Kimberly Anne McGrath v. Melissa Powers Hester

CourtCourt of Appeals of Tennessee
DecidedApril 14, 2021
DocketM2019-02147-COA-R3-CV
StatusPublished

This text of Kimberly Anne McGrath v. Melissa Powers Hester (Kimberly Anne McGrath v. Melissa Powers Hester) is published on Counsel Stack Legal Research, covering Court of Appeals of Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kimberly Anne McGrath v. Melissa Powers Hester, (Tenn. Ct. App. 2021).

Opinion

04/14/2021 IN THE COURT OF APPEALS OF TENNESSEE AT NASHVILLE January 28, 2021 Session

KIMBERLY ANNE MCGRATH v. MELISSA POWERS HESTER

Appeal from the Chancery Court for Wilson County No. 2018CV261 C. K. Smith, Chancellor ___________________________________

No. M2019-02147-COA-R3-CV ___________________________________

This appeal arises from an action regarding life insurance proceeds. As part of a permanent parenting plan, both parents were to insure their respective lives for $300,000 until the child support obligation was completed, with the children named as the sole beneficiaries to the policies and the other parent named as trustee for the benefit of the children. The Trial Court granted summary judgment finding that the children had a vested interest in the life insurance policy but that they were only entitled to the portion of the proceeds equivalent to the remaining child support obligation. With the defendant’s concession on appeal that the children had a vested interest in the life insurance proceeds, that a constructive trust was appropriate, and that the most recent permanent parenting plan was controlling, the only issues before this Court involved the amount of life insurance proceeds to which the children were entitled and attorney’s fees. We modify the amount of the Trial Court’s judgment and hold that the children are entitled to the entire $300,000 life insurance proceeds per the agreed permanent parenting plan. We affirm the Trial Court’s denial of attorney’s fees. Additionally, we deny the mother’s request for an award of attorney’s fees incurred on appeal.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed in Part, Modified in Part; Case Remanded

D. MICHAEL SWINEY, C.J., delivered the opinion of the court, in which THOMAS R. FRIERSON, II, and KRISTI M. DAVIS, JJ., joined.

Donald Capparella, Kimberly Macdonald, Jacob R. Nemer, and Kristen B. Amonette, Nashville, Tennessee, for the appellant, Kimberly Anne McGrath.

Amy J. Farrar, Sonya S. Wright, and Amanda Moore, Murfreesboro, Tennessee, for the appellee, Melissa Powers Hester. OPINION

Background

Kimberly Anne McGrath (“Mother”) and Brian Wayne Hester (“Father”) were married in 2002. The parents had two children during the marriage and divorced in 2009. Father obtained a term life insurance policy for $500,000 in 2005. From 2005 through 2014, Mother was designated as the direct beneficiary of this policy under her former married name.

At the time of the parents’ divorce, the Davidson County Circuit Court (“Circuit Court”) entered a divorce decree approving the parents’ agreed permanent parenting plan. The 2009 permanent parenting plan designated Mother as the primary residential parent and ordered Father to pay $1,600 per month for child support for their two children. The 2009 permanent parenting plan included the following provision relating to the life insurance requirement:

The ☐mother ☐father ☒both shall insure his/her own life in the minimum amount of $300.000.00 by whole life or term insurance. Until the child support obligation has been completed, each policy shall name the following as sole irrevocable primary beneficiary: ☐the other parent ☒ the other parent, as trustee for the benefit of the children, to serve without bond or accounting, other :Please Type Other Information.

The Circuit Court entered an agreed order in 2010, allowing Mother to relocate with the children and modifying Father’s child support obligation to $910 per month. The life insurance provision remained the same. In 2011, Father married Melissa Powers Hester (“Ms. Hester” or “Defendant”). The parents agreed to modify their permanent parenting plan again in 2013, and Father’s child support obligation was decreased to $679 per month. In the 2013 revised plan, the life insurance provision read as follows:

If agreed upon by the parties, the ☐mother ☐father ☒both shall insure his/her own life in the minimum amount of $300,000.00 by whole life or term insurance. Until the child support obligation has been completed, each policy shall name the child/children as sole irrevocable primary beneficiary, with the other parent as trustee for the benefit of the child(ren), to serve without bond or accounting.

-2- In 2014, Father designated his wife, Ms. Hester, as the direct beneficiary of his life insurance policy. The permanent parenting plan was again modified by the Circuit Court in 2017 by agreement of Mother and Father. This plan decreased Father’s child support obligation to $547 per month. The life insurance provision in this plan read as follows:

Both shall insure his/her own life in the minimum amount of $300.000.00 by whole life or term insurance. Until the child support obligation has been completed, each policy shall name the child/children as sole irrevocable primary beneficiary, with the ☒ other parent other ____________, as trustee for the benefit of the child(ren), to serve without bond or accounting.

Father subsequently died in September 2018 when the children were ages 11 and 13. At the time of his death, Father maintained the life insurance policy for $500,000 with Ms. Hester listed as the beneficiary on the policy.

Mother subsequently filed a complaint in the Wilson County Chancery Court (“Trial Court”), requesting a constructive trust and an emergency temporary restraining order.1 According to Mother’s complaint, the proceeds of Father’s life insurance policy should be placed into a constructive trust and the life insurance company should be restrained from paying any proceeds of the life insurance policy to Ms. Hester or any other third party except the court clerk. The Trial Court entered an emergency temporary restraining order restraining and enjoining Northwestern Mutual Life Insurance Company “from paying any proceeds of any life insurance policy insuring the life of [Father], deceased, to [Ms. Hester], or to any third party other than the Clerk of [the Trial] Court.” An agreed order was later entered by the Trial Court instructing Northwestern Mutual Life Insurance Company to deposit the $300,000 disputed amount of the life insurance proceeds with the Trial Court clerk, with the remaining amount payable to Ms. Hester. Northwestern Mutual Life Insurance Company subsequently deposited such amount with the Trial Court clerk.

Mother filed a motion for summary judgment, as well as a memorandum of law in support of her motion, a statement of undisputed material facts, her affidavit, insurance policy documentation, and copies of the four permanent parenting plans with the respective court orders approving the plans. According to Mother, no genuine issue of material fact existed “as to the issue of the imposition of a constructive trust on the life insurance proceeds of [Father].” According to Mother, Father was required to maintain a life insurance policy for the children, and he failed to do so. Mother argued that she, as trustee for the children, had a vested interest in the life insurance proceeds due to the 2017

1 The action initially included Northwestern Mutual Life Insurance Company as a defendant to this action. Upon the parties’ agreement, Northwestern Mutual Life Insurance Company deposited the life insurance proceeds at issue with the clerk of the Wilson County Chancery Court, and Mother voluntarily nonsuited all claims against the insurance company.

-3- permanent parenting plan that required Father to maintain the children as beneficiaries of his $300,000 life insurance policy. Mother argued that the Trial Court should enter a judgment as a matter of law imposing a constructive trust for $300,000 of the life insurance proceeds and awarding that amount to Mother as trustee for the minor children. As part of her motion, Mother also requested an award of attorney’s fees and expenses.

Ms.

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Bluebook (online)
Kimberly Anne McGrath v. Melissa Powers Hester, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kimberly-anne-mcgrath-v-melissa-powers-hester-tennctapp-2021.