United States District Court, W.D. Virginia, Harrisonburg Division
C. Hoppe, United States Magistrate Judge.
November 1994, Peggy Phillips (“Phillips”)
obtained a life insurance policy from Globe Life &
Accident Insurance Company (“Globe”). She
maintained this policy with Globe until her death in January
2016. The dispute in this case centers around two
change-of-beneficiary letters signed by Phillips on November
5, 2015, one naming her children (Defendants Ken Biggs,
Malinda Biggs, Frank Biggs, and Iva Biggs-Gordon,
collectively the “Biggs Defendants”) as equal
beneficiaries of the policy, and the other naming her former
daughter-in-law (Defendant Sherry Sturrock
(“Sturrock”)) as the sole beneficiary of the
policy. Despite being mailed-and ostensibly
received-together, Globe processed these letters on
successive days, effectively creating the dispute between
Sturrock and the Biggs Defendants. Rather than resolve the
conflict, Globe filed this interpleader action, ECF No. 1,
and asked the Court to determine who should receive the
proceeds of Phillips's only life insurance policy with
Globe. After receiving no objection, the Court granted
Globe's request to deposit $20, 471.78 of insurance
proceeds with the Court.
Sturrock and the Biggs Defendants assert their entitlement to
the entire proceeds of the policy. In a written opinion, the
Court previously denied Sturrock's motion for summary
judgment. See Globe Life & Accident Ins. Co. v.
Sturrock, No. 5:16cv28 (W.D. Va. May 22, 2017), ECF No.
32 (“Summ. J. Mem. Op.”). The Court held a bench
trial on the merits on August 3, 2017. This Memorandum
Opinion constitutes the Court's findings of fact and
conclusions of law, pursuant to Rule 52(a) of the Federal
Rules of Civil Procedure. For the following reasons, the
Court finds that Sturrock is entitled to $2, 500 of the
policy proceeds and the four Biggs Defendants are entitled to
divide equally the remaining proceeds of approximately $17,
971.78, with interest.
Policy Documents and Related Writings
issued a twenty-year life insurance policy worth $10, 000,
with the identification number 00-B641002, to Phillips on
November 7, 1994, and Phillips named Frank Biggs
(“Frank”) as the designated beneficiary. Globe
Ex. 2, at 1-10, ECF No. 1-2; see also Ex. B14, ECF
No. 59-3. The policy gave Phillips the option to
change the beneficiary of her policy by filing “a
satisfactory written request with” Globe. Globe Ex. 2,
at 4. On February 7, 1997, in response to Phillips's
request to increase her coverage from $15, 000 to $20, 000,
Globe issued a term life insurance rider in the amount of $5,
Id. at 11-17.
first recorded change of beneficiary occurred on August 25,
2008, when Phillips named Ken Biggs (“Ken”) as
the primary beneficiary of her policy and Malinda Biggs
(“Malinda”) as the contingent beneficiary. Ex.
B14-B. Next, on September 4, 2013, Globe issued a
confirmation notice to Phillips that it had changed the
beneficiary on her policy to Lisa Cashin
(“Lisa”), Ex. B14-C, who was Frank's
girlfriend at the time and is now his wife.
November 8, 2014, Phillips renewed her policy, which Globe
assigned a different identification number (00-6R94321).
Globe Ex. 5, ECF No. 1-5. Despite the new identification
number, the policy was in all respects the same as the
original policy in that it was a twenty-year policy worth
$20, 000. See id.; see also Ex. S1, ECF No.
59-1; Ex. B14-E. Phillips named Sturrock as the primary
beneficiary when she made this renewal. Ex. S4; Ex. B11;
see also Globe Ex. 5, at 12. On February 17, 2015,
Globe issued a confirmation notice to Phillips that it had
changed the beneficiary on her policy, now with the
identification number 00-6R94321, to Iva Biggs-Gordon
(“Iva”). Ex. B14-F.
November 5, 2015, Phillips signed two change-of-beneficiary
letters, one requesting that Globe change the beneficiaries
on policy number 00-B641002 to the Biggs Defendants equally,
Ex. S2; Ex. B2, at 1, and the other requesting that Globe
change the beneficiary on policy number 00-6R94321 to Sherry
Sturrock, Ex. S3; Ex. B2, at 2. Despite these letters being
mailed together, Globe issued change-of-beneficiary notices
on successive days-November 17 and November 18, 2015; the
first notice reflected that the beneficiaries on policy
number 00-6R94321 had been changed to the Biggs Defendants,
Ex. B14-G, and the second notice reflected that the
beneficiary on policy number 00-6R94321 had been changed to
Sturrock, Ex. S4; Ex. B14-H. Phillips did not make any
further changes to her policy before she died on January 8,
2016. Summ. J. Mem. Op. 3.
Summary of Bench Trial & Competing Evidence
Sturrock's Evidence & Witness Testimony
called five witnesses as part of her case in chief. First,
Robert Workman (“Robert”), Sturrock's
brother, testified that Phillips had lived with Iva and Brian
Gordon (“Brian”) and that he retrieved
Phillips's belongings on November 8, 2015, after Iva and
Brian had placed them outside of their house. See
Transcript (“Tr.”) 6-7. Robert noted that he did
not retrieve everything, however, and that he left behind the
furniture that Phillips did not want. Id. at 8.
Photographs of Phillips's belongings before they were
retrieved show furniture, boxes, and an oxygen tank outside
of Iva and Brian's house. See Exs. S7, S8.
Workman (“Barbara”), Sturrock's mother,
testified that she had known Phillips for approximately
thirty-five years and that Phillips and Sturrock were very
close. Tr. 9-10. Barbara explained that during a conversation
she had with Phillips around Thanksgiving 2015, Phillips
stated that she was leaving the proceeds of her life
insurance policy to Sturrock because Sturrock had been there
for her whereas her family had not and she felt her family
did not deserve the money. Id. at 10-11. Per
Barbara, Phillips conveyed that she knew her first policy had
expired, and she expressed her intention to leave the
entirety of the second and only remaining policy to Sturrock.
Id. at 11. Barbara had seen Phillips express
frustration and anger with Iva and she complained of being
left alone at times when she lived with Frank and Lisa, but
Barbara had not heard Phillips say anything negative about
Ken or Malinda. Id. at 11, 13.
Stone (“Stone”) testified that she had known
Phillips for about twenty years, Ken for about ten years, and
Frank for about thirty years. Id. at 14. Stone
asserted that she visited with Phillips after Iva had moved
Phillips's belongings out of her house and onto the
street. Stone expressed outrage at what Iva had done to
Phillips, and Phillips responded that it was all right
because “she'd get the last laugh.”
Id. at 14-15. Stone claimed that she “knew
exactly what [Phillips] was referring to, ”
id., specifically, that Phillips meant that she
planned to leave the insurance policy to Sturrock because
Phillips had said that the money would go to the person who
was willing to take care of her, id. at 20. On cross
examination, Stone admitted that she did not speak to
Phillips often and had never visited Phillips when she lived
with Frank or when she lived with Iva and Brian. Id.
at 16. Stone further explained that Phillips expressed
displeasure with Iva, but not with any of her other children.
Id. at 16-17.
Forrest (“Forrest”) then testified that she spoke
with Phillips nearly every day while Phillips lived with
Sturrock. Id. at 21. According to Forrest, on an
unspecified day late in the fall of 2015 after Phillips had
left the hospital, id. at 26-27, she was visibly
upset because of difficulties with her previous living
situation with Iva, and she noted how she felt much better
living with Sturrock, id. at 21-22. Forrest said
that Phillips told her it was for this reason that Sturrock
would get the money from the policy, although Sturrock was to
give Malinda $2, 500 of the proceeds. Id. at 22.
Forrest stated that Phillips explained that there were two
$20, 000 policies, but that she had stopped paying on the
policy assigned to her children, so that policy was no longer
valid. Id. Forrest testified that Phillips told her
that the Biggs Defendants “shouldn't get [anything]
from me.” Id. at 23. Forrest went on to
explain that Phillips brought up her insurance policy
frequently because it was “all [Phillips] had” in
addition to her belongings, and Forrest noted that she heard
Phillips discuss the policy on at least three or four
occasions. Id. In sum, Forrest asserted that
Phillips wanted to leave the policy to Sturrock because she
felt betrayed by her children and that Sturrock was the only
one who stepped up during the last few months of
Phillips's life. Id. at 24. Forrest said she
mostly heard Phillips express discontent with Iva and, on one
or two occasions, Frank and his wife Lisa, but she never
heard Phillips say anything negative about Ken or Malinda.
Sturrock herself testified. She said that she had known
Phillips for many years and had remained friends with
Phillips even after divorcing Frank in January 2004.
Id. at 28-29. Phillips had lived with her son Frank
at various times, and he was her favorite child. Id.
at 40-41. Sturrock noted that she helped Phillips with her
bank account when her family had not. Id. at 29- 30.
Sturrock stayed in touch with Phillips even when Phillips had
moved out of state, and she frequently heard about Phillips
changing the beneficiary on the policy. Id. at 30.
When Phillips changed the beneficiary to Frank's wife,
Lisa, Sturrock acknowledged that Phillips intended for the
proceeds to be divided equally between the Biggs Defendants.
Id. at 30-31. Sturrock testified that when Phillips
renewed her policy in November 2014, she listed Sturrock as
the beneficiary because Sturrock had always been there for
her, but she changed the beneficiary to Iva in February 2015
with the understanding that Iva would help with
Phillips's medication and medical paperwork. Id.
at 31-32. Sturrock did not know what Phillips intended for
Iva to do with the proceeds. See Id. at 32.
the change-of-beneficiary letters, Sturrock claimed that she
prepared the letters, but that Phillips had dictated them.
Id. at 33. That same day Phillips also executed a
“Do Not Resuscitate” letter granting Ken
decision-making authority in the event her medical situation
deteriorated. Ex. S5. Sturrock admitted that Phillips
discussed her intentions regarding the policy with both
Sturrock and Ken present, but that once Ken left, she told
Sturrock that she was not going to leave the policy proceeds
to her children. Tr. 33. This was in contrast to the
discussion when Ken was present, during which Phillips agreed
to list all her children on the policy, rather than just Ken,
because Ken said he would prefer to have everyone named as
beneficiaries. Id. at 36. Per Sturrock, Phillips
intentionally put the original policy number (00-B641002) on
the letter requesting that her children be named
beneficiaries “knowing full well” that this
policy had expired and was no longer valid; conversely,
Phillips intentionally put the new policy number (00-6R94321)
on the letter requesting that Sturrock be named the
beneficiary to effectuate her desire for Sturrock to receive
the policy proceeds. Id. at 33. To that end,
Sturrock testified that “[u]nfortunately, she thought
she would make things difficult on them and, you know, easy
on me but that's not what happened.” Id.
also noted that Phillips did not think Malinda should be
completely left out, so she prepared a letter, dated December
3, 2015, for Phillips to sign confirming that she would give
Malinda $2, 500 out of the money she received from Phillips.
Id. at 34-35; see Ex. S11. Sturrock
explained that the letter was intended to be vague in that it
did not mention the money was to come from an insurance
policy because Phillips did not want her children to know of
her true intentions should the letter ever fall into the
wrong hands. Tr. 35. Phillips later asked Sturrock to
throw away the letter, but Sturrock refused because she
wanted to abide by Phillips's earlier wishes.
The Biggs Defendants' Evidence & Witness
Biggs Defendants called seven witnesses as part of their case
in chief. First, Brian, Iva's husband, testified that
Phillips lived with him and Iva, during which time he heard
Phillips mention two different insurance policies on a few
occasions. Tr. 43. Brian explained that it was his
understanding, based on what he heard from Phillips, that
both policies-a $20, 000 policy and a $5, 000 policy-were to
be divided equally among her four children. Id. at
43-44. Brian also noted how Phillips would neglect to use her
oxygen and would get in arguments with Iva when pressed about
her smoking habits. Id. at 45.
Frank's current wife, testified that she had known
Phillips for approximately ten years and that Phillips lived
with her and Frank most recently from June 2013 to August
2014. Id. at 47-48. Lisa confirmed that Phillips
listed her as the beneficiary on her life insurance policy
for tax purposes, but that the money was still supposed to go
to Phillips's children. Id. at 48-49.
Funk (“Jessica”), Frank and Sturrock's
daughter, testified that she was close with her grandmother.
Id. at 52. Jessica indicated that Phillips was
generally happy, but she would “express certain
feelings” whenever she was getting ready to move to the
next house. Id. Malinda asked Jessica about a visit
she had with Phillips at the hospital on January 4, 2016,
shortly before Phillips died. Id. at 53-54. Jessica
testified that her sister Kayla and Sturrock were also
visiting Phillips. Id. Jessica said Phillips
discussed her intention to split her $20, 000 policy between
the four children. Id. Jessica memorialized her
recollection of this conversation in an email dated May 17,
2016. Ex. B5. Additionally, Jessica explained that Phillips
wanted Sturrock to write a letter to Iva expressing
Phillips's belief that Iva did not deserve the money, but
that she was going to give it to Iva anyway so as to keep her
word. Tr. 54. Jessica understood Phillips to be referring to
money from the $20, 000 policy. Id. at 55. Jessica
also testified that her father, Frank, had expressed his
intent to give his portion of the policy proceeds to her and
her sister. Id. at 60-61.
testified that he had always maintained he did not want any
money from his mother's life insurance policy, and he
confirmed that if he were to receive it, he would give his
share to his daughters. Id. at 61-62. Frank stated
that Phillips lived with him multiple times, beginning when
he was still married to Sturrock. Id. at 62. Frank
explained that his mother had Chronic Obstructive Pulmonary
Disease and was “very difficult” to live with.
Id. at 63. He attributed some of this difficulty to
Phillips's resistance to his attempts to limit her
smoking. Id. at 63-64. He said that Phillips had
lived with her sister in Florida on and off, and when they
had problems, Phillips would move to back to Frank's
house and later Iva's. Frank also noted that after
Phillips moved out of his house and in with Iva and Brian, he
did not talk to her for almost a year, and indeed did not
speak with her again until the day she passed. Id.
at 63, 67-68. As to the policy, Frank noted again that he was
not in favor of Phillips having obtained it, but she was
determined to leave something for her children because their
father had not. Id. at 67.
testified that Phillips would bring up the insurance policy
every time the two talked on the phone and that these
conversations continued after Phillips moved in with Iva and
Brian. Id. at 71. Iva stated that Phillips did not
react well to Iva's attempts to get her to wear her
oxygen and limit her smoking. Id. at 72-73. Iva also
explained that initially, Phillips spoke of having only one
policy and was concerned when it had been cancelled.
Id. at 71. Phillips told Iva she would take care of
it, which she did by renewing it, and within a few months,
relayed to Iva that she had added an additional $5, 000
policy. Id. Iva stated that Phillips added the $5,
000 policy for her and Malinda so the girls could have
something extra. Id. at 71-72. On cross examination,
Iva admitted she did not have any proof that the $5, 000
policy ever existed, just Phillips's word. Id.
at 76. As for the larger policy, Iva asserted that
Phillips's intentions had remained the same for more than
twenty years, specifically that the four children were to
receive the proceeds and split them evenly. Id. at
72. Iva testified that this was still Phillips's
intention when she listed Iva as the sole primary beneficiary
in February 2015. Id. at 75.
testified that he talked with Phillips about her policy,
which she had obtained because her first husband passed away
with nothing to leave to the children, and Phillips did not
think that was “right.” Id. at 76-77.
Ken described his visit with Phillips at the hospital in
November 2015, specifically that Phillips mentioned having
two policies and that this was the first time he had heard of
a second policy. Id. at 77. Ken explained that
according to Phillips, the larger policy was to be split
between the four children and the smaller policy, worth $5,
000, was to be put in Sturrock's name and be split
between Sturrock and Malinda. Id. at 77-78; see
also Id. at 80.
Malinda testified. Malinda said that Phillips purchased the
policy after her first husband died so as to have something
to leave her children and that she was very proud of this
policy. Id. at 82. Malinda asserted that no matter
who was listed as the primary beneficiary, Phillips intended
for this policy to be split among her children. Id.
at 86. Malinda said it was early 2015 when she first heard of
the second policy, worth $5, 000 to be split between Malinda
and Iva, id. at 83, although she admitted that she
did not have any proof of this policy, id. at 89.
Malinda explained that she thought Phillips was confused
about the nature of her policy because she had told Malinda
something was wrong with the policy sometime after November
7, 2014, when the policy was renewed with a different
identification number. Id. at 85-86. Malinda offered
to help, but Phillips declined and the next time they talked
conveyed that the problem had been resolved. Id. at
86. Malinda stated that she spoke with Sturrock after Ken had
visited the hospital on November 5 and learned from Sturrock
that she had written the letters regarding Phillips's
desired changes to the beneficiaries of her policies.
Id. at 84. Malinda also spoke with Phillips the
night of the hospital visit, at which time Phillips told
Malinda that she had asked Sturrock to write a letter
promising to give Malinda half of the $5, 000 policy.
Id. at 87; see also Ex. B3.
further testified that the family remained close with
Sturrock even after she and Frank divorced and that there was
“no doubt that [Sturrock] was close and a part of our
family.” Tr. 83. Indeed, Malinda said that Phillips
told her in November 2015 that she wanted the smaller policy
to be split between Malinda and Sturrock, rather than Malinda
and Iva. Id. at 87-88. Malinda explained that she
spoke with Sturrock often as Phillips's health declined
because she lived in Texas and Sturrock kept her apprised of
her mother's condition. Id. at 84. Malinda
described that during these conversations, Sturrock relayed
that Globe had informed her that Phillips had two policies.
Id. at 84-85. Malinda testified that Sturrock had
told her that $63 would be coming out of Phillips's bank
account to cover the second policy. Id. at 85;
see also Ex. B4, at 8, ECF No. 59-3. Per Malinda,
Sturrock maintained that there were two policies until around
May 2016. Tr. 85. Malinda also explained that her mother
would get tired of staying in one place, would suddenly
complain about being treated poorly, and then would move,
which resulted in her moving around a lot. Id. at
83. Likewise, Malinda stated that Phillips began expressing
discontent while living at Sturrock's ...