Opinion ID: 161465
Heading Depth: 2
Heading Rank: 2

Heading: Mental Capacity

Text: 23 The district court instructed the jury that the law presumes that Ronald Rice, the deceased, had the mental capacity to change the policy beneficiary to his mother. The instructions also stated that this presumption could be outweighed by evidence to the contrary and that Plaintiff had to establish Decedent's lack of mental capacity by the greater weight of the evidence. Plaintiff raises two objections to the presumption instruction: first, that there is no general presumption of mental capacity to change one's beneficiary; and second, that the presumption was rebutted and should not have been included in the jury instructions. Only the first of these objections was raised below. 24
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.
34 Because Plaintiff did not raise this objection below, we review the challenged instruction only to see whether it is patently plainly erroneous and prejudicial. Zimmerman v. First Fed. Sav. & Loan Ass'n, 848 F.2d 1047, 1054 (10th Cir. 1988); cf. Fed. R. Civ. P. 51 (No party may assign as error the giving or the failure to give an instruction unless that party objects thereto before the jury retires to consider its verdict, stating distinctly the matter objected to and the grounds of the objection. (emphasis added)). Only rarely will we reverse based on allegedly erroneous instructions to which there was no objection at trial; the party claiming plain error has the heavy burden of demonstrating fundamental injustice. Medlock v. Ortho Biotech, Inc., 164 F.3d 545, 553 (10th Cir. 1999) (quotation marks omitted). 35 The full text of the challenged instruction is as follows: 36 Presumptions are rules based upon experience or public policy and are established in the law to assist a jury in discovering the truth. Presumptions take the place of evidence unless and until outweighed by evidence to the contrary. 37 In this case, the law presumes that Ronald Rice, the deceased, had the mental capacity to change the policy beneficiary to his mother. 38 The next instruction, to which no objection has been taken, stated: In this action, where plaintiff, Cindy Rice, alleges that Ronald Rice, the insured, lacked the mental capacity to change the beneficiary to his policy from his wife to his mother, plaintiff has the burden of establishing by the greater weight of the evidence that on the date Ronald Rice executed the change of beneficiary form, Ronald Rice lacked the requisite mental capacity. 39 Plaintiff argues that it was incorrect under Federal Rule of Evidence 301 for the court to give the first of these instructions to the jury in this case. Rule 301 states that a presumption imposes a burden of production, but does not shift the burden of proof. Plaintiff argues that Rule 301 incorporates the bursting bubble theory of presumptions. Under this approach, once she met her burden of production the presumption would drop out of the picture entirely, and therefore it would have been inappropriate to mention the presumption in the jury instructions. However, the advisory committee notes reject the notion that the presumptions authorized by Rule 301 would simply disappear when contrary evidence is introduced. See Fed. R. Evid. 301 advisory committee notes, 1972 Proposed Rules. While there is conflicting authority, see, e.g., Bratton v. Yoder Co. (In re Yoder Co.), 758 F.2d 1114, 1119-20 (6th Cir. 1985), we cannot say that the jury instruction amounted to plain error. 40 In any event, in this case Plaintiff bore the burden of proof on the issue of mental capacity even absent the presumption. Moreover, the instruction made it clear that the presumption could be overcome by a preponderance of the evidence. There is sufficient authority that a presumption instruction that tracks the burden of proof as in this case is not reversible error. See, e.g., Lewis v. Owen, 395 F.2d 537, 542 (10th Cir. 1968); Dostal v. Balt. & Ohio R.R. Co., 189 F.2d 352, 355-56 (3d Cir. 1951); cf. Brown v. Henderson, 189 N.E. 41, 43 (Mass. 1934) (Lummus, J., concurring in the result) (The statutory presumption . . . is wholly overshadowed by that burden of proof, and can have no practical effect. . . . [It] is like a handkerchief thrown over something also covered by a blanket. For this reason, if the burden of proof is correctly stated to the jury, there can be no reversible error in dealing with the presumption . . . .). Whether or not the district court was correct to instruct the jury on the presumption of mental capacity in this case, the instructions as a whole were not patently plainly erroneous and prejudicial. Zimmerman, 848 F.2d at 1054.