Richard A. Torti, Sr., As Successor Trustee of the Stuart Family 1997 Trusts Plaintiff- Appellant
Debra Hoag; Gentry Partners Limited DefendantsJohn Hancock Life Insurance Company, USA Defendant-Appellee
Submitted: January 12, 2017
from United States District Court for the Eastern District of
Arkansas - Little Rock
COLLOTON, GRUENDER, and KELLY, Circuit Judges.
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. 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 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.
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."
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.
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.
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.
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.
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 ...