Witt v. Jones

722 P.2d 474, 111 Idaho 165, 1986 Ida. LEXIS 491

• Court: Idaho Supreme Court
• Decided: July 8, 1986
• Docket: 15962
• Status: Published

Opinions

BAKES, Justice.

Plaintiff appellant Linda Jones Witt appeals from a district court order awarding summary judgment to defendant Mary Jones, her stepmother. Linda sued her stepmother claiming a right to additional proceeds under her father’s life insurance policy in which she was a named beneficiary. Suit was brought against defendant Mary Jones in both her capacity as personal representative of the estate of James Jones (Linda’s father) as well as in her individual capacity. The district court held plaintiff’s cause of action was barred by the statute of limitations or, in the alternative, by application of the doctrine of laches. The district court also held that plaintiff failed to allege facts sufficient to support a cause of action for fraud or deceit or the creation of a constructive trust pursuant to the court’s powers of equity. We affirm.

Appellant, Linda Jones Witt, is the daughter of James Jones by a previous marriage. Appellant alleges that when she was still a minor her parents, in a divorce proceeding, entered into a property settlement agreement providing that Linda was to be irrevocably designated as a beneficiary to one-half of the proceeds of her father’s life insurance policy with Connecticut General Life Insurance Company. She further alleges that this property settlement agreement was subsequently incorporated into the divorce decree obtained in 1951 in California.¹ Linda’s father later married the respondent, Mary Jones, to whom he remained married until the time of his death on July 15, 1977, some 26 years after the property settlement agreement was executed.

At the time of his death, James Jones was a resident of Kootenai County, Idaho. His widow, Mary Jones, filed a petition for. informal probate in district court following James’ death. On October 31, 1977, Mr. Jones’s will was entered in the probate proceeding. In that will, Mr. Jones made no provision for his daughter, Linda, stating, “I have amply provided for her by naming her as beneficiary in certain insurance policies.” Apparently, one of the insurance policies to which Mr. Jones was referring was a $150,000 life insurance policy with Connecticut General Life Insurance Company. Linda filed the present action alleging that this particular policy was the very policy which was the subject of the 1951 California divorce proceeding between Linda’s mother and father and that as result of that proceeding (specifically the property settlement agreement) James Jones had been required to name his daughter Linda as beneficiary to half of the policy proceeds. However, as alleged by appellant, contrary to that settlement agreement, Mr. Jones on January 29, 1976, changed the designated beneficiaries under the policy and named Linda as only a 13% beneficiary. His wife at the time of his death, Mary, was designated as 50% beneficiary.² Linda received her 13% share of the policy proceeds ($19,500) on April 4, 1978. She testified that she was unaware of the property settlement agreement until after her father’s death in 1977. She additionally testified via affidavit that she did not become aware of her father’s breach of that agreement (i.e., the January, 1976, change in designation of beneficiaries) until July, 1981.

Linda brought suit against defendants on July 12, 1982. Defendants Trans World Airlines, Inc., and Connecticut General Life Insurance Company moved for dismissal on grounds that plaintiff had failed to state a cause of action against them; they were later dismissed by stipulation. Defendants Von Krohn, Jones, and Berry had not been served with process at the time the district court entered its order of summary judgment. Thus, the sole respondent on appeal is Mary Jones, who was sued both in her individual capacity, and as personal representative of the estate of James Jones.

Appellant raises three issues: (1) on the claim against respondent, in her capacity as personal representative of the estate of James Jones, did the trial court err in concluding that appellant’s claim was barred by the statute of limitations; (2) on the claim against respondent in her individual capacity, did the district court err in refusing to impose a constructive trust on the proceeds which respondent received from the Connecticut General Life Insurance Company; and (3) whether the district court erred in holding appellant’s action barred by application of the doctrine of laches. Finding grounds to affirm the district court as to the first two issues raised by appellant, it is unnecessary to address the third issue. We address each of the two issues in turn.

I

The district court held that appellant’s claim against respondent Mary Jones, in her capacity as personal representative of the estate of James Jones, was barred by the statute of limitations.³ The basis of appellant’s claim is that her father breached the property settlement agreement by changing the beneficiary on his insurance policy and that, as a result of said breach, she has been damaged. The alleged breach by her father occurred prior to his death and therefore constituted a claim against his estate, and respondent Mary Jones, in her capacity as personal representative, was the appropriate party to defend against said claim. Although the trial court applied a different statute of limitations, claims against the estate of a decedent are controlled by I.C. § 15-3-803, which provides, in pertinent part:

“15-3-803. Limitations on presentation of claims.—

“(b) All claims against the decedent’s estate which arose before the death of the decedent, including claims ... founded on contract, tort, or other legal basis, are barred against the estate, the personal representative, and the heirs and devisees of the decedent, unless presented within three (3) years after the decedent’s death whether or not notice to creditors has been published.” (Emphasis added.)

Based upon the foregoing statute, the claim against respondent Mary Jones, in her capacity as personal representative, had to be brought no later than July 15, 1980, three years after the death of James Jones. Plaintiff’s complaint was not filed until July 12, 1982, nearly two years late. Appellant having failed to meet the July 15, 1980, deadline, her claim against respondent Mary Jones, in her capacity as personal representative, was barred by the statute of limitations contained in I.C. § 15-3-803.⁴

II.

At the hearing on the motion to dismiss and at the later hearing on the motion for summary judgment brought by respondent Mary Jones, counsel for appellant argued that the 50% of the insurance policy proceeds which were paid to Mary Jones as a designated beneficiary under the policy, were, nevertheless, impressed with a constructive trust because of fraudulent or otherwise wrongful conduct on her part. Therefore, counsel argued, under I.C. § 5-218 the applicable statute of limitations against respondent Mary Jones, in her individual capacity, was three years from discovery of the facts constituting the fraud. Appellant alleged that her discovery of the necessary facts did not occur until July of 1981. The district court held that Linda’s complaint failed to allege with particularity any facts setting out a cause of action for fraud against Mary Jones, stating: “There are no factual allegations of any fraud or deceit on the part of the Defendants to keep any information from Plaintiff to secret it or prevent her from learning about it.” Presumably the “it” or “information” the court was referring to was the fact that Linda’s father had changed the beneficiary designation, listing her as only a 13% beneficiary of the insurance policy.

On appeal appellant argues that her complaint and affidavit submitted at the hearing on the motion for summary judgment does support a cause of action for fraud and resultant constructive trust. We disagree. A constructive trust arises where legal title to property has been obtained through actual fraud, misrepresentations, concealments, taking advantage of one’s necessities, or under circumstances otherwise rendering it unconscionable for the holder of legal title to retain beneficial interest in the property. Davenport v. Burke, 30 Idaho 599, 167 P. 481 (1917). To the extent appellant’s claim of constructive trust is premised on fraudulent acts by Mary Jones, it is essential that appellant plead with particularity factual allegations of such fraud. I.R.C.P. 9(b); Theriault v. A.H. Robins Co., Inc., 108 Idaho 303, 698 P.2d 365 (1985). The elements of a cause of action for fraud are: “(1) a representation; (2) its falsity; (3) its materiality; (4) the speaker’s knowledge of its falsity or ignorance of its truth; (5) his intent that it should be acted on by the person and in the manner reasonably contemplated; (6) the hearer’s ignorance of its falsity; (7) his reliance on the truth; (8) his right to rely thereon; and (9) his consequent and proximate injury.” Faw v. Greenwood, 101 Idaho 387, 389, 613 P.2d 1338, 1340 (1980).

Examination of Linda’s complaint and her supporting affidavit discloses her failure to allege with any degree of particularity facts which would support the existence of the elements of cause of action for fraud. In fact, the complaint, apart from permissible general allegations of knowledge, only makes the conclusory allegation that “devious tactics [were] imposed by Defendants to thwart Plaintiff____” There are no particular factual allegations disclosing what these so-called tactics were, what made them devious, or when they were made. Linda’s affidavit discloses nothing beyond the fact that she was unaware of the property settlement agreement until after her father’s death and was unaware of the change of designation of beneficiaries under the insurance policy until sometime in July, 1981. Her affidavit contains no allegations that this lack of information regarding either the property settlement agreement or the designation of beneficiaries under the policy resulted from any acts of fraud or concealment on the part of the defendant Mary Jones.⁵ In short, we think the district court correctly held that plaintiff failed to allege any facts which would support the existence of fraud or deceit on part of the defendant Mary Jones.

Finally, appellant’s complaint fails to allege facts of nonfraudulent but otherwise wrongful conduct which would support creation of a constructive trust. Furthermore, such a claim would be barred by the four year limitation contained in either I.C. § 5-217 (obligations not founded on instruments in writing), Templeton Patents, Ltd. v. J.R. Simplot Co., 220 F.Supp. 48 (D. Idaho 1963) (claims of unjust enrichment partake of the nature of a contract and are therefore governed by statute of limitation for oral contracts); or I.C. § 5-224 (general limitation period prescribed for causes of action not specifically provided for in other sections of the code). Any claim by appellant for constructive trust accrued at the time the insurance policy proceeds were distributed. It is undisputed that the policy proceed checks were issued by the insurer on October 11, 1977. Thus, the statute would have run on October 11, 1981. As stated above, Linda’s complaint was not filed until July 12, 1982.

The order of the district court dismissing plaintiff’s complaint is affirmed. Costs to respondent. No attorney fees.

DONALDSON, C.J., and SHEPARD and HUNTLEY, JJ., concur.

1 . Neither the divorce decree nor the property settlement agreement are contained in the record on appeal to this court.

2 . The remaining 37% of the policy proceeds were distributed among three other beneficiaries named by decedent: his mother, Marie L. Jones, 13%; his sister, Dorothy Jones Von Krohn, 11%; and a personal friend, Janet Helen Berry, 13%.

3 . The district court apparently held that the applicable statute of limitations was the four-year limitation contained in I.C. § 5-217. The court nevertheless held that the statute began to run on January 29, 1976, the date James Jones breached the terms of the settlement agreement, and concluded that appellant’s action, which was commenced on July 12, 1982, was barred by the provisions of 5-217.

4 . Appellant in her motion for reconsideration before the district court argued that the limitation imposed by I.C. § 15-3-803 was inapplicable on grounds that a beneficiary’s claim to proceeds of an insurance policy is not a claim against the estate of the decedent in whose name the policy is taken since such proceeds in the present case were not distributed by or into the estate of James Jones. However, appellant's action is against Mary Jones, both in her individual capacity and in her capacity as personal representative of the estate of James Jones. Accordingly, appellant is attempting to assert some sort of claim against Mary Jones in her capacity as personal representative of the estate of James Jones. The only basis for Linda’s assertion that she has a claim against respondent Mary Jones, in her capacity as personal representative, would be her contention that her father breached the property settlement agreement. The consequence of said breach being her loss of the right to 50% of the policy proceeds. Clearly, plaintiffs cause of action is not one for proceeds of the policy per se (which would be a claim asserted against the entity distributing such proceeds, i.e., the insurance company) rather her third party beneficiary claim is for damages resulting from the breach of a contract which is clearly a claim against her father prior to his death and against his estate thereafter.

5 . The only statements in Linda’s affidavit concerning defendant Mary Jones were, “Whenever I confronted or made inquiry of Mary Jones, about my father or his estate, she became curt, short-spoken, distant, and domineering. Communication between us in dealing about these matters became non-existent. / had no direct contact with Mary Jones after my father’s funeral." (Emphasis added.) There simply are no allegations in the affidavit indicating that Linda made inquiry of Mary concerning the insurance policy. In fact, her averments in the affidavit indicate that the reason for her delayed claim regarding the proceeds from the policy centered around her belief that she had been named as beneficiary of other insurance policies held by her father and not as the result of any concealment or misrepresentations made by defendant. “When I received the $19,500.00 I believed I would hear further from the insurance company with regard to any additional payment, or verification that there was another policy." It is clear from this statement that Linda was relying on possible information held by the insurance company and not on information possibly held by defendant Mary Jones. As appellant’s counsel correctly states in his brief, the estate was not a beneficiary under the policy and therefore had no interest in or claim to the policy.