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Wang v. Primerica Life Insurance Co.

November 5, 2010

LI-SHAN WANG, PLAINTIFF,
v.
PRIMERICA LIFE INSURANCE COMPANY, DEFENDANT.
PRIMERICA LIFE INSURANCE COMPANY, THIRD-PARTY PLAINTIFF,
v.
MICHELLE XU, A/K/A YUAN MENAGER-XU,: A/K/A MICHELLE YUAN XU, KAYA NEFTCI, AN INFANT BY HIS MOTHER AND NATURAL GUARDIAN MICHELLE XU, MERVE NEFTCI AND EMRE NEFTCI, THIRD-PARTY DEFENDANTS.



The opinion of the court was delivered by: McKENNA, D.J.

MEMORANDUM AND ORDER

Plaintiff Li-Shan Wang, who describes herself as the long-term girlfriend of Salih Neftci ("Decedent"), brings this action asserting her right to benefits under Decedent's life insurance policy (the "Policy") with Primerica Life Insurance Company ("Primerica"). The suit was originally brought in New York state court against Primerica. Primerica removed the action to this Court and interpleaded Decedent's infant sons, Kay and Kaan Neftci, and their mother, Michelle Xu,("Xu Defendants") and Decedent's adult living children, Emre and Merve Neftci ("Neftci Defendants") (collectively, "Third-Party Defendants"). The Third-Party Defendants also assert claims to the proceeds of Decedent's Policy. Primerica acknowledged its obligation to render payment under the Policy and deposited the Policy proceeds with this Court. Primerica has been dismissed from the case with prejudice, and the action remains only to resolve to whom the proceeds should be paid.

Currently pending before the Court are Xu Defendants' Motion to Dismiss Wang's claim pursuant to Rule 12(c) and Rule 56 of the Federal Rules of Civil Procedure and Wang's Motion for Leave to Amend her complaint pursuant to Rule 15(a) of the Federal Rules of Civil Procedure.

For the reasons set forth below, Xu Defendants' motion to dismiss is DENIED and Wang's motion for leave to amend is GRANTED.

I. Background

Decedent applied for a life insurance policy with Primerica in 1996 and Primerica issued him the Policy in March 1997. (Xu Defs.' Rule 56.1 Statement ¶ 1; Pl.'s Rule 56.1 Counter-Statement ¶ 1; Aff. of Jonathan Warner in Supp. of Xu Defs.' Mot. to Dismiss, dated Nov. 13, 2009 ("Warner Aff.") Ex. B.) The interpretation of Decedent's one-page policy application (the "Application") is at the center of this dispute.*fn1 Wang maintains that Decedent intended to name her as a Policy beneficiary, (Pl.'s Rule 56.1 Counter-Statement ¶ 2), whereas Xu Defendants maintain that Decedent intended to name only his three then living children as the beneficiaries and name Wang as the trustee for the children (Xu Defs.' Rule 56.1 Statement ¶ 2). Both parties agree that no trust was identified in Decedent's Application and that no valid trust ever existed. (Xu Defs.' Rule 56.1 Statement ¶ 3; Pl.'s Rule 56.1 Counter-Statement ¶ 3.)

Also at the center of the dispute is the significance of various letters requesting changes to Decedent's Policy that were sent to Primerica between October 2008 and Decedent's death in April 2009.

In a letter dated October 24, 2008, Decedent requested revocation of "all prior designations" and named his four living children as the Policy's beneficiaries.*fn2 (Xu Defs.' Rule 56.1 Statement ¶ 6; Pl.'s Rule 56.1 Counter-Statement ¶ 6.) Wang argues, however, that Decedent lacked capacity at this time to make these changes because of his recently diagnosed brain tumor. (Pl.'s Rule 56.1 Counter-Statement ¶ 6.)

On December 3, 2008, Decedent sent another letter to Primerica requesting that his two infant children receive a larger share of the Policy proceeds. (Xu Defs.' Rule 56.1 Statement ¶ 7; Pl.'s Rule 56.1 Counter-Statement ¶ 7.) In this letter, "irrevocable" appears in parentheses next to the names of Decedent's infant sons but not next to the names of his adult children. (Warner Aff. Ex. F.) Xu Defendants argue that, by this letter, Decedent designated his infant sons as "irrevocable beneficiaries" as defined by the Policy and thus, no changes to their designation could be made without their written consent. (See Xu Defs.' Mem. in Opp. to Pl.'s Mot. to Am. ("Xu Defs.' Memo in Opp.") at 10.) Wang again maintains that Decedent lacked capacity to make these changes. (Pl.'s Rule 56.1 Counter-Statement ¶ 7.)

Primerica received another letter from Decedent, dated December 1, 2008 and signed December 5, 2008 that designated Wang as the Policy's sole beneficiary and Policy owner. (Warner Aff. Ex. I; Pl.'s Affirmation in Supp. of Pl.'s Mot. to Amend ("Pl.'s Affirm.") ¶ 16.) Wang argues that if Decedent was competent to make Policy changes after his diagnosis, then she is entitled to the Policy proceeds because of this letter. (Pl.'s Affirm. ¶ 3.) The Xu Defendants argue that this letter is unenforceable because it was not actually signed by Decedent and they point to, inter alia, a letter in Decedent's name received by Primerica in January 2009, complaining of fraudulent activity in reference to the alleged Policy transfer to Wang. (Xu Defs.' Memo in Opp. at 4.) Xu Defendants also argue that Decedent could not have revoked the designation of his infant children as irrevocable beneficiaries because they did not give written consent. (Id.)

A. Procedural History

Wang initially filed this action on May 27, 2009 in New York state court asserting her right, as Policy beneficiary, to the Policy's death benefit, and alleging that the October 2008 change in beneficiary was the result of undue influence and contrary to Decedent's expressed wishes. (See Warner Aff. Ex. K.) On June 16, 2009, the case was removed to this Court.

The Xu Defendants moved, in November 2009, to dismiss Wang's claim for lack of standing pursuant to Rule 12(c) and Rule 56 of the Federal Rules of Civil Procedure. (Xu Defs.' Mem. in Supp. of their Mot. to Dismiss ("Xu Defs.' Memo") at 1.) The Neftci Defendants support this motion. (See Neftci Defs.' Memo. in Opp. to Mot. to Dismiss their Cross-Claim at 1.)

A pre-trial conference was held in September 2009, and this Court set a discovery cut-off date of March 31, 2010 and referred general pretrial matters to Magistrate Judge Freeman. (See Minute Order, Sept. 11, 2009.) The discovery deadline was extended to May 14, 2010. (See Status Conf. Minute Entry, Mar. 26, 2010.) By May 2010, all party depositions had been completed (see Xu Defs.' Memo. in Opp. at 7) and certain non-party depositions were to be completed by June 14, 2010 (see Endorsed Letter to Magistrate Judge Freeman, May 11, 2010).

On April 6, 2010, Wang moved to amend her complaint to (1) reduce the amount of proceeds that she was seeking under her original cause of action, which is based on the theory that Decedent lacked the requisite mental capacity to make changes to the Policy after his diagnosis, and (2) add an alternative claim asserting that if the Decedent posessed the requisite mental capacity to make Policy changes, then Wang is entitled to the Policy's entire death benefit as a result of Decedent's letter dated December 1, 2008 and signed December 5, 2008 that named her the Policy's sole beneficiary and transferred ownership of the Policy to her. (Pl.'s Affirm. ¶ 3.) The Xu Defendants oppose Wang's motion, arguing that Wang unduly delayed in seeking amendment, Wang's proposed amendment would be futile, and Wang acted with a dilatory motive. (Xu Defs.' Mem. in Opp. at 7-11.)

II. The Motion to Dismiss for Lack of Standing to Sue

Xu Defendants seek to dismiss Wang's complaint for lack of standing to sue pursuant to Rules 56 and 12(c) of the ...


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