State Farm Life Insurance Company v. Diane D. Gutterman v. Regan Daughtry Gutterman and John S. Gutterman, Iii, Infants, and H.J. Davidson, Jr., Co-Guardian Ad Litem of the Minor Children, Etc.

Citations: 896 F.2d 116; 15 Fed. R. Serv. 3d 1479; 1990 U.S. App. LEXIS 3388Docket: 88-4865

Court: Court of Appeals for the Fifth Circuit; March 11, 1990; Federal Appellate Court

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The case revolves around a life insurance policy issued by State Farm for Dr. John S. Gutterman, II, who named his wife, Diane Gutterman, as the primary beneficiary. Following Dr. Gutterman's death from a gunshot wound in January 1987, initially labeled a suicide, State Farm filed an interpleader action to determine the rightful beneficiary of the policy proceeds, totaling $700,000. The defendants included Diane Gutterman, a bankruptcy trustee, and the couple's minor children, Regan and John S. Gutterman, III. 

In December 1985, Dr. Gutterman had changed the policy's beneficiaries, naming his children as primary beneficiaries and Diane as the successor. However, following the couple's Chapter 7 bankruptcy filing in September 1986, the trustee claimed the proceeds as part of Diane's bankruptcy estate.

The court appointed a guardian ad litem and subsequently a co-guardian ad litem for the minors. After State Farm deposited the policy proceeds in the court's registry, it sought to withdraw from the case, which the court allowed. Diane Gutterman then successfully moved for summary judgment to receive the proceeds, which were ordered to be paid to her bankruptcy trustee. Consequently, the court terminated the guardianship and dismissed the claims of the minor children, a decision that the appellate court affirmed.

A co-guardian filed a motion for reconsideration, asserting that Diane Gutterman should not receive the insurance proceeds if she caused Dr. Gutterman’s death. The court ruled that even if Diane were disqualified, the children of Dr. Gutterman would not be entitled to the proceeds, which is now under appeal. The co-guardian claims that there are material factual disputes regarding Diane's involvement in her husband's death, arguing that if she is found guilty, the children, as heirs, should receive the proceeds. Additionally, he contends that Dr. Gutterman had executed a valid change of beneficiary form naming the children. 

The court, however, found that the co-guardian did not provide sufficient evidence to demonstrate a genuine issue of fact regarding Diane's guilt. It ruled that no valid change of beneficiary form was executed. While acknowledging the need to view evidence favorably towards the non-moving party, the court noted that after Diane provided an affidavit denying involvement in her husband’s death, the burden shifted to the co-guardian to show disputed facts. The court emphasized that mere allegations or minimal evidence are inadequate to overcome a properly supported motion for summary judgment. The co-guardian cited several disputed facts but only substantiated one, relying on Diane's deposition where she claimed her husband’s death was self-inflicted.

Diane Gutterman, during her deposition, followed her attorney's advice to refrain from answering questions about her husband's death due to an ongoing criminal investigation. She did not disclose critical details, such as her husband's last words, her actions post-shooting, her communications with the police, the couple's alcohol consumption, or her observations of the incident. The co-guardian argued that an adverse inference could be drawn from her refusal to answer, referencing Baxter v. Palmigiano, which supports this claim. However, similar to Avirgan v. Hull, the court determined that the adverse inference from Diane's refusal was insufficient to create a material fact dispute that would prevent summary judgment.

The assertion of her Fifth Amendment rights, particularly on counsel's advice, was deemed ambiguous, especially since the co-guardian did not provide additional evidence to support the inference. The court concluded that Diane’s refusal to discuss collateral matters did not constitute significant evidence to contest the summary judgment.

Furthermore, the co-guardian's claim regarding Dr. Gutterman's attempt to change the insurance policy beneficiaries was rejected, as the court agreed with the district court's finding that Dr. Gutterman lacked ownership of the policy, and thus the authority to change beneficiaries rested with Diane, the policy owner. The court emphasized that the insurance contract's clear terms must be upheld unless ambiguity, mistake, or fraud is present, which was not the case here. Therefore, even if Dr. Gutterman intended to retain the right to change beneficiaries, the unambiguous contract terms indicated he did not possess that right. The decision was affirmed. Additionally, it was noted that the grand jury did not return an indictment and further charges are contingent upon new substantial evidence. The text also referenced legal precedents cautioning against drawing inferences solely from the invocation of the Fifth Amendment rights without supporting evidence.