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Coleman v. Olson

Supreme Court of Tennessee, Nashville

June 15, 2018

ROSE COLEMAN
v.
BRYAN OLSON

          Session October 11, 2017

          Appeal by Permission from the Court of Appeals Circuit Court for Montgomery County No. MCCCCVDN130157 Ross H. Hicks, Judge

         When a divorce complaint is filed and served, a statutory injunction goes into effect prohibiting both parties from changing the beneficiary on any life insurance policy that names either party as the beneficiary without the consent of the other party or a court order. See Tenn. Code Ann. § 36-4-106(d)(2) (2010). Jessica Olson sued her husband, Bryan Olson, for divorce. A week later, Ms. Olson, while seriously ill, changed the beneficiary on her life insurance policy from her husband to her mother. Ms. Olson died a few days later. Her mother, Rose Coleman, collected the life insurance benefits. Ms. Coleman sued Mr. Olson for grandparent visitation under Tennessee Code Annotated section 36-6-306 (2010). Mr. Olson responded that he did not oppose visitation, and therefore, Ms. Coleman was not entitled to court-ordered visitation. In addition, Mr. Olson countersued to recover the life insurance benefits. The trial court awarded the insurance benefits to the Olsons' child, finding that Ms. Olson had intended to remove Mr. Olson and substitute their child as the insurance beneficiary. The trial court ordered Ms. Coleman to pay the remaining life insurance funds into the court registry, to account for her expenditures, and to pay a judgment for expenditures that did not benefit the child. The trial court also granted Ms. Coleman's petition for grandparent visitation. The Court of Appeals reversed, awarding the life insurance benefits to Mr. Olson based on Ms. Olson's violation of the statutory injunction and its consideration of Mr. Olson's financial needs. In addition, the Court of Appeals reversed the trial court's award of visitation to Ms. Coleman. We hold that (1) Ms. Olson violated the statutory injunction under Tennessee Code Annotated section 36-4-106(d)(2) when she removed Mr. Olson as her life insurance beneficiary; (2) the Olsons' divorce action abated when Ms. Olson died and the statutory injunction became ineffective; (3) a trial court, after the abatement of a divorce action, may remedy a violation of the statutory injunction after considering the equities of the parties; (4) the trial court erred by awarding the life insurance benefits to the Olsons' child based on the pleadings and the evidence; (5) the Court of Appeals erred by awarding the life insurance benefits to Mr. Olson without sufficient evidence of the equities of the parties; (6) the trial court, on remand, may remedy the violation of the statutory injunction by awarding all or a portion of the life insurance benefits to either or both parties after hearing additional evidence and considering the equities of the parties; and (7) Ms. Coleman was not entitled to court-ordered grandparent visitation absent Mr. Olson's opposition to visitation. We affirm in part and reverse in part the judgment of the Court of Appeals; we reverse and vacate the judgment of the trial court and remand to the trial court for further proceedings.

         Tenn. R. App. P. 11, Appeal by Permission; Judgment of the Court of Appeals Affirmed in Part and Reversed in Part; Judgment of the Trial Court Reversed and Vacated; Remanded to the Trial Court

          Christopher J. Pittman and Zachary L. Talbot, Clarksville, Tennessee, for the appellant, Rose Coleman.

          Travis N. Meeks, Clarksville, Tennessee, for the appellee, Bryan Olson.

          Erin S. Poland, Clarksville, Tennessee, Amicus Curiae and Guardian Ad Litem for the Minor Child.

          Sharon G. Lee, J., delivered the opinion of the Court, in which Jeffrey S. Bivins, C.J., and Cornelia A. Clark, Holly Kirby, and Roger A. Page, JJ., joined.

          OPINION

          SHARON G. LEE, JUSTICE

         I.

         In 2007, Jessica and Bryan Olson were married and the next year they had a child. On July 5, 2012, Ms. Olson sued for divorce in the Montgomery County Chancery Court. When Ms. Olson filed and served the complaint, a statutory injunction went into effect prohibiting both parties from changing the beneficiary on any life insurance policy that named either party as beneficiary without the other's consent or a court order. See Tenn. Code Ann. § 36-4-106(d)(2).[1]

         Four days after filing for divorce, Ms. Olson became ill and was treated in the emergency room of a local hospital. The next day, Ms. Olson returned to the emergency room and then went to Vanderbilt University Medical Center where she was diagnosed with Stevens-Johnson syndrome, a serious and painful skin condition.

         Two days later, on July 12, 2012, Ms. Olson signed a document that changed the beneficiary of her life insurance policy from Mr. Olson to Ms. Coleman and named the Olsons' minor child as the contingent beneficiary. Two of Ms. Olson's friends, Jenny Mims and Jessica Steventon, were in Ms. Olson's hospital room when she signed the document. Ms. Mims notarized Ms. Olson's signature and sent the document to Ms. Olson's employer. One week later, on July 19, 2012, Ms. Olson died. As the beneficiary of the life insurance policy, Ms. Coleman collected nearly $400, 000.

         Less than a week after her daughter's death, Ms. Coleman filed a petition in the Montgomery County Juvenile Court against Mr. Olson, alleging that her grandchild was dependent and neglected. She sought either custody or grandparent visitation under Tennessee Code Annotated section 36-6-306. The next month, the juvenile court granted Ms. Coleman four weeks of visitation. Later, the juvenile court granted Ms. Coleman four more weeks of visitation. In late January 2013, Mr. Olson filed a petition in the Montgomery County Circuit Court challenging the juvenile court's jurisdiction to award grandparent visitation under Tennessee Code Annotated section 36-6-306 and the juvenile court's decision to grant visitation without hearing evidence. The circuit court denied the petition. On February 12, 2013, the juvenile court dismissed Ms. Coleman's case without prejudice, based on her notice of voluntary nonsuit.

         On February 12, 2013, the same day the juvenile court dismissed her case, Ms. Coleman filed a petition in the Montgomery County Circuit Court for grandparent visitation under Tennessee Code Annotated section 36-6-306. Ms. Coleman alleged that based on her significant relationship with her grandchild and Ms. Olson's death, the Olsons' child would be substantially harmed if his relationship with Ms. Coleman ended. Mr. Olson answered, stating that he did not oppose Ms. Coleman's visitation, and therefore, she was not entitled to court-ordered visitation under Tennessee Code Annotated section 36-6-306. Mr. Olson countersued Ms. Coleman for the life insurance benefits, alleging fraud, forgery, conversion, and undue influence.[2] Mr. Olson argued in his pretrial brief that Ms. Olson secretly changed the beneficiary on her life insurance policy in violation of the statutory injunction.

         On November 14 and December 5, 2014, the trial court heard evidence presented by Ms. Coleman and Mr. Olson.[3] Ms. Coleman, who lived in Massachusetts, testified that she and her daughter and grandchild had a good relationship, visited often, and talked almost daily. In late June 2012, Ms. Coleman traveled to Tennessee because of problems between her daughter and Mr. Olson. During that time, Ms. Olson discussed filing for a divorce and changing the beneficiary of her life insurance policy.

         In July 2012, Ms. Coleman returned to Tennessee when Ms. Olson became ill. On July 12, 2012, while Ms. Olson was hospitalized, Ms. Coleman, at her daughter's request, prepared a handwritten change of beneficiary document that removed Mr. Olson as the beneficiary and named Ms. Coleman as the primary beneficiary and the Olsons' child as the contingent beneficiary. Ms. Coleman testified that she did not know about the statutory injunction, but understood that Ms. Olson wanted Ms. Coleman to be the administrator of the insurance funds for the benefit of the child. According to Ms. Coleman, Ms. Olson read and signed the change of beneficiary document in the presence of Ms. Coleman, Ms. Mims, and Ms. Steventon. Ms. Coleman explained that when Ms. Olson signed the document, she was intubated, responsive, awake, and able to see. Ms. Olson communicated by writing, pointing, and texting, and she had no questions about what she was signing. Ms. Coleman denied signing Ms. Olson's name on the document or that she or anyone else pressured Ms. Olson to change her insurance beneficiary. Ms. Coleman also denied that she agreed with Ms. Mims and Ms. Steventon to lie about Ms. Olson's signature.

         Ms. Mims testified that Ms. Olson and her child came to live with her and her husband on July 8, 2012. Two days later, Ms. Mims took Ms. Olson to a local emergency room and then went with her to Vanderbilt University Medical Center. According to Ms. Mims, Ms. Olson could communicate, speak, answer questions, and understand what was going on. Ms. Mims visited Ms. Olson at the hospital almost every day, and when they exchanged text messages, Ms. Olson's responses were appropriate. Ms. Mims understood that Ms. Olson wanted to change her life insurance beneficiary for the benefit of her child. On July 12, 2012, Ms. Mims received information from Ms. Olson's employer about how Ms. Olson could change her life insurance beneficiary. Ms. Mims and Ms. Steventon were in Ms. Olson's hospital room when Ms. Coleman handwrote the change of beneficiary document, and they watched Ms. Olson sign the document. Ms. Mims testified that Ms. Olson made Ms. Coleman the beneficiary because Ms. Olson was concerned that if she named her child as beneficiary, Mr. Olson would receive the funds. Ms. Olson was conscious and her eyes were open when she signed the document. Ms. Mims believed that Ms. Olson signed the change of beneficiary document of her own free will. Ms. Mims denied that she conspired with Ms. Coleman or that she pressured Ms. Olson to sign the document. Ms. Mims notarized the signed document and faxed it to Ms. Olson's employer.

         Ms. Steventon testified by deposition that she went with Ms. Mims to Vanderbilt University Medical Center to visit Ms. Olson and to witness her signing the change of beneficiary document. Ms. Steventon, Ms. Mims, and Ms. Coleman discussed the information that should be included in the document. Ms. Steventon saw Ms. Coleman handwrite the document, and she saw Ms. Olson sign it. Ms. Olson communicated with them by writing and nodding her head. Ms. Steventon saw no one threaten Ms. Olson, and she saw no one pressure or direct Ms. Olson to sign the document. She believed that Ms. Olson knew what she was doing and that she voluntarily signed the document.

         Janelle Kascht, the regional manager for Ms. Olson's employer and her supervisor, testified by deposition that in the month before Ms. Olson's death, Ms. Olson told her she was divorcing her husband and needed to get her financial matters in order. The day Ms. Olson went into the hospital, Ms. Kascht called Ms. Olson and explained how to change the beneficiary of her life insurance policy. Ms. Kascht testified that Ms. Olson's responses were appropriate, and she had no concerns about Ms. Olson's ability to understand what was happening.

         Marcus Johnson, Ms. Olson's friend and coworker, testified that Ms. Olson, before going to the hospital, was upset and talked to him about finding a new apartment, refinancing loans, changing her 401(k), and removing Mr. Olson's name from "everything." On July 9, 2012, Ms. Olson told Mr. Johnson that she was sick and would not be at work. On July 12, 2012, Mr. Johnson gave Ms. Kascht the change of beneficiary paperwork that Ms. Mims had faxed to him. Mr. Johnson was familiar with Ms. Coleman because she had visited Ms. Olson at work. He had no reason to believe that Ms. Coleman threatened or pressured Ms. Olson into signing the change of beneficiary document.

         Dr. Todd W. Rice, a pulmonary and critical care physician at Vanderbilt University Medical Center, testified by deposition that he treated Ms. Olson and diagnosed her with Stevens-Johnson syndrome. According to his notes from July 12, 2012, Dr. Rice saw Ms. Olson in the intensive care unit during morning rounds and four or five times throughout the day. Her face was red and swollen, she could open her eyes some, and she had sloughing or peeling of the top layer of the eye. Ms. Olson was medicated and intubated, but awake and responsive.

         Mr. Olson testified that he tried to visit and call Ms. Olson in the hospital but could not see or speak with her. Mr. Olson also attempted to contact Ms. Coleman, but she did not respond. Mr. Olson did not know that Ms. Olson had changed her life insurance beneficiary until after he opened her estate. He believed that someone had forged Ms. Olson's signature on the change of beneficiary document. Mr. Olson testified that after Ms. Olson's death, he had marital assets worth $15, 000 and marital debts totaling $230, 000.

         Both parties called handwriting experts to testify about Ms. Olson's signature on the change of beneficiary document. Ms. Coleman's expert, Thomas Vastrick, a forensic document examiner certified by the American Board of Forensic Document Examiners, testified that it was highly probable that the person who signed the change of beneficiary document was the same person who wrote Ms. Olson's known signatures. Mr. Olson's expert witness, Marty Pearce, a forensic document examiner certified by the Institute of Graphological Science, testified that the signature on the change of beneficiary document was not Ms. Olson's genuine signature.

         Ms. Coleman testified that she received $393, 000 in life insurance benefits. From these funds, she established a $50, 000 college fund and bought items for her grandchild. Ms. Coleman also paid Ms. Olson's funeral expenses, travel expenses for herself and her grandchild, and attorney's fees, leaving a balance of $292, 488 in life insurance proceeds. She denied spending the money on herself.

         As to grandparent visitation, Ms. Coleman explained that she believed ending her relationship with her grandchild would harm the child and that court intervention was necessary for her to continue the relationship. Ms. Coleman stated that her relationship with the child had strengthened after she spent more time with the child under the juvenile court's order of visitation. Although Mr. Olson allowed Ms. Coleman to have visitation after she dismissed her juvenile court petition, Ms. Coleman testified that she and Mr. Olson did not care for each other and that their communications were unpleasant. Ms. Coleman said that Mr. Olson gave her a "hard time" about visitation, denied her visitation, restricted her visitation, and sometimes did not allow her to talk with the child on the phone. Ms. Coleman admitted that Mr. Olson had restricted her visitation after she did not tell him about her plans to take the child to Disney World. Ms. Coleman attributed the hostility between her and Mr. Olson to their contentious litigation and the marital problems between her daughter and Mr. Olson.

         Mr. Olson confirmed the mutual animosity between the parties and explained that Ms. Coleman had never liked him or approved of his marriage to Ms. Olson. He agreed that his child had a significant relationship with Ms. Coleman and that it was in the child's best interest to continue to visit with her. Mr. Olson stated that he had not opposed visitation and had tried to facilitate a relationship between Ms. Coleman and the child. Ms. Coleman, however, had insisted on scheduling visitation through their attorneys and the court system and failed to communicate her desired visitation dates. Mr. Olson testified that he would ensure that Ms. Coleman continued to have a significant relationship with the child without court intervention.

         Trial Court's Ruling

         In February 2015, the trial court denied Mr. Olson's counterclaim for the life insurance benefits and granted Ms. Coleman's petition for grandparent visitation. The trial court awarded the life insurance benefits to the Olsons' child, finding that Ms. Olson had changed her life insurance beneficiary because of "unintentional or accidental undue influence." In reaching this decision, the trial court first found that Ms. Olson had signed the change of beneficiary document; although she was suffering from a serious illness, Ms. Olson's mental capacity "was not diminished to the point that she was unable to make decisions." The trial court concluded that Ms. Olson had intended to change her beneficiary from Mr. Olson to her child to ensure that her child benefitted from the insurance proceeds and determined that whether Ms. Olson's action was "intentional or not, the change of beneficiary form did not accomplish what Ms. Olson intended" because she "inadvertently" made Ms. Coleman the beneficiary. The trial court found no evidence of fraud or forgery.

         The trial court also found that the purpose of the statutory injunction in Tennessee Code Annotated section 36-4-106(d)(2) was to maintain the status quo until the trial court finalized the divorce. As a result, the child's interests were "equitably vested in the enforcement of the Order despite the change of beneficiary to Ms. Coleman." The trial court concluded that Ms. Olson had violated the conditions of the injunction, but her conduct was not "contemptuous" or an intentional defiance of a court order.

         Based on these findings, the trial court invoked its "inherent equity power to right a wrong and do what is in the best interests of the minor child" and awarded the life insurance benefits to the Olsons' child. The trial court also ordered Ms. Coleman to deposit the remaining funds into the court registry for the use and benefit of the child. The trial court found that Ms. Olson's funeral expenses, necessities for the child, and the child's $50, 000 college fund were appropriate expenditures but that Ms. Coleman's ...


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