Court Opinion

ID: 67901
Source: CourtListenerOpinion
Date Created: 2010-04-26 06:26:50+00
Date Added: 2024-06-11T17:21:01.457712
License: Public Domain

[DO NOT PUBLISH]

               IN THE UNITED STATES COURT OF APPEALS

                       FOR THE ELEVENTH CIRCUIT
                         ________________________                 FILED
                                                         U.S. COURT OF APPEALS
                               No. 08-16324                ELEVENTH CIRCUIT
                           Non-Argument Calendar               JUNE 2, 2009
                         ________________________           THOMAS K. KAHN
                                                                 CLERK
                       D. C. Docket No. 07-00163-CV-1

DENISE HENNINGER,

                                          Plaintiff-Counter-Defendant-Appellee,

                                    versus

THE STANDARD INSURANCE COMPANY,

                                   Defendant-Counter-Claimant-Cross-Claimant,

NORMA HENNINGER,

                                       Defendant-Cross-Defendant-Appellant.
                         ________________________

                  Appeal from the United States District Court
                     for the Southern District of Georgia
                       _________________________
                                (June 2, 2009)

Before CARNES, MARCUS and PRYOR, Circuit Judges.

PER CURIAM:

      Norma Henninger (“Norma”) appeals from the district court’s entry of

summary judgment in this contractual dispute brought under Georgia state law, in
which Norma alleged that she -- rather than her son Joseph’s ex-wife, Denise

Henninger (“Denise”) -- was entitled to the proceeds of Joseph’s $150,000 life

insurance policy. On appeal, Norma argues that: (1) the district court erred by

finding that it was ambiguous whether her son designated her and Denise to be co-

beneficiaries, and also erred by resolving the alleged ambiguity by considering

parol evidence; and (2) there was a genuine dispute of material fact as to whether

Joseph did substantially all he could to change the beneficiary designation. After

careful review, we affirm.

      We “review[] a district court’s grant of summary judgment de novo, viewing

the evidence in the light most favorable to the party opposing the motion.” Kelley

v. Hicks, 400 F.3d 1282, 1284 (11th Cir. 2005). A party is entitled to summary

judgment if the pleadings, depositions, answers to interrogatories, and admissions

on file, together with the affidavits, show that there is no genuine issue as to any

material fact and that the moving party is entitled to a judgment as a matter of law.

Fed. R. Civ. P. 56(c).

      First, we are unpersuaded by Norma’s claim that the district court erred in

finding the contract to be ambiguous and in relying on parol evidence to resolve

that ambiguity. As the record reveals, Joseph’s designation read as follows:

      Beneficiary Information You may name a beneficiary or beneficiaries
      to receive any company-paid life insurance, optional life or accidental

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      death benefits payable at your death. Unless you specify otherwise,
      benefits are divided equally between the beneficiaries you name.
      Attach a separate sheet if you need additional space.

This instruction was followed by this handwritten provision:

      Denise Henninger           wife          100%
      Norma Henninger            mother        100%

On appeal, Norma relies on this language to argue that the contract unambiguously

provides that the two listed beneficiaries are to share the proceeds equally.

      “Under Georgia law, there are three steps in the process of contract

construction. The trial court must first decide whether the contract language is

ambiguous; if it is ambiguous, the trial court must then apply the applicable rules

of construction (O.C.G.A. § 13-2-2); if after doing so the trial court determines that

an ambiguity still remains, the jury must then resolve the ambiguity.” Maiz v.

Virani, 253 F.3d 641, 658-59 (11th Cir. 2001) (alteration and quotations omitted).

“A word or phrase is ambiguous when it is of uncertain meaning and may be fairly

understood in more ways than one.” Kusuma v. Metametrix, Inc., 381 S.E.2d 322,

323 (Ga. App. 1989) (quotations omitted).             When applying the rules of

construction, the cardinal rule “is to ascertain the intention of the parties,” and, to

do so, “the court should consider the language of the contract in light of the

surrounding circumstances.”     Maiz, 253 F.3d at 659 (quotations omitted).        “If,

however, after applying the rules of construction, the intent of the parties continues

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to be disputed and capable of more than one interpretation, then it is a factual

matter for resolution by the jury and not a matter of law for determination by the

court.” Id. (quotations omitted).

      The Georgia Code provides that “[p]arol evidence is inadmissible to add to,

take from, or vary a written contract. All the attendant and surrounding

circumstances may be proved and, if there is an ambiguity, latent or patent, it may

be explained.” O.C.G.A. § 13-2-2(1). Thus, where a contract is unambiguous on

its face, it “is not susceptible to variance by parol evidence.” A. Atlanta AutoSave,

Inc. v. Generali-U.S. Branch, 514 S.E.2d 651, 653 (Ga. 1999). However, “where

an ambiguity exists in the written terms, parol evidence may be used in

ascertaining that intent.” Holcim (US), Inc. v. AMDG, Inc., 596 S.E.2d 197, 200

(Ga. App. 2004); Gans v. Ga. Fed. Sav. & Loan Ass’n, 347 S.E.2d 615, 619 (Ga.

App. 1986) (“when it is impossible to determine the intent of the parties from the

language of the contract itself, it is proper to introduce extrinsic evidence,

including parol evidence, to establish that intent”).

      Here, as the district court found, Joseph’s designation of beneficiaries was

ambiguous: the beneficiary designation form completed by Joseph provided that

“unless you specify otherwise, benefits are divided equally between the

beneficiaries you name,” and yet Joseph clearly specified otherwise by writing

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“100%” next to each beneficiary’s name. This designation could be construed as

creating either contingent or co-beneficiaries, and was therefore ambiguous. See

Kusuma, 381 S.E.2d at 323; see also Metropolitan Life Ins. Co. v. Hurford, 983 F.

Supp. 1045, 1047 (D.C. Kan. 1997).1 Under Georgia law, the court was obliged to

attempt to resolve this ambiguity by applying the applicable rules of construction --

including parol evidence -- before submitting the issue to a jury. Maiz, 253 F.3d at

658-59; Holcim, 596 S.E.2d at 200. The testimony of the benefits coordinator for

Joseph’s employer established that Joseph’s non-intuitive designation followed

exactly the form Joseph would have been instructed to use to create contingent

beneficiaries, so this testimony was useful in ascertaining what he intended to do

when he used that language. See Holcim, 596 S.E.2d at 200. This testimony does

not contradict the written policy, as the written policy did not describe how to

create contingent beneficiaries. We thus conclude that this parol evidence -- the

benefits coordinator’s testimony that the particular language used here matched

       1
          In Hurford, the insured made the following designation of benefits: Rosalyce Hurford,
wife, all; Rhonda Hurford, daughter, one quarter; Bryan Hurford, son, one quarter; Roger
Hurford, son, one quarter; Bruce Hurford, son, one quarter. 983 F. Supp. at 1046. Rosalyce and
the insured divorced sometime later, and Nina Hurford -- the insured’s wife at the time of his
death -- submitted a claim for the policy’s proceeds. Id. The court determined that the
designation was ambiguous, but concluded that this ambiguity did not render the policy
noncompliant with the Federal Employees Group Life Insurance Act. Id. at 1047-48. It declined
to determine an appropriate distribution, however, because the parties had reached an agreement
concerning payment of proceeds. Id. at 1048. Thus, to the extent Norma suggests that the
Hurford court held that a distribution of 200% of a policy’s proceeds was not ambiguous, she is
incorrect: that court expressly found the distribution to be ambiguous.

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instructions the insured would have received on creating contingent beneficiaries --

resolves the contract’s ambiguity and shows that Joseph intended to designate

contingent beneficiaries.2

       We likewise reject Norma’s argument that there was a genuine dispute of

material fact as to whether Joseph did substantially all he could to change the

beneficiary designation.       Under Georgia law, “[e]ven in the event of a divorce

decree and settlement agreement, the beneficiary of an insurance policy generally

remains the same until a change of beneficiary is effected in accordance with the

terms of the policy.” Hinkle v. Woolever, 547 S.E.2d 782, 783 (Ga. App. 2001).

“If, however, the insured has done substantially all that is required of him, or all

that he is able to do, to effect a change of beneficiary, and all that remains to be

       2
         We need not address Norma’s argument that this testimony on this issue was hearsay,
because she did not raise that argument in her initial brief. See United States v. Jernigan, 341
F.3d 1273, 1284 n.8 (11th Cir. 2003) (noting that a claim that is not plainly and prominently
indicated is abandoned on appeal, even if properly preserved below). For the same reason, we
do not address Norma’s argument that this testimony failed to establish an industry-wide custom.
Id. Moreover, although other testimony demonstrated that the language used here did not reflect
an industry-wide practice, the issue in this case was what Joseph intended, not whether his
language would be widely accepted as an indication of that intent or whether the instruction he
received during orientation was accurate.

        In addition, Norma’s argument regarding the right of The Standard Insurance Company,
Joseph’s life insurance company, to interpret the designation appears to be without merit. A
distribution by Standard would not have prevented Denise from alleging that Standard had
misinterpreted the contract or otherwise violated her rights as a third-party beneficiary, and a
court would not be bound by Standard’s interpretation. Moreover, Standard expressly found the
designation to be “not clear,” and said that it was not in a position to determine how the proceeds
should be distributed.

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done is ministerial action of the insurer, the change will take effect though the

details are not completed before the death of the insured. Some affirmative act,

however, on the part of the member to change the beneficiary is required; his mere

intention will not suffice to work a change of beneficiary.”         Id. at 783-84

(quotations omitted).

      In Hinkle, the Georgia appellate court found that the insured “did

substantially all he could to change the beneficiary.”    Id. at 784.   He did not

complete the change of beneficiary form, but he did write the insurer on four

occasions to request the change. Id. The insurer replied only that it required a

copy of the divorce decree, and his attorneys forwarded that the same day it was

entered, which happened to be after his death. Id. In contrast, in a case where the

insured expressed an intention to change the designation, but did not execute any

document to that effect or make any other attempt to comply with the procedure set

forth in the policy, the court found that he did not do substantially all he could.

Maxwell v. Britt, 319 S.E.2d 88, 90 (Ga. App. 1984).

      Moreover, although state law provides the substantive law for this diversity

suit, “the admissibility of evidence in federal courts is governed by federal law.”

Borden, Inc. v. Florida East Coast Ry. Co., 772 F.2d 750, 754 (11th Cir. 1985).

“Inadmissible hearsay generally cannot be considered on a motion for summary

                                         7
judgment.” Club Car, Inc. v. Club Car (Quebec) Import, Inc., 362 F.3d 775, 783

(11th Cir. 2004). Hearsay is an out-of-court statement, other than one made by the

declarant, offered in evidence to prove the truth of the matter asserted. Fed. R.

Evid. 801(c).

      Here, the district court correctly found that undisputed evidence -- the

benefits coordinator’s testimony -- showed that Joseph did not change his life

insurance beneficiary designation, and that his failure to do so was purposeful.

Although several individuals testified that Joseph and Denise did not have a good

relationship after their divorce, that fact does not contradict the benefits

coordinator’s testimony.   In addition, although several individuals testified that

Joseph told them he had changed his beneficiary designation, this testimony was

inadmissible hearsay: it was offered to prove that Joseph did, in fact, make the

change, and Norma has not shown that it fit within any of the exceptions to the

general rule that hearsay is inadmissible. See Fed. R. Evid. 801-804.

      Thus, unlike in Hinkle, there was no evidence that Joseph contacted

Standard or the Department to change his designation. Rather, there was evidence

that he specifically told the Department that, although he wished to make other

beneficiary changes, he did not wish to change his life insurance designation. As

in Maxwell, Joseph’s failure to take any step towards changing his beneficiary

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designation prevents us from considering the change to be made. 319 S.E.2d at 90.

Accordingly, there was no genuine dispute as to whether Joseph did all he could to

change his beneficiary designation.

       AFFIRMED.3

       3
          In addition, Appellee’s motion for leave to file a sur-reply brief is DENIED, and
Appellee’s motion for an award of damages and costs for a frivolous appeal under Fed. R. App.
P. 38 is DENIED. The Appellant will be taxed costs only as provided for in Fed. R. App. P. 39.

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