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South Carolina
Judicial Department
2005-UP-098 - United of Omaha v. Helms


In The Court of Appeals

United of Omaha Life Insurance Company,        Respondent,


Elaine Helms and Linda R. Cowart,        Defendants,

Of Whom Elaine Helms is        Respondent,

and Linda R. Cowart is the        Appellant.

Appeal From Horry County
John L. Breeden, Jr., Circuit Court Judge

Unpublished Opinion No. 2005-UP-098
Submitted February 1, 2005 – Filed February 10, 2005


E. Windell McCrackin, of Myrtle Beach, for Appellant.

Elaine Helms, of Lancaster, and Susan P. MacDonald, of Myrtle Beach, for Respondent.

PER CURIAM:  In an action for life insurance proceeds, Linda Cowart (“Cowart”) appeals the trial court’s grant of interpleader and summary judgment in favor of United of Omaha Life Insurance Company (“United of Omaha”) and its denial of Cowart’s summary judgment motion.  We affirm. [1]   


In 1999, United of Omaha issued a life insurance policy in the amount of $30,000 on behalf of William B. Cowart.  According to the policy terms, the owner of the policy is “(a) the Insured or, (b) the applicant if a person other than the Insured applied for this policy, or (c) the assignee of record in the case of an assignment of ownership.”  On the application for the policy, Cowart, William’s wife, is listed as the primary beneficiary, and the word “owner” is handwritten next to her name. [2]   Other than this handwritten notation, no evidence suggests William ever assigned ownership of the policy. 

After William became ill in November 2001, Cowart moved out of the marital home and William moved in with his sister, Elaine Helms.  Thereafter, William submitted a change of beneficiary form to United of Omaha and designated Helms as the primary beneficiary.  United of Omaha in turn issued a beneficiary endorsement effective January 5, 2002. 

After William died on March 24, 2002, both Cowart and Helms submitted claims for the proceeds of the policy.  In April 2002, Cowart made a written request to United of Omaha, asking it not to pay the proceeds until a court could determine the matter.  Because United of Omaha could only pay one beneficiary, it filed an interpleader action, pursuant to Rule 22, SCRCP.  Cowart answered and counterclaimed against United of Omaha, alleging breach of contract and bad faith for failure to pay the proceeds to her.  Cowart also cross-claimed against Helms, alleging undue influence.  

Cowart filed a motion for summary judgment as to her counterclaims.  United of Omaha moved to deposit the funds with the clerk of court, to be dismissed from the case, and to dismiss Cowart’s counterclaims.  The court denied Cowart’s motion for summary judgment.  The court determined that United of Omaha was entitled to deposit the policy proceeds with the clerk of court and to be relieved from liability pursuant to Rule 22, SCRCP.  The court further found that United of Omaha was entitled to summary judgment as to Cowart’s breach of contract and bad faith counterclaims.  Cowart appeals.


I.          Interpleader

Cowart argues the trial court erred in granting interpleader to United of Omaha because United of Omaha was not a neutral stakeholder.  We disagree.

In an appeal from a grant of interpleader, this court examines whether the evidence before the trial court was sufficient to support its grant of interpleader.  First Union Nat’l Bank of South Carolina v. FCVS Communications, 321 S.C. 496, 499, 469 S.E.2d 613, 616 (Ct. App. 1997), rev’d in part, 328 S.C. 290, 494 S.E.2d 429 (1997) (dismissing as moot the writ of certiorari as to interpleader).  When claims are such that a plaintiff is or may be exposed to double or multiple liability, the claimaints may be joined as defendants and required to interplead.  Rule 22(a), SCRCP.  “‘The historical and still the primary purpose of interpleader is to enable a neutral stakeholder, usually an insurance company or a bank, to shield itself from liability for paying over the stake to the wrong party.’”  FCVS Communications, 321 S.C. at 499, 469 S.E.2d at 616 (quoting Indianapolis Colts v. Mayor of Baltimore, 733 F.2d 484, 486 (7th Cir. 1984)).  Only the potential for multiple claims is needed.  Id. at 499, 469 S.E.2d at 616.

In FCVS Communications, First Union National Bank held the account for the partnership FCVS Communications.  When it became unclear who had the authority to transact business on the account, the bank filed an interpleader action against the partnership and individual partners in order to clarify the competing claims.  This court upheld the trial court’s grant of interpleader in light of the conflicting claims to the funds.  FCVS Communications, 321 S.C. at 501, 469 S.E.2d at 617. 

Cowart argues that, unlike the bank in FCVS Communications, United of Omaha is not a “neutral stakeholder” because it is trying to shield itself from liability due to its actions in changing the beneficiary.  Thus, she argues, its actions do not fit within the purpose of Rule 22, SCRCP.

We find that United of Omaha, like the bank in FCVS Communications, faced competing claims to the insurance proceeds, thus exposing itself to double liability.  Here, both claims are arguably valid.  This alone justifies an action for interpleader.  Rule 22(a), SCRCP (“Persons having claims against the plaintiff may be joined as defendants and required to interplead when their claims are such that the plaintiff is or may be exposed to double or multiple liability.”).  Further, we conclude there is no evidence that United of Omaha was not a “neutral stakeholder.”  United of Omaha sought to pay the proceeds due under the policy, despite Cowart’s allegation that United of Omaha inappropriately changed the beneficiary in this case.  Whether or not the beneficiary was appropriately changed has no effect on United of Omaha’s duty to pay; it merely affects to whom the proceeds are paid.  Thus, United of Omaha was sufficiently neutral.

To further support her argument, Cowart cites to Citizens Bank of Forsyth v. Middlebrooks, 72 S.E.2d 298 (Ga. 1952), in which the Georgia Supreme Court denied an institution’s action for interpleader.  The Middlebrooks court found that a stakeholder was not entitled to interpleader because the stakeholder was in possession of all the facts and there was no reasonably debatable question of law.  Id. at 332.  This case is not helpful to Cowart, however, because here, the question of the owner of the policy as well as the appropriate beneficiary is indeed a question of law that is reasonably debatable.  Thus, even pursuant to Middlebrooks, the grant of interpleader in the present case was appropriate.

Because the evidence presented to the trial court was sufficient to demonstrate United of Omaha was exposed to multiple liability consistent with Rule 22, SCRCP, and South Carolina case law, we find no error in its decision to grant interpleader.

II.               Grant of Summary Judgment as to Cowart’s Counterclaims

Cowart argues the trial court erred in granting summary judgment in favor of United of Omaha on her bad faith and breach of contract claims because United of Omaha’s motion was made under Rules 12 and 22, SCRCP.  She argues the trial court was precluded from granting a motion for summary judgment because she was never given notice.  We disagree.

In reviewing the grant of a summary judgment motion, the appellate court applies the same standard that governs the trial court under Rule 56, SCRCP.  Nexsen v. Haddock, 353 S.C. 74, 77, 576 S.E.2d 183, 185 (Ct. App. 2002).  Summary judgment is appropriate when no genuine issue of material fact exists and the moving party is entitled to a judgment as a matter of law.  Id.  In ruling on a motion for summary judgment, the evidence and the inferences that can be drawn therefrom should be viewed in the light most favorable to the non-moving party.  George v. Fabri, 345 S.C. 440, 452, 548 S.E.2d 868, 874 (2001). 

If a court considers matters outside the pleadings when deciding on a motion to dismiss, the motion will be treated as one for summary judgment pursuant to Rule 56, SCRCP, provided the parties are given the requisite notice and opportunity to present outside materials pertinent to a Rule 56, SCRCP, motion.  Rule 12(b)(6), SCRCP; Johnson v. Dailey, 318 S.C. 318, 321, 457 S.E.2d 613, 615 (1995). 

In its December 16, 2002 reply to Cowart’s counterclaims, United of Omaha moved to dismiss the counterclaims generally pursuant to Rules 12 and 22, SCRCP.  On the same date, United of Omaha filed a motion to be relieved from liability and moved to have the bad faith counterclaim dismissed pursuant to Rule 12, SCRCP.  Nearly a year later, in November 2003, Cowart filed a separate motion for summary judgment as to her counterclaims, she submitted an affidavit, and a hearing was held on all the motions.  United of Omaha filed the November 11, 2003 affidavit of Tom Groves, with supporting exhibits, prior to the hearing, and it was submitted to the trial court without objection. 

Cowart claims that she did not have the requisite notice that the trial court intended to transform United of Omaha’s motions to dismiss into motions for summary judgment until she received the court’s order.  Although notice pursuant to Rule 56, SCRCP, must be given when a trial court converts a motion to dismiss into one for summary judgment, Cowart did not move before the trial court for reconsideration based upon her lack of notice.  Because she did not complain about the conversion and the lack of notice to the trial court, thus denying the court the opportunity to rule upon the matter, her issue is not preserved for our review.  See Staubes v. City of Folly Beach, 339 S.C. 406, 412, 529 S.E.2d 543, 546 (2000) (holding that matters not raised to and ruled upon by the trial court are not preserved for appellate review); In re Estate of Timmerman, 331 S.C. 455, 460, 502 S.E.2d 920, 922 (Ct. App. 1998) (holding that when a party receives an order granting certain relief not previously contemplated or presented to the trial court, the aggrieved party must move pursuant to Rule 59(e), SCRCP, to alter or amend the judgment in order to preserve the issue for appellate review).  Further, Cowart was not caught by surprise at the hearing because she was able to present outside materials at the hearing in support of her own motion for summary judgment. 

Because Cowart failed to complain to the trial court that conversion was improper and she was nevertheless able to present her own materials, this issue has no merit. [3]


The trial court did not err in granting United of Omaha’s motion for interpleader.  Cowart’s issue regarding the conversion of the motion to dismiss into one for summary judgment is not preserved for appellate review.  Further, the denial of Cowart’s motion for summary judgment is not appealable.  Accordingly, the order of the trial court is



[1] Because oral argument would not aid the court in resolving the issues on appeal, we decide this case without oral argument pursuant to Rule 215, SCACR. 

[2] The policy itself refers to the application or endorsement for beneficiary information.  

[3] Cowart also argues that the trial court erred in denying her motion for summary judgment as to her contract counterclaim.  It is well-settled that the denial of a motion for summary judgment is not appealable.  Olson v. Faculty House of Carolina, Inc., 354 S.C. 161, 168, 580 S.E.2d 440, 444 (2003).  Thus, we decline to address Cowart’s argument on this issue.