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Ministers & Missionaries Benefit Bd. v. Snow

United States Court of Appeals, Second Circuit

March 5, 2015

THE MINISTERS AND MISSIONARIES BENEFIT BOARD, Interpleader-Plaintiff-Cross-Defendant-Appellee,
v.
LEON SNOW, LEANN YOWELL SNOW, Interpleader-Defendants-Cross-Claimants-Appellants,
v.
THE ESTATE OF CLARK FLESHER, MICHELE ARNOLDY, Individually & as Personal Representative of the Estate of Clark Flesher, Interpleader-Defendants-Appellees.

Argued January 12, 2015

Appeal from a final judgment entered on March 26, 2014, by the United States District Court for the Southern District of New York (Forrest, Judge) granting summary judgment for the Estate of Clark Flesher and Michele Arnoldy, and denying summary judgment for Leon and LeAnn Yowell Snow. Because we conclude that the case implicates threshold questions of New York State law that are unsettled, important, and determinative, we CERTIFY these questions to the New York Court of Appeals.

JESSE T. WILKINS (Gregory R. Preston, on the brief), Preston & Wilkins, LLC, Levittown, NY, for Leon and LeAnn Yowell Snow.

BRIAN ROSNER, (Natalie A. Napierala, on the brief), Carlton Fields Jorden Burt, P.A., New York, NY, for the Estate of Clark Flesher and Michele Arnoldy.

Before: KATZMANN, Chief Judge, KEARSE and RAGGI, Circuit Judges.

OPINION

Page 151

KATZMANN, Chief Judge.

This case raises important, yet unanswered, questions of New York State law. Specifically, its resolution turns on whether a governing-law provision that states that the contract will be governed by and construed in accordance with the laws of the State of New York, in a contract not consummated pursuant to New York General Obligations Law section 5-1401, requires the application of New York Estates, Powers & Trusts Law section 3-5.1(b)(2), a New York statute that may, in turn, require application of the law of another state. For the reasons discussed below, we conclude that this is a threshold issue that is determinative, unsettled, likely to recur, and has important public policy implications. See Osterweil v. Bartlett, 706 F.3d 139, 142 (2d Cir. 2013); State Farm Mut. Auto. Ins. Co. v. Mallela, 372 F.3d 500, 509 (2d Cir. 2004). Accordingly, we CERTIFY two questions concerning this issue to the New York Court of Appeals. See N.Y. Comp. Codes R. & Regs. tit. 22, § 500.27(a); 2d Cir. Local R. 27.2(a).

BACKGROUND

Reverend Clark Flesher was a participant in two benefits plans administered by the plaintiff Ministers and Missionaries Benefit Board (" MMBB" ), a New York not-for-profit corporation. Flesher entered into the MMBB plans before his divorce from his then-wife, LeAnn Flesher (now LeAnn Snow). Snow, also a reverend and MMBB policyholder, was listed as the primary beneficiary on both of Flesher's MMBB plans. Her father, Leon Snow, was listed as the contingent beneficiary on both plans. When Flesher and LeAnn Snow divorced in 2008 they signed a Marital Settlement Agreement in which each agreed to relinquish all rights to inherit from the other. The Settlement Agreement also expressly permitted them to change the beneficiaries on their respective MMBB plans. Flesher, however, never exercised this option.

Flesher passed away on June 22, 2011. After his death, the two sets of interpleader defendants each claimed entitlement to the benefits of his MMBB plans (what the parties refer to as the " disputed funds" ). MMBB was unable to determine how to distribute the disputed funds, and on December 23, 2011, commenced this action against the interpleader defendants: (1) the Estate and Flesher's sister, Michele Arnoldy, individually and as the personal representative of the Estate; and (2) LeAnn and Leon Snow. On September 25, 2012, the United States District Court for the Southern District of New York (Griesa, J.) granted interpleader relief to the plaintiff and discharged it from all liabilities as to the defendants, dismissed it from the action, and enjoined all other actions to recover any part of the disputed funds from proceeding until the court issued a final judgment resolving which party was entitled to the disputed funds. The case was transferred to Judge Forrest on June 6, 2013, and the parties each moved for summary judgment.

On their cross-motions for summary judgment, the district court held that the Estate of Clark Flesher is entitled to the disputed funds. See Ministers & Missionaries Benefit Bd. v. Estate of Clark Flesher, No. 11 Civ. 9495 (KBF), 2014 WL 1116846, at *6 (S.D.N.Y. Mar. 18, 2014). In reaching this conclusion, the district court reasoned that: (1) the parties agreed that " [t]he relevant choice-of-law rules are the rules of the forum state, here, New York," Id. at *5 (internal quotation marks omitted); (2) the disputed funds constituted

Page 152

Flesher's personal property, and under New York Estates, Powers & Trusts Law section 3-5.1(b)(2), the " revocation or alteration of a testamentary disposition of personal property, and the manner in which such property devolves when not disposed of by will, are determined by the law of the jurisdiction in which the decedent was domiciled at death" ; (3) Rev. Flesher was domiciled in the state of Colorado at his death; and (4) under Colorado's revocation law, Colo. Rev. Stat. § 15-11-804(2)(a)(i), the divorce terminated both Snows' claims to the disputed funds.[1]See 2014 WL 1116846, at *5--*6. New York's analogous revocation law ...


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