Opinion
No. ED 84110
December 14, 2004
Appeal from the Circuit Court of St. Charles County, Hon. Stephen Ehlmann.
James C. Ochs, St. Louis, MO, for Appellant.
John C. Maxwell, St. Charles, MO, for Respondent.
Before Patricia L. Cohen, P.J. and Kathianne Knaup Crane, J.
Mary Jill Gillespie (second wife) appeals from the trial court's grant of summary judgment in favor of the Estate of Michael G. McPherson (Estate) on second wife's action for declaratory judgment as to the rightful beneficiary of a life insurance policy. Second wife contends the trial court erred in granting the Estate's motion for summary judgment and denying her motion for summary judgment because second wife was the named beneficiary on Michael G. McPherson's (Decedent) life insurance policy and thus, is entitled to the proceeds of the life insurance. We reverse and remand.
The facts in this case are largely undisputed. Second wife married Decedent on August 16, 2000. Decedent was previously married to Nancy McPherson, who is now known as Nancy Riddel, (first wife) and that marriage produced four children. On February 27, 1997, Decedent and first wife's marriage was dissolved. As part of the dissolution of marriage, Decedent entered into a marital settlement agreement in which custody of the four children was given to first wife, with Decedent agreeing to pay monthly child support and a percentage of the children's day care, health insurance, and higher education costs. In addition, Decedent agreed to procure and maintain a life insurance policy in the amount of $100,000.00 naming first wife as the irrevocable beneficiary until the youngest of the parties' four children was emancipated. At the time of the dissolution of marriage, Decedent had not yet procured the life insurance policy.
Decedent's oldest child, April McPherson, is the personal representative of his estate.
The relevant provision of the marital settlement agreement read:
Husband agrees to procure and maintain in full force and effect a policy of life insurance insuring Husband's life with a face value of one hundred thousand dollars ($100,000.00), naming Wife as irrevocable beneficiary thereon, until such time as the parties' youngest child has become emancipated. Husband agrees to provide Wife with written documentation each year following the divorce to verify that said life insurance coverage is still in full force and effect and that Wife is named as irrevocable beneficiary thereon.
On March 27, 2000, almost three years after his divorce from first wife, Decedent procured a policy of life insurance through Shelter Insurance Company after first wife called and discussed the life insurance provision of the marital settlement agreement with second wife. Second wife, who was Decedent's fiancée at the time, accompanied Decedent to the Shelter Insurance agent's office. Decedent named first wife as the beneficiary on the policy and listed second wife as the contingent beneficiary. There was no reference to first wife being an irrevocable beneficiary on the policy itself. Second wife, who paid all of her and Decedent's bills, wrote the checks for the insurance premiums on the life insurance policy. Second wife and Decedent furnished first wife with a copy of the insurance policy.
After Decedent and second wife's marriage and without first wife's knowledge, Decedent and second wife went to the Shelter Insurance Company agent's office and changed the beneficiaries of Decedent's life insurance policy. First Wife was removed and second wife was named as the primary beneficiary. Second wife's daughter, Decedent's step-daughter, was named as a contingent beneficiary. First wife was never notified of the change in beneficiaries.
Shortly after her marriage to Decedent, second wife decided to divorce Decedent for financial reasons. The marriage was dissolved by a default judgment. Second wife was awarded the majority of marital assets. There was no mention of the life insurance policy in question in the dissolution judgment. Second wife and Decedent continued to cohabitate until his death in October 2002. At the time of his death, Decedent's and first wife's youngest child was nine years old. Second wife continued to pay the insurance premiums after the dissolution of the parties' marriage. Thereafter, second wife filed a claim for payment as the beneficiary of the $100,000.00 life insurance policy. Shelter Insurance Company denied payment stating its belief that the dissolution of the marriage revoked second wife's right to the policy.
Second wife filed a petition for declaratory judgment against Shelter Insurance Company and the Estate requesting a determination and declaration of the rightful beneficiary of Decedent's life insurance proceeds. Second wife did not name first wife as a party defendant and first wife did not seek to intervene or join the action. Shelter Insurance Company filed a motion for interpleader, which was granted by the trial court, and Shelter Insurance Company paid $102,235.28 into the court registry. Shelter Insurance Company was then dismissed with prejudice.
Thereafter, the Estate filed its motion for summary judgment with its memorandum in support. The Estate alleged that because Decedent was under a duty to procure the life insurance policy naming first wife as the irrevocable beneficiary under the terms of the dissolution judgment, Decedent was not free to change the beneficiary without first wife's consent and therefore, first wife was entitled to the insurance proceeds as a matter of law. The Estate also alleged second wife was not entitled to the insurance proceeds as a result of her divorce from Decedent. Second wife filed her motion for summary judgment alleging she was entitled to the insurance proceeds as the named beneficiary on the life insurance policy where there was no evidence of intent to revoke second wife's rights as the beneficiary. Thereafter, the trial court granted the Estate's motion for summary judgment and denied second wife's motion for summary judgment. Second wife's subsequent motion, titled a "Motion for Reconsideration," was overruled and this appeal follows.
We address second wife's second point first because it is dispositive. In her second point, second wife contends the trial court erred in granting the Estate's motion for summary judgment and denying her motion for summary judgment because second wife was the named primary beneficiary on Decedent's life insurance policy and thus, is entitled to the proceeds of the life insurance. We agree.
Appellate review of a trial court's grant of summary judgment is essentially de novo. ITT Commercial Fin. Corp. v. Mid-Am. Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993). The record is reviewed in the light most favorable to the party against whom judgment was entered, according that party all reasonable inferences that may be drawn from the record. Id. Summary judgment will be upheld on appeal if the movant is entitled to judgment as a matter of law and no genuine issues of material fact exist. Id. at 377. The material facts in this case are not substantially in dispute and thus, this case presents only a question of law.
The Estate alleged two theories in its motion for summary judgment asserting the reasons second wife was not entitled to the insurance proceeds. First, the Estate alleged that because Decedent was under a duty to procure the life insurance policy naming first wife as the irrevocable beneficiary under the terms of the dissolution judgment, Decedent was not free to change the beneficiary without first wife's consent and therefore, first wife was entitled to the insurance proceeds as a matter of law. Secondly, the Estate argued that second wife's divorce from Decedent effectively terminated her right as the beneficiary under the policy. We address each of the assertions in turn.
In support of its argument that first wife was entitled to the insurance proceeds under the dissolution settlement agreement, the Estate cites to Wheeler v. McDonnell Douglas Corp., 999 S.W.2d 279 (Mo.App. E.D 1999). In Wheeler, the court affirmed the entry of summary judgment in favor of the insured's two minor children awarding them life insurance proceeds from a General American policy over a claim by the insured's girlfriend. Id. at 286. The insured in Wheeler entered into a dissolution settlement agreement providing that the insured would maintain the General American life insurance policy with his children named as the beneficiaries until their emancipation. Id. at 282. Pursuant to the settlement agreement, the insured designated his children as equal beneficiaries under the life insurance policy. Id. Thereafter, the insured began dating and living with his girlfriend and subsequently added his girlfriend as a one-third beneficiary under his General American policy. Id. The insured died and his girlfriend made a claim on General American for payment of proceeds due her as a one-third beneficiary of the insured's life insurance policy. Id. General American refused payment until the dispute created by the children's competing claim was judicially resolved. Id. The trial court granted summary judgment in favor of the children and awarded the children all proceeds payable under the General American policy. Id. at 283. The insured's girlfriend appealed.Id. The Wheeler court, quoting Gen. Am. Life Ins. Co. v. Rogers, 539 S.W.2d 693 (Mo.App. 1976), held:
"[T]he law in Missouri and elsewhere is clear that a contract obligating the insured to maintain a present policy in full force and effect for the benefit of certain beneficiaries named pursuant to an agreement is valid and that the beneficiaries so named acquire a right in the proceeds of the policy which will be protected against subsequently named beneficiaries who have no superior right." Rogers, 539 S.W.2d at 697; see also Perry v. Perry, 484 S.W.2d 257, 258 (Mo. 1972); Prudential Insurance Co. of America v. Gibson, 421 S.W.2d 26, 33-34 (Mo.App. 1967). The vested equitable interest may not be subsequently defeated by an attempt to change the beneficiary without the contracting first beneficiary's consent. Prudential, 421 S.W.2d at 33. Insured's agreement to maintain the specified policies with the children as beneficiaries until the children's emancipation made the children irrevocable beneficiaries until emancipation and gave them a vested equitable interest in the proceeds of insured's General American policy that could not be defeated by insured's subsequent attempt to add plaintiff as a beneficiary.
Wheeler, 999 S.W.2d at 285. (Emphasis added.)
There is a key distinction between the present case and theWheeler case. The distinction is that at the time of the marital settlement agreement in Wheeler there was a present policy and at the time of the marital settlement agreement between Decedent and first wife there was no policy in effect. Thus, first wife did not obtain a vested equitable interest in the life insurance policy subsequently obtained by Decedent. The Estate has not cited nor have we found any precedent to support the Estate's proposition that an individual can obtain a vested equitable interest in a life insurance policy that is not in effect at the time the parties enter into a settlement agreement. The Estate was not entitled to summary judgment on the basis of this argument.
First wife may have had other remedies available to her, but none were asserted in this action.
The Estate's second allegation in its motion for summary judgment asserted second wife was not entitled to the insurance proceeds by effect of her divorce from Decedent. However, the marital status of the parties is irrelevant under these circumstances. We acknowledge the principle that if an insured intended to make a change in his or her beneficiary designation, he or she would have done so. See Gnekow v. Metropolitan Life Ins. Co., 108 S.W.2d 621 (Mo.App. 1937). Furthermore, there is a presumption that a beneficiary designation is unaffected by a subsequent dissolution or annulment of marriage. Section 461.073, RSMo Cum. Supp. 2003. This presumption is supported by the evidence that Decedent did not change the beneficiary on the policy after his divorce from second wife. Decedent and second wife continued to cohabitate after their divorce and live as a couple. There is no evidence to show that Decedent did not intend second wife to remain as the beneficiary. The Estate was not entitled to summary judgment on this assertion. Because we find the Estate was not entitled to judgment as a matter of law on either of the grounds asserted in its motion for summary judgment, we must reverse the trial court's grant of summary judgment. Point granted.
The life insurance policy here did not appear to have a revocation upon divorce clause. See General American Life Ins. Co. v. Barrett, 847 S.W.2d 125 (Mo.App.W.D. 1993).
We need not address second wife's remaining point. For the foregoing reasons, we find summary judgment in the Estate's favor was not appropriate because it was not entitled to judgment as a matter of law. Second wife is entitled to judgment as a matter of law as the named beneficiary on the insurance policy. The judgment is reversed and remanded for the trial court to enter summary judgment in favor of second wife.
Patricia L. Cohen, P.J. and Kathianne Knaup Crane, J., concur.