Equitable Life Assurance Society v. McKay

Equitable Life Assurance Society (Equitable) filed an interpleader action in federal district court in Oregon to settle conflicting claims to the proceeds of two life insurance policies issued to the decedent. The complaint named the decedent’s widow and his children from a previous marriage as defendants. The policies named the decedent’s children as the sole beneficiaries, but the widow claimed that the decedent had intended to name her as a beneficiary. The parties stipulated that Washington substantive law applied to the case. The only evidence to support the widow’s claim was her testimony and that of the insurance agent concerning their transactions with the decedent. Federal Rule of Evidence 601 provides that state law will determine the competency of a witness to testify. The children moved for summary judgment on the grounds that the Washington dead man’s statute precluded the widow and the insurance agent from testifying about their transactions with the decedent because they were persons of intertest within the meaning of the statute. Under Oregon law, generally all evidence is admitted, and the jury decides whether to believe a witness. The district court found that because the Washington statute was substantive, it applied. The widow appealed and argued that the statute was procedural and that the court should have applied Oregon’s law—the law of the forum. The Ninth Circuit Court of Appeals certified the question to the Oregon Supreme Court of whether a trial court in Oregon would apply Oregon law to the issue of a witness’s competency to testify to a decedent’s transactions or statements.