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Metropolitan Life Insurance Co. v. Leban

United States District Court, E.D. Louisiana
Nov 26, 2003
CIVIL ACTION NO. 03-268 (E.D. La. Nov. 26, 2003)

Summary

holding state law should govern the issue of competency because the federal statute did not address it

Summary of this case from Cotton v. Prudential Insurance Company of America

Opinion

CIVIL ACTION NO. 03-268

November 26, 2003


ORDER AND REASONS


This matter comes before the Court on motion of Jacqueline L. LeBan for summary judgment and motion of Metropolitan Life Insurance Company ("Met Life") for summary judgment. Oral argument was held on October 29, 2003, and the matter was taken under advisement. Having considered the record, the memoranda of counsel and the law;, the Court has determined that summary judgment is appropriate for the following reasons.

Jacqueline L. LeBan was the wife of Joseph Robert LeBan when he died on May 12, 2002, and when he executed a "Designation of Beneficiary" form on October 24, 2000, changing the beneficiaries of his Met Life policy under the Federal Employees Group Life Insurance ("FEGLI") program to include his then — current wife, all of his children and a step child. The previous designation, made in 1982, designated only one son, Brian LeBan, as the beneficiary. Although he is included among the beneficiaries designated in 2000, Brian LeBan is challenging that validity of that designation by challenging the competency of his father, who was diagnosed with Alzheimer's at the time of the redesignation.

In support of his argument, Brian LeBan attaches the affidavit of an alleged handwriting expert who testifies that "it was more likely than not signed by Joseph LeBan" but that some portions were filled out by a person other than Joseph LeBan. The Court finds that accepting this as true, this evidence is irrelevant. It notes that the comparison of the signatures of Joseph LeBan on each of the designation forms is remarkably similar and no indication of a loss of ability on the part of Joseph LeBan at the time he signed the redesignation.

Brian LeBan also attaches an affidavit of Michael S. Hunter, M.D., who testified based on his memory and a review of Joseph LeBan's medical records that he first saw Joseph LeBan in 1999, and that he diagnosed "severe" Alzheimers' disease. There seems to be no dispute that: Joseph LeBan was diagnosed with Alzheimer's at that time. The relevance of the remainder of Dr. Hunter's affidavit is limited by the fact that he does not indicate that he continued to treat Joseph LeBan, or define the scope of the medical records he reviewed. Dr. Hunter does not indicate that he ever examined Joseph LeBan again, but states that Joseph LeBan continued to decline steadily and that he was of the opinion that on October 24, 2000, Joseph LeBan was incapable of understanding what he was signing. Because Dr. Hunter does not indicate facts that would indicate that he was present at the October 24, 2000, signing or had privy to facts relevant to that time, his opinion is of insufficient probative value. Again, there is no dispute that Alzheimer's is a progressive disease, and the Court is wary to read the doctor's affidavit as stating the medical opinion that an Alzheimer's patient can never have episodes of cogency.

The affidavit of Joseph LeBan's first wife Agnes is of no probative value.

The Court is scrutinizing the evidence offered in opposition to summary judgment because there is such strong authority for the proposition that the Court's review is limited to ensuring that the statutory requirements of FEGLI are met. Here, there is no dispute that all requirements set forth in the statute were met. The insured is allowed to freely designate a beneficiary at any time, provided that the statutory requirements are met, provided that the beneficiary does not obtain the proceeds "through fraudulent or illegal means." Id. citing Ridaeway v. Ridgway 454 U.S. 46, 57 (1981). See also Prudential Ins. Co. v. Athmer, 178 F.3d 473 (7th Cir. 1999) (beneficiary murdered insured). "Congress intended to establish, for reasons of administrative convenience, an inflexible rule that a beneficiary must be named strictly in accordance with the statute, irrespective of the equities in a particular case."Metropolitan Life Ins. Co. v. Manning. 568 F.2d 922, 926 (2d Cir. 1977). See also Dean v. Johnson, 881 F.2d 946 (10th Cir. 1989). The statute makes no mention of competency; only an employee can fill out a change of beneficiary form. Reed v. U.S., 182 F.3d 918 (6th Cir. 1999) (incompetent's attorney in fact could increase insurance for incompetent, but Court recognized "bright line" rule disallowing a representative to execute change of beneficiary form). "The only endeavor for the court is to determine the identity of the widow or other statutorily designated successor." Huff v. Metropolitan Life Ins. Co., 675 F.2d 119, 122 (6th Cir. 1982).

There is support for the proposition that the Servicemembers' Group Life Insurance ("SGLI") statute was intended to be construed the same as FEGLI, so that SGLI cases are relevant. Prudential Ins. Co. v. Hinkel, 121 F.3d 364 (8th Cir. 1997).

Reviewing Joseph LeBan's competency to redesignate beneficiaries is also limited under La. CIV. Code art. 1926, which provides as follows:

TABA contract made by a noninterdicted person deprived of reason at the time of contracting may be attacked after his death, on the ground of incapacity only when the contract is gratuitous, or it evidences lack of understanding, or was made within thirty days of his death, or when application for interdiction was filed before his death.

In this case, it is undisputed that no interdiction application had been filed and that the redesignation took place more than 30 days before his death. Also, redesignation of a beneficiary is not gratuitous under Louisiana law. Martin v. Metropolitan Life Insurance Co., 516 So.2d 1227 (La.App. 2d Cir. 1987); Standard Life Insurance Co. v. Taylor, 428 So.2d 1294 (La.App. 3d Cir. 1983). Finally, there is no evidence of a lack of understanding. On the contrary, Joseph LeBan's decision to designate all of his family, including those married and born since 1982, is both rational and indicative of competency.

In order to avoid the bar of Article 1926, Brian LeBan argues that federal law, which recognizes a rebuttable presumption of competency, allows for the introduction of any evidence concerning competency. Rice v. Office of Servicemembers Group Life Insurance, 260 F.3d 1240 (10th Cir. 2001). In that case, the change of beneficiary occurred a mere 23 days before the decedent committed suicide. The Court also notes that this is a Tenth Circuit decision. Within the Fifth Circuit, interpretation of FEGLI contracts have looked to state law. It is clear that familial relationship terms used in FEGLI are defined by state law.Spearman v. Spearman, 482 F.2d 1203 (5th Cir. 1973); Metropolitan Life Ins. Co. v. Carr, 690 F. Supp. 569 (N.D.Tex. 1988).

Similarly, Brian LeBan's reliance on Ridgway, supra and Athmer, supra, are unavailing. Although those cases confirm the deference to FEGLI's statutory provisions as to beneficiaries and the ``murdering heir rule," they do not address the competency issue raised herein. In fact, they provide support for the proposition that state law should fill in the gaps in federal law on the issue of competency; "[s]tate family law and family — property law must do `major damage' to `clear and substantial' federal interests before the Supremacy Clause will demand that state law be overridden." Ridgway, 454 U.S. at 55, quoting, Hisguierdo v. Hisauierdo, 439 U.S. 572, 581 (1979). In light of the dearth of caselaw defining federal requirements for incompetency, FEGLI's silence as to a requirement of competency or what proof is relevant thereto, and the absence of an articulation as to how or what federal policy will be undermined, this Court is reluctant to ignore the clear state law mandate.

On its face, Joseph LeBan's redesignation of beneficiaries meets the FEGLI statutory requirements, is rational and equitable. The fact that he was among the millions who suffer from the lengthy suffering attendant to Alzheimer's can not be used as an opportunity to ignore the effect of compliance with FEGLI's requirements and state law in order to devise a new rule that distorts what is reasonable and fair.

Finally, Brian LeBan opposed the motion for summary judgment as to Met Life because he thought the fees sought were too high. At oral argument requested by Brian LeBan, no specific aspect of those charges could be identified. Accordingly, that motion will also be granted.

Accordingly,

IT IS ORDERED that the motion for summary judgment filed by Jacqueline LeBan and the motion for summary judgment filed by Metropolitan Life Insurance Company are GRANTED. The parties shall submit a proposed judgment, approved as to form, within ten days.


Summaries of

Metropolitan Life Insurance Co. v. Leban

United States District Court, E.D. Louisiana
Nov 26, 2003
CIVIL ACTION NO. 03-268 (E.D. La. Nov. 26, 2003)

holding state law should govern the issue of competency because the federal statute did not address it

Summary of this case from Cotton v. Prudential Insurance Company of America
Case details for

Metropolitan Life Insurance Co. v. Leban

Case Details

Full title:METROPOLITAN LIFE INSURANCE CO., VERSUS, JACQUELINE L. LEBAN, ET AL

Court:United States District Court, E.D. Louisiana

Date published: Nov 26, 2003

Citations

CIVIL ACTION NO. 03-268 (E.D. La. Nov. 26, 2003)

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