governs such questions as ... whether and under what circumstances the insured or some other person has the power to change beneficiaries ... [and] the effect of a divorce between the insured and a beneficiary upon the latter's rights under the policy." Restatement (Second) of Conflict of Laws § 192 cmt. a.
    Ricardo's application shows he was domiciled in Iowa at the time he applied for the life insurance policy at issue. Ricardo lists an address in Melcher, Iowa, and the application was signed and witnessed in Knoxville, Iowa. ECF No. 30-5, 20, 23. The later contract modifications at issue in this case, namely, the dissolution decree and the change of beneficiary, do not impact the choice of law inquiry pursuant to section 192 comment a. Therefore, the Court will apply Iowa law.
    
      
      Indeed, Judge Hornby, a district court judge for the District of Maine, convincingly suggests the name "summary judgment" should be changed to "motion for judgment without trial." 13 Green Bag 2d at 284.
    
    
      
      Judge Hornby notes that over seventy years of U.S. Supreme Court jurisprudence gives no hint the summary judgment process is unconstitutional under the Seventh Amendment. Id. at 281 (citing Parklane Hosiery Co. v. Shore , 439 U.S. 322, 336, 99 S.Ct. 645, 58 L.Ed.2d 552 (1979) and Sartor v. Ark. Natural Gas Corp. , 321 U.S. 620, 627, 64 S.Ct. 724, 88 L.Ed. 967 (1944) ). While Judge Hornby recognizes not much can be done to reduce the complexity of the summary judgment process, he nonetheless makes a strong case for improvements in it, including, among other things, improved terminology and expectations and increased pre-summary judgment court involvement. See id. at 283-88.
    
    
      
      Section 192 provides an exception if another "state has a more significant relationship under the principles stated in [section] 6" to the disputed issue. Restatement (Second) of Conflict of Laws § 192 (Am. Law Inst. 1971). Because neither party pleaded choice of law or offered related evidence, the Court declines to fully analyze the section 6 factors. However, based on the evidence in the record, no state appears to have a more significant relationship to the case than does Iowa under section 6 principles. See Restatement (Second) of Conflict of Laws § 6.
    
   IV. ANALYSIS

A. Effect of Decree and Change of Beneficiary

Two well-established propositions in Iowa law clarify the parties' rights in this case. First, under ordinary circumstances, a named beneficiary has no vested interest in the insurance policy. Stackhouse v. Russell , 447 N.W.2d 124, 125 (Iowa 1989) (citing Stolar v. Turner , 237 Iowa 593, 21 N.W.2d 544, 550 (1946) ). In other words, "the insured has complete control and domination of the policy" and may freely change beneficiaries. Stolar , 21 N.W.2d at 550 (quoting Potter v. Nw. Mut. L. Ins. , 216 Iowa 799, 247 N.W. 669, 671 (1933) ). The second proposition, however, is that when "the beneficiary is named pursuant to contract, the insured loses power to designate different beneficiaries." Stackhouse , 447 N.W.2d at 125 (citing Stolar , 21 N.W.2d at 550 (collecting cases) ).

Stackhouse establishes that this second proposition extends to dissolution decrees. Stackhouse , 447 N.W.2d at 125. In that case, the decedent obtained a life insurance policy during his first marriage. Id. After they divorced, the decree required the decedent to name his two children as the sole beneficiaries of the policy. Id. The decedent later remarried and named his second wife as the beneficiary, with his two children as contingent beneficiaries. Id. Upon his death, both his children and his second wife claimed the life insurance proceeds. Id. The court held decedent "could not avoid his obligation ... by changing beneficiaries of the policy," and thus, enforced the decree and ordered the life insurance proceeds paid to his two children. Id. at 126.

Like in Stackhouse , Ricardo obtained a life insurance policy during his marriage to Bobbi Jo. ECF No. 29-1 ¶ 1. After they divorced, the decree required Ricardo to name his children Elaina and Noah as irrevocable beneficiaries of "the Life Insurance policies currently insuring [his] own life." Id. ¶ 11. Like the decedent in Stackhouse , Ricardo subsequently attempted to change beneficiaries. ECF No. 30-1 ¶ 12. Applying the rule of Stackhouse , Ricardo was not able to change the named beneficiaries after the decree was entered.

Christina and Katherine contend that Stackhouse is distinguishable because, in that case, the decree addressed a specific insurance policy, whereas the decree in this case addressed any and all of Ricardo's life insurance policies at the time of the decree. ECF No. 32 at 2. Christina and Katherine do not, however, explain why this distinction is material and do not point to any authority that suggests it is. The Court finds no reason for this distinction to preclude Stackhouse 's applicability.

For the foregoing reasons, the Court concludes Ricardo's attempt to change the beneficiary to Christina is unenforceable. Therefore, Elaina and Noah have a superior claim to the disputed insurance proceeds.

B. Christina and Katherine's Additional Arguments

Christina and Katherine offer two additional arguments: (1) Elaina and Noah's claim is time-barred and (2) equity requires judgment in their favor. ECF Nos. 29 at 3-4, 32 at 2-3. The Court does not find either argument sufficiently persuasive to deny Elaina and Noah's motion.

1. Whether Elaina and Noah's Claim is Time-Barred

Christina and Katherine contend that Elaina and Noah's claim to the life insurance proceeds is time-barred. ECF No. 29 at 3 (citing Kan. Stat. Ann. § 59-2239 ); ECF No. 32 at 3 (same). The Court first notes this Kansas statute does not apply because this case is governed by Iowa law. But even if Kansas law applied, the facts of this case do not implicate this statute because section 59-2239 bars claims against a decedent's estate not filed within six months of the decedent's death. Kan. Stat. Ann. § 59-2239(1) ; see also Nelson v. Nelson , 288 Kan. 570, 205 P.3d 715, 730 (2009). The parties in this case are stating claims to life insurance proceeds not to assets in Ricardo's estate. Therefore, this case falls outside section 59-2239's scope. Accordingly, the Court concludes Elaina and Noah's claim is not time-barred as a matter of law.

2. Whether Equity Requires Judgment in Favor of Christina and Katherine

Christina and Katherine urge that equity requires judgment in their favor. ECF Nos. 29 at 4, 32 at 2-3. They point first to Ricardo's intent, arguing that "Christina Avila, Mr. Avila's daughter from a prior relationship, was an intended beneficiary of the life insurance policy in question at the time of the entry of the Decree." ECF No. 32 at 2-3. Furthermore, they point to a second life insurance policy maintained by Ricardo, the benefit of which Elaina and Noah have already collected. ECF No. 29 ¶ 8. They argue this second policy, along with Ricardo's attempt to name Christina as the beneficiary under the disputed policy, shows that Ricardo intended for Christina to receive the proceeds at issue here. ECF No. 32 at 2-3.

Christina and Katherine's arguments do not persuade the Court. In interpreting and enforcing the dissolution decree, the Court declines to speculate on Ricardo's intent based on these actions. Indeed, Iowa courts look to the dissolution court's intent, not the parties' intent, in construing a dissolution decree, as indicated by the decree's four corners. In re Marriage of Anderson , 451 N.W.2d 187, 191 (Iowa Ct. App. 1989). The decree clearly states Elaina and Noah are irrevocable beneficiaries, and Iowa law compels the Court to enforce that provision.

V. CONCLUSION

Based upon this record, the Court finds Christina and Katherine have not provided any evidence to demonstrate a genuine issue for trial such that a reasonable jury could find for them. For the foregoing reasons, Elaina Avila and Noah Avila's Motion for Summary Judgment (ECF No. 30) is GRANTED. Christina Avila and Katherine Cisper Avila's Motion for Summary Judgment (ECF No. 29) is DENIED. The net proceeds deposited by State Farm Life Insurance Company shall be disbursed to Elaina Avila and Noah Avila.

IT IS SO ORDERED. 
      
      The record shows Ricardo also attempted to change the disputed policy's beneficiary before the dissolution decree was entered. The change of beneficiary form dated June 11, 2007, shows Ricardo naming Bobbi Jo, his ex-wife, and Christina, his daughter with Katherine, as equal beneficiaries. ECF No. 32-2. Although Christina and Katherine mention it in their response, ECF No. 32, neither party states a claim to proceeds under this change of beneficiary; Bobbi Jo is not claiming relief in this case. Instead, Christina states her claim to the proceeds based on the later change of beneficiary. While this attempted change is not at issue here, the court notes the dissolution decree likely supersedes this attempted change. Bobbi Jo's and Christina's interests were " 'mere expectanc[ies,]' ... which may be disposed of by the dissolution court." Sorensen v. Nelson , 342 N.W.2d 477, 480 (Iowa 1984).
     