Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Torti v. Hoag

United States Court of Appeals, Eighth Circuit

August 17, 2017

Richard A. Torti, Sr., As Successor Trustee of the Stuart Family 1997 Trusts Plaintiff- Appellant
v.
Debra Hoag; Gentry Partners Limited DefendantsJohn Hancock Life Insurance Company, USA Defendant-Appellee

          Submitted: January 12, 2017

         Appeal from United States District Court for the Eastern District of Arkansas - Little Rock

          Before COLLOTON, GRUENDER, and KELLY, Circuit Judges.

          KELLY, Circuit Judge.

         Richard A. Torti, as Trustee of the Stuart Family Trusts, brought a lawsuit against Debra Hoag, Gentry Partners Limited (Gentry) and the John Hancock Life Insurance Company, USA (Hancock), alleging claims of breach of fiduciary duty, breach of contract, and negligence.[1] After Torti settled with Hoag and Gentry, Hancock moved pursuant to Federal Rule of Civil Procedure 12(b)(6) for dismissal of the breach of contract and negligence claims remaining against it. The district court[2] granted Hancock's motion, dismissing Torti's second amended complaint (SAC) with prejudice. Because we agree that Torti failed to plead sufficient facts to state a plausible claim for breach of contract or negligence, we affirm.[3]

         I. Background

         This is an appeal from the district court's grant of a motion to dismiss, so we draw the relevant facts from Torti's SAC. See Neubauer v. FedEx Corp., 849 F.3d 400, 403 (8th Cir. 2017). We also consider the exhibits attached to the SAC, including the trust agreement and the Hancock insurance policy. See id. On August 8, 1997, Layton P. Stuart, as trustor, established the Stuart Family 1997 Trusts (the Trusts) by a written trust agreement. At the time, Stuart was Chief Executive Officer of One Bank & Trust (One Bank) in Little Rock, Arkansas. Pursuant to the trust agreement, Michael Heald, the Chief Operating Officer (COO) of One Bank, was appointed trustee. The trust agreement granted Heald certain powers of administration, including the authority "to apply for and to own policies of insurance on the life of the trustor."

          Heald, as trustee, applied for a $20 million variable life insurance policy on Stuart's life, which was issued by Hancock on August 12, 1997. As relevant here, Paragraph 11 of the policy gave the trustee authority to apply for loans against the cash value of the policy "on receipt at [the Hancock] Home Office of a completed form satisfactory to [Hancock] assigning the policy as the only security for the loan." Paragraph 24 of the policy allowed the policy to be assigned without the consent of any revocable beneficiary but stated that Hancock would not be on notice of any assignment unless it was provided notice "in writing" and "a duplicate of the original assignment has been filed at [the Hancock] Home Office." Paragraph 28 of the policy stated in relevant part:

The written application for the policy is attached at issue. The entire contract between the applicant and [John Hancock] consists of the policy and such application. However, additional written applications for policy changes . . . may be submitted to [Hancock] after issue and such additional applications may become part of the policy. . . . Other changes in this policy may be made by agreement between [the Trusts] and [Hancock]. Only the President, Vice President, the Secretary, or an Assistant Secretary of the Company has authority to waive or agree to change in any respect any of the conditions or provisions of the policy, or to extend credit or to make an agreement for [Hancock].

Hoag, an insurance broker acting as Hancock's agent, facilitated the Trusts' purchase of the policy. The confirmation page of the policy named the "Stuart Family Trust, Mike Heald, Trustee" as the owner of the policy with an address of 300 W. Capitol Avenue, Little Rock, Arkansas, 72201. The premium for the policy was $350, 000 per year for ten years.

         To finance the premiums, Heald, on behalf of the Trusts, entered into a split-dollar agreement with One Bank, effective August 12, 1997. One Bank agreed to pay the annual premiums for the life insurance policy, to be reimbursed upon Layton Stuart's death out of the insurance proceeds. As consideration for the payment of premiums, the Trusts assigned the Hancock policy to One Bank. Paragraph 6 of the split-dollar agreement prohibited the trustee from "transfer[ing], assign[ing], encumber[ing] or terminat[ing] the Insurance Policy . . . [d]uring the term of this Agreement, " including by applying for loans against the cash value of the policy, which was to "remain available (subject to provisions of the Insurance Policy) to satisfy the amount payable to [One Bank]." The split-dollar agreement was signed by Heald on behalf of both parties-as COO of One Bank and as trustee of the Trusts. In an August 15, 1997, letter to Heald, Hoag acknowledged that the premium for the policy would be funded via the split-dollar agreement.

         Nearly fourteen years later, on June 2, 2011, Heald retired as trustee and appointed Hoag as successor trustee. On June 3, 2011, Hoag requested a loan against the full cash value of the policy on a Hancock "Request for Policy Loan" form, using the Hancock insurance policy as collateral. The request form identified Hoag as the trustee and the Trusts as the owner of the policy with an address of 300 W. Capitol Avenue, Little Rock, Arkansas, 72201. Though the request form provided signature lines for assignees of the insurance policy (here, One Bank), the form was signed only by Hoag, as trustee, on behalf of the Trusts.

         On June 7, 2011, Hancock issued a check in the amount of $1, 761, 000.00 payable to the "Stuart Family Trusts." The check was sent by FedEx to 300 W. Capitol Avenue, Little Rock, Arkansas, 72201. Hancock allowed the check to be paid after it was endorsed by Layton Stuart, who used the proceeds for non-trust related purposes.

         Hoag resigned as trustee on October 25, 2012, and appointed Torti as successor trustee. Stuart died on March 24, 2013. In May 2013, Hoag notified Torti that before Hancock would pay the insurance proceeds, Torti would have to sign a release, releasing Hancock from any "demands, claims and causes of action . . . relating to or arising out of the Policy or the payment of any benefits thereunder." Torti refused and Hancock transferred the net death benefits owing under the policy-a sum of $17, 693, 837.10-to a ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.