United States District Court, D. Delaware
CHRISTOPHER L. PEDRICK, Plaintiff,
KATHERINE ROTEN, JESSICA PEDRICK, AND TIAA-CREF INDIVIDUAL & INSTITUTIONAL SERVICES, LLC, Defendants
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For Christopher L. Pedrick, Plaintiff: David J. Ferry, Jr., LEAD ATTORNEY, Lisa L. Coggins, Ferry, Joseph & Pearce, P.A., Wilmington, DE, USA.
For Katherine Roten, Jessica Pedrick, Defendants, Cross Claimants: Matthew M. Carucci, LEAD ATTORNEY, Carucci Di Lorenzo, LLC, Wilmington, DE, USA.
For Tiaa-Cref Individual & Institutional Services LLC, a Delaware Limited Liability Company, Defendant, Cross Defendant: James Darlington Taylor, Jr., Saul Ewing LLP, Wilmington, DE, USA.
Sherry R. Fallon, United States Magistrate Judge.
The plaintiff, Christopher L. Pedrick (" Plaintiff" ), brought this action seeking legal and equitable relief to obtain a two-thirds distribution of the proceeds of an annuity account maintained by defendant, TIAA-CREF Individual and Institutional Services, LLC (" TIAA-CREF" ). (D.I. 59) Plaintiff and his two daughters, defendants Katherine Roten (" Roten" ) and Jessica Pedrick (" Pedrick" ), are the beneficiaries of the annuity contract. TIAA-CREF distributed the proceeds of the account in equal one-third shares to Plaintiff, Roten and Pedrick in accordance with the original beneficiary designation made by decedent Nancy T. Pedrick, Plaintiff's mother. Prior to her death, Nancy Pedrick attempted to change the beneficiary of the annuity account. TIAA-CREF did not implement the change. Plaintiff sued TIAA-CREF for breach of contract, and Roten and Pedrick for unjust enrichment. (D.I. 59)
Based on the findings of fact and conclusions of law below, the court will enter judgment in favor of Plaintiff and against
TIAA-CREF on Plaintiff's claim for breach of contract, and in favor of Roten and Pedrick on Plaintiff's claim for unjust enrichment.
Plaintiff initiated this action on December 12, 2011, seeking imposition of a constructive trust over the annuity proceeds, reformation of the annuity beneficiary designation, and recovery of damages against Roten and Pedrick for unjust enrichment. (D.I. 1) Plaintiff also asserted claims against TIAA-CREF for negligence and breach of contract. ( Id.) Plaintiff sought judgment against TIAA-CREF and the individual defendants, jointly and severally, for compensatory damages. ( Id.) On January 20, 2012, Roten and Pedrick filed cross-claims against TIAA-CREF for negligence. (D.I 8; D.I. 9)
Roten and Pedrick filed a Motion for Judgment on the Pleadings on February 3, 2012. (D.I. 13) On February 24, 2012 TIAA-CREF joined the co-defendants' Motion, and filed its own Motion for Partial Judgment on the Pleadings. (D.I. 19; D.I. 20) All parties signed a stipulation on March 13, 2012, dismissing with prejudice Count III (negligence) of the complaint. (D.I. 22) Thereafter, on May 7, 2012, Plaintiff filed a Motion for Leave to File an Amended Complaint (" Motion to Amend" ). (D.I. 24)
On September 5, 2012, the court held oral argument on the Defendants' motions for judgment on the pleadings and Plaintiff's Motion to Amend. On January 29, 2013, the court entered a Memorandum Opinion granting in part the Defendants' motions for judgment on the pleadings, and granting Plaintiff's Motion to Amend. See Pedrick v. Roten, 2013 WL 351667, at *1 (D. Del. Jan. 29, 2013). ( See also D.I. 58)
Specifically, the court grant[ed] Defendants judgment on the pleadings as to Plaintiff's constructive trust and reformation claims. The court grant[ed] Plaintiff leave to amend his unjust enrichment claim to add the equitable remedy of restitution, and his unjust enrichment and breach of contract claims to add the theory of substantial compliance.
Pedrick v. Roten, 2013 WL 351667, at *11. Plaintiff filed his First Amended Complaint on January 30, 2013. (D.I. 59)
On February 5, 2013, the court held a pretrial conference, wherein the parties elected to present this matter to the court through briefing in lieu of trial. The parties submitted a Revised Proposed Pretrial Order on February 11, 2013 (D.I. 60), which the court subsequently entered on February 14, 2013. On March 15, 2013, the parties filed a Joint Appendix, including a statement of undisputed facts. (D.I. 63, Ex. Al) On April 19, 2013, the parties stipulated to a modified briefing schedule, with briefing to be completed by May 6, 2013. (D.I. 64) On August 5, 2013, the court held oral argument on the briefing on the merits.
This is the decision on the merits based on the briefs and oral argument.
III. FINDINGS OF FACT
1. Nancy T. Pedrick (the " Decedent" ) was Plaintiff's mother, and grandmother of defendants Roten and Pedrick. (D.I. 63, Ex. A1 ¶ 2)
2. On July 21, 2005, the Decedent executed a last will and testament (the " Will" )
( id., Ex. A4) and a revocable trust agreement (the " Trust" ) ( id., Ex. A5). The terms of the Will required the sale of the Decedent's tangible personal property (not otherwise disposed of in the Will) so that the sale proceeds and remainder of the estate would fund the Trust. ( Id., Ex. A4) The Trust assets were to be distributed upon the Decedent's death in equal one-third (1/3) shares to Plaintiff, Roten and Pedrick. ( Id., Ex. A5)
3. On September 7, 2010, the Decedent revised her estate plan by executing a codicil to the Will (the " Codicil" ) ( id., Ex. A6) and an amendment to the Trust (the " Trust Amendment" ) ( id., Ex. A7). The Codicil directed a distribution of the Decedent's tangible personal property equally between Roten and Pedrick. ( Id., Ex. A6) The Trust Amendment altered the Trust's distribution ratio such that Plaintiff would receive two-thirds (2/3) of the Trust assets, and Roten and Pedrick would split the remaining one-third (1/3) of the assets. ( Id., Ex. A7)
4. At all times relevant to this matter, the Decedent held an annuity account with TIAA-CREF. ( Id., Ex. A1 ¶ 1) Under the terms of the annuity contract, the Decedent had the right to change the beneficiary of the annuity proceeds " by written notice satisfactory to TIAA." ( Id., Ex. A12 at 100) The contract further provided that a change of beneficiary would " take effect as of the date it was signed, whether or not the signer is living at the time we [TIAA-CREF] receive it." ( Id.)
5. Consistent with the Trust's original dispositional scheme, the Decedent initially listed Plaintiff, Roten, and Pedrick as equal one-third beneficiaries of the annuity account. ( Id., Ex. A1 ¶ 10) In accordance with her revised estate plan, however, the Decedent sought to change the annuity account beneficiary to the Trust entity (as amended), so that Plaintiff would receive two-thirds of the annuity account proceeds, and Roten and Pedrick would split the remaining one-third of the proceeds. ( See id., Ex. A2)
6. On October 16, 2010, the Decedent attempted to carry out the beneficiary change by executing a beneficiary designation form (" Beneficiary Designation" ). ( Id., Exs. A1 ¶ 11, A2) The form was preprinted by TIAA-CREF and was the standard change-of-beneficiary form for the type of annuity contract in issue. ( See id., Exs. A1 ¶ 12, A29 at 452)
7. The Decedent properly completed Sections 1 and 2 of the Beneficiary Designation. ( Id., Ex. A2)
8. Section 3 of the Beneficiary Designation is entitled " CHOOSE YOUR BENEFICIARIES . . . Tell us who should receive your account balance after your death." ( Id.) Section 3 includes a blank box with the following instructions: " Check this box and attach a signed and dated page, to list additional primary and/or contingent beneficiaries, a trust, or to provide additional instructions." ( Id.) Below the box are spaces designated for information for two primary and two contingent beneficiaries. ( Id.) The categories of information include: first name, middle initial, last name, social security number/tax identification number, date of birth, percentage, relationship, and gender. ( Id.)
9. The Decedent drew a check in the box, and left blank the spaces designated for primary and contingent beneficiary information. ( Id.) The Decedent attached a copy of the Trust Amendment to the Beneficiary Designation. ( Id.) The Trust Amendment included the Decedent's signature, the dates of the Trust and Trust Amendment, dispositional instructions, the beneficiaries' first names and their respective relationships to the Decedent. ( Id.,
Exs. A2, A7) The Decedent mailed the signed and dated Beneficiary Designation to TIAA-CREF.
10. The Decedent passed away on October 19, 2010. ( Id., Ex. A1 ¶ 16)
11. On October 21, 2010, Plaintiff notified TIAA-CREF via telephone that the Decedent had passed away. ( Id., Ex. A29 at 447-49)
12. On October 22, 2010, TIAA-CREF received the Decedent's Beneficiary Designation. ( Id., Ex. A1 ¶ 17)
13. On November 1, 2010, TIAA-CREF's Beneficiary Services department sent a letter to the Decedent's address explaining that it was unable to process the requested beneficiary change:
The designation cannot be recorded since the beneficiary section was left blank. Also, the attached Amendment Of [sic] Trust needs clarification. If you wish to name an individual, please provide us with the name, date of birth and social security number or if you wish to name the Trust as beneficiary, please inform us of the date of the Trust. A phone call or signed note with the Trust information is acceptable.
The beneficiary designation we currently have on file will remain in effect until we receive ...