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Union Security Insurance Co. v. Hockensmith

United States District Court, E.D. Kentucky, Central Division, Lexington

November 14, 2017

TIMOTHY T. HOCKENSMITH, et al., Defendants.


          Danny C. Reeves, United States District Judge.

         Plaintiff Union Security Insurance Company (“Union Security”) brings this interpleader action seeking to resolve a controversy concerning the payment of life insurance proceeds. Defendants Timothy and Margaret (“Maggie”) Hockensmith (“the Hockensmiths”) have filed motions for judgment on the pleadings [Record No. 11] and to dismiss the interpleader action [Record No. 30]. Union Security has filed a motion to dismiss the Hockensmiths' counterclaims [Record No. 17] and the Hockensmiths have moved for leave to amend their counterclaims [Record No. 24');">24].


         Lucia Mora (“Mora” or the “decedent”) was formerly employed by Vuteq USA, Inc. (“Vuteq”) and participated in its employee welfare benefit plan (“the Plan”), which provided life insurance benefits. [Record No. 1, p. 3 ¶ 9] Union Security insured the Plan under Group Term Life Insurance Policy Number G 5469917. Mora had life insurance benefits under the policy in the amount of $41, 000.00. Id. at ¶ 11.

         The policy provided that the life insurance proceeds would be paid to Mora's beneficiary upon her death. The policy defined “beneficiary” as “the person or entity you choose to receive your amount of insurance at your death.” Id. at ¶ 14. Mora was free to change the beneficiary at any time, but such requests had to be signed and in writing, and in a form acceptable to Union Security. Requests to change a beneficiary could be sent to Union Security's home office or Vuteq's main office. [See Record No. 1-1. p. 24');">24.] The policy provided default beneficiaries in the event a beneficiary was not named or the beneficiary was not living at the time of the policyholder's death. [Record No. 1 at ¶ 14]

         Union Security informed Mora by letter dated August 25, 2015, that it did not have a beneficiary designation on file and asked her to complete and return one. Id. at ¶ 18. However, Mora passed away on January 21, 2016, without having returned the form. Id. at ¶¶ 18-19. Mora's ex-husband, Timothy Hockensmith (“Timothy”) asserted a claim for benefits under the policy in April 2016. Id. at ¶ 20. Shortly thereafter, Mora's sister-in-law, Shawna Passero, filed an “incomplete claim, ” which appeared to be made on behalf of Mora's estate. Id. at ¶ 21. Passero advised Union Security that she intended to assert a claim on behalf of herself and Mora's daughter Maggie, who was a minor at the time. Mora's sister, Guadalupe America Mora Chichino (“America”), asserted a claim for benefits under the policy in October 2016. Id. at ¶ 22.

         Union Security sought to determine Mora's true beneficiary in light of the competing claims. While it did not have a signed, written beneficiary designation in its records, Union Security's “census records” from 2015 indicated that Mora signed a beneficiary designation on May 8, 2014, naming America as the sole primary beneficiary. Union Security asked Vuteq to provide a copy of the beneficiary designation that it had in its file. Vuteq had Mora's original application for coverage in 1999, which named her mother, Margarita Chichino (“Margarita”), and her daughter Maggie as primary beneficiaries. Id. at ¶ 25. Vuteq also provided a signed statement to Union Security which provides:

I, Doreen St. Onge, reviewed the beneficiary designation signed by Lucia Mora under policy 5469917/0/1. The beneficiary designation appeared to be signed by the insured, was dated after June 1, 2014, and named Timothy Hockensmith as the sole primary beneficiary. I also hereby certify the original beneficiary designation was mailed to Mr. Timothy Hockensmith, and a copy was not retained in our records.

Id. at ¶ 24');">24. Timothy advised Union Security that he did not have a copy of the document.

         Vuteq also had a record of a 2011 divorce decree under which Timothy agreed to “waive, release, and relinquish unto [Mora] . . . all of his right, title, and interest in and to all property now owned or hereafter acquired by [Mora], including . . . the right to take any non-probate assets of the other (such as life insurance proceeds . . .) for which Husband may be named beneficiary . . . .” Id. at ¶ 26.

         Union Security filed this action in interpleader naming Timothy, Maggie, America, Shawna, and Margarita as defendants. 28 U.S.C. § 1331; 29 U.S.C. § 1001, et seq. It appears that Shawna has been served with the Complaint, but has not filed an Answer or otherwise made an appearance. [See Record No. 7.] Union Security is still attempting to serve the remaining defendants in Mexico. [See Record Nos. 33-35.]


         The Hockensmiths have moved for judgment on the pleadings under Rule 12(c) of the Federal Rules of Civil Procedure or, alternatively, for summary judgment under Rule 56. [Record No. 11] A party's Rule 12(c) motion is properly granted when there is no issue of material fact and the moving party is entitled to judgment as a matter of law. JPMorgan Chase Bank, N.A. v. Winget, 10 F.3d 577');">510 F.3d 577, 582 (6th Cir. 2007). The Court accepts as true “all well-pleaded material allegations, ” but “need not accept as true legal conclusions or unwarranted factual inferences.” Id. at 581-82 (quoting Mixon v. Ohio, 193 F.3d 389');">193 F.3d 389, 400 (6th Cir. 1999)).

         Motions to dismiss under Rule 12(c) are reviewed under the same standard as those under Rule 12(b)(6). Lindsay v. Yates, 498 F.3d 434, 437 n.5 (6th Cir. 2007). To survive a motion to dismiss under Rule 12(b)(6), a plaintiff must allege sufficient factual matter to state a claim for relief that is plausible on its face. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007); Peatross v. City of Memphis, 18 F.3d 233');">818 F.3d 233, 239-40 (6th Cir. 2016). The Court may consider exhibits attached to the Complaint so long as they are referred to in ...

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