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Life Insurance Co. of North America v. Camm

United States District Court, S.D. Indiana, New Albany Division

August 6, 2007

LIFE INSURANCE COMPANY OF NORTH AMERICA, Plaintiff,
v.
DAVID R. CAMM, JANICE RENN and FRANK RENN, as Personal Representative of the Estate of Kimberly S. Camm, ESTATE OF KIMBERLY S. CAMM, ESTATE OF BRADLEY R. CAMM, ESTATE OF JILL C. CAMM, Defendants. JANICE RENN and FRANK RENN, as Personal Representative of the Estate of Kimberly S. Camm, Cross-Claimants,
v.
DAVID R. CAMM, Cross-Defendant.

          ENTRY ON CROSS-CLAIMANT JANICE RENN'S MOTION FOR SUMMARY JUDGMENT

          DAVID F. HAMILTON, JUDGE.

         In this interpleader action to resolve entitlement to life insurance proceeds governed by ERISA, cross-claimant Janice Renn has moved for summary judgment. She contends she is entitled to the insurance proceeds because cross- claimant David Camm has been convicted of murdering the insured, Kimberly Camm, who was Mrs. Renn's daughter and David Camm's wife. As explained below, Mrs. Renn's motion for summary judgment is granted.

         I. Summary Judgment Standard

         Summary judgment must be granted “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c). The motion should be granted so long as no rational fact-finder could return a verdict in favor of the non-moving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Thus, a court's ruling on a motion for summary judgment is akin to a ruling on a motion for a directed verdict. The question for the court on both is “whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.” Id. at 251-52.

         II. Undisputed Facts and Procedural Background

         Kimberly Camm and her two children, Jill and Bradley Camm, were murdered on September 28, 2000. At the end of a trial in 2002, a jury found David Camm, the husband of Kimberly and the father of Jill and Bradley, guilty of murdering all three. The Indiana Court of Appeals reversed the murder convictions and ordered a new trial. Camm v. State, 812 N.E.2d 1127 (Ind. App. 2004), transfer denied, 822 N.E.2d 980 (Ind. 2004). A new trial resulted in new convictions for murder on March 3, 2006. David Camm's appeal of the convictions from the second trial is now pending, but a decision is not necessarily imminent. The transcript was just filed with the Indiana Court of Appeals on June 4, 2007 in Cause No. 87 S 00-0612-CR-00499. Camm's brief is currently due to be filed on September 4, 2007.

         Through an employee benefit plan governed by the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001 et seq., Kimberly Camm had obtained life insurance through Life Investors Insurance Company of America (“LIICA”) in an amount of $171, 000. At the time of her death, the effective designation of beneficiaries for the policy listed as primary beneficiaries: David Camm, 50%; Jill Camm, 25%; and Bradley Camm, 25%. Kimberly Camm designated as the secondary or contingent beneficiary her mother Janice Renn, 100%. The half of the proceeds of the LIICA policy to which Jill and Bradley Camm would have been entitled has been paid to Mrs. Renn pursuant to an earlier agreed judgment. Currently at issue with respect to the LIICA policy is the remaining half of the proceeds ($85, 500 plus interest), which would ordinarily be payable to David Camm as primary beneficiary. Those proceeds remain in possession of the clerk of court.

         Kimberly Camm had also obtained life insurance coverage under a group policy issued by Life Insurance Company of North America (“LINA”) pursuant to an employee benefit plan also governed by ERISA. Under the plan, Kimberly Camm was entitled to death benefits of $250, 000 funded by LINA. Those proceeds were deposited with the clerk of this court pursuant to the November 15, 2002, Agreed Partial Judgment Order. At the time of Kimberly Camm's death, she had designated the same combination of primary beneficiaries - David Camm, 50%; Jill Camm, 25%; and Bradley Camm, 25% - and her mother Janice Renn as the contingent beneficiary. Again, the half that would have gone to Jill and Bradley has already been paid to Mrs. Renn under an agreed partial judgment. Currently at issue with respect to the LINA policy is the remaining half of the proceeds ($125, 000 plus interest).

         III. Analysis

         Mrs. Renn's motion for summary judgment argues that David Camm's second conviction for the murder of Kimberly Camm makes him ineligible to take any of the proceeds of the LIICA or LINA policies pursuant to the “slayer's rule” codified in Indiana Code § 29-1-2-12.1. David Camm argues that the probate exception to federal diversity jurisdiction is an obstacle to this court's subject matter jurisdiction. Although the court must follow a different route through federal statutory and common law, the court ultimately agrees that Mrs. Renn is entitled to judgment as a matter of law.

         A. Subject Matter Jurisdiction

         The probate exception to the federal courts' diversity jurisdiction “reserves to state probate courts the probate or annulment of a will and the administration of a decedent's estate; it also precludes federal courts from endeavoring to dispose of property that is in the custody of a state probate court. But it does not bar federal courts from adjudicating matters outside those confines and otherwise within federal jurisdiction.” Marshall v. Marshall, 547 U.S. 293, ___, 126 S.Ct. 1735, 1748 (2006); see generally Jones v. Brennan, 465 F.3d 304, 306 (7th Cir. 2006) (noting that exception applies to diversity jurisdiction); Storm v. Storm, 328 F.3d 941, 943-44 (7th Cir. 2003) (explaining scope of exception). The two interpleader actions consolidated in this single action are each within the federal courts' federal question jurisdiction under 28 U.S.C. § 1331 because the disputes are over employee benefits subject to ERISA. This case falls squarely within the court's federal question jurisdiction. The probate exception could not bar exercise of that jurisdiction.

         B. Effect of the Agreed Partial Judgment Orders

         David Camm argues that the court's prior agreed partial judgment orders require the court to wait until all criminal appeals are concluded before taking any further action. The 2002 agreed orders by their terms stayed these proceedings while Camm pursued his original appeal. By their terms, ...


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