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Glenn v. White

United States District Court, Fifth Circuit

January 9, 2014

ROBERT R GLENN, Plaintiff,
v.
KATHLEEN M WHITE, Defendant.

ORDER

NELVA GONZALES RAMOS, District Judge.

Before the Court is Defendant Kathleen M. White's (White's) Motion for Summary Judgment (D.E. 22). Robert R. Glenn brings this action as the Executor of the Estate of William B. Glenn, Sr., seeking damages allegedly arising from White's actions as Independent Executrix of the Estate of Anne Marie Glenn, W. Glenn's daughter.[1] White seeks a summary judgment, arguing (1) she neither owed nor breached a duty to Glenn; (2) any claims have been released; (3) Glenn's complaints are barred by res judicata; (4) Glenn's claims are barred by limitations; and (5) White has no personal liability under Texas law. For the reasons set out below, the Motion for Summary Judgment (D.E. 22) is GRANTED.

FACTS

These parties have been involved in litigation for approximately 16 years. Part of the litigation took place in Texas and part in Indiana; and the litigation overlaps. The core of the dispute lies in a claim arising out of the treatment of a life insurance policy.

Anne Glenn was a Corpus Christi, Texas physician who treated patients with spinal cord injuries. She conducted her medical practice through business entities (AMGMD Investments, Ltd. and AMGMD, PA) using funds procured in 1996 through two loans from Mercantile Bank (Bank). The total of the loans borrowed, in excess of $300, 000, was secured by certain assets (both realty and personalty) owned by Anne Glenn and her businesses, along with a life insurance policy on Anne Glenn's life in the amount of $300, 000. While the policy was pledged to secure the loan, Anne Glenn named her father, Glenn, as beneficiary.

Anne Glenn died of cancer in 1997, with her father surviving her as her sole heirat-law. Anne Glenn's 1996 will named White as her Independent Executrix. Anne Glenn bequeathed her Indiana farm and antiques to her cousin, Sylvia Knowlton, and the rest of her estate was to be used to establish a foundation to assist persons with spinal cord injuries. Glenn was not provided for in the will and the insurance policy was not part of Anne Glenn's probate estate (AMG). However, AMG did include other assets that had been pledged as collateral to secure the Bank's loan.

Glenn, in an attempt to preserve the $300, 000 value of his beneficiary interest in the insurance policy, filed claims on two fronts. First, he tried to force the Bank to recover its loan from its lien against the other pledged assets rather than from the insurance policy. That effort ultimately failed. Second, he filed a claim against AMG to impose his $300, 000 claim on estate assets as a claim in subrogation of the Bank's rights, in substitution for the loss of insurance policy benefits to the Bank. In other words, because the Bank could have chosen to recover from secured interests in certain estate assets but instead took the insurance policy, Glenn sought to substitute estate assets for his depleted interest in the policy.

In the meantime, Glenn made a bid to defeat Sylvia Knowlton's interest in the Indiana farm because no effort to probate Anne Glenn's will was timely filed in Indiana and he was the sole heir-at-law. The "Indiana litigation" included a state action and a federal action involving both Knowlton and White. Those cases were ultimately settled together in 2001. In exchange for a monetary settlement, Glenn quitclaimed any interest in the Indiana farm to Sylvia Knowlton. In connection with that settlement, the parties (including both Glenn and White) resolved and released all claims among them, known or unknown. The only exception to that release was Glenn's pending 1997 claim against AMG.

In 2003, the parties resolved Glenn's 1997 claim against AMG through an agreed judgment making him a "Class 8" unsecured creditor of AMG estate. However, Glenn has not recovered anything from the estate because, by the time the litigation involving AMG was concluded, the estate was insolvent. Glenn died in 2006. In the current action, Glenn seeks damages against White, Individually, for allegedly depleting the assets of AMG through unnecessary fees and costs, and failing to include the Indiana farm in the distributable assets (or require Knowlton to redeem the Indiana farm by providing for payment of an amount equivalent to the value of the farm, which money would be used to pay creditor claims).

DISCUSSION

A. Whether Glenn's Claims Were Released.

The settlement of the Indiana litigation, to which Glenn and White were signatories, resolved by its terms all claims related to the ownership and application of the Indiana farm: Glenn received a monetary settlement and Knowlton received a deed to the farm. It also included a broad release by each of the signatories, said to apply to both their individual and representative capacities, of all claims made by and against each other, applying to "any, every and all claims, demands or causes of action accruing, arising, growing out of, or connected with any and all allegations made in the State or Federal actions, the Decedent's Estate, the Decedent's non-probate property, and any other possible controversy between them, including any claims or causes of action which could have been raised, whether known or not known, and whether foreseeable or not." D.E. 22-5, p. 2; D.E. 22-6. The only exception to this broad release was "the current claim of William Glenn pending in the State courts of Texas against the Estate [AMG] and Wells Fargo Bank."[2] D.E. 22-5, p. 2.

Glenn argues that this release should be strictly construed against White as the drafter pursuant to Indiana law. First, there is no evidence to support the assertion that White was the drafter of the release. Second, Glenn does not refer to any part of the release that is ambiguous and subject to any particular construction. Under Indiana law, which expressly governs the release, releases serve the important public policy of facilitating the orderly settlement of disputes. Haub v. Eldridge, 981 N.E.2d 96, 101 (Ind.App. 2012). They are to be construed pursuant to general contract principles- giving effect to terms pursuant to their clear and ordinary meaning. Id.

In Haub, the release addressed "all claims, ... however arising, up to the date of" the release and specifically referenced a particular accident. The court gave effect to both references by holding that the ordinary meaning of the release terms was that all claims as of the date of release, including but not limited to the specific accident, were released. Id. Likewise, the import of the release language Glenn agreed to is that he released all claims against White in her individual and representative ...


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