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Hartford Life and Annuity Insurance Co. v. Farris

United States District Court, N.D. Illinois, Eastern Division

June 19, 2014

HARTFORD LIFE AND ANNUITY INSURANCE COMPANY, Plaintiff,
v.
ANNE FARRIS, HONGJIAO HU, and NATALIA NEBEL, Defendants.

MEMORANDUM OPINION AND ORDER

HARRY D. LEINENWEBER, District Judge.

Before the Court are Cross-Motions for Summary Judgment. For the reasons stated herein, Defendant Natalia Nebel's Motion for Summary Judgment [ECF No. 49] is granted and Defendant Hongjiao Hu's Motion for Summary Judgment [ECF No. 55] is denied.

I. BACKGROUND

This interpleader case seeks to determine the proper beneficiary of a life insurance policy. The material facts are not in dispute - the parties agree on the background and many of the specifics, and all of the facts in Defendant Nebel's Rule 56.1 Statement of Facts are deemed admitted because Defendant Hu did not respond to the numbered paragraphs in Nebel's Statement. See, Local Rule 56.1(b)(3)(C).

Thomas Walkowiak ("Walkowiak"), the insured, married Defendant Natalia Nebel ("Nebel") in May 1989. In 1996, Walkowiak bought a life insurance policy (the "Policy") from Hartford Life and Annuity Insurance Company and designated Nebel as the primary beneficiary. He financed the purchase with marital funds from a joint checking account he shared with Nebel. Thereafter, Nebel paid the premiums using funds from the joint account. After she and Walkowiak separated in early 2008, Nebel continued to pay the premiums from the joint account. Although Walkowiak stopped depositing money into the joint account later that year, Nebel continued to transfer money from her personal account into the joint account so that she could keep paying the premiums.

Even though he and Nebel were separated, Walkowiak relied on Nebel for financial help. Nebel lent Walkowiak thousands of dollars so that Walkowiak could purchase expensive prescription medications and meet other obligations. On one occasion in 2011, Walkowiak removed a significant amount of money (probably several thousand dollars, but the record does not specify) from the joint account without Nebel's permission. But despite the breakdown of the marriage and apparent transgressions of any remaining trust, Walkowiak told Nebel on multiple occasions that she remained the Policy's beneficiary. In a May 2010 e-mail to Nebel, Walkowiak affirmed "I will always try my hardest to help and support you until I die, and then you will get the life insurance." Contrary to this and similar assurances, Walkowiak removed Nebel as the Policy's primary beneficiary and replaced her with Defendants Hongjiao Hu ("Hu") (his business partner and paramour) and Anne Farris (his sister) ("Farris") in September 2011, without notifying Nebel.

Nebel filed for divorce in December 2011. While attempting to finalize the dissolution, Walkowiak represented to Nebel and her attorney that Nebel would remain the beneficiary of the Policy. Walkowiak even listed the Policy as a marital asset to be distributed in the divorce. But the divorce was never finalized, as Walkowiak committed suicide on December 30, 2011. Expecting that she would receive the life insurance proceeds, Nebel organized and financed Walkowiak's cremation, memorial service, reception following the service, and obituary. On her own dime, she traveled to Massachusetts to dispose of the ashes in the manner Walkowiak had requested.

When Nebel attempted to obtain the insurance proceeds, she was surprised to learn that she was no longer a beneficiary under the Policy. She contested payment of the Policy's proceeds to Hu and Farris, and Hartford initiated this interpleader action. Nebel and Hu have filed cross motions for summary judgment.

II. JURISDICTION

Defendant Farris is a citizen of Florida, and Defendant Nebel is a citizen of Illinois. Because there are at least two claimants with diverse citizenships and the amount in controversy exceeds $500.00, the Court has jurisdiction over this interpleader case pursuant to 28 U.S.C. ยง 1335.

III. LEGAL STANDARD

Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(a). The Court construes all facts and draws all reasonable inferences in favor of the non-moving party. Ricci v. DeStefano, 557 U.S. 557, 586 (2009).

IV. ANALYSIS

Nebel contends that she acquired a vested interest in the Policy's proceeds by paying the Policy premiums. Because Nebel is a vested beneficiary, she argues, Walkowiak could not ...


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