Pruitt v. Lincoln Nat'l Life Ins. Co.

609 F.Supp.3d 1193

Ligia C. PRUITT, formerly known as Ligia Southwick, Plaintiff,

v.The LINCOLN NATIONAL LIFE INSURANCE COMPANY, Defendant.

Case No. 21-2345-JWB

United States District Court, D. Kansas.

Signed July 1, 2022

Christopher M. Gaughan, Connor P. Kelley, Gaughan & Connealy, Overland Park, KS, for Plaintiff.

Clark H. Cole, Armstrong Teasdale, LLP, St. Louis, MO, Kevin W. Prewitt, Armstrong Teasdale, LLP, Kansas City, MO, for Defendant.

MEMORANDUM AND ORDER

JOHN W. BROOMES, UNITED STATES DISTRICT JUDGE

This matter is before the court on the parties’ cross-motions for summary judgment. (Docs. 20, 22.) The parties have each filed a memorandum, a response, and a reply, making the motions ripe for decision. (Docs. 21, 23, 26, 27, 30, 31.) For the reasons stated herein, Plaintiff's motion for summary judgment (Doc. 22) is DENIED and Defendant's motion for summary judgment (Doc. 20) is GRANTED.

I. Facts

The following facts are taken from a joint statement provided by the parties for purposes of summary judgment.

Dr. Christopher L. Southwick (the "Insured") applied for life insurance with The Lincoln National Life Insurance Company ("Lincoln") in an application dated June 27, 2013 (the "Application"). The Application designated Plaintiff Ligia Pruitt—who was then the Insured's spouse and known as Ligia Southwick—as the primary beneficiary. The Application designated the Christopher L. Southwick Family Trust as the contingent beneficiary (the "Contingent Beneficiary").

Lincoln issued policy number T700058560 to the Insured with a policy date of July 9, 2013 (the "Policy"). Lincoln delivered the Policy to the Insured in Kansas. The Policy provided a death benefit of $1.5 million. A true and accurate duplicate copy of the Policy with portions of the Application redacted for privacy purposes is attached to ECF No. 15 as Exhibit A.

The Insured and Pruitt subsequently divorced and executed a marriage settlement agreement, dated April 25, 2018, which was entered on May 1, 2018 in the District Court of Johnson County, Kansas, Case No. 18cv00314 (the "Marriage Settlement Agreement"). A true and accurate copy of the Marriage Settlement Agreement is labeled Exhibit B, filed as ECF No. 19. Section V, C on pages 7 and 8 of the Marriage Settlement Agreement contained a mutual release provision which included the specific relinquishment by both the Insured and Pruitt of "any right to receive insurance proceeds as beneficiary or life insurance on the life of the other except as specifically provided otherwise in this Agreement":

In consideration of the mutual releases contained in this paragraph, each of the parties hereby releases the other party and his or her respective legal representative, trustees, family members, heirs, successors and assigns, from any claim of any marital right, title or interest in or to any of the earnings, accumulations, future investments, retirement or profit sharing plans, money, assets or property of the other, any rights of inheritance in the estate of the other, except as otherwise provided in this Agreement, any rights to elect to take against the Will of the other, any rights to act as executor or administrator of the Will or estate of the other, any rights to receive allowance from the estate of the other or from any trust established to benefit the other, any additional right which either party has or may have by reason of their marriage, including dower or curtesy, whether by statute, agreement or common law, and each party hereby specifically relinquishes any right, title or interest through inheritance from the other or in the estate of the other, any right to receive insurance proceeds as beneficiary or life insurance on the life of the other except as specifically provided otherwise in this Agreement, and except those exceptions and provisions hereinbefore contained, it is specifically understood and agreed, however, that nothing herein contained in this paragraph shall be construed as limiting the rights of enforcement of the terms and provisions of this Agreement by either party.

The Marriage Settlement Agreement did not elsewhere provide Pruitt or the Insured the right to receive insurance proceeds as a beneficiary of life insurance on the life of the other. Lincoln is not a party to the Marriage Settlement Agreement. Lincoln is not identified by name anywhere within the Marriage Settlement Agreement. The Marriage Settlement Agreement does not expressly reference the Policy by name or by policy number T700058560. After this divorce, the Insured did not redesignate Pruitt as a beneficiary under the Policy.

The Insured died on December 21, 2020. After the death of the Insured, Pruitt demanded the death benefit under the Policy from Lincoln in January and February 2021 based on her prior designation by the Insured in the Application as the primary beneficiary. A true and accurate copy of the February 17, 2021 letter from Pruitt's attorneys (without the enclosures referenced therein) is attached to ECF No. 15 as Exhibit C. The letter represented on page 2 that the "Marriage Settlement Agreement allowed both Mrs. Pruitt and the Insured to retain their own life insurance policies, but did not revoke or otherwise modify their respective life insurance beneficiaries on those policies." The letter did not mention the above-quoted mutual release contained in Section V, C of the Marriage Settlement Agreement. The letter included a complete copy of the Marriage Settlement Agreement.

Lincoln denied Pruitt's claim for the death benefit under the Policy in a letter to Pruitt dated March 1, 2021. A true and accurate copy of Lincoln's March 1, 2021 letter to Pruitt is attached to ECF No. 15 as Exhibit D. The March 1, 2021 letter stated:

After our review of the information provided, we determined that there are no benefits due to you for the following reason(s):

The state of Kansas revokes the designation of a former spouse as beneficiary unless the policy was specifically awarded in the settlement agreement, the former spouse was renamed as beneficiary after the divorce took place or the former spouse is the policy owner.

Lincoln's March 1, 2021, denial letter did not reference or mention the mutual release contained in Section V, C of the Marriage Settlement Agreement. Lincoln's March 1, 2021 denial letter did not expressly cite K.S.A. 59-105(b)(1)(A).

K.S.A. 59-105, entitled "Revocation of spousal inheritance rights upon divorce," provides in part that "[o]n and after July 1, 2019, except as provided by the express terms of a governing instrument, a court order or contract relating to the division of the marital estate made between the divorced individuals before or after the marriage, divorce or annulment, the divorce or annulment of a marriage: ... Revokes any revocable ... Disposition or appointment of property made by a divorced individual to such individual's former spouse in a governing instrument...." K.S.A. 59-105(b)(1). A governing instrument "means a document executed by the divorced individual before the divorce or annulment of such individual's marriage to such individual's former spouse." K.S.A. 59-105(a)(4). A "revocable" disposition "means one under which the divorced individual, at the time of the divorce or annulment, was alone empowered, by law or under the governing instrument, to cancel the designation in favor of such individual's former spouse...." K.S.A. 59-105(a)(6).

Lincoln subsequently received in March 2021 a claim for the death benefit on behalf of the Contingent Beneficiary. A true and correct copy of the portions of the Contingent Beneficiary's trust documents as provided to Lincoln in conjunction with the March 2021 claim is labeled Exhibit E and filed under seal as ECF No. 18 (see also ECF No. 17, Order granting leave to file under seal). Lincoln paid the death benefit plus interest to the Contingent Beneficiary on April 6, 2021. The trustee of the Contingent Beneficiary is Laura Lee Southwick, who is another former spouse of the Insured.

Pruitt filed this lawsuit on June 30, 2021, and Lincoln filed its Answer on August 26, 2021. In its Answer, Lincoln asserted that Pruitt "relinquished, waived, and/or is barred and estopped from claiming, any beneficiary status under the policy at issue, by virtue of the April 25, 2018 Marriage Settlement Agreement, filed in Case No. 18 cv 00314 on May 1, 2018 with the District Court of Johnson County, Kansas," as provided in Section V, C. (Doc. 8 at 4.)

II. Summary Judgment Standards

Summary judgment is appropriate if the moving party demonstrates that there is no genuine dispute as to any material fact, and the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). A fact is "material" when it is essential to the claim, and the issues of fact are "genuine" if the proffered evidence permits a reasonable jury to decide the issue in either party's favor. Sotunde v. Safeway, Inc. , 716 F. App'x 758, 761 (10th Cir. 2017). The movant bears the initial burden of proof and must show the lack of evidence on an essential element of the claim. Thom v. Bristol—Myers Squibb Co. , 353 F.3d 848, 851 (10th Cir. 2003) (citing Celotex Corp. v. Catrett , 477 U.S. 317, 322–23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ). The nonmovant must then bring forth specific facts showing a genuine issue for trial. Id. The court views all evidence and reasonable inferences in the light most favorable to the nonmoving party. LifeWise Master Funding v. Telebank , 374 F.3d 917, 927 (10th Cir. 2004).

III. Analysis

A. Summary of Arguments

Plaintiff filed this action seeking a judgment declaring, among other things, that Plaintiff is the rightful beneficiary of the life insurance policy and is entitled to the full payment of the policy proceeds. (Doc. 1-1 at 6.)

Defendant contends it is entitled to summary judgment pursuant to K.S.A. 59-105, arguing that the statute revoked the Insured's designation of Plaintiff, his former spouse, as the policy's primary...