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Campbell v. Garcia

United States District Court, N.D. Ohio, Eastern Division

June 12, 2018

JESSIE GARCIA, et al., Defendants.



         This matter is before the Court on Defendants' Motions to Dismiss (ECF # 8, 15 and 21), which Plaintiff opposes (ECF # 18, 22, 24, 25, and 26). For the following reasons, the Court denies the Motions.

         I. BACKGROUND

         Donald Campbell (“Donald”) and F. Margaret Campbell (“Margaret”) were married. They have two children; Allen Campbell who is the Plaintiff in this case (“Plaintiff”), and Frederick Campbell (“Frederick”). Frederick was married to Defendant Jessie Garcia (“Garcia”). Both Plaintiff and Frederick have children.

         Donald and Margaret had a complicated estate plan. They each had a Last Will and Testament, as well as an inter vivos Living Trust (“the Donald Trust” or “the Margaret Trust”). They acted as Trustees for their respective Trusts during their lifetimes and each named the other as their successor Trustee and beneficiary upon their death. Plaintiff indicates he is a residual beneficiary and successor Trustee of the Margaret Trust upon the deaths of both Margaret and Donald. It is not clear who the residual beneficiary or successor Trustee of the Donald Trust is. In addition, Donald and Margaret created a limited partnership known as the Campbell Family Limited Partnership for which each of the inter vivos Trusts was an equal partner. Each of the Trusts and the limited partnership appear to have been funded with multiple different brokerage accounts, annuities and IRAs, all of which were managed by Defendant Merrill Lynch. Defendant TransAmerica appears to have provided life insurance policies and annuities which were owned by either the Donald Trust, the Margaret Trust, the limited partnership or Donald or Margaret individually.

         Donald died in 2010 and Margaret became the Trustee and the beneficiary of the Donald Trust. She was also still the Trustee and beneficiary of her own Trust, making her the sole controlling agent of the limited partnership. Frederick died in 2013. Plaintiff alleges that upon Frederick's death, his wife, Garcia, lived with Margaret at the Judson Assisted Living Facility in Cleveland, Ohio for an extended period of time. Margaret was in her late 90's and was blind, or at least sight impaired. Plaintiff had Power of Attorney for her. Margaret died in April 2015.

         Plaintiff was named as the Executor of Margaret's Estate as well as the successor Trustee of the Margaret Trust. He indicates that in the course of fulfilling his duties in these roles, he attempted to try to make sense of all of the various accounts and assets within the two Trusts and the limited partnership and noticed irregularities in the accounts. Although they were three separate legal entities, the financial statements for the individual Trusts and the limited partnership seemed to be combined, making it very difficult to determine which assets and accounts belonged to the Margaret Trust, which belonged to the Donald Trust, which belonged to the limited partnership and which belonged to Margaret individually. Assets that were originally in one of the Trusts appeared to have transferred to the other Trust after Donald's death. Other assets or accounts within the Trusts were greatly diminished or disappeared entirely from one statement to the next, with no corresponding paperwork or explanation. He states he contacted Merrill Lynch and TransAmerica to inquire about these irregularities and ask for documentation but they refused to answer any of his questions.

         Plaintiff focuses on two Merrill Lynch accounts which he contends were originally associated with the Margaret Trust. The first of these accounts appears to be an Investor Life Insurance Policy from TransAmerica with the Merrill Lynch account number of CM5024464 (“the CM Policy”). The other account is an annuity from TransAmerica bearing the Merrill Lynch account number of M920023980 (“the M Contract”).

         Plaintiff alleges that the CM Policy was listed in the Margaret Trust as of the August 31, 2011 Merrill Lynch statement, but appeared to transfer between the Trusts, then disappeared from the statements entirely in 2013. He states he questioned Merrill Lynch about this account and asked for documentation to explain the transactions but they refused to provide it to him. Plaintiff, an Alabama resident, filed suit in the Baldwin County Circuit Court on November 10, 2015 to compel Merrill Lynch and TransAmerica to produce the statements and documents to justify the transfers. Merrill Lynch filed a Motion to Compel Arbitration of the issue pursuant to the brokerage account agreements signed by Donald and Margaret. The Alabama court granted the Motion compelling the parties to submit the issue of disclosure of information to arbitration. Plaintiff alleges the parties settled the action prior to arbitration, agreeing to the production of some, but not all of the information. He states the case was dismissed by agreement of the parties. Plaintiff and Defendants agree that the issues of ownership of the assets and the appropriateness of transfers of assets were not before the Alabama court.

         Plaintiff alleges that in November 2015, three days after filing the Alabama lawsuit, Merrill Lynch informed him the CM policy was a life insurance policy insuring Frederick's life that was owned by the Donald Trust at the time of Frederick's death. Plaintiff alleges that based on the information in the Merrill Lynch statements, the account was originally owned by the Margaret Trust and appears to have been transferred into the Donald Trust after Donald's death. TransAmerica then handled a beneficiary change naming Garcia as the beneficiary. Plaintiff contends Garcia is not a beneficiary of either the Margaret Trust or the Donald Trust. He asserts that the transfer between trusts after Donald's death and the change in beneficiary to someone other than a Trust beneficiary was improper. He asserts TransAmerica wrongfully paid the proceeds of this policy directly to Garcia in December 2013.

         Plaintiff alleges that the M Contract, which appears to be an annuity from TransAmerica, was placed in the Margaret Trust as early as 2011 and remained there until December 2015. He indicates he was notified in December 2015 that Garcia had filed a claim for the proceeds of the M Contract. He notified TransAmerica that he was disputing the claim as Garcia was not a beneficiary of the Margaret Trust. He requested information and documentation from Merrill Lynch and TransAmerica concerning this account and how Garcia came to be named on it but they refused his request.

         In their Motion, TransAmerica states Donald was the original annuitant of the CM Contract and Margaret was the beneficiary. After Donald's death, the annuitant was changed to Frederick, Margaret became the owner of the policy and Plaintiff and Frederick were listed as the beneficiaries. TransAmerica alleges that on February 12, 2014, TransAmerica was informed of Frederick's death and were told a new annuitant would be required. TransAmerica does not indicate who provided this information or requested a change in the annuitant status. TransAmerica states that on February 27, 2014, Change of Annuitant and Beneficiary Forms were completed, signed and notarized, naming Garcia as a beneficiary in Frederick's place. Plaintiff contends his mother was in her late 90's and substantially visually impaired.[1] He asserts she could not have read what she was signing or appreciated the ramifications of her actions. He asserts the change in beneficiaries and the payment of proceeds to Garcia was improper.

         Plaintiff filed the probate Estate of F. Margaret Campbell in the Cuyahoga County Probate Court in 2015. Defendants allude to a Probate Court adversarial action to determine ownership of the assets in question. They do not provide specific information about those proceedings but state they were dismissed without prejudice by the Court.

         Plaintiff filed an action in the Cuyahoga County Common Pleas Court, General Division, on December 21, 2017, alleging Merrill Lynch, TransAmerica and Garcia improperly transferred assets from the Trusts and between the Trusts, and improperly disposed of individual non-trust assets without the authority to do so. Plaintiff contends some of the documents he received suggest Merrill Lynch employees may have assisted Garcia in changing the designated beneficiary of accounts into her name. Plaintiff brings claims against the Defendants for undue influence, tortious interference with a contract, tortious interference with an inheritance, ...

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