Opinion
11 Civ. 9495 (KBF)
03-18-2014
THE MINISTERS AND MISSIONARIES BENEFIT BOARD, Interpleader Plaintiff, v. THE ESTATE OF CLARK FLESHER, MICHELE ARNOLDY, individually and as Personal Representative of the Estate of Clark Flesher, LEON SNOW, and LEANN YOWELL SNOW, Interpleader Defendants.
MEMORANDUM DECISION & ORDER
:
This interpleader action was filed on December 23, 2011 by plaintiff The Ministers and Missionaries Benefit Board ("MMBB") against two sets of defendants—(1) The Estate of Clark Flesher and Michele Arnoldy (both individually and as Personal Representative of the Estate) (collectively, the "Estate Defendants"); and (2) LeAnn Snow and Leon Snow (collectively, the "Snows")—pursuant to 28 U.S.C. §§ 1332 and 1335. The dispute arises out of the disbursement of more than $400,000 held in two benefit funds in Flesher's name, for which MMBB is the Plan Administrator (the "Disputed Funds").
In an order dated September 25, 2012, United States District Judge Thomas P. Griesa granted interpleader relief to plaintiff; Judge Griesa discharged plaintiff from all liabilities as to defendants, dismissed plaintiff from the action, and enjoined all other actions to recover any portion of the Disputed Funds from proceeding (including an earlier-filed declaratory judgment action by Arnoldy in Colorado state court, El Paso County). (9/25/12 Order ¶¶ 1-4, ECF No. 49.) Judge Griesa ordered defendants and all other persons or entities asserting claims relating to the Disputed Funds to interplead and to settle all claims in this Court. (Id. ¶ 5.) Finally, Judge Griesa ordered that, "[o]nce the Court has issued a final judgment that determines who is entitled to the Disputed Funds, the Court will issue an order directing Plaintiff to pay the Disputed Funds to the person or persons who are entitled to them." (Id. ¶ 7.)
On May 22, 2012, the Colorado action was stayed pending resolution of this action. (ECF No. 44.)
This action was transferred to the undersigned on June 6, 2013. Pursuant to the schedule set by the Court on August 2, 2013, the Estate Defendants and the Snows each moved for summary judgment on September 16, 2013. Those motions became fully briefed on October 15, 2013.
For the reasons set forth below, the Estate Defendants' motion for summary judgment is GRANTED and the Snows' motion for summary judgment is DENIED. I. FACTS
The parties have submitted largely overlapping sets of materials in support of and in opposition to these motions. The Estate submitted a statement of material facts pursuant to Local Civil Rule 56.1 ("ED SOF") (ECF No. 60), a declaration from Brian Rosner ("Rosner Decl.") (ECF No. 59), and two affidavits from defendant Michele Arnoldy ("[Date] Arnoldy Aff.") (ECF Nos. 76, 88). The Snows submitted their own statement of material facts pursuant to Local Civil Rule 56.1 ("SN SOF") (ECF No. 73), a response to the Estate Defendants' Local Civil Rule 56.1 statement ("SN RSOF") (ECF No. 79), and a declaration from Jesse Wilkins ("Wilkins Decl.") (ECF No. 71). Because the Estate Defendants failed to respond to the Snow's Local Civil Rule 56.1 statement, the facts contained therein are deemed admitted for the purposes of this motion. See Local Civil Rule 56.1(c).
These affidavits are dated October 7, 2013 and October 15, 2013, respectively. While the October 7, 2013 affidavit states that Arnoldy was "duly sworn, the October 15, 2013 affidavit states both that Arnoldy was "duly sworn" and "avers under penalties of perjury." (10/7/13 Arnoldy Aff. at 1; 10/15/13 Arnoldy Aff. at 1.)
The Snows appear to have filed two identical copies of all submissions in support of and in opposition to their motion for summary judgment. For the sake of simplicity, the Court cites to the docket numbers corresponding to the first such filing in this Decision.
The following facts are undisputed unless otherwise noted.
A. The Accounts
Clark Flesher and LeAnn Snow were married on September 20, 1980. (SN SOF ¶ 2, Wilkins Decl. Ex. D ¶ 1.a.) Flesher, a minister, became a member of the MMBB Retirement Plan ("RP") and Death Benefit Plan ("DBP") sometime in 1989. (SN SOF ¶ 3.) LeAnn Snow, also a minister, became a member of the RP and the DBP sometime in 1994. (SN SOF ¶ 4.)
LeAnn Snow is officially and professionally known as Reverend Dr. LeAnn Snow Flesher. (SN SOF ¶ 1.)
Express provisions in the RP and the DBP describe the procedures by which a member designates a beneficiary for their interests in the respective plans. (SN SOF ¶ 13.) In separate Designation of Beneficiary Forms, each dated January 7, 2002, Flesher designated his then wife "LeAnn Flesher" as the "primary" beneficiary of the RP and the DBP, and his then father-in-law Leon Snow as the "contingent" beneficiary of those accounts. (ED SOF ¶ 5; SN SOF ¶ 5.)
B. The 2008 Divorce
A judgment of divorce for Flesher and LeAnn Snow was entered in the Superior Court of California, Alameda County, on or about December 22, 2008, with a Marital Settlement Agreement (the "Agreement") incorporated by reference and attached thereto. (SN SOF ¶ 7; ED SOF ¶ 6.) The Agreement became effective on November 20, 2008. (See Wilkins Decl. Ex. D at 1, 12.)
Paragraph 9 of the Agreement required the parties to contact MMBB "to calculate the community interest in each party's retirement accounts" and to prepare a Qualified Domestic Relations Order ("QDRO") to equalize the division of the parties' RPs. (SN SOF ¶ 8; Wilkins Decl. Ex. D ¶ 9.) Once the QDRO was finalized and "the equalization payment made," Flesher and LeAnn Snow would then be awarded their interests in the respective RPs. (SN SOF ¶ 9; Wilkins Decl. Ex. D ¶ 9.) Paragraph 10 of the Agreement immediately awarded Flesher and LeAnn Snow their respective life insurance policies in the DBP, and authorized them to change their respective beneficiaries for each. (SN SOF ¶ 10; Wilkins Decl. Ex. D ¶ 10.)
Paragraph 42 of the Agreement, in the section entitled "Reciprocal Waiver of Inheritance," provides that both Flesher and LeAnn Snow relinquished "all right to inherit from the other, and all right to receive in any manner any property of the other on the death of the other, either under succession laws or under community property law, or so-called family allowance, except as a devisee, legatee, or beneficiary under any Will or other instrument subsequently executed by either party, or when the other party is named in such capacity." (SN RSOF ¶ 8; ED SOF ¶ 8; Wilkins Decl. Ex. D ¶ 42.)
Neither Flesher nor LeAnn Snow changed the designated beneficiaries on their RP and DBP accounts or made a calculation of community interest for the accounts. (ED SOF ¶ 10.)
C. Flesher's Move to Colorado
In December 2010, Flesher moved from California to Colorado. (ED SOF ¶ 11.) According to Flesher's sister, Arnoldy, Clark became seriously ill in May 2010 and was admitted to the hospital for surgery at that time. (10/15/13 Arnoldy Aff. ¶ 4.) Flesher gave up his apartment in California in October 2010; between October and December, he was living in a hotel, where Arnoldy was also staying for a period "nursing him back to health." (Id. ¶¶ 8-9; Rosner Decl. Ex. 8 at EST000001.) According to Arnoldy, Clark told her and other family members and friends that he was moving to Colorado. (10/15/13 Arnoldy Aff. ¶ 9.)
Arnoldy and Flesher were "very close"; following Flesher's 2008 divorce from LeAnn Snow, he and Arnoldy spoke almost every day and often for hours on end. (See 10/15/13 Arnoldy Aff. ¶ 3.)
At the end of December 2010, Arnoldy and Flesher checked out of the California hotel, got into Flesher's car (which was "loaded to the ceiling with all of [his] personal goods, particularly those necessary (such as pastoral reference books) to begin his new ministry in Colorado"), and drove to the airport so Arnoldy could fly home. (Id. ¶¶ 10-12.) According to Arnoldy, Flesher then drove to 3530 Conecrest Lane, Colorado Springs, Colorado, which was the home of Flesher's long-time personal friend. (Id. ¶ 13.) Flesher left a few items in storage in California. (See Rosner Decl. Ex. 7 at 4.) Medical bills for treatment received by Flesher from January 2011 through June 2011 were sent to this address; these bills were retrieved by Arnoldy from Flesher's papers after his death. (See id. Ex. 8 at EST000002-EST000007; 10/15/13 Arnoldy Aff. ¶ 22.) Financial statements and phone bills from this time period, also retrieved by Arnoldy after Flesher's death, were also to this address in Colorado Springs. (See 10/15/13 Arnoldy Aff. Ex. B.)
According to Arnoldy, in Colorado, Flesher became involved in his local church and two ministries serving sex-trafficked children. (10/15/13 Arnoldy Aff. ¶¶ 13-14, 23-24; Rosner Decl. Ex. 7 at 4-5.) According to Arnoldy, Flesher intended to move into the facility of one of these ministries for three months, and he pre-paid three months rent; Flesher was also simultaneously looking to purchase a home in the Colorado Springs area. (10/15/13 Arnoldy Aff. ¶¶ 14, 25; Rosner Decl. Ex. 7 at 4-5.) These moves never occurred. (10/15/13 Arnoldy Aff. ¶ 26.) Postings by Flesher on his Facebook page from early 2011, which Arnoldy downloaded, also indicate that Flesher was living in Colorado Springs and intended to start a "new life" there with a new ministry. (See id. ¶¶ 15-19; Rosner Decl. Ex. 8 at EST000008-EST000014.)
The Snows, for their part, proffer no evidence, one way or the other, regarding Flesher's decision to move to Colorado in December 2010. The parties agree that Flesher and LeAnn Snow had virtually no contact following their 2008 divorce. The last contact that LeAnn Snow describes in her April 24, 2012 affidavit was in October 2008, when she and Flesher met jointly with their respective attorneys to finalize a financial agreement in connection with their divorce. (See Wilkins Decl. Ex. A ¶ 14.) According to Arnoldy, following the divorce, Flesher and LeAnn Snow had "limited" communications and only one face-to-face meeting. (10/15/13 Arnoldy Aff. ¶ 36.) Arnoldy does not recall Flesher mentioning his former father-in-law, Leon Snow, for "years." (Id.) According to Arnoldy, Flesher did not tell LeAnn Snow about his May 2010 illness and, at his direction, neither did she. (Id. ¶ 37.) The Snows note that there is no evidence that Flesher changed his automobile registration or his driver's license to Colorado. (Wilkins Decl. Ex. P, Q; Snows Opp. at 7, ECF No. 77.) The Snows also note that the Estate Defendants do not allege Flesher filed taxes in or changed his place of voting to Colorado. (Snows Opp. at 7.)
D. Flesher's Death
On June 22, 2011, Flesher passed away at a Colorado Springs hospice. (ED SOF ¶¶ 1, 16.) He died without a will. (10/15/13 Arnoldy Aff. ¶ 5.) In July 2011, the District Court for El Paso County, State of Colorado, created the Estate of Clark F. Flesher (the "Estate") and appointed Arnoldy as Personal Representative of the Estate. (ED SOF ¶ 2.)
At the time of Flesher's death, the approximate value of the Disputed Funds contained in his RP and DBP accounts was in excess of $400,000.00. (SN SOF ¶ 11; ED SOF ¶ 4.) The Disputed Funds are administered by MMBB, which is a not-for- profit pension fund incorporated in New York, with its principal place of business in New York, New York. (ED SOF ¶ 3; SN SOF ¶ 6.) Accordingly, the assets that fund the RP and the DBP are held in New York. (SN SOF ¶ 12.) II. STANDARD OF REVIEW
Summary judgment may not be granted unless the movant shows, based on admissible evidence in the record placed before the court, "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). The moving party bears the burden of demonstrating "the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). In making a determination on summary judgment, the court must "construe all evidence in the light most favorable to the nonmoving party, drawing all inferences and resolving all ambiguities in its favor." Dickerson v. Napolitano, 604 F.3d 732, 740 (2d Cir. 2010).
Once the moving party has asserted facts showing that the non-movant's claims cannot be sustained, the opposing party must set out specific facts showing a genuine issue of material fact for trial. Price v. Cushman & Wakefield, Inc., 808 F. Supp. 2d 670, 685 (S.D.N.Y. 2011); see also Wright v. Goord, 554 F.3d 255, 266 (2d Cir. 2009). "[A] party may not rely on mere speculation or conjecture as to the true nature of the facts to overcome a motion for summary judgment," as "[m]ere conclusory allegations or denials . . . cannot by themselves create a genuine issue of material fact where none would otherwise exist." Hicks v. Baines, 593 F.3d 159, 166 (2d Cir. 2010) (citations omitted); see also Price, 808 F. Supp. 2d at 685 ("In seeking to show that there is a genuine issue of material fact for trial, the non-moving party cannot rely on mere allegations, denials, conjectures or conclusory statements, but must present affirmative and specific evidence showing that there is a genuine issue for trial.").
Only disputes relating to material facts—i.e., "facts that might affect the outcome of the suit under the governing law"—will properly preclude the entry of summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); see also Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986) (stating that the non-moving party "must do more than simply show that there is some metaphysical doubt as to the material facts"). III. ANALYSIS
In federal interpleader actions where jurisdiction is based on a diversity of citizenship, like the instant action, courts apply the law of the forum state. See Griffin v. McCoach, 313 U.S. 498, 503 (1941); Skandia Am. Reins. Corp. v. Schenck, 441 F. Supp. 715, 722-23 (S.D.N.Y. 1977). The Snows concede that "[t]he relevant choice-of-law rules are the rules of the forum state, here, New York." (Snows Opp. at 1.) Under New York law, "[t]he intrinsic validity, effect, revocation or alteration of a testamentary disposition of personal property, and the manner in which such property devolves when not disposed of by will, are determined by the law of the jurisdiction in which the decedent was domiciled at death." N.Y. Est. Powers & Trusts Law § 3-5.1(b)(2) (emphasis added). The Disputed Funds are "personal property." Id. § 3-5.1(a)(2) ("'Personal property' means any property other than real property, including tangible and intangible things.")
The Snows argue that, because the Disputed Funds are not "personal property," the Court should engage in the choice-of-law analysis common to contractual disputes. (See Snows Opp. at 1-2.) This argument is wholly without merit. The definition of "personal property" in § 3-5.1(a)(2) plainly covers the Disputed Funds. --------
If the Estate Defendants have met their burden of proving that Flesher changed his domicile to Colorado prior to his death, then Flesher's prior beneficiary designations of LeAnn Snow and Leon Snow on his RP and DBP have been revoked. Under Colorado law, divorce "[r]evokes any revocable . . . disposition or appointment of property made by a divorced individual to his or her former spouse in a governing instrument and any disposition or appointment created by law or in a governing instrument to a relative of the divorced individual's former spouse . . . ." Colo. Rev. Stat. § 15-11-804(2)(a)(i). Colorado courts hold that this provision automatically revokes beneficiary designations on insurance policies following divorce, absent a specific carve out in the policy, marriage dissolution agreement, or a court order. See In re Estate of Johnson, 304 P.3d 614, 616-17 (Colo. App. 2012); see also In re Estate of DeWitt, 54 P.3d 849, 852-53 (Colo. 2002). The fact that an insurance policy sets forth procedures for changing a prior beneficiary designation, by itself, is insufficient. See Johnson, 304 P.3d at 617. There is no dispute that no such carve out exists in the RP and DBP.
The Second Circuit defines domicile as "the place where a person has his true fixed home and principal establishment, and to which, whenever he is absent, he has the intention of returning." Palazzo ex rel. Delmage v. Corio, 232 F.3d 38, 42 (2d Cir. 2000). "'One may have more than one residence in different parts of . . . the world, but a person may have only one domicile.'" Wiest v. Breslaw, No. 01 Civ. 5663 (LMM), 2002 WL 413925, at *2 (S.D.N.Y. Mar. 15, 2002) (quoting Rosario v. INS, 962 F.2d 220, 224 (2d Cir. 1992)). Put another way, "a person can have more than one residence at a time, [but] he or she cannot simultaneously have more than one domicile." Wiest, 2002 WL 413925, at *3 (internal quotation marks omitted).
To effect a change of domicile, two things are indispensable: a new residence and an intention to remain there. Palazzo ex rel. Delmage, 232 F.3d at 42 (citing Sun Printing & Publishing Ass'n v. Edwards, 194 U.S. 377, 383 (1904)). A residence means "an established abode, for personal or business reasons, permanent for a time." Rosario, 962 F.2d at 224. In cases where "there is evidence indicating the party has more than one residence, or the residence is unclear, the court should focus on the intent of the party." Wiest, 2002 WL 413925, at *3 (internal quotation marks omitted). "Declarations of intent by the person whose domicile is in question are given heavy, but not conclusive, weight," especially when there is no evidence tending to disclose a contrary intent. Id. (internal quotation marks omitted). A party alleging that there has been a change of domicile has the burden of proving "'the required intent to give up the old and take up the new domicile'" by clear and convincing evidence. Palazzo ex rel. Delmage, 232 F.3d at 42 (internal punctuation omitted) (quoting Katz v. Goodyear Tire & Rubber Co., 737 F.2d 238, 243-44 (2d Cir. 1984)).
The Estate Defendants have met their burden of showing that Flesher was domiciled in Colorado at the time of his death. There is no dispute that Flesher physically moved to Colorado in December 2010. Extensive, credible evidence from Flesher's sister, Arnoldy, which was based on first hand observation and knowledge, clearly indicates that Flesher moved to Colorado with nearly all of his possessions and intended to stay there. Arnoldy, and the documents she obtained, provides further credible evidence that Flesher intended to remain in Colorado in order to undertake new ministry opportunities and to receive medical treatment.
To the extent certain information upon which Arnoldy relies, including the Facebook posts printed by Arnoldy from Flesher's Facebook page, contain hearsay statements, the Court finds that these materials are properly considered because they fall within the so-called residual hearsay exception in Federal Rule of Evidence 807. See Fed. R. Evid. 807; Schering Corp. v. Pfizer Inc., 189 F.3d 218, 231-36 (2d Cir. 1999) (describing elements of residual exception). These statements are sufficiently trustworthy in light of Arnoldy's authentication, close relationship with Flesher, and corroboration by other documentary evidence. They are highly probative of Flesher's domicile, and cannot be obtained by other means because Flesher is deceased. Finally, the Snows have been on notice of these statements since the Estate Defendants responded to the Snows' discovery requests on March 15, 2013. (See Rosner Decl. Ex. 8.)
For their part, the Snows do not create a genuine issue of material fact as to Flesher's domicile at the time of his death. This is likely because the Snows had little to no contact with Flesher in the two and a half years between his divorce from LeAnn Snow and his death. At most, the Snows raise the argument that Flesher had not updated changed certain licenses and registrations to Colorado at the time of his death. In light of the other, uncontroverted evidence offered by the Estate Defendants, see supra Section I.C, and which the Court finds are properly consider, this is insufficient to create a genuine issue of fact as to Flesher's domicile at the time of his death. IV. CONCLUSION
For the reasons set for above, the Estate Defendants' motion for summary judgment is GRANTED and the Snows motion for summary judgment is DENIED. The parties are directed to submit a joint proposed form of judgment within 7 days of the date of this Decision. The Clerk of Court is directed to close the motions at ECF Nos. 57, 61, and 65.
SO ORDERED. Dated: New York, New York
March 18, 2014
/s/_________
KATHERINE B. FORREST
United States District Judge