Schlafly v. The Lincoln National Life Insurance Company et al

BRIEF in Opposition

D.N.J.June 5, 2017

SAUL EWING LLP BY: Ruth A. Rauls, Esq. 650 College Road East, Suite 4000 Princeton, N.J. 08540 p: (609) 452-5049 f: (609) 452 6114 rrauls@saul.com Attorneys for Defendant Lincoln National Life Insurance Company UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY _____________________________ ANDREW L. SCHLAFLY, on Behalf of Himself Individually and on Behalf of All Other Members of Eagle Forum, a Non-Profit Membership Corporation, Plaintiff, v. THE LINCOLN NATIONAL LIFE INSURANCE COMPANY and JOHN HANCOCK LIFE INSURANCE COMPANY (USA), Defendants. _____________________________ THE LINCOLN NATIONAL LIFE INSURANCE COMPANY, Third-Party Plaintiff, v. ANNE SCHLAFLY CORI, EUNIE SMITH, CATHIE ADAMS, ROSINA : : : : : : : : : : : : : : : : : : : : : : : : : : CIVIL ACTION NO. 2:17-cv-02522-ES-SCM Case 2:17-cv-02522-ES-SCM Document 49 Filed 06/05/17 Page 1 of 19 PageID: 1061 KOVAR, CAROLYN MCLARTY, SHIRLEY CURRY, EDWARD R. MARTIN, JR., JOHN F. SCHLAFLY, BRUCE S. SCHLAFLY, KATHLEEN SULLIVAN, ESTATE OF PHYLLIS M. SCHLAFLY, EAGLE TRUST FUND, THE SCHLAFY IRREVOCAL INSURANCE TRUST, EAGLE FORUM EDUCATION AND LEGAL DEFENSE FUND, AND EAGLE FORUM, Third-Party Defendants. _____________________________ : : : : : : : : : : : : : : ______________________________________________________________ MEMORANDUM OF LAW OF THE LINCOLN NATIONAL LIFE INSURANCE COMPANY IN OPPOSITION TO PLAINTIFF’S MOTION TO DISMISS ______________________________________________________________ Case 2:17-cv-02522-ES-SCM Document 49 Filed 06/05/17 Page 2 of 19 PageID: 1062 i TABLE OF CONTENTS Page PRELIMINARY STATEMENT ............................................................................... 1 FACTS AND PROCEDURAL HISTORY ............................................................... 2 LEGAL ARGUMENT ............................................................................................... 6 I. PLAINTIFF LACKS STANDING TO SEEK DISMISSAL OF LINCOLN’S COUNTERCLAIM AND THIRD PARTY COMPLAINT ON BEHALF OF THE IRREVOCABLE SCHLAFLY TRUST AND THE EFELDF. .................................................... 6 II. EVEN IF PLAINTIFF HAS STANDING TO SEEK DISMISSAL OF LINCOLN’S COUNTERCLAIM AND THIRD PARTY COMPLAINT AS IT PERTAINS TO THE IRREVOCABLE SCHLAFLY TRUST AND EFELDF POLICIES, HIS MOTION SHOULD BE DENIED. .................................................................................. 8 III. IF PLAINTIFF’S MOTION IS GRANTED, LINCOLN REQUESTS AN ORDER DIRECTING TO WHOM THE DEATH BENEFITS UNDER THE IRREVOCABLE SCHLAFLY TRUST AND EFELDF POLICIES BE PAID AND SHIELDING IT FROM FURTHER LIABILITY UPON SUCH PAYMENT. ................................... 13 CONCLUSION ........................................................................................................ 14 Case 2:17-cv-02522-ES-SCM Document 49 Filed 06/05/17 Page 3 of 19 PageID: 1063 ii TABLE OF AUTHORITIES Page(s) Cases Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) .............................................................................................. 9 Bierman v. Marcus, 246 F.2d 200 (3d Cir. 1957) ............................................................................... 11 CNA Ins. Cos. v. Waters, 926 F.2d 247 (3d Cir. 1991) ............................................................................... 10 Custom Pak Brokerage, LLC v. Dandrea Produce, Inc., 2014 WL 988829 (D.N.J. Feb. 27, 2014) ............................................................. 6 Fid. & Guar. Life Ins. Co. v. D’alessandro, 2015 WL 7776556 (D.N.J. Dec. 2, 2015) ........................................................... 11 Hilston v. Am. Gen. Life Ins. Co., 2015 WL 2232986 (E.D. Pa. May 12, 2015) ........................................................ 7 John Hancock Mut. Life Ins. Co. v. Doran, 138 F. Supp. 47 (S.D.N.Y. 1956) ....................................................................... 12 Marin v. Leslie, 337 F. App’x 217 (3d Cir. 2009) .......................................................................... 6 Phillips v. Co. of Allegheny, 515 F.3d 224 (3d Cir. 2008) ................................................................................. 9 Travelers Ins. Co. v. Johnson, 579 F. Supp. 1457 (D.N.J. 1984) .................................................................... 9, 10 Statutes 28 U.S.C. § 1332 ........................................................................................................ 9 28 U.S.C. § 1335 .................................................................................................. 9, 10 Case 2:17-cv-02522-ES-SCM Document 49 Filed 06/05/17 Page 4 of 19 PageID: 1064 iii 28 U.S.C. § 2361 ........................................................................................................ 9 Other Authorities Fed. R. Civ. P. 22 ....................................................................................................... 9 Fed. R. Civ. P. 12(b)(6) .............................................................................................. 8 Case 2:17-cv-02522-ES-SCM Document 49 Filed 06/05/17 Page 5 of 19 PageID: 1065 1 PRELIMINARY STATEMENT Plaintiff, Andrew L. Schlafly, seeks to dismiss Lincoln’s Counterclaim and Third-Party Complaint (“CTPC,” Document 7) insofar as it asserts causes of action for interpleader relief with respect to the proceeds of two life policies that it issued: (1) to the Eagle Forum Education and Legal Defense Fund (the “EFELDF”) bearing policy number JP5553913 which insured the life of Phyllis Schlafly, deceased (“Decedent”) (the “EFELDF Policy”); and (2) to the Phyllis Schlafly Irrevocable Insurance Trust (“Irrevocable Schlafly Trust”) bearing policy number JP553909 which insured the life of Decedent (the “Irrevocable Schlafly Trust Policy”). Plaintiff does not seek to dismiss Lincoln’s causes of action of interpleader relief with respect to the death benefit under the life insurance policy issued by Lincoln to Eagle Forum bearing policy number JP5553916 (the “Eagle Forum Policy”). Plaintiff’s motion should be denied. First, Plaintiff lacks standing to challenge the CTPC as it pertains to the EFELDF and Irrevocable Schlafly Trust Policies. Plaintiff is neither the trustee nor beneficiary of the Irrevocable Schlafly Trust, and Plaintiff has asserted no facts that would import him standing with respect to the EFELDF Policy. Second, even if Plaintiff has standing to bring this motion, it should be denied on the merits as Lincoln has a bona fide fear of adverse claims to the benefits due under the EFELDF and Irrevocable Schlafly Trust Case 2:17-cv-02522-ES-SCM Document 49 Filed 06/05/17 Page 6 of 19 PageID: 1066 2 Policies in light of the various lawsuits that concern, directly or indirectly, which individuals can assert control over and take actions on behalf of the EFELDF and the Irrevocable Schlafly Trust. Accordingly, Plaintiff’s motion to dismiss should be denied, or in the alternative, an order should be entered directing who should receive the benefits under the EFELDF and Irrevocable Schlafly Trust Policies, and relieving Lincoln of further liability under these policies upon such payment. FACTS AND PROCEDURAL HISTORY Lincoln issued the Eagle Forum, EFELDF, and Irrevocable Schlafly Trust Policies in February 2006. CTPC, ¶¶ 24, 27, and 29. The EFELDF is the owner and beneficiary of record, entitled to payment of the death benefit under the EFELDF Policy. Id. at ¶ 28. The application for the Irrevocable Schlafly Trust Policy identified John Schlafly as the trustee of the Irrevocable Schlafly Trust. Id. at ¶ 30. The Irrevocable Schlafly Trust is the owner and beneficiary of record, entitled to payment of the death benefit under the Irrevocable Schlafly Trust Policy. CTPC, ¶ 31. The Decedent died on September 5, 2016, at which time the death benefits under the Policies became payable. Id. at ¶ 32. In March 2017, Plaintiff filed its original complaint in the New Jersey Superior Court seeking benefits under the Eagle Forum Policy, and Lincoln was served on March 14, 2017. Lincoln’s Notice of Removal (Document 1), at ¶ 2. On Case 2:17-cv-02522-ES-SCM Document 49 Filed 06/05/17 Page 7 of 19 PageID: 1067 3 or about March 24, 2017, after the initial complaint was filed, Lincoln received a letter from the law firm of Smith Amundsen purporting to submit documents necessary to make a claim on the Eagle Forum Policy (“Claim Letter”). Declaration of Ruth A. Rauls dated May 22, 2017 submitted in opposition to Plaintiff’s Motion for Reconsideration (Document 28-2) (“5/22/2017 Rauls Decl.”), ¶ 2. Enclosed with that letter was a copy of a Temporary Restraining Order (“TRO”) that was entered by the Honorable John B. Barberis, Jr. in a lawsuit brought by various third-party defendants in Madison County, Illinois, Case No. 2016MR000111 (“Madison County Action”). 5/22/2017 Rauls Decl., ¶ 3. The TRO set forth that: (1) Cori and Smith were the only individuals authorized to communicate with any third party regarding any insurance policy owned, maintained, and/or paid for by Eagle Forum and that Eagle Forum should make a claim to any life insurance policies insuring the life of the Decedent as soon as was practicable; (2) “[A]llowing defendants Martin and John Schlafly to continue to serve and hold themselves out as officers of Eagle Forum is detrimental to the status quo, and contrary to the Court’s desire;” and (3) “In the event of a dispute arising between Eagle Forum and [EFELDF] regarding the proper allocation of monies received by Eagle Forum from donors, members and supporters, such funds shall be held in escrow pending further order of this Court.” 5/22/2017 Rauls Decl., ¶ 4. Case 2:17-cv-02522-ES-SCM Document 49 Filed 06/05/17 Page 8 of 19 PageID: 1068 4 Based on the filing of this litigation and receipt of the Claim Letter and enclosed TRO, Lincoln discovered that since the Decedent’s death, there have been multiple lawsuits initiated by the various third party defendants which contain allegations regarding which individuals can assert control over and take actions on behalf of EFELDF and the Irrevocable Schlafly Trust. CTPC, ¶ 48; 5/22/2017 Rauls Decl., ¶ 5. The allegations contained in these lawsuits include allegations regarding John Schlafly’s authority to act on behalf of certain entities, which includes directly or indirectly EFELDF and the Irrevocable Schlafly Trust. CTPC at ¶ 60. The lawsuits are described in detail at Paragraphs 47 through 58 of Lincoln’s CTPC. 5/22/2017 Rauls Decl., ¶ 5. Lincoln, therefore, has a factual basis to legitimately fear multiple liability and conflicting claims to the proceeds of the EFELDF and the Irrevocable Schlafly Trust Policies. Lincoln timely removed the action to this Court (Document 1), sought the automatic two-week extension of time to respond to Plaintiff’s amended complaint (Document 3), and, on May 3, 2017, timely filed its answer to Plaintiff’s amended complaint and the CTPC (Document 7). Also on May 3, 2017, Lincoln filed its motion to deposit the funds payable under all three Lincoln Policies (Document 9). On May 4, 2017, Lincoln received an e-mail from Plaintiff disputing that there are competing claims under the EFELDF and the Irrevocable Schlafly Trust Policies and requesting payment of the Policy benefits under the Irrevocable Schlafly Trust Case 2:17-cv-02522-ES-SCM Document 49 Filed 06/05/17 Page 9 of 19 PageID: 1069 5 Policy. 5/22/2017 Rauls Decl., ¶ 6. Counsel did not provide a response to this email. Id. at ¶ 7. Lincoln’s motion to deposit was granted on May 8, 2017 (Document 13). Following the granting of Lincoln’s motion, Plaintiff filed a letter to the Court requesting that the court modify its order in so far as it directed payment of the death benefit under the Irrevocable Schlafly Trust Policy into Court. (Document 14). Plaintiff’s May 8, 2017 correspondence was silent as to the proceeds under the EFELDF Policy. Pursuant to the May 8, 2017 Order, the proceeds under all three policies were deposited into Court on May 17, 2017. (Document 25). The clerk filed a Certificate of Deposit on May 22, 2017. (Document 27).1 On May 10, 2017, Plaintiff moved for reconsideration of the Deposit Order to the extent it directed deposit of the death benefits due under both the EFELDF and Irrevocable Schlafly Trust Policies. (Document 22). Lincoln opposed Plaintiff’s motion for reconsideration. (Document 28). Plaintiff filed a reply on May 29, 2017 and the motion is currently returnable on June 5, 2017. Now Plaintiff, who asserts no authority or relation to EFELDF or the Irrevocable Schlafly Trust, seeks to dismiss Lincoln’s CTPC insofar as it requests 1 Plaintiff electronically filed a letter on May 17, 2017, contesting the deposit of the proceeds of both the EFELDF Policy and the Irrevocable Trust Policy. (Document 26). Case 2:17-cv-02522-ES-SCM Document 49 Filed 06/05/17 Page 10 of 19 PageID: 1070 6 interpleader relief with respect to the EFELDF and Irrevocable Schlafly Trust Policies. LEGAL ARGUMENT I. PLAINTIFF LACKS STANDING TO SEEK DISMISSAL OF LINCOLN’S COUNTERCLAIM AND THIRD PARTY COMPLAINT ON BEHALF OF THE IRREVOCABLE SCHLAFLY TRUST AND THE EFELDF. At the outset, Plaintiff has set forth no facts that would afford him standing to seek dismissal of Lincoln’s CTPC on behalf of the Irrevocable Schlafly Trust and/or the EFELDF. It is axiomatic that a party lacks standing to challenge a claim that does not affect it on behalf of another party. See, e.g., Custom Pak Brokerage, LLC v. Dandrea Produce, Inc., 2014 WL 988829, at *2 (D.N.J. Feb. 27, 2014) (holding that the defendants “‘unaffected by [the] proposed amendment’ do not have standing to assert claims of futility on behalf of proposed [additional] defendants” in opposition to Plaintiff’s motion to amend). A trustee is the proper person to maintain an action against a third-party for injury to the trust. Marin v. Leslie, 337 F. App’x 217, 219 (3d Cir. 2009). However, the application for the Irrevocable Schlafly Trust Policy identified third- party defendant, John Schlafly, not Plaintiff, as the trustee of the Irrevocable Schlafly Trust. See CTPC ¶ 30. As set forth in Lincoln’s Interpleader Complaint, Lincoln is uncertain of John Schlafly’s authority to act on behalf of the Irrevocable Schlafly Trust and his current status as trustee of the Irrevocable Schlafly Trust. Case 2:17-cv-02522-ES-SCM Document 49 Filed 06/05/17 Page 11 of 19 PageID: 1071 7 CTPC, ¶¶ 33-35, 38, 40-45, 47-60. Plaintiff does not purport to be the current trustee of the Irrevocable Schlafly Trust, and in fact submitted a certification from John Schlafly in connection with his Motion for Reconsideration which affirmatively states that John Schlafly is the sole trustee of the Irrevocable Schlafly Trust. Thus, Plaintiff is not the trustee for the Irrevocable Schlafly Trust. Lincoln also acknowledges that in some instances a beneficiary of a life insurance trust may obtain standing upon the death of the insured. Hilston v. Am. Gen. Life Ins. Co., 2015 WL 2232986, at *5 (E.D. Pa. May 12, 2015). However, Plaintiff concedes that he is not a beneficiary of the Irrevocable Schlafly Trust, but rather, the Decedent’s grandchildren are. Plaintiff’s Brief, p. 4.2 Accordingly, Plaintiff lacks standing to seek dismissal of Lincoln’s CTPC on behalf of the Trust. Likewise, Plaintiff does not have standing to seek dismissal of Lincoln’s CTPC as it pertains to the EFELDF. The EFELDF is the owner and beneficiary of the EFELDF Policy and, thus, the EFELDF, not Andrew Schlafly, is the only party with standing to seek dismissal of Lincoln’s CTPC as it pertains to the EFELDF Policy. Plaintiff has asserted no facts that would import him standing with respect to the EFELDF. 2 Lincoln does not know who the actual beneficiaries of the Irrevocable Schlafly Trust are and cannot evaluate the veracity of Plaintiff’s contention that the Decedent’s grandchildren are the beneficiaries as Plaintiff has not submitted any document or affidavit to corroborate this assertion. Case 2:17-cv-02522-ES-SCM Document 49 Filed 06/05/17 Page 12 of 19 PageID: 1072 8 To date, Lincoln has achieved service of its CTPC upon Plaintiff, and Third- Party Defendants, Anne Schlafly Cori, Eunie Smith, Cathie Adams, Rosina Kovar, Carolyn McLarty, Shirley Curry, Edward R. Martin, Jr., John F. Schlafly, Bruce S. Schlafly, the Estate of Phyllis M. Schlafly, the Irrevocable Schlafly Trust, the EFELDF, and Eagle Trust Fund. Declaration of Ruth A. Rauls dated June 5, 2017, ¶¶ 2-5. Lincoln is in the in the process of serving Kathleen Sullivan. Id. at ¶ 6. Therefore, upon receiving notice of this proceeding, the proper party can submit any application deemed necessary regarding these funds and payment of same. Until then, the funds are properly deposited and maintained in Court and safeguarded. Accordingly, Plaintiff lacks standing to challenge Lincoln’s counterclaim and third-party complaint as it pertains to the Irrevocable Schlafly Trust and EFELDF Policies, and therefore, it should be denied. II. EVEN IF PLAINTIFF HAS STANDING TO SEEK DISMISSAL OF LINCOLN’S COUNTERCLAIM AND THIRD PARTY COMPLAINT AS IT PERTAINS TO THE IRREVOCABLE SCHLAFLY TRUST AND EFELDF POLICIES, HIS MOTION SHOULD BE DENIED. Even if Plaintiff has standing to seek dismissal of Lincoln’s CTPC as it pertains to the Irrevocable Schlafly Trust and EFELDF Policies, his motion to dismiss should be denied on the merits. Pursuant to Fed. R. Civ. P. 12(b)(6), to survive a motion to dismiss, a civil plaintiff must allege facts that “raise a right to relief above the speculative level . . . Case 2:17-cv-02522-ES-SCM Document 49 Filed 06/05/17 Page 13 of 19 PageID: 1073 9 on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). “This ‘does not impose a probability requirement at the pleading stage’, but instead ‘simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of the necessary element’.” Phillips v. Co. of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008). Lincoln’s CTPC asserts a cause of action for interpleader relief with respect to all three Lincoln Policies. Lincoln alleges this Court’s jurisdiction pursuant to: 28 U.S.C. §§ 1335 and 2361 (statutory interpleader); and 28 U.S.C. § 1332 (diversity). Where the basis for jurisdiction is diversity, Fed. R. Civ. P. 22 permits interpleader relief. Interpleader relief “affords a party who fears that he will be exposed to the vexation of defending multiple claims to a limited fund or property that is under his control a procedure to settle his controversy and satisfy his obligations in a single proceeding.” Travelers Ins. Co. v. Johnson, 579 F. Supp. 1457, 1460 (D.N.J. 1984). The test for determining whether it is proper to interplead the adverse claimants and discharge the stakeholder is “whether the stakeholder legitimately fears multiple vexation directed against a single fund.” Wright & Miller, supra, at 369. See Bierman v. Marcus, 246 F.2d 200, 202 (3d Cir. 1957). * * * Case 2:17-cv-02522-ES-SCM Document 49 Filed 06/05/17 Page 14 of 19 PageID: 1074 10 However, short of a plainly frivolous claim, interpleader does not depend on the merits of the adverse claims and “the stakeholder is not obliged at his peril to determine which claimant has the better claims.” Id. Id. Here, Plaintiff seeks dismissal of the CTPC on the basis that Lincoln is not subject to competing claims to the Irrevocable Schlafly Trust and EFELDF Policies. To the contrary, Lincoln’s CTPC for Interpleader fully sets forth the basis for its “bona fide fear of adverse claims” warranting interpleader relief under 28 U.S.C. § 1335. CNA Ins. Cos. v. Waters, 926 F.2d 247, 251 (3d Cir. 1991). Specifically, Lincoln cites to and references the numerous lawsuits instituted by the various third-party defendants following Decedent’s death that contain allegations regarding, directly or indirectly, which individuals can assert control over and take actions on behalf of the EFELDF and the Irrevocable Schlafly Trust, Lincoln remains unable to determine which party is authorized to receive the death benefits under the EFELDF and the Irrevocable Schlafly Trust Polices and cannot determine to whom the benefits should be paid. CTPC, ¶¶ 33-35, 38, 40-45, 47-60. Plaintiff contends that Lincoln is not subject to competing claims to benefits under the Irrevocable Schlafly Trust and the EFELDF Policies because it received only one claimant’s statement for benefits under each Policy. Plaintiff’s Brief, p. 3. However, contrary to Plaintiff’s argument, the benefits due under the Irrevocable Schlafly Trust and the EFELDF Policies would be subject to completing claims, Case 2:17-cv-02522-ES-SCM Document 49 Filed 06/05/17 Page 15 of 19 PageID: 1075 11 regardless if Lincoln received only one, or even zero, claimant statements for these benefits. Claimants are adverse if they are claiming or may claim the same fund. Bierman v. Marcus, 246 F.2d 200, 202 (3d Cir. 1957). Thus, it is not necessary for an insurer to receive two written claims for benefits to avail itself to interpleader relief with respect to those benefits where there is an indication that an adverse claim will be asserted. Fid. & Guar. Life Ins. Co. v. D'alessandro, 2015 WL 7776556, at *3 (D.N.J. Dec. 2, 2015). As set forth at length above, Lincoln anticipates that the third-party defendants will assert adverse claims with respect to the death benefits under the Irrevocable Schlafly Trust and the EFELDF Policies in light of the multiple lawsuits that will impact which individuals can assert control over and take actions on behalf of EFELDF and the Irrevocable Schlafly Trust. The receipt of executed claims forms would not relieve Lincoln of its uncertainty as to the proper party to make a claim for and receive the benefits due under the EFELDF and the Irrevocable Schlafly Trust Policies because that would not alter the multiple litigations that have been filed or the allegations made in those litigations. Moreover, Plaintiff’s argument that Lincoln should not be afforded interpleader relief because it delayed in filing its CTPC for Interpleader is devoid of any legal or factual merit. Lincoln first received notice of Decedent’s death on September 9, 2017 from Agent Kevin McCann, at the request of John Schlafly. Case 2:17-cv-02522-ES-SCM Document 49 Filed 06/05/17 Page 16 of 19 PageID: 1076 12 Lincoln CTPC, ¶ 33. On the same date, Lincoln forwarded claim forms to Mr. McCann and requested further documents needed to process the claims. Plaintiff asserts that claim documents were not provided to Lincoln until March 17, 2017, after an unexplained six month delay. See Plaintiff’s Brief in Support of Motion for Reconsideration (Document 22-1), p. 3. Aside from being without legal merit, Plaintiff’s purported delay argument is factually incorrect. Lincoln sought interpleader relief after this litigation was filed, it received the Claim Letter and accompanying TRO, and discovered the multiple litigations in which there is an apparent fight for control over certain entities, three of which are beneficiaries of the Lincoln Policies. Lincoln timely asserted its interpleader claim upon receiving sufficient information and notice to fear multiple claims. Further, Plaintiff has not identified any authority barring interpleader relief due to a delay in requesting such relief from the court. Plaintiff’s reliance on John Hancock Mut. Life Ins. Co. v. Doran, 138 F. Supp. 47, 49 (S.D.N.Y. 1956) is misplaced. In Doran, the court permitted the insurer to deposit funds subject to completing claims 10 months after it had received notice of an adverse claim to the proceeds of a life insurance policy. 138 F. Supp. at 49–50. Although the court imposed pre-filing interest finding the delay improper, the court did not deny the Case 2:17-cv-02522-ES-SCM Document 49 Filed 06/05/17 Page 17 of 19 PageID: 1077 13 insurer the protections of interpleader relief as misrepresented by Plaintiff in his brief. Plaintiff’s Brief, p. 5. Therefore, for the foregoing reasons, there is no basis to dismiss Lincoln’s CTPC. III. IF PLAINTIFF’S MOTION IS GRANTED, LINCOLN REQUESTS AN ORDER DIRECTING TO WHOM THE DEATH BENEFITS UNDER THE IRREVOCABLE SCHLAFLY TRUST AND EFELDF POLICIES BE PAID AND SHIELDING IT FROM FURTHER LIABILITY UPON SUCH PAYMENT. Notably absent from Plaintiff’s motion is the identification of the proper person to receive the benefits due under the EFELDF and the Irrevocable Schlafly Trust Policies.3 Therefore, if Plaintiff’s motion is granted Lincoln respectfully requests an order directing who should receive the benefits under the EFELDF and Irrevocable Schlafly Trust Policies, and relieving Lincoln of further liability under these policies upon such payment. To be clear, Lincoln does not dispute the that the policies should be paid and in fact, has paid the proceeds of all three policies into court. 3 Based on Plaintiff’s reply in further support of his Motion for Reconsideration (Document 45), Lincoln believes that Plaintiff will assert that John Schlafly is the proper person to receive the benefits under these policies. John Schlafly has been named as a third party defendant in this litigation and can assert any claim to the benefits in response to the CTPC. Case 2:17-cv-02522-ES-SCM Document 49 Filed 06/05/17 Page 18 of 19 PageID: 1078 14 CONCLUSION For each of the foregoing reasons, this Court should deny Plaintiff’s motion to dismiss, or in the alternative, an order should be entered directing who should receive the benefits under the EFELDF and Irrevocable Schlafly Trust Policies, and relieving Lincoln of further liability under these policies upon such payment. Dated: June 5, 2017 Princeton, New Jersey By:/s/ Ruth A. Rauls Ruth A. Rauls Valerie G. Pennacchio SAUL EWING LLP 650 College Rd E Ste 4000 Princeton, NJ 08540 rrauls@saul.com vpennacchio@saul.com (609) 452-5049 (973) 286-6717 Attorneys for Defendant The Lincoln National Life Insurance Company Company Case 2:17-cv-02522-ES-SCM Document 49 Filed 06/05/17 Page 19 of 19 PageID: 1079 SAUL EWING LLP BY: Ruth A. Rauls, Esq. 650 College Road East, Suite 4000 Princeton, N.J. 08540 p: (609) 452-5049 f: (609) 452 6114 rrauls@saul.com Attorneys for Defendant Lincoln National Life Insurance Company UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY _______________________________ ANDREW L. SCHLAFLY, on Behalf of Himself Individually and on Behalf of All Other Members of Eagle Forum, a Non-Profit Membership Corporation, Plaintiff, v. THE LINCOLN NATIONAL LIFE INSURANCE COMPANY and JOHN HANCOCK LIFE INSURANCE COMPANY (USA), Defendants. _______________________________ THE LINCOLN NATIONAL LIFE INSURANCE COMPANY, Third-Party Plaintiff, v. ANNE SCHLAFLY CORI, EUNIE SMITH, CATHIE ADAMS, ROSINA : : : : : : : : : : : : : : : : : : : : : : : : : : CIVIL ACTION NO. 2:17-cv-02522-ES-SCM Case 2:17-cv-02522-ES-SCM Document 49-1 Filed 06/05/17 Page 1 of 3 PageID: 1080 KOVAR, CAROLYN MCLARTY, SHIRLEY CURRY, EDWARD R. MARTIN, JR., JOHN F. SCHLAFLY, BRUCE S. SCHLAFLY, KATHLEEN SULLIVAN, ESTATE OF PHYLLIS M. SCHLAFLY, EAGLE TRUST FUND, THE SCHLAFY IRREVOCAL INSURANCE TRUST, EAGLE FORUM EDUCATION AND LEGAL DEFENSE FUND, AND EAGLE FORUM, Third-Party Defendants. _______________________________ : : : : : : : : : : : : : : DECLARATION OF RUTH A. RAULS Ruth A. Rauls, of full age, declares as follows: 1. I am a partner at Saul Ewing, attorneys for Defendant and Counterclaim and Third-Party Plaintiff, the Lincoln National Life Insurance Company, in this action. I submit this Declaration in Opposition to Plaintiff, Andrew Schlafly’s motion to dismiss Lincoln’s Counterclaim and Third-Party Complaint. 2. Lincoln forwarded its CTPC and third-party summonses to counsel for Third-Party Defendants, Anne Schlafly Cori, Eunie Smith, Cathie Adams, Rosina Kovar, Carolyn McLarty, and Shirley Curry, and on May 10, 2017 counsel executed a waiver of personal service. (Documents 38 through 43). Their answers to Lincoln’s CTPC are due to be filed on July 10, 2017. Case 2:17-cv-02522-ES-SCM Document 49-1 Filed 06/05/17 Page 2 of 3 PageID: 1081 3. On May 19, 2016, Lincoln achieved personal service of the CTPC on Bruce Schlafly. (Document 47). His answer to the CTPC is due to be filed on June 9, 2017. 4. Lincoln achieved personal service of the CTPC on Edward R. Martin, Jr., John F. Schlafly, the Estate of Phyllis M. Schlafly, the EFELDF, and Eagle Trust Fund on May 26, 2017. We are awaiting the affidavits of service upon these parties from the process server and will file upon receipt. Their answers are due to be filed on June 16, 2017. 5. Lincoln achieved personal service of the CTPC on the Irrevocable Schlafly Trust on June 5, 2017. We are awaiting the affidavit of service upon the Irrevocable Schlafly Trust from the process server and will file upon receipt. Its answer is due to be filed on June 26, 2017. 6. Lincoln is in the in the process of achieving personal service of its CTPC on Kathleen Sullivan. I declare under penalty of perjury that the foregoing is true and correct. Dated: June 5, 2017 /s/ Ruth A. Rauls RUTH A. RAULS Case 2:17-cv-02522-ES-SCM Document 49-1 Filed 06/05/17 Page 3 of 3 PageID: 1082 98853.1 06/05/2017 SAUL EWING LLP BY: Ruth A. Rauls, Esq. 650 College Road East, Suite 4000 Princeton, N.J. 08540 p: (609) 452-5049 f: (609) 452 6114 rrauls@saul.com Attorneys for Defendant Lincoln National Life Insurance Company UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY _______________________________ ANDREW L. SCHLAFLY, on Behalf of Himself Individually and on Behalf of All Other Members of Eagle Forum, a Non-Profit Membership Corporation, Plaintiff, v. THE LINCOLN NATIONAL LIFE INSURANCE COMPANY and JOHN HANCOCK LIFE INSURANCE COMPANY (USA), Defendants. _______________________________ THE LINCOLN NATIONAL LIFE INSURANCE COMPANY, Third-Party Plaintiff, v. : : : : : : : : : : : : : : : : : : : : : : : : CIVIL ACTION NO. 2:17-cv-02522-ES-SCM Case 2:17-cv-02522-ES-SCM Document 49-2 Filed 06/05/17 Page 1 of 3 PageID: 1083 98853.1 06/05/2017 ANNE SCHLAFLY CORI, EUNIE SMITH, CATHIE ADAMS, ROSINA KOVAR, CAROLYN MCLARTY, SHIRLEY CURRY, EDWARD R. MARTIN, JR., JOHN F. SCHLAFLY, BRUCE S. SCHLAFLY, KATHLEEN SULLIVAN, ESTATE OF PHYLLIS M. SCHLAFLY, EAGLE TRUST FUND, THE SCHLAFLY IRREVOCABLE INSURANCE TRUST, EAGLE FORUM EDUCATION AND LEGAL DEFENSE FUND, AND EAGLE FORUM, Third-Party Defendants. _______________________________ : : : : : : : : : : : : : : : : : : CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of Defendant/Third Party Plaintiff The Lincoln National Life Insurance Company’s Memorandum of Law in Opposition to Plaintiff Andrew L. Schlafly’s Motion to Dismiss, Declaration of Ruth Rauls, and this certification of service, was served today upon counsel for the following parties as follows: Andrew Schlafly 939 Old Chester Road Chester Township, NJ 07931 Plaintiff, pro se Case 2:17-cv-02522-ES-SCM Document 49-2 Filed 06/05/17 Page 2 of 3 PageID: 1084 98853.1 06/05/2017 Darren H. Goldstein Flaster Greenberg PC Commerce Center 1810 Chapel Ave. West Cherry Hill, NJ 08002 Attorneys for Defendant John Hancock Life Insurance Company (U.S.A.) via ECF. Dated: June 5, 2017 Princeton, New Jersey By: /s/ Ruth A. Rauls Ruth A. Rauls Valerie G. Pennacchio SAUL EWING LLP 650 College Rd E Ste 4000 Princeton, NJ 08540 rrauls@saul.com vpennacchio@saul.com (609) 452-5049 (973) 286-6717 Attorneys for Defendant The Lincoln National Life Insurance Company Company Case 2:17-cv-02522-ES-SCM Document 49-2 Filed 06/05/17 Page 3 of 3 PageID: 1085