The opinion of the court was delivered by: Thomas J. McAVOY Senior United States District Judge
Plaintiff Tracy Linder commenced the instant action seeking to determine the validity of certain disclaimers executed by Defendants Louis and Keitha Delles concerning the estate of their deceased daughter and certain federal benefits to which their daughter was entitled. Presently before the Court is Plaintiff's motion and Defendants' cross-motion for summary judgment pursuant to Fed. R. Civ. P. 56.
Defendants Louis and Keitha Delles are the parents of Barbara White, who died on June 14, 2011. At the time of her death, White was employed as a Contracting Specialist for the United States Army Corps of Engineers. As such, White was entitled to certain benefits and payments upon her death, including: (a) a life insurance policy; (b) the account balance in her Thrift Savings Plan; (c) her accumulated Federal Employee Retirement System contributions and earnings; and (d) her last pay check and payment for accrued but unused leave.
White left a Last Will and Testament naming Plaintiff Tracy Linder as her personal representative and beneficiary of the residuary estate. Except for a single small gift, White devised her entire estate to Plaintiff. There has been no challenge to the will.
Shortly after White's death, Defendants received a letter from the Army dated June 23, 2011. The letter included various information and forms to be completed for White's benefits to be paid out to the proper beneficiary. White's sister, Christine Hoffman, sent copies of these forms to the attorney for White's estate, James McVittie. McVittie apparently contacted the federal Office of Personnel Management ("OPM") and learned that the death benefit forms were sent to Defendants because OPM did not have a beneficiary designation form in White's personnel file. It is claimed that, upon McVittie's inquiry, OPM advised that it would accept a disclaimer or waiver of the benefits from Defendants.
McVittie prepared Affidavits of Disclaimer and, by letter dated July 6, 2011, sent them to Defendants. In the cover letter, McVittie advised Defendants that, by signing the Affidavits of Disclaimer, they would be giving up any legal right they may have had to any portion of White's estate or government benefits. McVittie's letter further explained that, if Defendants signed the Affidavits of Disclaimer, any portions of White's estate or benefits to which they would have been entitled would pass to the estate and be administered under the terms of the will. After being assured by McVittie that signing the Affidavits of Disclaimer would not cause any negative tax consequences, on July 11, 2011 Defendants executed the Affidavits of Disclaimer, which they understood to be irrevocable. These Affidavits were filed in the State of Oregon probate proceeding. McVittie also prepared applications for the federal benefits and included copies of the Affidavits of Disclaimer with those applications.
The federal agencies refused to honor the Affidavits of Disclaimer and advised that Defendants could disclaim the benefits only through use of specific forms and procedures. McVittie prepared the necessary forms and sent them to Defendants. Defendants did not submit the applications prepared by McVittie, but, instead, submitted their own application. Defendants' application did not seek to disclaim the benefits, but to obtain them for themselves. Plaintiff then commenced the instant action seeking to obtain White's federal benefits. To date, Defendants have received some of the benefits, which are being held by their attorney.
In response to Plaintiff's lawsuit, Defendants claim that they signed the Affidavits of Disclaimer upon their understanding that Plaintiff would become personally liable on the debt on the real property owned by Plaintiff and White. According to Defendants, they believed that Plaintiff was unable to afford the mortgage payments and that the White estate would have sufficient assets to satisfy the mortgage only if they disclaimed the federal benefits. Defendants claim that, after signing the Affidavits of Disclaimer, they learned that Plaintiff was not an owner of the house she shared with White and not an obligor on the promissory note. Defendants contend that they would not have signed the Affidavits of Disclaimer had they known Plaintiff was not an owner of the real estate or an obligor on the promissory note.
Presently before the Court is Plaintiff's motion for summary judgment and Defendants' cross-motion for summary judgment.
The parties move for summary judgment pursuant to Rule 56. It is well settled that, on a motion for summary judgment, the Court must construe the evidence in the light most favorable to the non-moving party, see Tenenbaum v. Williams, 193 F.3d 581, 593 (2d Cir. 1999), and may grant summary judgment only where "there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). An issue is genuine if the relevant evidence is such that a reasonable jury could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, 477 U.S. 242, 248 (1986). A party seeking summary judgment bears the burden of informing the court of the basis for the motion and of identifying those portions of the record that the moving party believes demonstrate the absence of a genuine issue of material fact as to a dispositive issue. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the movant is able to establish a prima facie basis for summary judgment, the burden of production shifts to the party opposing summary judgment who must produce evidence establishing the existence of a factual dispute that a reasonable jury could resolve in his favor. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). A party opposing a properly supported motion for summary judgment may not rest upon "mere allegations or denials" asserted in his pleadings, Rexnord Holdings, Inc. v. Bidermann, 21 F.3d 522, 525-26 (2d Cir. 1994), or on conclusory allegations or unsubstantiated speculation. Scotto v. Almenas, 143 F.3d 105, 114 (2d Cir. 1998).
With these standards in mind, the Court will address the ...