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John Hancock Life Insurance Company (USA) v. Andrews

United States District Court, N.D. Georgia, Atlanta Division

January 31, 2017

JOHN HANCOCK LIFE INSURANCE COMPANY (USA), Plaintiff,
v.
WILLIAM ANDREWS and GLADYS ANDREWS, Defendants.

          OPINION AND ORDER

          WILLIAM S. DUFFEY, JR. UNITED STATES DISTRICT JUDGE

         This matter is before the Court on Plaintiff John Hancock Life Insurance Company (USA)'s (“Plaintiff”) Motion for Summary Judgment [53].

         I. BACKGROUND

         A. Facts

         On August 1, 1984, Plaintiff issued an annuity (“Annuity”) to Defendant William Andrews (“Mr. Andrews”). (Plaintiff's Statement of Material Facts [53.2] (“PSMF”) ¶ 3; [11.1] at 1).[1] The Annuity required Plaintiff to pay Mr. Andrews $200, 000 a year for thirty years, beginning on August 1, 1996, and ending on August 1, 2025. ([11.1] at 1). On October 5, 1999, Mr. Andrews sold to Settlement Capital Corporation (“Settlement Capital”) his right to receive future payments under the Annuity for the thirteen-year period of August 2001 through August 2014 (the “Initial Annuity Payment Agreement”). (PSMF ¶¶ 1, 8).[2]

         On February 12, 2001, Mr. Andrews entered into a second agreement with Settlement Capital to sell his remaining future payments under the Annuity (the “Second Annuity Payment Agreement” or “SAPA”). (PSMF ¶¶ 2, 6). Under the SAPA, Mr. Andrews sold to Settlement Capital his Annuity payments for the period of August 2015 through August 2025 (the “Annuity Payments”), in return for an immediate lump sum of $250, 000. (PSMF ¶¶ 2-4). The SAPA explains the consequences of the transaction to Mr. Andrews:

[Mr. Andrews] shall not have any further interest in or rights to the Annuity, the Assigned Receivable Payments or any other payments due in connection with the Annuity. . . . [Mr. Andrews] does hereby absolutely sell, assign, transfer, set over and convey to Purchaser, free and clear of any liens or encumbrances, all of [Mr. Andrews'] right, title, and interest in, to, and under the Assigned Receivable Payments. . . . This Agreement and the Transaction Documents may be amended, modified, superseded or canceled, or any of the terms, provisions, representations, warranties, covenants or conditions hereof or thereof may be waived only by written instrument signed by all parties hereto.

(PSMF ¶ 8). Mr. Andrews received the immediate lump sum payment of $250, 000 required to be paid by Settlement Capital. (PSMF ¶ 5).

         On February 20, 2001, JRH Capital Corporation (“JRH”) purchased from Settlement Capital the right to receive the Annuity Payments. (PSMF ¶ 10).[3] The agreement by which JRH purchased the Annuity Payments listed JRH's address as “John Hancock Life Insurance Company, 200 Clarendon Street, Boston, MA 02117, Attn: Bond & Corporate Finance.” (PSMF ¶ 12).

         Consistent with the Initial Annuity Payment Agreement, Mr. Andrews did not receive any Annuity payments from 2001 through 2014. (PSMF ¶ 26). In January 2015, about six months before the first Annuity Payment was required to be made to JRH, Plaintiff mistakenly mailed an annual statement of Annuity payments to “William Andrews, Attn: Bond & Corporate Finance, Clarendon Street, Boston, MA.” (PSMF ¶ 11). The annual statement was returned as undeliverable. (PSMF ¶ 13). Plaintiff's Returned Mail Team ran a LEXIS Accurint report to identify Mr. Andrews' current address. (PSMF ¶ 14).[4] LEXIS Accurint returned a Georgia address for Mr. Andrews. (PSMF ¶ 15).

         In early June 2015, the Returned Mail Team sent an address confirmation letter to Mr. Andrews at the Georgia address provided by LEXIS Accurint. (PSMF ¶15). On June 15, 2015, Mr. Andrews called Plaintiff's customer service department to discuss the letter. (PSMF ¶ 16). Mr. Andrews told the customer service representative to send the Annuity Payments to the address they had for him in Georgia. (PSMF ¶ 18). The representative updated Plaintiff's system to reflect Mr. Andrews' Georgia address. (PSMF ¶¶ 17-18). Plaintiff sent Mr. Andrews a letter confirming the change in address to which the Annuity Payments would be sent. (PSMF ¶ 20). There is no evidence that Mr. Andrews told the representative he previously sold, and thus no longer had a right to receive, the Annuity Payments. (PSMF ¶ 19).

         On August 1, 2015, Plaintiff mailed Mr. Andrews a check for $188, 490 (the “Funds”). (PSMF ¶ 21).[5] Mr. Andrews immediately endorsed the check to his wife, Defendant Gladys Andrews (“Mrs. Andrews”). (PSMF ¶¶ 23-24). He did not receive consideration for this payment to Mrs. Andrews. (PSMF ¶ 24). At the time of the transfer, Mr. Andrews owned no assets “other than [his] clothing.” (PSMF ¶ 25).

         On August 4, 2015, Mrs. Andrews opened a Platinum Savings Account at Wells Fargo Bank (the “Platinum Account”) into which she immediately deposited the Funds. (PSMF ¶ 27). From August 12, 2015, through August 27, 2015, Mrs. Andrews withdrew $4, 100 in cash and transferred $22, 240 to her checking account (the “Checking Account”). (PSMF ¶ 29; [25.5] at 17).

         On August 27, 2015, Plaintiff called Mr. Andrews, told him the Funds were sent to him in error, and asked him to return the Funds immediately. (PSMF ¶¶ 30, 32). Mr. Andrews said he intended to review the terms of the SAPA before returning the Funds. (PSMF ¶ 32). On August 31, 2015, Mrs. Andrews transferred another $2, 150 from her Platinum Account to her Checking Account. (PSMF ¶ 29; [25.5] at 17).

         On September 1, 2015, Plaintiff sent Mr. Andrews a letter explaining the error and requesting “full reimbursement” of the Funds within thirty days. (PSMF ¶ 33; [11.3]). The letter stated that, unless the Funds were returned by the end of 2015, Plaintiff was “required to report the overpayment to the Internal Revenue Service (IRS) as a distribution in [Mr. Andrews'] name.” ([11.3] at 3). Two days later, on September 3, 2015, Mrs. Andrews transferred $5, 000 from her Platinum Account to her Checking Account. ([25.5] at 27).

         On September 16, 2015, Plaintiff called Mr. Andrews and left him a voicemail. ([11.3] at 4). Mr. Andrews did not return the call. ([11.3] at 4). On September 21, 2015, Plaintiff sent Mr. Andrews another letter, attaching a copy of the SAPA and demanding repayment of the Funds. (PSMF ¶ 33; [11.3]). The letter stated that Plaintiff would initiate legal proceedings if Mr. Andrews did not return the Funds by October 1, 2015. ([11.3] at 5). On September 22, 2015, Plaintiff's counsel called Mr. Andrews and again demanded payment. (PSMF ¶ 36). Mr. Andrews said he had spoken to counsel about Plaintiff's request. (PSMF ¶ 36). He did not agree to return the Funds. Two days later, Mrs. Andrews transferred another $5, 000 from her Platinum Account to her Checking Account. ([25.5] at 27).[6]

         In October 2015, Mrs. Andrews made five cash withdrawals, totaling $44, 000, from her Platinum Account. (PSMF ¶ 38). The same month, she transferred $21, 000 from her Platinum Account to her Checking Account. ([25.5] at 40). From August 12, 2015, through October 22, 2015, she withdrew from her Platinum Account, or transferred to her Checking Account, a total of $103, 490. (PSMF ¶ 39).[7]

         B. Procedural History

         On October 22, 2015, Plaintiff filed its Verified Complaint on Claim for Debt [1] (“Complaint”) naming Mr. Andrews as a defendant. The Complaint sought repayment of the Funds plus interest, and litigation expenses under O.C.G.A. § 13-6-11. On October 22, 2015, Plaintiff also filed its Motion for Temporary Restraining Order and Request for a Preliminary Injunction [2], seeking a temporary restraining order (“TRO”) “restraining and enjoining [Mr. Andrews] from spending, depleting, or otherwise disposing of the funds he has received by mistake.” ([2.1] at 1-2).

         On November 4, 2015, Mrs. Andrews made a cash withdrawal of $18, 000 from her Platinum Account. (PSMF ¶ 43). On November 6, 2015, Plaintiff filed its Amended Complaint on Claim for Debt and Injunctive Relief [11] (“Amended Complaint”), adding Mrs. Andrews as a defendant[8] and asserting claims for unjust enrichment (Count 1), conversion (Count 2), money had and received (Count 3), imposition of a constructive trust (Count 4), relief under Georgia's Uniform Voidable Transactions Act (“UVTA”), O.C.G.A. § 18-2-70 et seq. (Count 5), injunctive relief (Count 6), and attorney's fees under O.C.G.A. § 13-6-11 (Count 7). On November 6, 2015, Plaintiff amended its TRO motion to reflect the changes in its Amended Complaint, including the addition of Mrs. Andrews as a named defendant. ([14]).

         On November 9, 2015, the Court held a hearing on Plaintiff's request for a TRO. ([15]). The Court declined to issue a TRO because Plaintiff did not present sufficient evidence in support of its requested relief. The Court suggested that Defendants' counsel advise Defendants to refrain from spending the Funds. The Court ordered the parties to engage in expedited discovery so that Plaintiff could promptly determine if there was evidence warranting a motion for preliminary injunctive relief. (See November 10, 2015, Order by Docket Entry; [30] at 4).

         From November 9, 2015, through November 20, 2015, Mrs. Andrews transferred $17, 000 from her Platinum Account to her Checking Account. (PSMF ¶ 45; [27.1]). In November 2015, she withdrew approximately $13, 400 from her Checking Account and spent approximately $3, 600 in a single Wal-Mart transaction, $1, 200 in a Lowe's transaction, $2, 000 on the Atlanta Falcons, and $1, 500 at department stores such as Dillard's and Von Mauer. (PSMF ¶ 46).[9]

         On December 2, 2015, Defendants filed counterclaims against Plaintiff for negligent misrepresentation (Count 1), breach of the duty of good faith and fair dealing (Count 2), and promissory estoppel (Count 3). ([24] at 6-8). Defendants claim that “Plaintiff negligently supplied [Mr. Andrews] with false information that he was entitled to receive [the Funds], ” and that Mr. Andrews “reasonably relied on this representation and endorsed the proceeds to his wife.” ([24] at 7). Defendants ask the Court to enter judgment in their favor, against Plaintiff, in the amount of $188, 490 plus interest. ([24] at 8).

         On December 3, 2015, Plaintiff filed its Renewed Motion for a Preliminary Injunction [25]. On December 7, 2015, the Court conducted a telephone conference with the parties. ([27]). During the conference, Defendants' counsel confirmed that he told Mrs. Andrews the Court would “frown upon” her continued expenditure of the Funds. ([30] at 5). The next day, the Court issued a TRO enjoining Defendants “from accessing, spending, transferring, withdrawing, or otherwise dissipating the Funds.” ([30] at 10). The Court also ordered Defendants to deposit any remaining Funds into the Registry of the Court. ([30] at 10). On December 9, 2015, Defendants deposited $50, 005.17 into the Court Registry. (See December 10, 2015, Docket Entry; PSMF ¶ 49).

         On December 22, 2015, the Court held a hearing on Plaintiff's Renewed Motion for a Preliminary Injunction. ([43]). The next day, the Court granted the motion and enjoined Defendants from “accessing, spending, transferring, encumbering, withdrawing, or otherwise dissipating the Funds, or any property purchased with the Funds.” ([42] at 10). The Court found that, under the SAPA, Mr. Andrews “unequivocal[ly] . . . relinquished any right to the Annuity Payments.” ([42] at 6). The Court stated “[i]t is incredulous that Mr. Andrews believed that he was entitled to an ...


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