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Garden State Life Insurance Co. v. Estate of Raine

United States District Court, S.D. Mississippi, Eastern Division

September 25, 2018

GARDEN STATE LIFE INSURANCE COMPANY, PLAINTIFF
v.
THE ESTATE OF JAMES R. RAINE, et al. DEFENDANTS

          MEMORANDUM OPINION AND ORDER

          KEITH STARRETT, UNITED STATES DISTRICT JUDGE.

         This cause comes before the Court on Defendant Emma Raine's Motion for Partial Summary Judgment [43]. Defendant, the Estate of James R. Raine (the “Estate”), has filed its response and memorandum in support [46, 47], and Emma Raine has filed a reply [48]. Having reviewed the pleadings, the parties' submissions, the record in this matter, and the applicable law, and otherwise being fully advised in the premises, the Court finds the Motion for Partial Summary Judgment is well taken and will be granted.

         I. BACKGROUND

         A. Parties and Procedural History

         This case involves the determination of the proper party to receive the proceeds of a life insurance policy following the death of James R. Raine, who was the victim of a homicide on October 21, 2011.[1] Mr. Raine was shot to death in his home in Poplarville, Mississippi, having been shot multiple times in the forehead, chin, head and neck. [27] at ¶¶ 25, 31; [29] at ¶¶ 25, 31; [32] at ¶¶ 25, 26. Almost six years later, on July 6, 2017, Plaintiff, Garden State Life Insurance Company (“Garden State”), filed a Complaint for Interpleader and for Declaratory Judgment [1], which was later amended [27]. The basis of the interpleader action was Garden State's assertion that there are competing claims for the life insurance proceeds. [27 at ¶ 7].

         Both Emma Raine and the Estate of James R. Raine have answered the Amended Complaint [29, 32]. The United States also became a party to the action by filing an unopposed motion to intervene, which was granted, and a cross-claim against Emma Raine, seeking to recover fines and restitution pursuant to a criminal conviction for bankruptcy fraud and tax fraud in the amount of $94, 107.01 should Emma Raine be entitled to the proceeds of the insurance policy [17, 21]. Emma Raine concedes liability to the IRS should she prevail on summary judgment. [43 at p. 1]. Emma Raine is currently incarcerated in the Louisiana Correctional Institute for Women in St. Gabriel, Louisiana, having been convicted of second degree murder in the death of her second husband, Ernest Smith, in August 2016. [4] #1; [5] #3; [27], Ex. M.

         Discovery closed on July 2, 2018, and Emma Raine has now filed a Motion for Partial Summary Judgment as to the claim in the interpleader action concerning which Defendant is entitled to the proceeds of the Policy.

         B. Nature of the Dispute

         Garden State issued Policy No. 00411074 to, and covering the life of, James R. Raine, the Decedent, as the Owner and the Insured, on August 11, 2010, with the policy being in full force and effect on the date of James R. Raine's death (the “Policy”). [27] at ¶ 24; [29] at ¶ 24; [32] at ¶ 24. There is no dispute that Emma Raine is listed as the beneficiary on the Policy. [27] at ¶ 28; [29] at ¶ 28; [32] at ¶26. Emma Raine made a claim for the proceeds of the insurance on December 6, 2011. [27] at ¶ 30; [29] at ¶ 30; [32] at ¶26. Garden State thereafter began an investigation and review. Id.

         The dispute as to entitlement to the proceeds arose due to allegations set forth in the April 2, 2013 Petition to Open Intestate Estate filed in the Chancery Court of Pearl River County, Mississippi, wherein the Petitioners alleged that at the time of his death, James R. Raine was married to Emma Raine; they had no children together, but James R. Raine had one child. [27] at ¶ 49, Ex. U at ¶ III; [29] at ¶ 49; [32] at ¶ 31. The Petitioners further alleged that Emma Raine is a suspect in the shooting death of James R. Raine and that she brought about his death. [27 at ¶¶ 7, 50], Ex. U at ¶ VI. Finally, the Petitioners stated they had reason to believe that there may be life insurance policies applicable to the decedent and that they intended to file a claim on behalf of the Estate. [27] at ¶ 51, Ex. U at ¶ VII; [29] at ¶ 51; [32] at ¶ 31.[2]

         By interpleading the funds, Garden State sought “to avoid unilaterally paying proceeds to any person or any entity not clearly entitled to said proceeds or who may be determined to not be entitled to said proceeds, particularly with the aforedescribed Competing Claims.” [27] at ¶ 47.

         II. DISCUSSION

         According to the terms of the Policy, “[a]ny proceeds payable because of the death of the Insured will be paid to the Beneficiary. Unless changed as provided in this Policy, the Beneficiary will be designated in the application.” [27], Ex. A. at p. 9/20. Again, there is no dispute that Emma Raine is the Beneficiary under the terms of the Policy. The Policy goes on to provide that “[i]f the interest of all designated Beneficiaries has terminated, any proceeds will be paid to the Owner or his estate or successors.” Id. Garden State asserted, and the Estate argues, that the Beneficiary's interest could terminate under what is known as the Slayer Statute, [3] which provides as follows:

If any person willfully cause or procure the death of another in any way, he shall not inherit the property, real or personal, of such other; but the same shall descend as if the person so causing or procuring the death had ...

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