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John Hancock Life Insurance Co. v. Estate of Wheatley

United States District Court, S.D. Texas, Houston Division

November 12, 2019




         Plaintiff John Hancock Life Insurance, Co. (“John Hancock”) filed this interpleader action asking the Court to resolve which of two claimed beneficiaries is entitled to an annuity it manages. The two claimants, and the defendants in this case, are the Estate of Jennifer Lauren Wheatley and Louis Anthony Wheatley (“LW”), individually and as Administrator of the Estate (collectively, the “Estate Defendants”); and Jennifer Lauren Wheatley's (“Wheatley”) ex-husband Jeremy G. Ward. Before the Court is the Estate Defendants' Motion for Summary Judgment. (Doc. No. 34). The Estate Defendants and Ward have also filed Motions for Reconsideration. (Doc. No. 76, 78, 82, 98).

         After considering the parties' filings, all responses and replies thereto, and the applicable law, the Court finds that the Estate Defendants' Motion for Summary Judgment must be GRANTED. Having determined that the Estate Defendants are the entitled beneficiaries of the annuity, the Court GRANTS the Estate Defendants' Motions for Reconsideration as to the dismissal of their counterclaims against John Hancock for recovery of funds that John Hancock already remitted to Ward prior to the present interpleader action. (Doc. No. 76, 98). The Court DENIES the remaining Motions for Reconsideration. (Doc. No. 78, 82).

         I. BACKGROUND

         In 1987, Wheatley settled a medical malpractice lawsuit against the United States through a settlement stipulation. (Doc. No 74 ¶1). The settlement provided in part that the United States would purchase an annuity that would pay Wheatley $1, 000 “per month, increasing at 4% compounded annually, for life, commencing at age 18, guaranteed for 30 years.” (Doc. No. 74-1 at 2). Pursuant to the settlement, the United States entered into an annuity contract (the “policy” or “annuity policy”) in 1988 with John Hancock.[1]

         The annuity policy provided for both lump sum payments and monthly payments. Only the monthly payments are at issue in this case. Per the original terms of the annuity policy, Wheatley was the annuitant who was to receive the monthly payments throughout her lifetime. Id. at 3. Wheatley's “executors or administrators” were designated as the beneficiary who would receive the monthly payments after Wheatley's death. Id. The United States was designated as the owner of the policy. Id.

         In December 2008, Wheatley submitted a Beneficiary Designation-LIFE form (the “change of beneficiary form”) to John Hancock. This change of beneficiary form revoked previous beneficiary designations and named Ward, Wheatley's spouse at the time, as the primary beneficiary. (Doc. No. 1-2). The secondary beneficiary was Annie M. Hall, Wheatley's then mother-in-law. Id. John Hancock confirmed this change in beneficiary in January 2009. (Doc. No. 1-3).

         Wheatley died in October 2017, before all of the monthly payments from the annuity had been distributed. (Doc. No. 1 ¶15). Wheatley's father, LW, was named the administrator of Wheatley's estate by the General Court of Justice of Guilford County, North Carolina. Id. ¶16.

         Around this time, John Hancock began receiving conflicting claims to the annuity proceeds. In November 2017, John Hancock received a letter from the Estate Defendants claiming that they were entitled to payments from the annuity. Id. ¶17. In May 2018, John Hancock received a claim form from Ward also seeking payment as the beneficiary of the annuity for the period from December 2017 through May 2018. Id. ¶18. John Hancock remitted $12, 468.06 to Ward for the monthly payments under the annuity from December 2017 through May 2018 (the “Disbursed Payments”). Id. ¶19. John Hancock continued receiving correspondence from the Estate Defendants claiming that they were the entitled beneficiaries because the United States as the designated owner of the annuity was required to approve any change of beneficiary, and it did not consent to Wheatley's 2008 change of beneficiary. Id. ¶20.

         Due to the conflicting claims, John Hancock began withholding the monthly payments in June 2018. John Hancock filed the present statutory interpleader action in this Court pursuant to 28 U.S.C. § 1335 in August 2018. John Hancock is currently paying the monthly annuity funds to the Court pursuant to 28 U.S.C. § 1335.

         The Estate Defendants and Ward both asserted counterclaims and crossclaims in their Answers. The Estate Defendants asserted counterclaims for declaratory judgment, breach of contract, and negligence against John Hancock arising from the wrongful payment of the Disbursed Payments, and a crossclaim for declaratory judgment as to the Disbursed Payments against Ward. (Doc. No. 17). The Estate Defendants subsequently requested leave to amend their Answer to include a fourth counterclaim against John Hancock for failure to pay and a delay in payment of the annuity benefits under Texas Insurance Code § 542.058 and attorneys fees. (Doc. No. 46). Ward asserted counterclaims against John Hancock for breach of express written contract, breach of implied contract and/or quasi contract, and promissory estoppel, arguing that he is entitled to the annuity proceeds pursuant to the change of beneficiary form. (Doc. No. 33). Ward also asserted crossclaims against the Estate Defendants for tortious interference with his contractual rights under the annuity policy. Id. John Hancock moved to dismiss all counterclaims.

         The Court dismissed all counterclaims against John Hancock in March 2019 and ordered that, while John Hancock was to remain a party in the case, the claims against it would be abated pending the resolution of the interpleader action. (Doc. No. 61 at 12:10-21).

         The Estate Defendants have filed a Motion for Summary Judgment seeking the Court's determination that they are the beneficiaries entitled to the monthly annuity proceeds. They have also filed numerous Motions for Reconsideration seeking to revive their counterclaims against John Hancock to recover the Disbursed Payments. The Court addresses each in turn, as well as Ward's Motion for Reconsideration.


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