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The Prudential Ins. Co. of America v. Santy

United States District Court, District of New Hampshire

December 30, 2014

The Prudential Insurance Company of America
v.
Penny Santy, Solely as Administratrix of the Estate of Robert Santy; and Debra Menard Opinion No. 2014 DNH 263

Maureen Hingham, Esq. William Parnell, Esq. William Pandolph, Esq.

AMENDED ORDER

Andrea K. Johnstone United States Magistrate Judge

The Prudential Insurance Company of America (“Prudential”) brought this interpleader action to resolve competing claims to the benefits of two Prudential life insurance policies. The defendants are Penny Santy, who was married to the decedent, Robert Santy, at the time of his death, and Debra Menard, Robert’s brother’s ex-wife. Prudential has been dismissed from the case. Menard moves to dismiss the complaint. Santy objects.

Background

In 1988 and 1989, Prudential issued two life insurance policies to Robert Santy. Robert designated his brother, Richard Santy, as the primary beneficiary of the death benefits payable under the policies. Robert and Richard “were partners in a business, Santy Brothers Logging, and . . . the insurance was . . . purchased for business protection.” Compl. ¶ 8. Robert designated Debra Menard, Richard’s then-wife, as the contingent beneficiary of the policies. Although Richard and Menard got divorced in 2002, Menard remained the contingent beneficiary of the policies.

Robert died on December 9, 2013. Following Robert’s death, Prudential was notified that Richard had predeceased Robert. Menard, as the contingent beneficiary, submitted a claim for the death benefits under the policies. Penny Santy, Robert’s widow, subsequently contacted Prudential contesting payment to Menard. Prudential brought this interpleader action to determine which of the claimants is entitled to Robert’s life insurance proceeds.[1] The court granted Prudential’s assented-to motion to deposit funds into a court registry and to be dismissed from the case.[2]

Menard moves to dismiss the complaint, arguing that Santy does not have a valid claim to the death benefits under the policies. Santy objects.

Standard of Review

Federal Rule of Civil Procedure 12(b)(6) allows a defendant to move to dismiss on the ground that the plaintiff's complaint fails to state a claim on which relief can be granted. In assessing a complaint for purposes of a motion to dismiss, the court “separate[s] the factual allegations from the conclusory statements in order to analyze whether the former, if taken as true, set forth a plausible, not merely conceivable, case for relief.” Juarez v. Select Portfolio Servicing, Inc., 708 F.3d 269, 276 (1st Cir. 2013) (internal quotation marks omitted).

Discussion

Menard argues the case should be dismissed because there is no dispute that she is entitled to the death benefits as the contingent beneficiary of the policies. She argues that she had an insurable interest at the time the policy was issued and, therefore, her claim to the death benefits is valid. She also argues that her claim to the benefits became incontestable after two years under RSA 408:10.

In response, Santy argues that Menard “has no insurable interest in the life of the policyholder, Robert Santy, and therefore no right to the policy proceeds.” Santy Obj. (doc. no. 14) at ¶ 22. Santy contends that Menard relinquished any interest in Robert’s life or the logging business when she and Richard divorced. She also argues that the court should impose a constructive trust in Santy’s favor on the death benefits.

A. Insurable Interest

The court notes at the outset that “New Hampshire embraces the majority rule that only the insurer can raise the object[ion] of want of insurable interest.” Rice v. Wal-Mart Stores, Inc., No. Civ. 02-390-B, 2003 WL 22240349, at *1 (D.N.H. Sept. 30, 2003) (internal quotation marks and citations omitted). Thus, “[b]ecause [Santy is] ...


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