Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

USAA Life Insurance Co. v. Benvenuto

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

September 28, 2016

USAA LIFE INSURANCE COMPANY, a Texas corporation, Plaintiff,
v.
LORI L. DUNN BENVENUTO, et al., Defendants. KATHERINE ST. CLAIR mother, guardian and next friend of E.A.B. and H.M.B. Cross-Plaintiff, and Interpleader Defendant,
v.
LORI L. DUNN BENVENUTO, Cross-Defendant, and Interpleader Defendant.

          MEMORANDUM OPINION & ORDER

          Joan B. Gottschall Judge

         Before the court is the Motion for Partial Summary Judgment of Cross-Defendant/Interpleader Defendant Lori L. Benvenuto (“Lori”) on Count II of the Amended Cross-Complaint filed by Cross-Plaintiff/Interpleader Defendant Katherine St. Clair (“Katherine”). [ECF No. 96.] For the following reasons, Lori's motion is denied.

         I. BACKGROUND

         The court takes the following facts from the parties' Local Rule 56.1 statements and exhibits. The facts are undisputed unless expressly noted.

         Prior to his death on October 11, 2012, Paul Benvenuto (“Paul”) was employed by the Department of Justice, Federal Bureau of Investigation (“FBI”) as a special agent assigned to its Chicago Division. [Lori Benvenuto 56.1 Statement of Facts (“SOF”) ¶¶ 13, 30, ECF No. 107.] As an employee of the Federal Government, Paul was entitled to participate in the Federal Employees' Group Life Insurance (“FEGLI”) Program. [Id. ¶ 14.] Paul initially waived coverage at the time of his hire in 1997, but elected life insurance coverage in an amount equal to five times his salary during an open enrollment period in June 1999. [Id. ¶ 14, 16.]

         Cross-Defendant/Interpleader Defendant Lori is Paul's surviving spouse. Paul was previously married to Cross-Plaintiff/Interpleader Defendant Katherine. Paul and Katherine have two children, E.A.B. and H.M.B. On April 6, 2009, a state court in DuPage County, Illinois entered a Judgment for Dissolution of Marriage (“divorce decree”) which dissolved the marriage of Paul and Katherine. [Id. ¶ 19.] Pursuant to the terms of a Marriage Settlement Agreement (“MSA”) dated January 20, 2009 and incorporated by reference into the divorce decree, Paul was to maintain insurance on his life in an amount not less than $500, 000. [Id. ¶ 20.] Paul was also required to designate E.A.B. and H.M.B. as beneficiaries of his life insurance policy or policies. [Id.] In accordance with the MSA, Paul designated E.A.B. and H.M.B. as 50/50 beneficiaries of his FEGLI policy. [Id. ¶ 21.] The FEGLI Designation of Beneficiary form indicates that it was received by the FBI human resources office in Washington, DC on January 30, 2009. [Id.]

         On April 14, 2009, Paul provided the office of the Chicago Division of the FBI with a change in marital status form FD-207 and an unsigned and uncertified copy of the divorce decree. [Id. ¶ 22.] Lori states, and the record confirms, that Paul did not provide his office with a copy of the MSA. On October 16, 2009, Paul executed another FEGLI Designation of Beneficiary form naming the Paul M. Benvenuto Trust, dated 10/15/2009 (“PMB Trust”) as the beneficiary of his FEGLI policy. [Id. ¶ 24.] Paul and Lori married on January 4, 2012. Shortly thereafter, on January 6, 2012, Paul filed a third and final Designation of Beneficiary form with the FBI. The form identified Lori as the primary beneficiary of the FEGLI policy and the PMB Trust as the successor beneficiary. [Id. ¶¶ 25-26.]

         On February 13, 2012, Special Agent Lynette Schroeter (“SA Schroeter”) interviewed Katherine as part of the FBI's periodic reinvestigation of Paul. During the interview, Katherine told SA Schroeter that she and Paul were divorced in 2009 in DuPage County, that the records of the divorce were sealed, and she gave SA Schroeter the case number. [Id. ¶ 27.] After her interview with Katherine, SA Schroeter prepared a Report of Investigation which indicated that Katherine advised that she could “provide written documentation to verify any of the information that she…supplied” during the interview. [Id. ¶ 28.] There was no document referred to or attached to SA Schroeter's report. [Id.] However, Katherine avers in an affidavit attached to her response in opposition to Lori's motion for partial summary judgment that she provided SA Schroeter with a certified copy of the divorce decree and MSA. [Resp. to Benvenuto SOF, Ex. A, St. Clair Affidavit, ¶ 5, ECF No. 107-2.] SA Schroeter interviewed Katherine once again on June 1, 2012 as part of the FBI's reinvestigation program. There was no discussion of the divorce decree or MSA or Paul's obligations thereunder. [Id. ¶ 29.]

         Paul's FBI personnel file contains no certified copy of the divorce decree or MSA. Deborah Crum, Unit Chief with the Discovery Processing Unit with the FBI, averred in an affidavit that the FBI searched its internal records and discovered that it was not in possession of a certified divorce decree or MSA. [MSJ, Ex. A, Crum Affidavit, pp. 1-3, ECF No. 97.] [Benvenuto SOF, Ex. A, Crum Affidavit, pp. 1-3; Reply, Ex. E., 12/18/15 FBI Letter to St. Clair, ECF No. 108.]

         As a result of Paul's death on October 11, 2012, the life insurance benefits from his FEGLI policy, in the total amount of $812, 000, became payable. [Id. ¶ 31.] On October 28, 2012, Katherine, as guardian of E.A.B. and H.M.B., submitted claims for the FEGLI benefits on their behalf based on the language of the MSA requiring that Paul maintain life insurance naming his children as beneficiaries. Approximately one month later, on November 23, 2012, Lori submitted a claim for the FEGLI benefits based on her designation as a beneficiary.

         On January 28, 2013, USAA Life Insurance Company (“USAA”) filed the instant interpleader action against Katherine and Lori requesting that this court adjudicate their competing interests in a $252, 397.26 life insurance policy it had issued on the life of Paul. [Complaint for Interpleader, ECF No. 1.] The policy issued by USAA is separate from the FEGLI policy at issue in this case. Thereafter, Katherine filed a Cross-Claim against Lori and a third-party complaint against Metropolitan Life Insurance Company (“MetLife”) to recover $500, 000 from the proceeds of the FEGLI policy on Paul's life issued by MetLife. The FEGLI policy was issued by MetLife pursuant to the Federal Employees' Group Life Insurance Act, 5 U.S.C. § 8701 et seq. (“FEGLIA”). [Cross-Claim, ECF No. 12.] Pursuant to this court's orders of March 26, 2013 and July 2, 2013, USAA and MetLife deposited $252, 397.26 and $813, 981.34, respectively, with the District Court's Registry. [3/26/13 Order, ECF No. 14; 7/2/13 Order, ECF No. 34.]

         Ultimately, the $252, 397.26 USAA policy proceeds were released to Katherine because of the language in the MSA requiring Paul to maintain life insurance on behalf of his two natural children. [9/3/14 Order, ECF No. 83.] The USAA policy involved none of the precedence issues involved in the FEGLI policy.

         Because Paul was required to maintain $500, 000 of life insurance on behalf of E.A.B. and H.M.B., Katherine has, at most, an interest in $247, 602.74 of the MetLife/FEGLI insurance proceeds. Accordingly, the court released $563, 967.86 of the MetLife/FEGLI policy proceeds to Lori, the designated beneficiary of the FEGLI policy. [2/26/14 Oder, ECF No. 55.] $250, 013.48 of the MetLife/FEGLI insurance proceeds remains deposited with the District Court Registry and is at issue in this case. Katherine argues that, pursuant to the divorce decree and MSA, she, on behalf of her children, is entitled to those proceeds. However, Lori argues that, as the designated beneficiary of Paul's FEGLI policy, she is entitled to the proceeds. Lori has filed the instant motion for partial summary judgment.

         II. ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.