Court Opinion

ID: 58174
Source: CourtListenerOpinion
Date Created: 2010-04-26 02:29:29+00
Date Added: 2024-06-11T17:19:42.617861
License: Public Domain

[DO NOT PUBLISH]

             IN THE UNITED STATES COURT OF APPEALS

                     FOR THE ELEVENTH CIRCUIT
                      ________________________                  FILED
                                                       U.S. COURT OF APPEALS
                             No. 07-10162                ELEVENTH CIRCUIT
                                                             DEC 05, 2007
                       ________________________
                                                          THOMAS K. KAHN
                                                               CLERK
                    D.C. Docket No. 05-00378 CV-C-S

MARTHANN BUSH,

                                               Plaintiff-Counter Defendant-
                                               Cross Defendant-Appellee,

                                  versus

BONITA BUSH FLYNT,
JOHN MARTIN BUSH,
HENRY BRACKIN BUSH,

                                               Defendants-Counter Defendants-
                                               Counter Claimants-Appellants.

                       ________________________

                Appeal from the United States District Court
                    for the Middle District of Alabama
                      ________________________

                           (December 5, 2007)

Before BIRCH, CARNES and COX, Circuit Judges.

PER CURIAM:
                                   1. Background

      Dr. John Bush (“Dr. Bush”) died on November 29, 2004. During his lifetime,

he entered into several contracts with TIAA-CREF that required payment of certain

benefits to named beneficiaries upon his death.

      About a week before Dr. Bush’s death, his children, Bonita Flynt, John Bush,

and Henry Bush (“the Bush children”), learned that Dr. Bush’s wife (their step-

mother), Marthann Bush (“Marthann”), was attempting to change the beneficiary

designations on some of the TIAA-CREF contracts. In response to this unwelcome

news, John Bush, acting pursuant to a power of attorney given him by Dr. Bush in

March 2001, completed forms on November 24, 2004, to remove Marthann as the

sole beneficiary on two of the TIAA-CREF contracts (“the C and U contracts”). John

Bush mailed the forms to TIAA-CREF in February 2005, more than two months after

Dr. Bush’s death. John Bush stated in his affidavit that the reason for this delay was

that a TIAA-CREF official told him that they were in possession of a power of

attorney from Dr. Bush naming Marthann as his attorney-in-fact. (Marthann had

obtained this power of attorney from Dr. Bush while he was in an impaired state, and

it is undisputed that it was invalid.) TIAA-CREF and John Bush apparently believed

that John Bush’s power of attorney was void.

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      This litigation ensued. The Bush children sought a declaration that their

attempt to change the beneficiaries of the C and U contracts was effective, even

though the appropriate forms were mailed after Dr. Bush’s death. They also sued

Marthann for fraud, conversion, and deceit.

      The district court granted partial summary judgment in favor of Marthann,

holding that John Bush’s act of mailing the change of beneficiary forms after Dr.

Bush’s death was ineffective since his power of attorney expired upon Dr. Bush’s

death. Thus, the court held, Marthann remained the sole beneficiary of the C and U

contracts. And, following a bench trial, the district court found against the Bush

children on their Alabama state law claims against Marthann alleging fraud,

conversion, and deceit. The Bush children challenge both rulings on this appeal.

                              2. The Contract Claims

      The district court held, as a matter of law, that John Bush’s power of attorney

expired when Dr. Bush died. Thus, the court reasoned, John Bush had no power to

mail the change of beneficiary forms, since this was an act pursuant to powers granted

by a power of attorney.

      The Bush children contend that summary judgment with respect to the

disposition of the C and U contracts should be reversed because Marthann did not

attach the contracts as exhibits to her summary judgment motion. They also argue that

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the district court erred by holding that John Bush’s power of attorney was not coupled

with an interest. Alternatively, they argue that John Bush’s power of attorney was

coupled with an interest, and thus the powers conferred by it extended past Dr. Bush’s

death. Finally, the Bush children contend that John Bush’s act of mailing the change

of beneficiary forms to TIAA-CREF was effective since he was acting as a bailee of

his late father, rather than an agent. We address each argument in turn.

      The disputed issues before the district court involved the change of

beneficiaries. And the contract provisions relating to change of beneficiary were

before the court as attachments to an affidavit filed by John Bush. (R.1-33, Ex. A.)

Thus, the fact that Marthann did not attach the contracts as exhibits to her summary

judgment motion is irrelevant.

      The district court recognized the general rule that the authority conferred upon

John Bush by the power of attorney expired upon Dr. Bush’s death. The court then

held that his power of attorney was not coupled with an interest, which would be an

exception to the general rule, allowing it to continue after Dr. Bush’s death. The

district court did not err in deciding summary judgment on an issue that the parties

did not brief. And, we find no error in the determination that John Bush’s power of

attorney was not coupled with an interest.

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      The Bush children also contend that John Bush acted as a bailee for Dr. Bush

when he mailed the change of beneficiary forms. Thus, they argue, his powers and

duties as a bailee for his late father continued after his death and the change of

beneficiaries was effective. We reject this argument. The Bush children cite only one

case, Cutcliffe v. Chestnut, 190 S.E. 2d 800 (Ga. App. 1972), to support this position.

Cutcliffe involved a decedent who had given a friend money and authorized him to

purchase stock on his behalf and await his instructions. Then, the decedent died.

When the decedent’s estate demanded the stock, the court ruled that when the

decedent requested that his friend hold the stock, the friend became the custodian of

the stock and bound by the laws of bailment rather than agency.

      Cutcliffe is readily distinguishable from this case. Dr. Bush did not ask John

Bush to be a custodian of the change of beneficiary documents. John Bush undertook

the changes as an agent rather than a bailee. We see no reason to depart from the

general rule that John Bush’s power of attorney expired upon Dr. Bush’s death.

      We find no error in the district court’s decision to grant partial summary

judgment in favor of Marthann on the C and U contracts.

                                 3. The Tort Claims

      After a bench trial, the district court found in favor of Marthann on all state

law claims brought by the Bush children. The court held that the claims failed

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because the Bush children could point to no duty that Marthann owed them, and,

in the alternative, failed to demonstrate any reliance on any alleged fraudulent

misrepresentation. The crux of the Bush children’s state law claims against

Marthann was that they did not mail the change of beneficiary forms to TIAA-

CREF because they believed that Marthann’s fraudulently obtained power of

attorney was valid.

        The Bush children argue that we should reverse the district court on the

state law claims, because it applied an outdated “justifiable reliance” standard.

They also contend that Marthann owed them a duty to refrain from deceiving

them.

        “Reasonable reliance” is the correct standard under Alabama law. See

Foremost Ins. Co. v. Parham, 693 So. 2d 409 (Ala. 1997). So, the Bush children

are correct that the district court applied the wrong reliance standard, but the error

was harmless. Marthann made no representations to John Bush upon which he

relied in deciding when to mail the change of beneficiary forms. The absence of

any reliance by John Bush defeats the fraud and deceit claims.

        The question of duty is irrelevant, since there is no proof of fraud or deceit.

        AFFIRMED.

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