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STATE OF RHODE ISLAND AND PROVIDENCE PLANTATIONS
Filed - October 13, 2010
PROVIDENCE, SC.                                                                                          SUPERIOR COURT
ING LIFE INSURANCE and ANNUITY CO.,    :
INC. f/k/a AETNA LIFE INSURANCE AND                                                                  :
ANNUITY CO.                                                                                          :
                                                                                                     :
v.                                                                                                   :   C.A. NO: PC 07-6366
                                                                                                     :
JOSEPH FRENCH, PHYLLIS ALLSOP,                                                                       :
MARY CROCE, LOUIS CROCE,                                                                             :
NICHOLAS CROCE, and THE ESTATE                                                                       :
OF DEBORAH FRENCH                                                                                    :
DECISION
STERN, J.    Before this Court are: a Motion to Strike a Defendant’s answer to the First
Amended Complaint; a motion for Summary Judgment in favor of the Plaintiff; a Cross-motion
for Summary Judgment in favor of one Defendant; and a Cross-motion for Summary Judgment
in favor of another Defendant.   These motions arise out of an action where the Plaintiff seeks
interpleader in a dispute over the ownership of an annuity.  The Plaintiff, ING Life Insurance and
Annuity Co., Inc., f/k/a Aetna Life Insurance and Annuity Co. (“ING”), made a Motion for
Summary Judgment on Count I of its First Amended Complaint against the Defendants, decedent
Deborah French’s family (the Defendants are divided into three distinct groups : Phyllis Allsop,
Mary Croce, Louis Croce, Nicholas Croce (“Croce Defendants”); Joseph French (“French”);  and
the Estate of Deborah French  (“The Estate”)).    After ING filed its Motion for Summary
Judgment, Defendant French filed a cross motion against ING for Summary Judgment and the
Croce Defendants did the same.   The Croce Defendants also filed a Motion to Strike Defendant
French’s answer to the First Amended Complaint.
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I
FACTS AND TRAVEL
Prior to her death, Deborah French  (to distinguish from Defendant French, hereafter
“Deborah”) owned an annuity through ING.    When Deborah passed away, both the Croce
Defendants  and  French  claimed  ownership  of  the  ING  annuity  individually.  The  Croce
Defendants assert that the annuity belongs to Mary Croce, Deborah’s mother, because Mary
Croce applied to purchase the annuity with Deborah as a co-owner and because she provided
purchase money for the annuity.   French, Deborah’s widower, claims that he is the rightful
owner of the annuity because ING issued the annuity to Deborah as the sole owner, and Deborah
subsequently designated him as a beneficiary.
ING brought the original action seeking relief due to these conflicting claims over
ownership of the annuity.   In its original Complaint, ING sought to interplead the Defendants so
that ownership of the annuity might be determined through litigation.    In its interpleader claim,
ING requested that the Court order ING to pay the value of the annuity into the Registry of the
Court and that ING then be dismissed from the case and discharged from all liability in this
matter.    Finally, ING’s interpleader claim sought injunctive relief from any further actions
concerning the annuity brought against ING by the Defendants.
The Croce Defendants timely answered the original Complaint.   French did not answer,
and the clerk made an entry of default against him.   This Court denied French’s motion to have
the entry of default vacated.   ING and the Croce Defendants both made motions for an entry of
final judgment of default against French and were both denied.   Later, the Court allowed the
Estate to intervene as a Defendant.
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Each of the Defendants in this action asserts various counterclaims against ING. These
sound in tort and contract.  In essence, these claims assert that ING breached a duty of care owed
to the Defendants by mishandling the application process and the formation of the annuity and
that various harms (unique to each Defendant group) resulting from this alleged mishandling.
In 2008, ING moved for an order of interpleader under Rule 22 of the Rhode Island
Superior Court Rules of Civil Procedure. This Court denied that motion.   Subsequently, ING
amended its complaint and added a claim for declaratory judgment as well as alternative relief on
Count I of the Complaint.  French timely answered this First Amended Complaint.
The motions that are the subject of this hearing were submitted in the Spring of 2010 and
were scheduled to be heard in June of 2010.   After reviewing the Parties’ memoranda, the Court
ordered the Parties to re-brief the issue of contract formation and to cite to legal authorities in
support of their arguments.   The hearing was continued until August 31, 2010.   The Croce
Defendants complied with the Court’s request for additional briefing.
II.
STANDARD OF REVIEW
Motion for Summary Judgment- Rule 56
On a summary judgment motion, the court must review the evidence and draws all
reasonable inferences in the light most favorable to the non-moving party. Chavers v. Fleet Bank
(RI), N.A., 844 A.2d 666, 669 (R.I. 2004).   On such a motion, the court is to determine only
whether a factual issue exists.   It is not permitted to resolve any such factual issues.   The
emphasis is on issue finding, not issue determination.  O’Connor v. McKenna, 116 R.I. 627, 633,
359 A.2d 350, 353 (1976); Palazzo v. Big G Supermarkets, Inc., 110 R.I. 242, 245, 292 A.2d
235, 237 (1972); Slefkin v. Tarkomian, 103 R.I. 495, 496, 238 A.2d 742 (1968).                        “Summary
3




judgment is appropriate if it is apparent that no material issues of fact exist and the moving party
is entitled to judgment as a matter of law.” Chavers, 844 A.2d at 669.  A party opposing a motion
for summary judgment “‘carries the burden of proving by competent evidence the existence of a
disputed material issue of fact and cannot rest on allegations or denials in the pleadings or on
conclusions or legal opinions.’” Id. At 669-70 (quoting United Lending Corp., 827 A.2d at 631).
III.
INTERPLEADER
Rule                                                                                                     22  of  the  Rhode  Island  Superior  Court  Rules  of  Civil  Procedure  governs
interpleader cases.  The Rule states:
“Persons having claims against the plaintiff may be joined as
defendants and required to interplead when their clams are such
that  the  plaintiff  is  or  may be exposed to double or multiple
liability.    It is not ground for objection to the joinder that the
claims of the several claimants or the titles on which their claims
depend do not have a common origin or are not identical but are
adverse to and independent of one another, or that the plaintiff
avers that the plaintiff is not liable in whole or in part to any or all
of the claimants.   A defendant exposed to a similar liability may
obtain such interpleader by way of cross-claim or counterclaim.
The provisions of this rule supplement and do not in any way limit
the joinder of the parties permitted in Rule 20.” (Super. R. Civ. P.
22.)
The issue before the Court in regards to this Rule is whether a stakeholder, through a
motion for interpleader, may properly be dismissed from an action and discharged of any
liability in that action, where separate claims of liability against the stakeholder exist.   Further,
the court is asked to determine if the stakeholder should be granted injunctive relief barring any
future claims related to the stake at issue.   With no case law directly on point in Rhode Island,
the Court looks to Federal and other state precedents for guidance.
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In the past several decades, two distinct approaches to this Rule (adopted from a Federal
statute) have developed.   Some jurisdictions follow a traditional, hard line approach, while other
jurisdictions have adopted a more modern, flexible reading of the Rule. Traditionally, when the
stakeholder                                                                                           (usually  the  interpleading  plaintiff)  does  not  assert  a  claim to  the  stake,   “the
stakeholder should be dismissed immediately following its deposit of the stake into the registry
of the court.” Hudson Savings Bank v. Austin, 479 F.3d 102,107(1st Cir. 2007) (citing Comm’l
Union Insurance Co. v. United States, 999 F.2d 581, 583 (D.C. Cir. 1993).  This dismissal occurs
before the court adjudicates the disputes among the interpleading defendants.   Id.   However,
under the traditional Rule, an order of interpleader is not available to an interpleading plaintiff
who has incurred “independent liability” liability over and above or in addition to the stake.
Farmers & Mechanics National Bank v. Walser, 316 Md. 366, 373 (Md. Ct. App. 1989) (citing 4
J. Pomeroy, Equity Jurisprudence § 1322, at 906 (5th Ed. 1941)); see Wright & Miller, Federal
Practice and Procedure § 1706 (3d Ed. 2010).   This restriction of not allowing interpleader if
there are independent claims of liability has softened in recent decades, but many jurisdictions
still bar an order of interpleader where the stakeholder has some independent liability, for
example in negligence. Wright & Miller § 1706.
The modern trend dictates that rather than denying the interpleader motion outright when
there are independent claims of liability, the court should grant interpleader in part and use a
three step process. In the first step of this process, the stakeholder deposits the stake with the
court. In step two, without the dismissal of the stakeholder from the case, the defendants litigate
the issue of ownership among themselves.     The third and final step involves the stakeholder
litigating the matter of liability with the defendant who was not successful in the second step, or
who asserted a liability beyond the stake. Farmers & Mechanics National Bank v. Walser, 316
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Md. 386 (Citing Chafee, Modernizing Interpleader, 30 Yale L.J. 814, 843 (1921)).   It should be
noted that even under this more modern, flexible standard, where there are claims against the
stakeholder for liability independent of the stake, the stakeholder does not warrant dismissal
from the suit. Id. at 385-86.   Furthermore, “the trial court may not enjoin a separate action
against the stakeholder based upon this liability.” Id. at 385.   The stakeholder remains in the
background of the case until the defendants have litigated ownership of the stake amongst
themselves, then defendants’ claims of independent liability proceed against the plaintiff. Id. at
386.
A.
Analysis of Motion for Summary Judgment
Count I.
Before this Court, ING moves for summary judgment on Count I of its First Amended
Complaint. (Pl.’s Mot. for Summ. J.) ING argues that it is entitled to relief on its interpleader
claim because it is a stakeholder faced with multiple competing claims against the stake and the
Defendants have no claims of liability that are independent from the single fund. (Pl.’s Mem. for
Summ. J. pp. 2, 10.)
In ING’s view, the proper course for an interpleader claim involves three steps: 1.) that
the Court should order the Plaintiff to deposit the annuity with the Registry of the Court; 2.) that
the  Court  should  release  and  discharge  the  Plaintiff  from  any  liability  to  the  Defendants
regarding the annuity and dismiss the Plaintiff from the litigation between the Defendants; and
3.) that the Court should enjoin the Defendants from pursuing other claims against the Plaintiff if
they stem from the annuity.   Id. At 11-12.   Also in Count I of its Complaint, ING also seeks
judgment dismissing the counterclaims against it with prejudice.  The Croce Defendants object to
ING’s dismissal from the case and any injunction barring additional claims against ING.
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In the alternative, ING claims that even if the Court finds that the above mentioned steps
should not be followed due to independent liability claims, the modern trend still allows it
limited relief and should be followed here. Id. at  16.    The Court examines the three steps
proposed by ING individually, as well as the proposed dismissal of the Croce Defendants and
French’s counterclaims, below.
In its analysis, this Court chooses to adopt the modern approach to dealing with an
interpleader claim involving independent claims of liability.   Based on the facts of this case, the
Court finds that to do otherwise would be to  create  an unacceptable  amount  of  wasteful
litigation.   By following the three steps outlined above by the Farmers & Mechanics National
Bank Court, certain issues presented before this Court and central to this action (such as which
party will receive the annuity and what independent claims will be brought against ING) will be
resolved and their resolution will allow the action to go forward in a more efficient manner.   To
do otherwise would submit this Court, the attending attorneys and the parties before it to a
needless quagmire of litigation.   Without the benefit of adhering to the modern approach, the
dispute over the ownership of the annuity, ING’s claims and the Defendants’ counterclaims
would be combined into a single, large and complex litigation.   By using the modern approach
this Court intends to clear the already muddied waters surrounding this action and promote the
judicial efficiency that all parties to this dispute are entitled.
Interplead the Res
In the first of ING’s proposed steps it seeks relief in the form of a court order to deposit
the value of the annuity, less the attorneys’ fees and costs, into the Registry of the Court. (Pl.’s
Mem. for Summ. J. p. 11.)   The Croce Defendants raise no objection to this aspect of the claim;
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therefore, this Court need not delve into any in depth analysis of the claim and orders that the full
value of the annuity be entered into the Registry of the Court.
Dismissal of ING from the action and Discharge of ING’s Liability
ING requests that this Court dismiss ING from the action and discharge ING of any
liability it may owe the Defendants in relation to the present annuity.  All of the Defendants have
raised objections to this aspect of the claim for summary judgment. The Croce Defendants argue
that the law of the case doctrine prevents the Court from ruling differently on this motion than it
did on ING’s Rule 22 motion in 2008 and that most of the relief ING seeks through summary
judgment  is  foreclosed  because  the  Croce  Defendants  allege  independent  liability  in  their
counterclaims.
A. Law of the Case Doctrine
The Court will address the objection regarding the law of the case doctrine first.   The
Croce Defendants argue that the Court need not  and should not  reach the merits of ING’s
summary judgment motion under the law of the case doctrine.   That doctrine states: “under the
law-of-the-case doctrine, after a ‘judge has decided an interlocutory matter in a pending suit, a
second judge on that same court, when confronted at a later stage of the suit with the same
question in an identical manner, should refrain from disturbing the first ruling.’” State v.
Graham, 941 A.2d 848, 856 (R.I. 2008) (quoting Richardson v. Smith, 691 A.2d 543, 546 (R.I.
1997)).   However, questions are not presented in an identical way when motions are made under
different rules of civil procedure with different standards. See Shayer v. Bohan, 708 A.2d 158
(R.I. 1998) (Comparing a Rule 56 motion to remove a party from the litigation to a Rule 25(c)
motion to substitute parties).  Therefore, the Court must examine the motion on its merits.
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In the instant case, ING’s attempts to obtain interpleader relief have not been identical.
The first motion was a Rule 22 motion while the instant motion is a Rule 56 motion.   ING did
not request alternative relief (i.e., the three step process under the modern rule in the event that
the Court found that Defendants’ counterclaims alleged independent liability) or declaratory
judgment in its first motion.   Therefore the Court concludes that ING’s motion for summary
judgment on its interpleader claim is not barred by the law of the case doctrine because it has not
been presented in an identical way to its earlier Rule 22 motion.
B. Independent Liability Claims
The court will next address the Croce Defendants’ objection that ING is not entitled to
summary judgment relief because their counterclaims are independent claims of liability.   A
leading  treatise  uses  negligence                                                                      “in  processing  a  change  of  beneficiary  form  or  policy
assignment” as an example of a claim of independent liability. See Wright and Miller § 1706.  In
the instant case, the Croce Defendants point out in their memorandum in support of their
objection to Plaintiff’s Motion for Summary Judgment that some of their counterclaims against
ING are contingent in nature  they will litigate their tort claims only if they do not prevail in the
contest  for  the  stake.                                                                                (Croce  Defs.’  August                                          2010  Mem.  p.  10.)  Furthermore,  the  Croce
Defendants assert that these claims are not related to the annuity, or who has proper ownership of
it.   Rather, the Croce Defendants allege that ING has damaged them through its mishandling of
the annuity.  Conversely, ING alleges that the Croce Defendants’ claims are not claims of limited
liability, that ING should not be denied interpleader relief, and that there are no material facts in
dispute as to its eligibility for relief on its interpleader claim. (Pl.’s Mem. for Summ. J. pp. 11-
12).    The Court holds that the allegations of tort and negligence alleged by the Croce Defendants
are independent of the dispute over the ownership and create claims for liability over and above
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the amount of the stake.   Neither the traditional nor the modern treatment of the Rule permit a
stakeholder to be dismissed from an interpleader action if there are independent liability claims
associated with the stake.   ING’s argument that the claims are not claims of independent liability
is without merit.
Therefore, in accordance with the modern approach described above, this Court will grant
the interpleader motion in part and allow the Defendants to litigate the issue of ownership of the
annuity first, prior to litigating the independent claims. The Defendants shall submit a scheduling
order to the Court, pursuant to Super. R. Civ. P.16.
ING will not be dismissed from the action, nor will the Court discharge it from any
liability  at  this  time.    Instead,  ING  will  remain  in  the  background  of  the  case  and  any
independent  claims  of  liability  against  ING  will  be  addressed  following  the  Defendants’
litigation.
C. Injunctive Relief
ING seeks injunctive relief preventing the Defendants from bringing any further claims
relating to the annuity against it.   The Farmers & Mechanics National Bank court concluded that
the trial court’s injunctive power is limited to “litigation involving the fund that is the subject
matter of the interpleader.” 316 Md. at 383.  The court continued:
“In addition, where the defendant alleges an independent liability
based  upon  tort  or  breach  of  contract,  the  defendant  may  be
seeking  punitive  or  consequential  damages  which  exceed  the
interpleaded fund. . .the stakeholder should not be allowed to avoid
this additional liability simply by depositing a limited fund with
the court. . .Consequently, we follow the lead of the federal courts
and  conclude  that  when  a  defendant  in  an  interpleader  action
alleges that the stakeholder has incurred an independent liability,
the court may not enjoin that defendant from prosecuting this claim
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in a separate action or limit the defendant’s claims for damages to
the fund which the stakeholder has deposited with the court.” Id. at
384.
Accordingly, the court may enjoin the parties from filing suit relating to determining the
rightful owner of the annuity; however the court may not enjoin the parties from pursuing claims
of independent liability, such as tort claims.   Before the court issues a restraining order, it must
consider  all  four  factors  for  a  permanent  injunction  explained  in  such  cases  as  Iggy’s
Doughboys, Inc. v. Giroux, 729 A.2d 701, 705 (R.I. 1999).   To do otherwise would be an abuse
of discretion.   See DiDonato v. Kennedy, 822 A.2d 179, 181 (R.I. 2003) (Injunction vacated
where  trial  justice  issued  an  injunction  without  considering  the  four  factors  from  Iggy’s
Doughboys).   The parties have not briefed the issue of whether ING is entitled to an injunction
under Iggy’s Doughboys, despite the fact that a Justice of this Court alluded to this standard
during discussion of a restraining order in a previous hearing on this case.1   Therefore the Court
denies ING’s request for injunctive relief until it has demonstrated a fitness for such relief.
Dismissal of Counterclaims with prejudice
ING, in addition to its request to be dismissed from the action and discharged of any
liability related to the annuity, seeks to have the Defendants’ counterclaims against it dismissed
with prejudice.   In keeping with the holding above regarding ING’s interpleader motion, this
Court  cannot  dismiss  the  Defendants’  counterclaims  at  this  time.    The  Court  finds  those
counterclaims  to  be  independent  claims  of  liability.    Therefore,  the  modern  approach  to
interpleader claims involving independent claims of liability dictates that those claims will be
1 See 10/30/2008 Hr’g Tr. 7:20-8:1. In the context of a motion for default judgment, the justice stated: “you want me
to issue a restraining order which, quite frankly, requires an evidentiary hearing.   I can’t-whether or not someone
should be restrained is- the Court has to go through a balancing and weighing analysis. So you’re asking me for
equitable relief on papers instead of an evidentiary hearing.”
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heard after the Defendants litigate the ownership of the stake. The Court will not comment on
these claims at this time and reserves its ability to rule on them in the future.
IV.
DEFAULT
The Croce Defendants take the position that the Court must deny French’s Motion for
Summary Judgment and must grant the Croce Defendants’ Motion for Summary Judgment as to
French’s claim because default has been entered against French for failure to timely answer the
original complaint (Croce Defs.’ April 2010 Mem. p. 11.)   Defendant French, in his objection to
the Croce Defendants’ Motion to Strike his answer to the First Amended Complaint, cites Grieco
v. Perry,                                                                                          697  A.2d  1108  (R.I.  1997) for the proposition that, because the First Amended
Complaint has supplanted and replaced the original Complaint, the entry of default based upon
that complaint is no longer effective. Grieco does not stand for this proposition.
The Grieco plaintiff neglected to serve one of the defendants when he brought his initial
complaint.                                                                                         697 A.2d at 1108.   Later, when he filed his first amended complaint, he served the
defendant. Id.   Then the Grieco plaintiff filed a second amended complaint, which he neglected
to serve on the defendant. Id. After filing the second amended complaint, the Grieco plaintiff
sought a default judgment against the defendant on the first amended complaint. In reversing the
trial court’s grant of the default judgment, the Rhode Island Supreme Court held:
“We conclude that [the defendant] could not have defaulted on the first
amended complaint. After. . .their second amended complaint. . . the first
amended complaint was no longer an active pleading in the action . . .
Professor Kent, in explaining Rule 15 [of the Rhode Island Superior Court
Rules  of  Civil  Procedure],  notes  that                                                         ‘[a]n  amended  pleading  is  a
substitute  for  the  original  and  supersedes  it;  the  original  no  longer
performs any function in the case. No pleading nor motion need be or
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should be directed to it.’” Id. at 1109 (quoting 1 Kent, R.I. Civ. Prac., §
15.7 at 154 (1969)).
In cases such as Ness v. Digital Dial Communications, Inc.,  596 N.W.2d  365  (Wis.
1999), courts have carved out an exception to the rule that an amended complaint supersedes
prior pleadings.   The Ness Court held that notwithstanding the “basic rule that an amended
complaint supersedes the original complaint”, “a defaulting party cannot answer an amended
complaint, thereby attempting to cure its default, when the party is already in default at the time
the amended complaint is filed.” 595 N.W.2d at 370.   The Ness Court based its holding on a
Wisconsin statute that requires service of most papers related to a case to be served on every
party, but exempts service of pleadings on parties who are already in default for failure to appear,
unless the pleading includes a new or additional claim for relief. Id.   Just as a defaulting party
loses its right to notice of further pleadings under the Wisconsin statute, he or she “loses the right
to answer the amended complaint and revive its defense.” Id. at 371.  In addition, the Ness Court
was motivated by notions of fairness in reaching its conclusion. Id. at 372.
Rule  5 of the Rhode Island Superior Court Rules of Civil Procedure is substantially
similar to the Wisconsin statute upon which the Ness court based its holding.   Rule 5 requires
that “every pleading subsequent to the original complaint… and similar paper” be served upon
each of the parties. Super. R. Civ. P. 5.   However, “[n]o service need be made on parties in
default for failure to appear except that motions for assessment of damages and pleadings
asserting new or additional claims for relief against them shall be served upon them [.]” Id.
In Addition, the holding in Grieco is factually distinguishable from the case at bar.
Whereas the Grieco defendant was not yet defaulted when the second amended complaint was
filed, the Clerk had already entered default against Mr. French when ING amended its complaint
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to include a declaratory judgment count.   Therefore, Mr. French may “cure” his default, at least
to an extent, by answering the Amended Complaint only if the Amended Complaint asserts “new
or additional claims for relief against [Mr. French].” Super. R. Civ. P. 5; Ness, 596 N.W.2d at
n.3
Here, ING amended its complaint to add a count for declaratory judgment concerning the
same controversies that underlie its initial interpleader claim. (First Am. Compl. ¶¶ 27-8.)   This
declaratory judgment count does not seek relief “against” Mr. French. Thus Mr. French cannot
cure his default by answering Plaintiff’s First Amended Complaint.  He remains in default.
There are compelling reasons to allow Mr. French to remain in this litigation.   When
parties fall out of an interpleader case  due to default, summary judgment, dismissal, etc.  the
last party remaining typically is entitled to the res. See Sun Life Assurance Company of Canada
(U.S.) v. Conroy, 431 F.Supp.2d 220, 226-27 (D.R.I. Apr. 21, 2006) (Holding that “[a] named
interpleader defendant who fails to answer the interpleader complaint and assert a claim to the
res forfeits any claim of entitlement that might have been asserted…” and “‘if all but one named
interpleader defendant defaulted, the remaining defendant would be entitled to the fund…’”
(quoting Nationwide Mutual fire Insurance Co. v. Eason, 736 F.2d 130, 133 n.4 (4th Cir. 1984)).
This Rule might put the trial justice in the untenable position of issuing a declaratory judgment
that one interpleader Defendant (Mr. French) is entitled to the annuity but then having to award
the annuity to a different interpleader Defendant (Mrs. Croce) simply because that Defendant is
the “last man standing.” (Presumably, if all Defendants but the Croce Defendants were to fall out
of the case, three of the four Croce Defendants would stipulate dismissal.) A Justice of this Court
contemplated precisely this type of quandary when the Court refused to enter a judgment of
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default against Mr. French and allowed the Estate to intervene as an interpleading Defendant.
See 10/30/2008 Hr’g Tr. pp. 18-20.
However,  Defendant  French  remains  in  default  and  may  not  present  evidence  or
argument. The Croce Defendants’ Motion to Strike Defendant French’s answer is granted over
Defendant French’s objection. Defendant French’s Motion for Summary Judgment is denied.
V.
CONTRACT FORMATION
The Croce Defendants argue that they are entitled to summary judgment because “there
should be no dispute that the Subject Annuity Account was jointly owned by Mary Croce” and
Deborah French. (Croces’ Mem. for Summ. J. pp. 3, 18.)  The Croce Defendants argue that Mary
Croce co-owned the annuity with Deborah French and that Mary Croce became the sole owner
of the annuity by operation of law upon Deborah French’s death. Id. Defendant French moves
for a declaration that he is the rightful owner of the annuity and that the Croce Defendants do not
have any claim to the annuity policy, funds, or proceeds.   (French’s Mem. Summ. J. pp. 1-2.)  He
bases his motion on an assertion that there  is no evidence to support Croce Defendants’
allegation that Mary Croce co-owned the annuity with Deborah French. (French’s Mem. Summ.
J. p. 7.)
As mentioned above, French is in default; and therefore, lacks standing to bring a motion
on the instant litigation. Therefore, his motion is denied.   The Croce Defendants’ motion is also
denied, as it is clear to the Court that there are issues of material fact regarding the formation and
ownership of the annuity.
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The Croce Defendants argue that the evidence is undisputed that Mary Croce and
Deborah French completed an application form to co-own an annuity and that Joseph Reynolds,
an AETNA Authorized Agent, manifested his acceptance of the mother and daughter’s offer by
signing the form.   Further, Mary Croce paid for the annuity.   The Croce Defendants argue Mr.
Reynold’s authority, either actual or apparent, as  AETNA’s agent bound AETNA and its
successor in interest to the terms of the contract that day.   The evidence that Mary and Deborah
completed a form together, gave the form to Mr. Reynolds, and that Mr. Reynolds signed the
form is undisputed.   It is also undisputed that Mary Croce paid for the annuity.   However, this
evidence is subject to multiple legal conclusions, including the conclusion that no contract was
formed that day.   When the court considers a Summary Judgment motion, it must draw all
reasonable inferences in favor of the non-moving party (here: ING and/or The Estate).   Chavers
v. Fleet Bank (RI), N.A., 844 A.2d 666, 669 (R.I. 2004).
The form that Mary Croce and Deborah French completed together is entitled “AETNA
Customer Information.”  It is not labeled a contract or an agreement.  It identifies Deborah as the
Contract Holder   and Mary as the Joint Contract Holder.   Directly below the box identifying the
joint holder is the language: “must be spouse of primary Contract Holder[.]”   The form was
signed by Deborah, Mary and Mr. Reynolds in a section marked “Disclosures and Signatures”.
There is no reference to the tender of an offer or acceptance of that offer. It reads: “I declare the
information on this form is correct and true to the best of my knowledge.  I also represent that the
Social Security Number(s) shown on this form is/are correct.”   Disclosures follow this language
including: “If Aetna cannot process my request within five business days after receiving it at its
home office, Aetna may hold my form and payment.”
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Further evidence provided by ING indicates that AETNA received the form at its home
office and noticed right away that Mary and Deborah were not married to each other and
therefore were not eligible to co-own the annuity.   This evidence shows that AETNA called
Mary Croce and informed her that the company could not issue an annuity to the two women as
joint contract holders.   According to Gayle Williams of ING, Mary Croce consented to having
AETNA issue the policy to Deborah French as sole owner.
Viewed in a light most favorable to the non-moving parties the evidence in this case does
not support a conclusion that AETNA entered into a contract with Mary Croce.   The Croce
Defendants assume that the customer information form indicates that Mr. Reynolds accepted an
offer.   Rather, his signature could just as easily mean that he was attesting to the accuracy of the
information provided on the form.   This evidence, viewed in the light most favorable to the non-
moving parties, supports the inference that no contract was formed in Mr. Reynolds’s office that
day. Furthermore, had a contract been formed, it could have been modified by Mary Croce’s
telephone conversation with Gayle Williams of AETNA.   For these reasons the Court does not
find it proper to grant the Croce Defendants’ Motion for Summary Judgment with regards to the
contract formation issue. That motion is denied.
The Court notes that the Croce Defendants cite Nationwide Life Insurance Company v.
Steiner, a recent case from the United States District Court in the District of Rhode Island, for
the proposition that ING should be estopped from arguing that no contract was formed by virtue
of the fact that AETNA’s customer information form states that co-owners must be married to
each other.   No.  09-235S,  ---F.Supp.2d---,  2010 WL  2766667  (D.R.I. July  13,  2010).   The
question confronting the Nationwide Life Insurance court was “whether an insurer must honor its
policy when the application was incomplete, but the insurer retained the premium and delivered
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the contract anyway.” Id. at *6.   The Croce Defendants’ reliance on this case at this juncture is
unavailing, because, as discussed above, there is contradictory evidence regarding whether
AETNA did in fact accept the faulty application, take payment and issue the annuity or whether
AETNA  accepted  the  form,  noticed  the  deficiency,  contacted  Mary  Croce  to  address  the
deficiency, and then issued the annuity to Deborah French only.
The Croce Defendants also devote their attention to Mr. Reynolds’s actual or apparent
authority.   Given the conflicting inferences regarding what Mr. Reynolds’s signature actually
appears on and the possibility that any contract that may have been formed was later modified by
oral agreement with Gayle Williams, consideration of the issue of Mr. Reynolds’s authority is
unnecessary at this time.
LAST MAN STANDING
The Croce Defendants move for partial summary judgment on the issue of ownership of
the annuity.  (Croces’ Mem. for Summ. J. p.  1.)    The Croce Defendants argue that neither
Defendant French nor the Estate is entitled to the annuity; therefore the Croce Defendants are
entitled to it as the “last man standing.” Id. at 2-3.   They argue that French is out of contention
for the annuity because he is in default.    Id.    The Estate is out of contention, the Croce
Defendants argue, because it has not taken the position that it is entitled to the annuity or
presented evidence that it is entitled to the annuity. Id. at 3, 18.
The Croce Defendants argue that the Court should grant them summary judgment against
the Estate because the evidence shows the estate of a deceased policy holder gets the annuity in
only extremely limited circumstances.  (Croces’ Mem. for Summ. J. p.  19.)    One of these
circumstances is when there is no designated beneficiary at the time of the owner’s death. (Croce
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Defs.’ Ex. I at § 4.03.)   The Croce Defendants argue that because there is no evidence that the
annuity was ever without a designated beneficiary, the Estate cannot show that it is entitled to the
annuity. Id. at 20.
The Croce Defendants’ point about the dearth of evidence that the annuity has ever been
without a designated beneficiary has merit.   Following the discussion above, the facts support
two possible outcomes regarding the beneficiaries of the annuity.   On one hand, if AETNA
formed a contract with Mary Croce (and did not modify it), which would mean any subsequent
change of beneficiary forms would be inoperative and the original beneficiaries  Phyllis Allsop
and Nick Croce  would still be beneficiaries today.  On the other hand, if AETNA never formed
a contract with Mary Croce and Deborah French was the sole contract holder, then all of
Deborah’s change of beneficiary forms would be properly submitted and Defendant French
would be the beneficiary.  In either circumstance the annuity was never without a beneficiary.
A review of   a prior Court ruling on the Estate’s motion to intervene provides reasons for
allowing the Estate to remain in the litigation notwithstanding its extremely limited contractual
claims to the stake.   See Croce Defs.’ Ex. S, Tr. of 10/30/2008 hearing.   The Justice at the
October 2008 hearing contemplated the difficulty that the trial justice would have if he or she
had to issue contradictory rulings with regards to ownership of the stake- that is, if the justice
issued a declaratory judgment that Mr. French is the owner of the annuity, but nonetheless was
foreclosed from awarding the stake to Mr. French because he is out of the litigation. (10/30/2008
Hr’g Tr. 17:4-11.)  In this situation, the annuity would be without a beneficiary. Id.
For the foregoing reason, the Court denies the Croce Defendants’ Motion for Summary
Judgment on the issue of entitlement to the stake by virtue of being the “last man standing.”
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The Estate is still party to the litigation and in contention for the stake; therefore the Croces are
not the last Parties participating.
CONCLUSION
In conclusion, the Court will grant the Croce Defendants’ Motion to Strike Defendant
French’s answer;  and it will also deny Defendant French’s Motion for Summary Judgment.
The Court will also deny the Croce Defendants’ Motion for Partial Summary Judgment.
As explained above, there are disputed issues of material fact regarding whether Mary Croce
became an owner of the stake by operation of law.   In addition, the Croce Defendants are not
entitled to summary judgment as the “last man standing” in an interpleader action.
ING’s Motion for Summary Judgment is denied in part and granted in part as explained
above.
Counsel shall prepare an Order in accordance with this Court’s Decision.
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Rhode Island Law