Gupta v. Lincoln National Life Insurance Co.

In 1987, Uma Gupta (plaintiff) executed a general power of attorney (POA) stating that her husband was her attorney and granting him the authority to perform any act on Gupta’s behalf that she could lawfully perform herself. Gupta never revoked or rescinded the POA. In July 2001, Gupta filed for separation from her husband, but they continued to live together until the husband’s death in November 2001. Around the time of the separation, the husband sent a letter to Lincoln National Life Insurance Co. (Lincoln) (defendant), seeking to borrow $50,000 from Gupta’s retirement account. Lincoln sent a loan application to the spouses’ residence, which the husband completed and returned. Noting that the signature on the application did not match Gupta’s signature on file, Lincoln phoned the residence. The husband told Lincoln he had completed the loan application on Gupta’s behalf, and he faxed Lincoln a copy of the POA as evidence of his authority to do so. Lincoln processed the loan application and issued a check for $50,000. When Gupta later learned of the husband’s withdrawal, she contacted Lincoln, stating that the husband had acted without her consent and demanding that Lincoln restore the funds to her account. Lincoln refused and sought repayment of the loan from Gupta per the loan agreement’s terms. Gupta sued Lincoln, seeking a declaratory judgment that the loan transaction was not valid because the husband had acted outside the POA by engaging in self-dealing. Lincoln moved for summary judgment, arguing that the loan transaction was binding because Lincoln had properly relied on a valid POA. The trial court granted Lincoln’s motion, and Gupta appealed.