Opinion ID: 161465
Heading Depth: 3
Heading Rank: 1

Heading: Presumption of Mental Capacity Under Federal Law

Text: 25 We review de novo legal objections to the jury instructions, reading the instructions as a whole. Medlock v. Ortho Biotech, 164 F.3d 545, 552 (10th Cir. 1999). The instructions need not be flawless. Id. [N]o particular form of words is essential if the instruction as a whole conveys the correct statement of the applicable law. Webb v. ABF Freight Sys., 155 F.3d 1230, 1248 (10th Cir. 1998). 26 The question of mental capacity is not addressed in the SGLI Act. 27 [W]hen a question relating to the interpretation and administration of an insurance policy issued under the authority of the servicemen's insurance statute arises that is not answered by the statute itself . . . the answer is to be supplied by federal common law. Since the concept of 'federal common law' is nebulous when a statute is in the picture, it might be better to jettison the concept in that context and say simply that in filling gaps left by Congress in a federal program the courts seek to effectuate federal policies. 28 Athmer, 178 F.3d at 475 (citations omitted). We must therefore fashion appropriate rules on the requisite mental capacity to change one's insurance beneficiary. 29 We have not previously addressed this precise issue. In Wiley v. United States, 399 F.2d 844, 846 (10th Cir. 1968), we recognized a presumption in favor of mental capacity when the insured had been declared competent by the Veterans Administration and a state court. Here, however, Decedent was never declared competent (or incompetent) by any court or agency. 30 Nonetheless, under these circumstances, we find no reversible error in the district court's instruction. Most important, the presumption of mental capacity tracks Plaintiff's burden of proof on the issue. Plaintiff took no objection to the court's instruction on the burden of proof, and reading the instructions together, we believe they stated the law correctly. 31 Our holding is supported by other courts that have noted a federal presumption of mental capacity in the insurance context. See, e.g., Howells State Bank v. Novotny, 69 F.2d 32, 34 (8th Cir. 1934) (noting a presumption of mental capacity to assign one's life insurance policy); Metro. Life Ins. Co. v. Anderson, 101 F. Supp. 808, 811 (E.D. La. 1951) (noting the legal presumption of mental capacity to change one's insurance beneficiary); cf. 3 Couch on Insurance 40:2 (3d ed. 2000) (The fact that a policy was issued raises the presumption that the insured was of sound mind at the time the contract was entered into, and clear proof is required to establish that he or she lacked sufficient capacity. (footnotes omitted)). We also draw support from the Department of Veterans Affairs, which in administrative proceedings involving the validity of a change in beneficiary applies a general but rebuttable presumption that every testator possesses testamentary capacity. 38 C.F.R. 3.355(c). 32 State law also supports the district court's instruction. See, e.g., Commercial Union Ins. Co. v. Schmidt, 967 F.2d 270, 272 (8th Cir. 1992) (applying Minnesota law); Lynn v. Magness, 62 A.2d 604, 607 (Md. 1949) (stating that the law presumes every man to be sane and to possess the requisite mental capacity to change his beneficiary); Matthews v. Acacia Mut. Life Ins. Co., 392 P.2d 369, 373 (Okla. 1964) (The law presumes every person sane, and casts the burden of establishing insanity on the one asserting its existence.); Estate of Galland v. Rosenberg, 630 S.W.2d 294, 297 (Tex. App. 1981) (A presumption . . . exists that the decedent possessed the requisite mental capacity to make his designation.). Finally, the instruction is consistent with our jurisprudence in other areas of the law. For example, under federal law, the capacity of a person offered as a witness is presumed, and in order to exclude a witness on the ground of mental incapacity, the existence of the incapacity must be made to appear. United States v. Haro, 573 F.2d 661, 667 (10th Cir. 1978). 33 In sum, the district court correctly found that federal law generally presumes a person's mental capacity in this context.