[00:00:00] Speaker 01: I'll hear argument in the second case on the calendar, case 24-7237, Sands versus Norman. [00:00:06] Speaker 01: Mr. Fogel. [00:00:08] Speaker 03: Good morning, your honors. [00:00:09] Speaker 03: May it please the court, Joseph Fogel. [00:00:11] Speaker 03: I'll reserve seven minutes on the rebuttal, please. [00:00:15] Speaker 03: Oral arguments on this case are particularly appropriate because in review, the trial court did struggle with [00:00:23] Speaker 03: What's the legal framework for these hotly contested facts? [00:00:28] Speaker 03: Well, this is a review of a summary judgment granted. [00:00:33] Speaker 03: And we think that there are many facts that were weighed improperly. [00:00:37] Speaker 02: Counsel, if I may interrupt, if you could just clarify for me one thing. [00:00:44] Speaker 02: Is the claim here that there was fraud in this case? [00:00:48] Speaker 03: That's an excellent question. [00:00:50] Speaker 03: This is not a fraud pleading. [00:00:53] Speaker 03: that fraud is required. [00:00:56] Speaker 02: I know what you're saying. [00:00:58] Speaker 02: If it's not required, that's fine. [00:00:59] Speaker 02: But your claim is not that it was fraud, correct? [00:01:04] Speaker 03: I need to elaborate on that. [00:01:06] Speaker 03: In the second phase of the interpleter, there is a question about the insured's expressed intention on the designation forms. [00:01:17] Speaker 03: For that, in the interpleter context, fraud has [00:01:22] Speaker 03: very much comes up is not required. [00:01:26] Speaker 03: Fraud is not involved. [00:01:28] Speaker 03: The question is whether it's a false document, whether that document reflects the actual intent of the insurer. [00:01:36] Speaker 02: Fraud. [00:01:37] Speaker 02: But I just, again, if it's not fraud, then is it undue influence? [00:01:43] Speaker 02: Is it identity theft? [00:01:44] Speaker 02: I just want to make sure I understand what your legal theory is so that we can put the facts that you allege are [00:01:52] Speaker 02: the basis for the dispute and inappropriate for summary judgment in clear view. [00:01:58] Speaker 02: So I want to make sure I understand that. [00:02:00] Speaker 02: So if it's not fraud, then is it undue influence? [00:02:03] Speaker 02: Is it identity? [00:02:04] Speaker 02: What is it that your theory is? [00:02:07] Speaker 03: I'm drawing a difference between false documents which do not express the intention of the insured and allegations of fraud for additional damages beyond the insurance benefits that are at stake. [00:02:22] Speaker 03: in an interpletor. [00:02:26] Speaker 03: Many times district courts grapple with allegations of fraud to obtain additional damages against the other party. [00:02:34] Speaker 03: Those allegations have to be made with specificity, with intent, and be tied to the wrongdoer because additional damages are involved. [00:02:44] Speaker 03: Here, fraud is not the issue. [00:02:47] Speaker 03: The issue is whether these documents, electronic and paper, [00:02:51] Speaker 03: whether they represent an expression of the insured's intent. [00:02:57] Speaker 03: And it's only about the money that the insurance company has deposited with the court. [00:03:02] Speaker 03: That claim, those funds, it's not to seek additional funds from the other side. [00:03:09] Speaker 04: It's about... So I share a concern here, which is, are you arguing incapacity? [00:03:21] Speaker 03: There is a question of incapacity that presented in this case definitely early on. [00:03:26] Speaker 03: The heart of this case, though, is that the documents on which the other side relies are false documents, not fraudulent documents, because my side does not have to prove fraud. [00:03:39] Speaker 03: We have to prove that those documents upon which Ms. [00:03:43] Speaker 03: Sands relies [00:03:44] Speaker 03: are false documents. [00:03:46] Speaker 03: They are not an actual expression. [00:03:48] Speaker 01: By which you mean coerced essentially? [00:03:50] Speaker 01: That somehow she got Mr. Baxley to list her as the beneficiary on the insurance when that was not really what he was planning to do or wanted to do? [00:04:02] Speaker 01: That's the argument? [00:04:03] Speaker 03: False documents can have several different legs to support on. [00:04:09] Speaker 03: One is exactly that, that there's undue influence, that there's coercion. [00:04:14] Speaker 03: Another can be that a person lacks capacity to know what they're doing and they're signing or sending and things. [00:04:21] Speaker 02: And so which are you alleging? [00:04:23] Speaker 03: I'm alleging that these are false documents, not fraudulent documents, because I don't want to have to show the additional standards for fraud. [00:04:34] Speaker 03: I just want to show that these are false documents and not an expression of the insured's intention. [00:04:43] Speaker 04: So just to be clear, your theory is not fraud. [00:04:47] Speaker 04: It's not incapacity. [00:04:49] Speaker 04: It's not undue influence, right? [00:04:53] Speaker 04: I mean, don't say it's false. [00:04:56] Speaker 04: I understand what you're saying with the false documents. [00:04:58] Speaker 04: But I just want to make sure that we understand your legal theory and what it's not. [00:05:04] Speaker 03: The facts in this case initially presented as facts that were likely incapacity or undue influence. [00:05:13] Speaker 03: an ill man in the last months of his life, a flurry of communications with the insurance company, making changes that a fact finder just can't find credible. [00:05:28] Speaker 03: But the legal theory later, especially when Mrs. Guidry arrived on the scene and provided her declarations in the opposition to the summary judgment, makes it clear [00:05:42] Speaker 03: to our side that the documents that Ms. [00:05:45] Speaker 03: Sands relies upon are false documents. [00:05:48] Speaker 03: They're not documents that the insured actually did himself or that he would be likely to do himself. [00:05:56] Speaker 02: But your argument is not that of incapacity you believe that it's the false documents argument. [00:06:04] Speaker 02: That's the legal theory. [00:06:06] Speaker 03: Yes. [00:06:06] Speaker 03: That's where the facts led on this case. [00:06:08] Speaker 03: Exactly. [00:06:11] Speaker 03: And to sort of switch gears to the disputed facts on the summary judgment, we believe quite strongly that there's really an overwhelming number of instances where the district court weighed these facts or perhaps didn't have a strong indication from my side about how these facts were important. [00:06:39] Speaker 03: There are hotly contested facts that show time and time again that the documents that Ms. [00:06:47] Speaker 03: Sands relies upon to seek the payment of the benefits are false documents. [00:06:54] Speaker 03: They're not true expressions of the insured's intent. [00:06:58] Speaker 03: They're from emails that he didn't use. [00:07:01] Speaker 03: They're from a phone number that he didn't use. [00:07:04] Speaker 03: They have multiple errors that the insured has [00:07:06] Speaker 03: a life insurance agent would not make. [00:07:10] Speaker 03: These are just questions that at a trial of this matter would be explored in depth and combined with the insurance incapacity and the other facts that come out in the Guidry Declaration about the lack of a relationship with SANS. [00:07:30] Speaker 03: I think a full hearing at a trial would make it clear that [00:07:35] Speaker 03: The documents upon which Sands relies are fraud, pardon me, are false documents. [00:07:42] Speaker 03: And because this is simply an interpletor, it doesn't go beyond the funds put into this by the insurance company, fraud as a legal theory of recovery of additional funds is not required. [00:08:00] Speaker 03: And additionally, finally, I would add that Ms. [00:08:04] Speaker 03: Sands does not have to be [00:08:05] Speaker 03: absolutely connected to the false documents. [00:08:10] Speaker 03: That is outside of the importance of whether the insurance intent is actually expressed in these documents. [00:08:19] Speaker 03: Whether Ms. [00:08:20] Speaker 03: Sands did the nefarious things that my side would seek to show at trial or not is aside from it. [00:08:28] Speaker 03: The question is whether these documents are a clear true expression of the insurance intent. [00:08:35] Speaker 01: You want to save some time for rebuttal? [00:08:37] Speaker 01: Yes. [00:08:37] Speaker 01: Thank you. [00:08:38] Speaker 01: Thank you. [00:08:47] Speaker 00: Your honors, Michael Hoover, Interpreter Law for Debbie Sands. [00:08:53] Speaker 00: I'm going to be candid with you. [00:08:55] Speaker 00: This case has been really difficult to litigate because we're here on appeal and I still don't know what I'm defending against. [00:09:01] Speaker 00: I don't know if it's an allegation of fraud. [00:09:03] Speaker 00: I don't know if it's an allegation of undue influence. [00:09:05] Speaker 00: lack of capacity. [00:09:07] Speaker 00: So at the trial court, we briefed all of those. [00:09:10] Speaker 00: We assumed it was the kitchen sink and we briefed all of them. [00:09:14] Speaker 00: I'm not sure what else I can do to litigate this when I don't even know the difference between a false document and a fraudulent document. [00:09:22] Speaker 01: I mean, I take it the position is that these documents were submitted and they don't reflect Baxley's true intent and that the reason for that is because Ms. [00:09:33] Speaker 01: Sands [00:09:34] Speaker 01: somehow got to him and change the beneficiary. [00:09:37] Speaker 01: And there's not direct evidence of that, but there's evidence that is circumstantial. [00:09:43] Speaker 01: So I mean, I think the legal theory could have been defined more helpfully, but the facts start to set up maybe what this is about. [00:09:49] Speaker 00: And so if we assume that the way you phrase it is correct, that would be undue influence. [00:09:54] Speaker 00: And that's what the trial court settled on. [00:09:57] Speaker 00: And the real problem with the undue influence claim is that you don't prove anywhere. [00:10:01] Speaker 00: There's no evidence of Ms. [00:10:04] Speaker 00: Sands doing anything. [00:10:06] Speaker 00: You could argue that he was vulnerable. [00:10:08] Speaker 00: You could argue that he was sick. [00:10:10] Speaker 00: Everybody agrees he was sick. [00:10:12] Speaker 00: You get to a really curious second element of undue influence which is that the person has to have a confidential relationship with the sick person. [00:10:20] Speaker 00: So in this case, Ms. [00:10:20] Speaker 00: Sands says, look, we were engaged. [00:10:23] Speaker 00: But Mr. Norman says, no, you weren't. [00:10:25] Speaker 00: You weren't even near him the last month of his life. [00:10:29] Speaker 00: So the trial court resolved that by saying, well, we're going to just assume that he was in a relationship with Ms. [00:10:36] Speaker 00: Sands. [00:10:37] Speaker 00: And we'll go ahead and concede that element. [00:10:39] Speaker 00: Where we ran into trouble was the third element, which is you have to show to prove undue influence that Ms. [00:10:44] Speaker 00: Sands actually did something. [00:10:46] Speaker 00: And there's been no allegation. [00:10:48] Speaker 01: Wasn't she involved in the trust document aspect of this? [00:10:53] Speaker 00: Yeah. [00:10:53] Speaker 00: And so what happened is when Mr. Baxley was submitting these forms, they kept being rejected. [00:10:59] Speaker 00: And so what the insurance company does when it rejects forms is it'll send you a new blank form and they will include this trust certification form. [00:11:07] Speaker 00: with the blank form to fill out. [00:11:10] Speaker 00: Now, it only applies if a person has a trust, but he had tried so many different ways of getting the beneficiary change that he thought, okay, well, they must be telling me they want me to fill out this form. [00:11:21] Speaker 00: So he takes it to her. [00:11:22] Speaker 00: I don't know why he took it to her. [00:11:23] Speaker 00: I guess because he thought that trustee was like synonymous with beneficiary and he says, well, you signed this. [00:11:28] Speaker 00: So she signed it. [00:11:30] Speaker 00: Importantly, that form was never accepted. [00:11:32] Speaker 00: So it's not even relevant. [00:11:34] Speaker 01: No, I know. [00:11:34] Speaker 01: And you make a plausible argument, but it just shows she was involved in some way at this point in time. [00:11:40] Speaker 01: The same goes for Jason Meza, who's listed, who seems to be an associate of hers, but not a cousin of his. [00:11:47] Speaker 01: So I don't know what to make of any of this, other than it seems that she's there at the time. [00:11:53] Speaker 00: I want to correct the Jason Meza thing. [00:11:55] Speaker 00: That was Eric's friend. [00:11:56] Speaker 00: That was not Deb's friend. [00:11:57] Speaker 00: I know it was alleged throughout here that that was Sands' associate or accomplice like that. [00:12:02] Speaker 00: She didn't even know this Jason Meza fellow. [00:12:04] Speaker 00: That was Eric's friend he played golf with. [00:12:07] Speaker 00: And the only reason they met each other was through Eric. [00:12:11] Speaker 00: But even accepting that, if she signed this trust document, what was the undue influence? [00:12:19] Speaker 00: If I'm dating a girl or engaged to a girl, I can ask her, hey, will you make me your beneficiary? [00:12:24] Speaker 00: That's not undue influence. [00:12:26] Speaker 00: I have to do something like say, hey, I'm not going to give you your medicine. [00:12:29] Speaker 00: You're going to die if you don't make me your beneficiary. [00:12:31] Speaker 00: I'm not going to give you food. [00:12:32] Speaker 00: I'm not going to take care of you. [00:12:33] Speaker 00: I'm not going to take you to the doctor. [00:12:35] Speaker 00: And there's been no allegation, much less evidence, [00:12:38] Speaker 00: that she did any of these things. [00:12:40] Speaker 00: It's all been innuendo, it's all been conclusory statements, there's just been no evidence. [00:12:45] Speaker 01: What about some of the circumstantial evidence though, like Mrs. Guidry saying that Baxley did not want to have Sands around anymore, some of the things that the insurance company reported about the irregularities of the forms and how they were submitted, the fact that this gentleman was an insurance agent. [00:13:03] Speaker 01: I mean there's a lot of these different things that, [00:13:05] Speaker 01: They're not direct proof of anything, but given all the facts and circumstances, why don't they at least create a genuine dispute here? [00:13:12] Speaker 00: Well, I think because we went into detail refuting those. [00:13:18] Speaker 00: So for example, the fact that Eric was a licensed insurance agent [00:13:22] Speaker 00: He didn't do life insurance. [00:13:25] Speaker 00: He did property and casualty. [00:13:27] Speaker 00: Property and casualty doesn't have beneficiary designations. [00:13:30] Speaker 00: You know, it's for business. [00:13:31] Speaker 00: So your business is the insured and by default is the beneficiary. [00:13:37] Speaker 00: Eric had never had any experience setting up beneficiary designations. [00:13:40] Speaker 00: And what's interesting, I know there's been a lot of talk about how these forms are all messed up. [00:13:45] Speaker 00: When you really do a detailed analysis, they weren't crazy. [00:13:49] Speaker 00: What he was asking for was not like some weird thing. [00:13:53] Speaker 00: Basically, he was trying to make SANS the primary beneficiary of one policy. [00:13:58] Speaker 00: and the secondary beneficiary of another policy and he was trying to do them on one form and the company said, look, if he had done this on two separate forms, it would have been a problem. [00:14:07] Speaker 00: The issue is that he was trying to do it on one form which he had actually done before a few years earlier when he was doing something, he was making changes. [00:14:15] Speaker 01: What about all these issues with the email address and the other address? [00:14:19] Speaker 01: Again, it's not just one thing and I'm not saying any one of these necessarily dispositive but there's questions about each of them. [00:14:25] Speaker 00: Right, but again they're just allegations and so when you actually pull it up, one of the allegations was he had never used his email address. [00:14:34] Speaker 00: We went and pulled, we produced documents in the litigation where he had been using that email address since 2020. [00:14:39] Speaker 01: Including with the insurance company? [00:14:42] Speaker 00: Not to my knowledge, but he had certainly used it with other people. [00:14:48] Speaker 00: The idea that, the other thing that was sort of interesting is that if you look at the beneficiary changes, they didn't all benefit Sans. [00:14:57] Speaker 00: Like it wouldn't have make any sense that she would have broken into Eric's account, gone online or filled out these forms to make Eric's deceased father the beneficiary. [00:15:08] Speaker 00: And that's what half of the forms originally tried to do. [00:15:12] Speaker 00: And one of the forms that was accepted [00:15:15] Speaker 00: She was the primary beneficiary of a policy and then another form was submitted a couple weeks later that actually removed her as a beneficiary. [00:15:22] Speaker 00: Why would a person committing fraud go in and remove themselves as a beneficiary if the whole idea is to steal all the money? [00:15:29] Speaker 00: It doesn't add up. [00:15:30] Speaker 00: What does add up is that Eric was an alcoholic. [00:15:33] Speaker 00: He was on apparently according to his death certificate he had meth in his system at the time of his death which seems odd given that he was hospitalized. [00:15:42] Speaker 00: So somehow he was doing meth while he was in the hospital. [00:15:45] Speaker 00: This guy lived at what we would probably consider to be an alternative lifestyle. [00:15:50] Speaker 00: He partied hard. [00:15:51] Speaker 00: He was only 45 when he died. [00:15:54] Speaker 00: Who knows what he was thinking? [00:15:56] Speaker 00: I mean, the bottom line is that he was changing his beneficiaries constantly. [00:16:01] Speaker 00: It just so happened that on the date of his death, that was the one that was listed as the beneficiary. [00:16:07] Speaker 01: So what do you make of the Guidry Declaration? [00:16:11] Speaker 00: So I think it's important to know that she has it out for Ms. [00:16:16] Speaker 00: Sands. [00:16:17] Speaker 00: They're embroiled in litigation over the estate. [00:16:20] Speaker 00: But most of her stuff is, it's hearsay. [00:16:22] Speaker 01: What's the nature of the other litigation? [00:16:24] Speaker 00: So Eric executed a will, naming Deb the beneficiary of his estate, the executive beneficiary of her estate. [00:16:32] Speaker 00: And she's gone into court. [00:16:34] Speaker 00: She's challenged it. [00:16:35] Speaker 00: But if you look at her declaration, she says that she's been appointed [00:16:38] Speaker 00: as the executor of Eric's estate. [00:16:40] Speaker 00: And that's just simply not true. [00:16:41] Speaker 00: So half the allegations in her declaration are just made up. [00:16:46] Speaker 00: This notion that Deb never saw him in the hospital isn't true. [00:16:50] Speaker 00: We provided pictures of her with him in the hospital. [00:16:53] Speaker 00: The idea that she was in his emergency contact isn't true. [00:16:55] Speaker 00: We provided a text message from the hospital to Deb. [00:16:58] Speaker 00: She just made a bunch of stuff up hoping that it would stick. [00:17:01] Speaker 00: And it's when you really boil down and look at the evidence, it's not true. [00:17:04] Speaker 01: Was she deposed? [00:17:05] Speaker 01: Was Deb Guidry deposed? [00:17:06] Speaker 00: She was never deposed. [00:17:08] Speaker 01: Why was that? [00:17:10] Speaker 00: We were going to depose her towards the end of the case and we ran out of time. [00:17:15] Speaker 01: She claims that Eric wanted Sands to be out of the picture. [00:17:23] Speaker 01: Is that supported or contradicted? [00:17:26] Speaker 00: It's not supported because if you look at the record, there's actually emails that he sent her mid-February saying like, oh baby, I love you so much, you know, all that kind of stuff. [00:17:36] Speaker 00: So this idea that he had [00:17:38] Speaker 00: you know, tossed her to the side and had some new girlfriend at that time. [00:17:41] Speaker 00: It's just not supported. [00:17:42] Speaker 00: So the one thing I kept telling the district court is, look, you don't even have to look to the credibility of SANS. [00:17:49] Speaker 00: Everything that we've said is backed up by some sort of evidence, whether it's the declaration of the neighbor who explained why Eric's address changed, the fact that pretty much everything that was done was backed up by evidence. [00:18:05] Speaker 00: And then you've got her just making conclusory statements. [00:18:08] Speaker 00: as if they're fact, and none of them have been justified. [00:18:11] Speaker 00: In fact, they've been contradicted. [00:18:18] Speaker 01: I don't hear any other questions from my colleagues, so unless you have anything else to offer, we'll hear rebuttal. [00:18:22] Speaker 01: Thank you so much. [00:18:23] Speaker 01: Thank you. [00:18:30] Speaker 03: Much of what we heard from my opposing counsel would make for a very colorful trial because [00:18:38] Speaker 03: All of these statements are disputed. [00:18:42] Speaker 03: There's evidence that the email used to change the designation is just a fake email that Mr. Vaxley did not use elsewhere. [00:18:51] Speaker 03: The only other example of it being used is, gosh, email to Sands, not with the insurance company. [00:19:00] Speaker 03: So there's evidence that's highly questionable upon which Sands relies. [00:19:08] Speaker 03: The phone number used to make the beneficiary designations different with the insurance company were not his phone. [00:19:19] Speaker 03: Ms. [00:19:19] Speaker 03: Gidry, his mother, had his phone after he passed away and went through the phone and declared that she and a detective [00:19:30] Speaker 03: went through the phone and there was no information showing that the phone had been used to connect with Midland, the insurance company for the electronic designation changes that are involved here. [00:19:45] Speaker 03: There's, Mr. Baxley was a licensed life insurance agent that he would put on a form the same name as the primary beneficiary and then again as a contingent beneficiary [00:20:00] Speaker 03: meaning if that primary was not available, just lacks all credibility. [00:20:07] Speaker 03: In this honorable Court of Appeals, these types of factual contentions may be unusual to hear, but absolutely, at a trial of this matter, and more importantly, upon a motion for summary judgment, there was a great deal of weighing of evidence that [00:20:29] Speaker 03: is beyond the scope of the Rule 56 motion. [00:20:35] Speaker 03: To go back to the framework that it goes into, the undue influence, the coercion type arguments, do you have an implication that the person that the insured was involved in it? [00:20:53] Speaker 03: in some way, the cases of Lee versus West Coast Life and Ensley and Michaelman versus Lincoln National Life, these cases do reach questions about the accuracy of the beneficiary documents themselves. [00:21:13] Speaker 03: Many issues come up in the second phase about those beneficiary designations. [00:21:21] Speaker 03: whether it's a real signature, and the genuineness of the documents. [00:21:27] Speaker 03: And that's really to answer the question, is this an expression of the insurance intent? [00:21:34] Speaker 03: And here, where the district court created a fraud requirement, which was beyond and higher requirement [00:21:45] Speaker 03: than merely showing in the second phase that these are false documents, that these are not documents that reflect Mr. Baxley's expressed intention, deprived Mr. Norman of an opportunity at trial to have all of this evidence out and weighed. [00:22:08] Speaker 03: While my opposing counsel made some specific representations that [00:22:15] Speaker 03: They handled a certain question that there were novice forms or that there were other emails and things like that. [00:22:27] Speaker 03: Those are exactly the types of things that need to be fully examined at a trial rather than at summary judgment motion. [00:22:41] Speaker 03: If there are no further questions from the [00:22:44] Speaker 03: the bench while there are many references to evidence being weighed and the other very serious authenticity issues in this, they're covered in the brief and closely tracked to the record. [00:23:02] Speaker 01: Great. [00:23:02] Speaker 01: Thank you. [00:23:03] Speaker 01: Thank you. [00:23:04] Speaker 01: And we thank both council for the briefing and argument. [00:23:06] Speaker 01: This case is submitted.