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Mendelovici v. Integrity Life Insurance Co.

January 23, 2009

ADDA MENDELOVICI, PLAINTIFF,
v.
INTEGRITY LIFE INSURANCE COMPANY, MORITZ MENDELOVICI, INDIVIDUALLY AND AS EXECUTOR OF THE ESTATE OF LIEB MENDELOVICI AND ROBERT MCKEEVER, CLU, INDIVIDUALLY, DEFENDANTS.
INTEGRITY LIFE INSURANCE COMPANY, DEFENDANT/INTERPLEADING PLAINTIFF,
MORITZ MENDELOVICI, INDIVIDUALLY AND AS CO- EXECUTOR OF THE ESTATE OF LIEB MENDELOVICI, RAUL MENDELOVICI, INDIVIDUALLY AND AS CO-EXECUTOR OF THE ESTATE OF LIEB MENDELOVICI, THE ESTATE OF LIEB MENDELOVICI AND MIRIAM FRONS, INTERPLEADING DEFENDANTS.



The opinion of the court was delivered by: William J. Giacomo, J.

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the printed Official Reports.

In this interpleader action commenced by Integrity Life Insurance Company (hereinafter "Integrity") the Court was asked to determine which of the competing claimants were entitled to the distribution of an annuity.

The Court, after reviewing the submissions*fn1 of the parties, the relevant statutes, case law and the annuity contract determines that the parties must evenly share the Annuity distribution and all accumulated interest.

Factual and Procedural History

After living together since 1995, on March 4, 2000, Adda Mendelovici (hereinafter "plaintiff" or "Adda") married Lieb Mendelovici (hereinafter "Lieb").

On November 20, 2000, Integrity Life Insurance Company (hereinafter "Integrity") issued an annuity (the "Annuity") which named Adda as both the "Primary Owner" and the "Annuitant" and named Miriam Frons, plaintiff's niece as the "Annuitant's Primary Beneficiary". Plaintiff claims, and no one disputes, that this annuity was purchased via her own separate assets.

Sometime in March 2002, Integrity received a "Non-Financial Service Request Form" that bears a date of March 2, 2002, that changed the "Primary Owner" on the Annuity from plaintiff to "Adda and/or Lieb Mendelovici".

In 2003 Lieb died and Moritz Mendelovici ("Moritz") and Raul Mendelovici ("Raul"), Lieb's brothers, were named co-executors of Lieb's Estate (the "Estate"). In the process of going through some documents at plaintiff's request, Moritz discovered documents concerning the Annuity*fn2. Upon inquiry to Integrity, Moritz obtained a letter from an Integrity client services' representative that stated that the "IRS rule says that on a policy where there is joint ownership if one owner passes, they both are considered deceased. Since there is no owner's primary beneficiary designated The Lieb Mendelovici Estate now becomes the new owner." (January 30, 2004 letter from Chadonia Smith of Integrity Life Insurance Company.)*fn3

In 2004, plaintiff commenced this action seeking recovery of the $100,000 annuity based upon a claim of conversion. Faced with conflicting claims to the Annuity, Integrity commenced the Interpleader action in January 2005, naming all parties with possible claims to the Annuity.

On April 30, 2007, Justice Lawrence Horowitz dismissed the plaintiff's complaint for failure to prosecute pursuant to CPLR 3216. Plaintiff moved to vacate the April 30, 2007 default judgment dismissing her complaint and in a companion motion, Integrity moved pursuant to CPLR §1006(f) for an order to allow it to pay into this Court the amount in dispute herein, then $121,102.13, and discharging it from any liability.

By decision and order dated April 22, 2008 (the "Order"), this Court denied plaintiff's motion to vacate the default and granted Integrity's motion permitting it to pay into this Court the amount of the Annuity and its accumulated interest, i.e. $121,102.13, and discharging it from any liability to any claimant.

Now before the Court is the outstanding issue of the competing claims to the proceeds of the Annuity by the claimants, plaintiff Adda Mendelovici and Moritz Mendelovici as the Co-Executor of the ...


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