Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_05-cv-01716/USCOURTS-caed-2_05-cv-01716-5/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1332 Diversity-Interpleader Action

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1

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

UNITED INVESTORS LIFE No. 2:05-CV-1716-MCE-DAD

INSURANCE COMPANY,

Plaintiff,

v. MEMORANDUM AND ORDER

DONNA GRANT, individually and

as Administrator of the Estate

of George H. Grant, HELEN

FAUERBACH, JIM GRANT, KENNY

GRANT, BRANDON GRANT, and DOES

1 through 20, inclusive,

Defendants.

_________________________________/

DONNA GRANT, individually and as

Administrator of the Estate of 

George H. Grant,

Cross-Plaintiff,

v.

UNITED INVESTORS LIFE INSURANCE

COMPANY, and DOES 1 through 100,

inclusive,

Cross Defendants.

----oo0oo----

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Case 2:05-cv-01716-MCE -DAD Document 91 Filed 08/09/06 Page 1 of 6
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 Because the issues raised in this Motion are similar to 1

those addressed by the Court’s Order of May 8, 2006, the Court

will incorporate by reference its Order of May 8, 2006, and will

not reiterate the factual background or the legal standards on

summary judgment.

The Court also notes that Donna has requested that it take

judicial notice of certain court records. See Donna’s Req. For

Judicial Notice. The existence of those records will be so

noticed pursuant to Federal Rule of Evidence 201(b).

2

The present action arose from a life insurance policy issued

by Plaintiff United Investors Life Insurance Company (“United

Investors”) on the life of George Grant (“George”). George died

on May 30, 2004, apparently by homicide. On June 15, 2004,

George’s wife Donna Grant (“Donna”), the primary beneficiary on

George’s policy, submitted a claim for policy benefits to United

Investors along with George’s death certificate. In order to

protect itself from multiple potential claims, United Investors

deposited the policy amount with the Court and brought a

Complaint in Interpleader on August 25, 2005, requesting that the

Court absolve it of any further liability with respect to the

distribution of the funds.

On May 8, 2006, the Court granted United Investors’ cross

motion for summary judgment in interpleader, discharging United

Investors of any responsibility in the distribution of the policy

proceeds. As a result, the Court must now proceed to adjudicate

any claims of potential beneficiaries to the interpled property.

Through the instant Motion, Donna has petitioned the Court

to award her the full policy amount, a total of $518,616.44. For

the reasons set forth below, Donna’s Motion is denied.1

Case 2:05-cv-01716-MCE -DAD Document 91 Filed 08/09/06 Page 2 of 6
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 These Defendants include Helen Fauerbach, the named 2

contingent beneficiary under the terms of the policy, George’s

son, Brandon Grant, and George’s two brothers, Jim Grant and

Kenny Grant. 

 Donna fails to draw a parallel between her case and 3

Vanderlinden v. Metropolitan Life Insurance Co., 137 F. Supp. 2d

1160 (D. Neb. 2001). There is a crucial distinction between

claimants who have not yet asserted their claims and claimants,

as in Vanderlinden, who expressly disclaim their interests in the

property. The former retain viable future claims, while the

latter do not.

3

 ANALYSIS

Donna argues that she is entitled to the proceeds because

there are no opposing parties representing adverse interests. In

support, she points out that defaults have been entered against

the other potential beneficiaries named as Defendants in United

Investors’ original Complaint. (See Donna’s Mot. Summ. J. 6:6- 2

19.) As such, she claims that there are no other actual adverse

claims on the interpled property at this time.

Entering defaults against the named Defendants, however,

does not preclude them from raising claims in the future. The

defaults have not been reduced to judgment, and no potential

contingent beneficiary has expressly waived his or her right to

the insurance proceeds. As Donna correctly notes, any of the

defaulted Defendants could move for the default to be set aside

and could assert a claim in the funds at stake. Just as the

existence of viable potential claimants justified United

Investors’ decision to seek interpleader, see May 8, 2006, Order

13:8-17, so the presence of potential claimants militates against

the Court awarding the proceeds to Donna at this time.3

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Case 2:05-cv-01716-MCE -DAD Document 91 Filed 08/09/06 Page 3 of 6
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4

Even if the possibility of other potential claimants

emerging is so remote that the Court might effectively ignore it,

an actual claimant must establish his entitlement to the property

in question; judgment will not be given in favor of a single

remaining plaintiff by default. Midland Ins. Co. v. Friedgood,

577 F. Supp. 1407, 1411 (S.D.N.Y. 1984). To support her claim,

Donna relies on the plain text of the insurance policy, which

designates her as the primary beneficiary upon George’s death. 

She also asserts that there is no evidence in the Court’s record

that she was responsible for the death of George. Moreover, she

notes that she has never been arrested or charged in connection

with the homicide. Therefore, according to Donna, she has a

“prima facie” entitlement to the benefits that has not been

rebutted. (Donna’s Mot. Summ. J. 7:11.)

Donna’s contention is incorrect as a matter of law. The

standard for summary judgment is not whether the moving party has

made a “prima facie” case. Instead, summary judgment must

necessarily determine whether there is any “genuine issue of

material fact” that cannot be decided as a matter of law. Fed.

R. Civ. P. 56. The existence of other potential claimants,

combined with the circumstances of the case, creates enough

factual uncertainty that the Court cannot as a matter of law

award the proceeds to Donna. Even though no other claims have

been made on the insurance proceeds, that could change if it is

found that Donna was involved in the murder of George. Although

there is no evidence before the Court implicating Donna in

George’s murder, the case investigators have not “cleared her as

a suspect.” (Donna’s Mot. Summ. J. 7:7-8.) 

Case 2:05-cv-01716-MCE -DAD Document 91 Filed 08/09/06 Page 4 of 6
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5

In addition, the unusual circumstances of the case “do not bode

well for any routine exoneration on Donna’s part as a suspect.” 

See May 8, 2006 Order 10:14-25.

If Donna was involved in George’s murder, then she cannot

recover the insurance money. In the May 8, 2006, Order, this

Court found that California Probate Code Section 252, which

forbids a beneficiary from collecting on a life insurance policy

when the beneficiary was involved in the murder, was implicit in

every life insurance policy; therefore, United Investors had a

bona fide concern of multiple liability if it was to pay Donna

and she was subsequently found responsible for George’s death. 

See May 8, 2006, Order 9-11. The Court’s logic is also germane

to the distribution of interpled funds. In finding Section 252

implicit in every policy, the Court validated the broader

principle of preventing someone from profiting from his or her

wrong. The Court still finds this concern soundly mandated by

public policy, and, in light of Section 252, declines to award

the insurance proceeds to a potential suspect at this time.

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Case 2:05-cv-01716-MCE -DAD Document 91 Filed 08/09/06 Page 5 of 6
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 Because oral argument will not be of material 4

assistance, the Court orders this matter submitted on the briefs. 

E.D. Cal. Local Rule 78-230(h). 

6

CONCLUSION

In the context of a summary judgment motion, the Court

cannot say as a matter of law that there is only one valid

claimant for the funds; multiple potential claimants exist as

well. Even if Donna was the only possible claimant, her own

claim is so clouded with uncertainty at this time that the Court

cannot say as a matter of law that it is valid, especially in

light of the Court’s earlier findings with regard to Probate Code

Section 252. Donna’s Motion for Summary Judgment is accordingly

denied.4

IT IS SO ORDERED.

DATED: August 8, 2006

_____________________________

MORRISON C. ENGLAND, JR

UNITED STATES DISTRICT JUDGE

Case 2:05-cv-01716-MCE -DAD Document 91 Filed 08/09/06 Page 6 of 6