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The Prudential Insurance Company of America v. Julie Eisen

March 15, 2012

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, PLAINTIFF,
v.
JULIE EISEN, JASON BARNETT, JARED BARNETT, PAUL BARNETT, LORI BARNETT, AND PAUL OWENS, DEFENDANTS.



The opinion of the court was delivered by: Buckwalter, S. J.

MEMORANDUM

Presently before the Court are: (1) Defendants*fn1 Julie Eisen, Jason Barnett, Jared Barnett, Paul Barnett, and Lori Barnett's ("the Barnetts") Motion Pursuant to Federal Rule of Civil Procedure 12(c) for Judgment [sic] on the Pleadings; (2) Defendant Paul Owens's ("Owens") Response and Cross-Motion for Judgment on the Pleadings Or, In the Alternative, Motion for Summary Judgment Pursuant to Federal Rule of Civil Procedure 56; and (3) the Barnetts' Reply and Addendum to Owens's Motion for Summary Judgment. For the following reasons, summary judgment is granted in favor of the Barnetts.

I. BACKGROUND

A. Statement of the Facts

This matter involves a dispute regarding a life insurance policy and the Commonwealth of Pennsylvania's power of attorney statute. Prior to his death, Bruce H. Eisen ("Eisen") purchased a life insurance policy in the amount of $750,000.00 from Plaintiff Prudential Insurance Company of America ("Prudential"). (Compl. ¶ 11.) In early 2004, Eisen sought to appoint his sister Lori Barnett ("Lori"), a resident of Kansas, the power of attorney over his legal and financial affairs. (Id. ¶ 12.) During the execution of the power of attorney, Eisen was required to read and sign a statutorily-mandated notice, which explicitly stated that:

The purpose of this power of attorney is to give the person you designate ("your agent") broad powers to handle your property . . . Your agent may exercise the powers given here throughout your lifetime, even after you become incapacitated, unless you expressly limit the duration of these powers or you revoke these powers or a court acting on your behalf terminates your agent's authority. (Id., Ex. A) (capitalization of text omitted). Eisen signed and notarized the document. (Id.) Thereafter, on January 31, 2004, Eisen granted Lori the power of attorney ("the Barnett POA") over his financial and legal affairs. (Id. ¶ 12; Ex. A.) The Barnett POA gave Lori the authority to conduct insurance and benefit plan transactions on Eisen's behalf, including the right to change the beneficiaries and ownership of Eisen's life insurance proceeds. (Id., Ex. A ¶ 7.) Pursuant to this authority, Lori submitted a beneficiary designation form to Prudential on January 21, 2011, designating the Barnetts as the beneficiaries of Eisen's life insurance policy, with each family member to receive an equal 20% share. (Compl. ¶ 13; Ex. B.)

At some point after execution of the Barnett POA, Eisen began a long-term battle with terminal oral cancer.*fn2 (Barnetts' Answer & Affirm. Defenses to Compl. in Interpleader & Cross-cl. Against Def. Owens ("Barnett Answer") ¶ 28.) His mental and physical health significantly declined over the years, and in November 2010, the cancer allegedly metastasized to his brain. (Id.)

According to Owens, Eisen's relationship with the Barnetts deteriorated in the years immediately preceding his death. Eisen and his daughter, Julie Eisen, became estranged. (Aff. of Paul Owens ¶ 3.) Owens also asserts that Eisen suspected that Lori was unlawfully transferring and withdrawing money from his financial accounts without his permission under the guise of her power of attorney authority. (Id. ¶¶ 4, 5.) Apparently as a result of this familial deterioration, Eisen executed a second power of attorney on February 2, 2011 that designated his "close friend" Owens as his attorney-in-fact ("Owens POA"). (Id. ¶ 6.) To effectuate this second power of attorney, Owens downloaded and filled out a standard power of attorney form from the Internet. (Owens's Resp. to Mot. for J. on the Pleadings Or, In the Alternative, Mot. for Summ. J. ("Owens's Resp.")

6.) The Owens POA also granted Owens the authority to manage Eisen's life insurance policies. (Compl., Ex. C.) Notably, the Owens POA was silent as to whether it intended to revoke, terminate, or modify the previous Barnett POA. (Id.)

On March 3, 2011, Eisen allegedly contacted his bank and informed appropriate personnel that Owens was entitled to manage his bank account pursuant to his status as Eisen's attorney-in-fact. (Aff. of Paul Owens ¶¶ 7, 8.) The bank gave Eisen a form to complete to effectuate this transfer and terminate Barnett's access to Eisen's bank account. (Id. ¶ 8; Barnetts' Reply to Resp. of Paul Owens ("Barnetts' Reply"), Ex. A, PNC Bank POA Revocation.) Eisen completed and signed the form on March 14, 2011. (Barnetts' Reply, Ex. A.)

On March 29, 2011, Eisen purportedly requested Owens to prepare a new will on his behalf, through which Owens claims he sought to disinherit his family and name Owens as the sole beneficiary of his estate and the life insurance policy. (Owens's Answer, New Matter and Cross-cl. Against Barnetts ("Owens's Answer"), Ex. A.) Owens downloaded a standard will document from the Internet to execute the will, and named himself as executor and sole recipient of Eisen's residuary estate. (Id.)

On April 14, 2011, Eisen submitted a change of beneficiary designation form to Prudential, which designated Owens as the sole beneficiary of his life insurance policy. (Compl. ¶ 16; Ex. D.) Eisen signed the form and had it notarized. (Id.) The form contains no notation indicating that he meant to terminate the Barnett POA.

At some point, Lori became aware of the change of beneficiary designation.*fn3 She claims that she believed that the change was a result of Owens's "undue influence" over Eisen during the later stages of his terminal cancer battle. (Barnetts' Answer ¶ 16.) Therefore, Lori submitted another change of beneficiary designation form to Prudential on April 25, 2011, once again designating the Barnetts as the beneficiaries of the life insurance policy. (Compl., Ex. E.) On the form, Barnett indicated that she was making the designation in her capacity as Eisen's power of attorney. (Id.) Prudential acknowledged Lori's form submission on April 27, 2011. (Id.) Eisen died the very next day in Pennsylvania. (Compl. ¶ 18.)

On May 9, 2011, the Barnetts submitted beneficiary claims forms for the proceeds of Eisen's life insurance policy. (Id. ¶ 20; Ex. G.) Five days later, Owens submitted a beneficiary claims form for the proceeds. (Id. ¶ 21; Ex. H.)

B. Procedural History

On September 16, 2011, Prudential, as a mere stakeholder in the legal action, filed its Complaint in Interpleader naming both the Barnetts and Owens as defendants. Owens filed his Answer to the Interpleader Complaint and a Cross-Claim against the Barnetts on October 14, 2011.

On November 21, 2011, the Barnetts filed: (1) an Answer and Affirmative Defenses to Prudential's Complaint in Interpleader and Owens' Cross-Claim; and (2) their own Cross-Claim against Owens seeking a declaratory judgment. On December 20, 2011, Owens filed an Answer and Affirmative Defenses to the Barnetts' Cross-Claim asserted against him.

On January 9, 2012, the Barnetts filed a Motion for a Judgment on the Pleadings pursuant to Federal Rule of Civil Procedure 12(c). On January 23, 2012, Owens filed: (1) a Response in Opposition to the Barnetts' Motion for Judgment on the Pleadings; (2) a Cross-Motion for Judgment on the Pleadings; and (3) In the Alternative, A Motion for Summary Judgment pursuant to Federal Rule of Civil Procedure 56. The Barnetts filed a Reply on February 9, 2012. ...


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