Opinion
No. 83-1171
Decided April 4, 1984.
Domestic relations — Insurance — Separation agreement incorporated into dissolution decree operates as release of rights of ex-spouse in life insurance policy, when.
O.Jur 3d Family Law § 895.
O.Jur 2d Insurance § 825.
Where the parties to a separation agreement which is incorporated into a decree of dissolution specifically direct their attention to the issue of life insurance and express their intent to release all rights which each may have as beneficiary under the policies of the other, such language is sufficient to eliminate each party as beneficiary of the other notwithstanding the fact that no specific change of beneficiary is made.
APPEAL from the Court of Appeals for Mahoning County.
Linda L. Phillips ("Pelton"), appellant herein, and James D. Phillips were married on January 14, 1967. During the course of the marriage, James purchased an insurance policy on his life from the Farm Bureau Life Insurance Company of Missouri ("Farm Bureau"). Appellant was named as first beneficiary and the insured's estate was named as contingent beneficiary.
On December 7, 1976, Linda and James were granted a dissolution of marriage. The final decree incorporated the parties' separation agreement which provided, inter alia, that each party released the rights he or she had as beneficiary in any insurance policy issued to the other.
Following the dissolution, James married Carol J. Phillips, appellee herein. Appellant also remarried, changing her name to Linda L. Pelton.
On December 9, 1981, James Phillips was killed in an automobile accident. As of that date, he had made no change of beneficiary as to his life insurance policy with Farm Bureau.
Appellee was named administratrix of her husband's estate and in that capacity made demand upon Farm Bureau for the proceeds of the life insurance policy. Appellant also claimed entitlement to the proceeds. Farm Bureau refused to pay either party until a judicial determination of their respective rights was made.
Appellee filed a complaint against appellant and Farm Bureau seeking a judgment declaring her (appellee) to be the rightful owner of the insurance proceeds. Farm Bureau deposited the proceeds with the court by way of interpleader and was dismissed from the action.
Appellee filed a motion for summary judgment, asserting that the separation agreement operated as a release of appellant's rights under the policy. Appellant also sought summary judgment, arguing that she had not been removed as beneficiary.
The trial court sustained appellant's motion for summary judgment and overruled that of appellee. The court of appeals reversed and entered judgment in favor of appellee.
The cause is now before this court pursuant to the allowance of a motion to certify the record.
Messrs. Ingram Ingram and Mr. John G. Ingram, for appellee.
Messrs. Williams Batchelder, Mr. William G. Batchelder, Jr., and Mr. John T.H. Batchelder, for appellant.
The question presented in this case is whether the terms of the separation agreement executed between appellant and her former spouse and incorporated into their dissolution decree preclude appellant's participation in the proceeds of the former spouse's life insurance notwithstanding the fact that appellant is the named beneficiary under the policy.
In Cannon v. Hamilton (1963), 174 Ohio St. 268 [22 O.O.2d 331], this court set forth several principles which are dispositive of this matter.
The general rule is that divorce (or dissolution) alone does not automatically defeat the right of a named beneficiary to receive the proceeds of a former spouse's life insurance policy. Id. at paragraph one of the syllabus. In order to effectuate a change of beneficiary, the insured must ordinarily follow the procedure directed in the policy of insurance. Id. at paragraph two of the syllabus. In summary, the intentions of the insured as expressed in the designation of beneficiary will normally be upheld.
An exception applies where the terms of a separation agreement which is made part of the divorce (or dissolution) decree "plainly indicate" the elimination of the named beneficiary from all rights to the life insurance proceeds. Id. at paragraph three of the syllabus. In that instance, the insured and the former spouse have manifested a contrary intent from the specific designation contained in the policy which should be given effect.
In the instant case, the separation agreement between appellant and her former husband provided, in relevant part:
"That except as herein otherwise provided, each party hereto completely and forever releases the other from any and all rights each has, or may have —
"* * *
"As beneficiary in any life, or other type of insurance policy issued to the other."
No other mention of life insurance was made in the agreement.
In the above-cited language, the parties specifically directed their attention to the issue of life insurance and expressed their intention to release all rights which each may have had as beneficiary under the policies of the other. It is our view that this language was sufficient to eliminate each party as beneficiary of the other notwithstanding the fact that no specific change of beneficiary was made. Certainly, such language was sufficiently plain under the standards set forth in Cannon.
Accordingly, the judgment of the court of appeals is affirmed.
Judgment affirmed.
CELEBREZZE, C.J., W. BROWN, SWEENEY, LOCHER, HOLMES and C. BROWN, JJ., concur.