United States District Court, D. Nevada
ORDER MOTION TO FILE FIRST SUPPLEMENTAL ANSWER (ECF
FERENBACH UNITED STATES MAGISTRATE JUDGE
the Court is Petra Wilson's Motion for Leave to File
First Supplemental and Amending Answer to Complaint for
Interpleader. (ECF No. 55). For the reasons stated below,
Petra Wilson's motion is granted in part and denied in
March 2017, The Prudential Insurance Company of America
(“Prudential”) filed a complaint in interpleader.
(ECF No. 1). At issue are the Veterans Group Life Insurance
(“VGLI”) benefits for Rex Wilson. (Id.
at 1-3). Rex Wilson's wife, Petra Wilson, was originally
designated the sole beneficiary. (Id. at 3). By a
“VGLI Beneficiary Designation/Change form dated October
1, 2016, the Insured designated Faith Lee, parent, as the
primary beneficiary of 50 percent of the VGLI Coverage and
Petra Wilson, spouse, as the primary beneficiary of the
remaining 50 percent of the VGLI Coverage.”
(Id.). Rex Wilson died on October 13, 2016 and Petra
Wilson contested the change in beneficiaries. (Id.).
discovery, Petra Wilson learned that Rex Wilson backdated the
beneficiary change form. (ECF No. 55 at 2). Rex Wilson
requested and received the form on October 4 and mailed it
back to Prudential on October 6. (ECF No. 55-1 at 4). Rex
Wilson dated the form as October 1. (Id.) Petra
Wilson filed a motion to amend her answer to the complaint in
interpleader to add four affirmative defenses: (1) Rex Wilson
engaged in fraud by backdating the beneficiary change form,
(2) Rex Wilson was not competent when executing the
beneficiary change form, (3) “[t]he intentionally
backdated change of beneficiary form constitutes either an
invalid extension of the Policy or an invalid change of the
terms and conditions of the Policy, ” and (4)
“[b]ecause the veteran must have signed and dated the
form and the signature date must be the date that the Veteran
actually signed the form, the change of beneficiary form is
invalid on its face and does not meet the requirements to
change the terms and conditions of the Policy.”
(Id. at 3-5).
Lee opposed the motion to amend. (ECF No. 56). She argued the
proposed fraud affirmative defense was futile because the
statute Petra Wilson relied on (38 U.S.C. § 1979) does
not apply, there is no evidence that the erroneous date was
intentional, even an intentional misstatement of date would
not constitute fraud, and Petra Wilson lacks standing to
challenge the insurance contract. (Id. at 2-4).
Faith Lee did not address Rex Wilson's competency or
whether a technical error in the beneficiary change form
could render it invalid under relevant statutes or the
Wilson filed a reply, but she failed to respond to Faith
Lee's arguments regarding the proposed fraud affirmative
defense. (ECF No. 57). Petra Wilson simply argued that
“[a]ssuming Faith Lee is in fact correct that the fraud
defense…is futile, ” the other proposed
affirmative defenses have merit. (Id. at 1-2).
party may amend its pleading only with the opposing
party's written consent or the court's leave. The
court should freely give leave when justice so
requires.” Fed.R.Civ.P. 15(a)(2). “Five factors
are taken into account to assess the propriety of a motion
for leave to amend: bad faith, undue delay, prejudice to the
opposing party, futility of amendment, and whether the
plaintiff has previously amended the complaint.”
Johnson v. Buckley, 356 F.3d 1067, 1077 (9th Cir.
2004). In addition, under LCR 47-3 “[t]he failure of an
opposing party to include points and authorities in response
to any motion constitutes a consent to granting the
motion.” Faith Lee did not object to Petra Wilson's
proposed affirmative defenses 2-4. These affirmative defenses
are not facially brought in bad faith, prejudicial to Faith
Lee, or futile. See Prudential Ins. Co. of Am. v.
Mehlbrech, 878 F.Supp. 1382, 1386 (D. Or. 1995)
(addressing the mental capacity to elect beneficiaries in a
Servicemen's Group Life Insurance Policy); Prudential
Ins. Co. v. Perez, 51 F.3d 197, 198-99 (9th Cir. 1995)
(discussing compliance with the provisions of 38 U.S.C.
§ 1970 regarding beneficiary designations). Therefore,
Petra Wilson's motion to amend is granted as to her
proposed affirmative defenses addressing Rex Wilson's
competency and whether the erroneous date in the beneficiary
change form could render it invalid under relevant statutes
or the insurance policy.
Lee's sole objection to Petra Wilson's proposed fraud
affirmative defense is that the proposed amendment is futile.
(ECF No. 56 at 2-4). “[A] proposed amendment is futile
only if no set of facts can be proved under the amendment to
the pleadings that would constitute a valid and sufficient
claim or defense.” Sweaney v. Ada Cty., Idaho,
119 F.3d 1385, 1393 (9th Cir. 1997) (quoting Miller v.
Rykoff-Sexton, Inc., 845 F.2d 209, 214 (9th Cir.1988). A
Court may deny a motion to amend if it is clear that the
proposed amendment “could not affect the outcome of
th[e] lawsuit.” Klamath-Lake Pharm. Ass'n v.
Klamath Med. Serv. Bureau, 701 F.2d 1276, 1293 (9th Cir.
Wilson failed to respond to any of Faith Lee's arguments
regarding the futility of the proposed fraud affirmative
defense. The statute Petra Wilson cites in her proposed
amended answer does not appear to apply to this case, as it
deals with contesting “insurance coverage” rather
than the payment of benefits. 38 U.S.C. § 1979. In
addition, fraud generally requires a material
misrepresentation. United States v. Brugnara, 856
F.3d 1198, 1207-08 (9th Cir. 2017). Even accepting Petra
Wilson's allegation that Rex Wilson deliberately lied
about the date when he executed the change of beneficiary
form, Petra Wilson fails to allege how the misrepresentation
was material and impacted Prudential's acceptance of the
form. Because allowing the inclusion of the proposed fraud
affirmative defense would be futile, Petra Wilson's
motion is denied as to her first proposed affirmative
and for good cause shown, IT IS ORDERED that Petra
Wilson's Motion for Leave to File First Supplemental and
Amending Answer to Complaint for Interpleader (ECF No. 55) is
GRANTED IN PART AND DENIED IN PART.
FURTHER ORDERED that Petra Wilson has until November 10, 2017
to file an amended answer adding her second, third, and
fourth proposed affirmative defenses and the factual