UNUM Life Insurance Company of America v. Umdenstock

UNITED STATES DISTRICT COURT FOR THE

NORTHERN DISTRICT OF OKLAHOMA

UNUM LIFE INSURANCE )

COMPANY OF AMERICA, )

)

Plaintiff, )

)

v. ) Case. No. 20-CV-650-CVE-JFJ

)

HAYDEN UMDENSTOCK, )

JENNIFER UMDENSTOCK, )

as parent and legal guardian of T.U., a minor, )

)

Defendants. )

OPINION AND ORDER

Unum Life Insurance Company of America filed an interpleader complaint on December

9, 2020 to determine the rightful beneficiary of a life insurance policy on the life of Zachary

Umdenstock (decedent). Dkt. # 2. The complaint alleged that there are competing claims to the

proceeds of the decedent’s policy benefit, due to the possible application of Oklahoma’s slayer

statute, which would operate to preclude defendant Hayden Umdenstock from receiving his half

of the policy proceeds. Id. at 4-5. The interpleaded funds were deposited in this Court on February

26, 2021, Dkt. # 16, and plaintiff Unum Life was dismissed from the case on May 19, 2021, Dkt.

# 24.

Attorney Allen Smallwood first entered a special appearance on behalf of Benjamin

Umdenstock, personal representative of the decedent’s estate, on March 1, 2021. Dkt. # 17. In a

motion requesting transfer of interpleaded funds to the Tulsa County probate court, Smallwood

asserted that Hayden’s share of the decedent’s life insurance proceeds is an asset of the probate

estate. Dkt. # 18, at 1-2. The Court denied Smallwood’s motion. Dkt. # 21. In the order denying

the motion, the Court admonished Smallwood for filing a motion on behalf of a nonparty, asserting

legal theories without citation to authority, and attempting to appropriate interpleaded funds from

the two named beneficiaries—a minor child and an adult who had been found not guilty of first-

degree murder only by reason of mental illness. Id.

On June 1, 2021, Smallwood again entered an appearance—this time on behalf of Hayden.

Dkt. # 25. Smallwood, who represented Hayden in the criminal case for Zachary’s murder,

attached a signed authorization from September 15, 2020, in which Hayden conveyed his interest

in insurance proceeds to Smallwood in exchange for the legal fees incurred from defending

Hayden’s first-degree murder charge. Dkt. # 25-1. On October 6, 2021, Smallwood filed a motion

on Hayden’s behalf, seeking disbursement of the interpleaded funds to Hayden or, in the

alternative, to the Tulsa County probate court. Dkt. # 26. Smallwood’s most recent motion asserts

that the slayer statute arguably does not apply to the interpleaded funds because Hayden was found

not guilty of decedent’s murder by reason of insanity. Dkt. # 26, at 3-5. In the alternative,

Smallwood, again, asserts without citation to authority that the interpleaded funds should be

transferred to Tulsa County probate court for disbursement according to the orders in that

proceeding. Id. at 5 (“[T]he court is obligated to either pay directly to Hayden . . . or to order the

United States District Court Clerk to transfer those proceeds to the Tulsa County Probate Court

Clerk (Case No. PB-2019-440) for the probate court to determine to whom those proceeds should

be disbursed.”).

I.

As a preliminary matter, the Court first addresses Smallwood’s attempt to simultaneously

represent Hayden as well as Zachary’s estate in this case. The issue of Hayden’s competency and

his representation in this matter was first raised by Unum. See Dkt. # 19, at 2 (“available public

records are not clear regarding Hayden Umdenstock’s current capacity”); Dkt. # 23, at 1 (“Unum

Life has noted issues regarding the competency of the parties and their representation”); see also

Dkt. # 20 (Unum’s proof of service on Hayden c/o Oklahoma Forensic Center in compliance with

Fed. R. Civ. P. 4(g)). The Court has also acknowledged the issue of Hayden’s capacity to be

represented in this matter. Dkt. # 21, at 2.

To date, the only information presented to the Court by the parties in this case regarding

Hayden’s capacity is an order in Hayden’s Tulsa County criminal case in which Hayden was

adjudicated mentally ill and ordered to be held in custody until the court makes a “determination

that he is not . . . a person requiring treatment.” Dkt. # 26-2, at 3. According to OSCN, the court

in Hayden’s criminal case, State v. Umdenstock, Case No. CF-2018-5696 (Tulsa Cnty.), filed Dec.

12, 2018) (OSCN), has not made any such finding.1 To the contrary, the most recent order in

Hayden’s criminal case was filed on May 27, 2021, in which the court found Hayden to be

“presently a mentally ill person as defined by Title 43A of the Oklahoma Statutes,” and committed

him to custody of the Oklahoma Department of Mental Health and Substance Abuse. See Order,

Umdenstock, Case No. CF-2018-5696, OSCN Doc. No. 1049685797, at 2, filed on May 27, 2021.

Given the information available, the Court in this case will yield to the state court’s findings

regarding Hayden’s mental health and incapacitation. Fed. R. Civ. P. 17(b)(1) (“Capacity to sue

or be sued is determined . . . by the law of the individual’s domicile.”).

Under Fed. R. Civ. P. 17(c)(1), only a general guardian, a committee, a conservator, or a

“like fiduciary” may represent an incompetent person in a cause of action. When an incompetent

person is not represented in a case, “[t]he court must appoint a guardian ad litem—or issue another

appropriate order—” to protect the interests of that person. Fed. R. Civ. P. 17(c)(2). The Tenth

Circuit has held that the appointment of a guardian ad litem under Rule 17(c)(2) is within the

1 “Federal Rule of Evidence 201 authorizes court to take judicial notice of adjudicative facts at any

stage of the proceedings, and in the absence of a request of a party.” Zimomra v. Alamo Rent A

Car, Inc., 111 F.3d 1495, 1503 (10th Cir. 1997).

discretion of the court. Allstate Ins. Co. v. Brown, 920 F.2d 664, 672 (10th Cir. 1990). (“We read

this language to commit the matter of the appointment of a guardian ad litem to the discretion of

the district court.”).

Here, it appears that Smallwood has simply attempted to enter his appearance on Hayden’s

behalf without ever addressing the issue of Hayden’s competency. However, neither this Court nor

any other court has appointed an attorney to represent Hayden in this matter or in any other civil

matter.2 Furthermore, there is no evidence that a guardian, a committee, or a conservator was

appointed to represent Hayden in this case.

Smallwood’s participation in this case is perhaps best understood as an attempt to collect

his legal fees for representation of Hayden in his criminal case, which is underscored by the

document submitted that purportedly assigns Hayden’s share of the insurance proceeds to

Smallwood. Dkt. # 25-1. This would also explain Smallwood’s insistence on transferring the

interpleaded funds to the Tulsa County probate case, given that Smallwood represents the personal

representative of Zachary’s estate and has stated his intention of addressing the matter of Hayden’s

legal fees in the probate case. See Letter from Allen Smallwood, In re Estate of Umdenstock, Case

No. PB-2019-440, OSCN Doc. No. 1048518172, (Tulsa Cnty.), filed on January 26, 2021

(“[Hayden] has signed the necessary documents to authorize the personal representative in this

case, Benjamin Umdenstock, to use those [interpleaded] funds to disburse his legal expenses. . . .

Please let me know if, procedurally, that can be accommodated by your court.”). Thus, while the

Court does not recognize Smallwood as representing Hayden in this case, it nevertheless permits

2 The Court also notes that, while Smallwood did represent Hayden in the criminal case,

Smallwood’s entry of appearance in that case states he was retained by “defendant’s family.” See

Entry of Appearance and Motion to Continue Jury Trial and Discovery Exchange Dates,

Umdenstock, Case No. CF-2018-5696, OSCN Doc. No. 1045694549, at 1, filed on Dec. 26, 2019.

Smallwood to remain in this case and proceed as a third-party claimant whose right to the

interpleaded funds is derivative of Hayden’s.3

Additionally, after careful consideration, the Court finds that it is not necessary to appoint

a guardian ad litem for Hayden in this case. There are three reasons for this. First, the only other

named party is T.U., whose mother and legal guardian, Jennifer Umdenstock, has not entered an

appearance or otherwise responded to the litigation in this case. Consequently, if the Court were

to appoint a guardian ad litem for Hayden, it would likewise need to appoint separate guardian ad

litem to ensure that T.U.’s interests are adequately protected. Second, the amount in controversy

is $16,500.05, which is a relatively small amount—especially when factoring in the guardian ad

litem fees that would be deducted from that amount. Third, this case presents a simple issue for

the Court to determine, namely, whether Oklahoma’s slayer statute operates to preclude Hayden

from receiving his share of his father’s life insurance proceeds.

II.

The Court now turns to Smallwood’s motion requesting distribution of the interpleaded

funds. Under Oklahoma law, a named beneficiary of a life insurance policy has the burden of

proving by a preponderance of evidence: (1) the existence of the insurance contract; (2) the death

of the insured; and (3) his status as a beneficiary of the policy. State Mut. Life Assur. Co. of Am.

v. Hampton, 696 P.2d 1027, 1034 (Okla. 1985); Matter of Estates of Young, 831 P.2d 1014, 1016

(Okla Civ. App. 1992). Once a named beneficiary establishes his prima facie right to recover under

the insured’s policy, other claimants to the policy proceeds may assert the slayer statute as an

3 The Court notes the questionable propriety of representing in this action the decedent’s personal

representative in the Tulsa County probate case, as well as the person charged in the Tulsa County

criminal case with killing the decedent. It appears that the interests of the decedent’s estate are in

conflict with the interests of a potential predeceased heir.

affirmative defense to bar the named beneficiary from recovering the insurance proceeds. Young,

831 P.2d at 1016.

Oklahoma’s slayer statute states in relevant part that “[n]o beneficiary of any policy of

insurance . . . who in the like manner takes, causes or procures to be taken the life upon which such

policy certificate is issued . . . shall take the proceeds of such policy or certificate . . . .” Okla. Stat.

tit. 84, § 231. Oklahoma courts have consistently held that the slayer statute, as codified under §

231, is merely an extension of the common law rule that bars a beneficiary “from benefitting by

his own wrongdoing.” United Presidential Life Ins. Co. v. Moss, 838 P.2d 1011, 1014 (Okla. Civ.

App. 1992); Hampton, 696 P.2d at 103 (Ҥ 231 does not preclude judicial application of the

common law rule . . . in cases where the beneficiary has not been convicted of the crime.”); Young,

831 P.2d at 1015-16 (“a beneficiary's acquittal is not conclusive on the issue of whether the

beneficiary took, or caused to be taken, the insured’s life in such a manner as to constitute

felonious, intentional, unjustifiable homicide”). Thus, the outcome of a criminal proceeding arising

from the death of the insured is not dispositive of whether the slayer rule applies.

Here, it is not disputed that Zachary was enrolled in a basic life insurance policy and an

accidental death and dismemberment policy through his employer’s group plan, and that that total

combined amount of Zachary’s insurance policies was $30,000. Dkt. # 2, at 3; Dkt. # 26, at 1. It is

also not disputed that Zachary died on December 7, 2018. Dkt. # 2, at 4; Dkt. # 26, at 1. Finally, it

is not disputed that Hayden is one of the two named beneficiaries of Zachary’s insurance policy,

and that Zachary directed half of the $30,000 policy to be paid to Hayden upon Zachary’s death.

Dkt. # 26, at 1; Dkt. # 2 at 3. Accordingly, there is no dispute that Hayden has established a prima

facie right to Zachary’s insurance proceeds.

While it had no stake in the outcome, Unum brought the interpleader complaint because

Hayden’s right to recover Zachary’s insurance proceeds was likely implicated by Oklahoma’s

slayer rule. Dkt. # 2, at 4. Smallwood’s October 6, 2021, motion to disburse funds asserts that the

slayer rule does not apply, arguing that an “acquittal” of first-degree murder charges “requires a

finding that the . . . mens rea . . . could not be established due to the lack of the accused’s ability

to understand right from wrong.” Dkt. # 26, at 4. From this, Smallwood argues that the finding of

not guilty by reason of mental illness in Hayden’s criminal case demonstrates that Hayden “was

not capable of forming the necessary felonious criminal intent due to his extreme psychosis and

schizophrenic delusions requiring his acquittal.” Id. at 4-5. Smallwood cites Hampton for the

proposition that the slayer rule applies when the life is taken “in such a manner as to constitute a

felonious, intentional, or unjustifiable homicide.” Dkt. # 26, at 4.

Smallwood misses the point of the Oklahoma Supreme Court’s decision in Hampton.

Hampton involved a life insurance beneficiary who was charged with first-degree murder and the

lesser-included offense of first-degree manslaughter. 696 P.2d at 1029. After litigating the criminal

charges, the beneficiary was acquitted of all counts charged. Id. The beneficiary then attempted to

claim interpleaded funds stemming from the decedent’s life insurance proceeds, arguing that her

acquittal was dispositive of her right to the interpleaded funds. Id. The Hampton court held that

the criminal acquittal was not dispositive of whether the Oklahoma slayer rule applied to the case

because (1) the standard of proof required in a criminal matter is higher than a civil case, and (2)

the other heirs and/or beneficiaries were not a party to the criminal proceeding, thus depriving

them of due process. Id. at 1029. Thus, not only does Hampton stand for the opposite of what

Smallwood argues, but also the beneficiary in Hampton was acquitted of the criminal charges on

the merits—not by virtue of an affirmative defense or an agreement with the State.4

Even reviewing Smallwood’s motion in light of Hayden’s mental illness fails to dispel

application of the slayer rule. The Oklahoma Court of Civil Appeals held that the rule in Hampton

extends to cases in which a beneficiary is found not guilty of murder only by reason of mental

illness. Young, 831 P.2d at 1016 (“Appellee’s acquittal by reason of insanity was not conclusive

proof that he did not commit the murders.”). Smallwood points to “three qualified

psychological/psychiatric examinations” performed on Hayden to support state court’s verdict of

not guilty by reason of mental illness. However, this Court has not seen the reports nor have the

reports been made available for this Court’s review; what is more, those reports—in addition to

large swaths of sealed documents in Hayden’s criminal case—have not been subject to the

adversarial scrutiny of civil discovery and cross-examination. Finally, and perhaps most

importantly, the verdict in Hayden’s criminal case is only that Hayden “was unable to form the

necessary felonious intent to be found guilty of this criminal allegation.” Dkt. # 26-2, at 2

(emphasis added). Hayden was charged with first-degree murder only, and therefore, the court’s

findings apply only to the mens rea for that crime.

Smallwood argues in the alternative that “there is equal validity to the argument that these

insurance proceeds are a matter of contract law, or alternatively, that they are an asset of the estate

and should be distributed through the probate court.” Dkt. # 26, at 5. Neither of those arguments

is valid. First, application of the slayer statute is a matter of contract law only insofar as it relates

to the existence of a contingent beneficiary. Unum’s complaint expressly states that T.U. is the

4 The Court notes that the verdict of not guilty of first-degree murder only by reason of mental

illness was entered by agreement between Hayden’s counsel and the State. Dkt. # 26-2, at 1.

contingent beneficiary of Hayden’s share, Dkt. # 2, at 3, a point never disputed by Smallwood;

thus, the Court sees no contractual issues to resolve. Second, as a “payable on death” policy, the

interpleaded funds are not an asset of Zachary’s estate. The only instance in which insurance

proceeds become an asset of a decedent’s estate is when the slayer rule applies and there is no

contingent beneficiary listed in the policy. Moss, 838 P.2d at 1014 (“It would be incongruous to

argue that one who takes the life of the insured may not benefit directly from the proceeds, but

may, by the same wrongful act, indirectly dictate how those proceeds are to distributed.”).

Accordingly, Smallwood’s alternative theory for disbursement of the interpleaded funds is of no

avail.

III.

Application of the slayer rule as an affirmative defense requires only a preponderance of

evidence. Hampton, 696 P.2d at 1034. Here, there is sworn testimony of Broken Arrow police

officer, Barry Pickup, who questioned Hayden regarding Zachary’s whereabouts on the day

Zachary’s body was found. See Transcript of Preliminary Hearing on June 12, 2019, Umdenstock,

Case No. CF-2018-5696, OSCN Doc. No. 1045478214 (Tulsa Cnty.), filed on Nov. 25, 2019.

According to Officer Pickup, Hayden initially lied to the officer, denying that he knew where his

father was and telling the officer that Zachary’s “girlfriend had come by earlier and picked him

up.” Id. at 10. Hayden also denied knowing his father’s phone number when the officers offered

to call him, and according to the officer’s testimony, Hayden rebuffed efforts to check for Zachary

in the residence, where the body was eventually found. Id. at 9-13. The officer testified that Hayden

stated, “you guys are invading my property, if you want in, come back with a warrant.” Id. at 11.

The officer further testified that, when he eventually prevailed upon Hayden to allow officers into

the residence, Hayden confessed to killing his father after an altercation between the two on the

evening of the murder. Id. at 15. There is no question that Hayden’s conduct was wrongful, and

Hayden’s attempts to conceal his actions from law enforcement—coupled with his ostensibly

erudite knowledge of the Fourth Amendment—evince an understanding of the nature of his

conduct. No reasonable factfinder would construe Hayden’s actions as blameless and deserving of

a benefit that would be otherwise barred under the slayer statute.

Having considered Smallwood’s motion to disburse the funds (Dkt. # 26) to Hayden or the

Tulsa County probate court, and having reviewed the available evidence, the Court finds that, as a

matter of law, Smallwood’s motion to disburse the funds should be denied. Additionally, the Court

finds that no reasonable juror, given the available evidence, would rule in Hayden’s favor.

Accordingly, the interpleaded funds should be disbursed to T.U., the only contingent beneficiary

of Zachary’s insurance policy. Moss, 838 P.2d at 1014 (Oklahoma follows the majority rule that,

when the slayer statute does apply, the insurance proceeds are paid to the policy’s contingent

beneficiaries, if any are named).

IT IS THEREFORE ORDERED that Smallwood’s motion to disburse funds (Dkt. # 26)

is denied.

IT IS FURTHER ORDERED that the interpleaded funds deposited in this Court on

February 26, 2021, plus any accrued interest, shall be disbursed to T.U., c/o Jennifer Umdenstock

as representative of T.U.

IT IS FURTHER ORDERED that the Clerk of Court shall send a copy of this order to

the last known address of Jennifer Umdenstock:

Jennifer Umdenstock

Representative of T.U.

4149 Riverside Drive

Tulsa, OK 74105

and that the Clerk of Court endeavor to locate a current address for Jennifer Umdenstock.

IT IS FURTHER ORDERED that the Clerk of Court shall send a copy of this order to

the Oklahoma Department of Mental Health and Substance Abuse Services, the last known

custodian of Hayden Umdenstock:

Hayden Umdenstock

c/o Oklahoma Department of Mental Health

and Substance Abuse Services

2000 N. Classen Blvd., Suite 2-600

Oklahoma City, OK 73106

DATED this 19th day of November, 2021.

Chia

y Copeesces

CLAIRE V.EAGAN \—

UNITED STATES DISTRICT JUDGE

1]