Hertzske v. Snyder

Decision Date18 January 2017
Docket NumberNo. 20150735,20150735
Citation390 P.3d 307
Parties Tyler HERTZSKE, Appellee, v. Linda SNYDER, Appellant.
CourtUtah Supreme Court

Michael E. Day, Nathan Whittaker, Salt Lake City, for appellee.

Brian S. King, Salt Lake City, for appellant.

Justice Durham authored the opinion of the court, in which Chief Justice Durrant, Associate Chief Justice Lee, Justice Himonas, and Justice Pearce joined.

Justice Durham, opinion of the Court:

INTRODUCTION

¶1 Linda Snyder and Tyler Hertzske each claim sole entitlement to the death benefits of a life insurance policy (Policy) held by decedent Edward Hertzske. There are two issues presented in this case: (1) how Utah Code section 30–3–5(1)(e) should be interpreted in correlation with Utah Code section 75–2–804 ; and (2) the proper interpretation of "express terms" in section 75–2–804(2). The district court granted summary judgment to T. Hertzske, finding that there was "no genuine dispute as to any material fact" and that T. Hertzske was entitled to judgment as a matter of law. In support of the district court's conclusion, the judge held that where section 30–3–5(1)(e) was not considered or included in the divorce proceedings, it did not apply, and the Policy did not contain "express terms" that would except it from revocation under section 75–2–804(2). We affirm the district court's grant of summary judgment.

BACKGROUND

¶2 In August 2004, while Linda Snyder and Edward Hertzske were engaged, E. Hertzske obtained a $ 500,000 life insurance policy from Lincoln Benefit Life Co. (Lincoln). The Policy named Ms. Snyder as the primary beneficiary and T. Hertzske as the secondary beneficiary. The terms of the Policy provided a method for naming new beneficiaries during E. Hertzske's lifetime, but were silent as to whether the designation of a spouse as a beneficiary would survive a divorce. The Policy instructions regarding beneficiaries states, in relevant part,

The beneficiary will receive the death benefit when the insured dies and we have received due proof of death. The beneficiary is as stated in the app [lication], unless changed.
....
We will pay the death benefit to the beneficiaries according to the most recent written instructions we have received from you.
....You may name new beneficiaries. We will provide a form to be signed. You must file it with us. Upon receipt, it is effective as of the date you signed the form, subject to any action we have taken before we received it.

¶3 Ms. Snyder and E. Hertzske were married in March 2005 and separated at the end of 2011. In May 2013, E. Hertzske executed his will disinheriting Ms. Snyder "to the fullest extent permitted by law."1 In January 2014, E. Hertzske filed for divorce. During the divorce proceedings neither E. Hertzske nor Ms. Snyder mentioned the Policy in the petition or subsequent divorce proceedings, nor did they identify or reference Utah Code section 30–3–5(1)(e). On May 6, 2014, the court issued a divorce decree that was silent as to the Policy and contained none of the language required by section 30–3–5(1)(e).2

¶4 E. Hertzske died at age sixty-eight, less than a month after the divorce decree was entered. Both Ms. Snyder and T. Hertzske declared an interest in the Policy funds. The district court ruled in favor of T. Hertzske. Ms. Snyder appeals the decision.3 This court has jurisdiction over this appeal under Utah Code section 78A–3–102(3)(j).

STANDARD OF REVIEW

¶5 "Whether [a statute] applies ... is a matter of statutory interpretation, which presents a question of law." Vorher v. Henriod , 2013 UT 10, ¶ 6, 297 P.3d 614 (second alteration in original) (citation omitted). In this appeal, "[w]e review the district court's decision de novo, according no deference to its legal determination." State v. Steinly , 2015 UT 15, ¶ 7, 345 P.3d 1182.

ANALYSIS

¶6 T. Hertzske moved for summary judgment, and Ms. Snyder entered a cross-motion for summary judgment, each asserting that "his or her interest in the funds ... [is] superior to that of the other party." Summary judgment is appropriate "if the moving party shows that there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law." UTAH R. CIV. P. 56(a). Neither T. Hertzske nor Ms. Snyder disputes the material facts in this case. The only dispute "is a matter of statutory interpretation, which presents a question of law." Vorher v. Henriod , 2013 UT 10, ¶ 6, 297 P.3d 614. Therefore, the court properly issued a summary judgment, which we review for correctness. See McBroom v. Child , 2016 UT 38, ¶ 18, 392 P.3d 835. We affirm the district court's holding "that the divorce revokes Ms. Snyder's status as a beneficiary" and that T. Hertzske is the sole remaining beneficiary holding an interest in the Policy.

¶7 We first explain the function of Utah Code section 75–2–804(2), as this statute's function is essential to a determination of the parties' arguments. We then determine the applicability of Utah Code section 30–3–5(1)(e) to a beneficiary designation of a former spouse in a life insurance policy when there is no mention of the policy in the divorce proceedings or decree. Finally, we decide whether a life insurance policy's procedural directive for changing a beneficiary designation constitutes "express terms" as used in Utah Code section 75–2–804(2).4

I. UTAH CODE SECTION 75–2–804(2) CREATES A REBUTTABLE PRESUMPTION THAT A BENEFICIARY DESIGNATION IN A LIFE INSURANCE POLICY IS REVOKED UPON DIVORCE

¶8 Under section 75–2–804(2) a beneficiary designation in a life insurance policy is revoked upon divorce unless the "express terms" of the policy as "a governing instrument, a court order, or a contract relating to the division of the marital estate" indicate otherwise. UTAH CODE § 75–2–804(2). This section "revokes any revocable ... disposition or appointment of property made by a divorced individual to the individual's former spouse in a governing instrument" unless the "express terms of a governing instrument, a court order, or a contract relating to the division of the marital estate" contains an exception. Id. In the definitions section, a " '[d]isposition or appointment of property' includes ... any ... benefit to a beneficiary designated in a governing instrument." Id. § 75–2–804(1)(a). A governing instrument is "a governing instrument executed by the divorced individual before the divorce...." Id. § 75–2–804(1)(d). Read as a whole, the statute creates a rebuttable presumption that a beneficiary designation in a life insurance policy—a governing instrument—is revoked upon divorce. The presumption can be rebutted by express terms in the life insurance policy; a court order, including a decree of divorce; or a "contract relating to the division of the marital estate made between the divorced individuals."5 Id. § 75–2–804(2).

II. UTAH CODE SECTION 30–3–5(1)(e) DOES NOT APPLY IN THIS INSTANCE AND UTAH CODE 75–2–804 GOVERNS

¶9 This court's efforts at statutory interpretation attempt to give the meaning to a statute that the legislature intended. We use both the plain language of section 30–3–5(1)(e) and the function of section 30–3–5(1)(e) within the context of the entire statutory scheme to determine what the legislature intended when it enacted section 30–3–5(1)(e). We conclude that section 75–2–804 creates a rebuttable presumption that beneficiary designations of a former spouse on a life insurance policy are revoked in a divorce proceeding. This revocation can be rebutted using section 30–3–5(1)(e) in divorce proceedings only through the inclusion of the statutory language in the decree of divorce.

¶10 It has been a long-held practice of the courts in this state to "seek to give effect to the intent of the Legislature" when interpreting statutes. State v. Rasabout , 2015 UT 72, ¶ 10 & n.14, 356 P.3d 1258. The best indicator of legislative intent is the plain language of the statutes themselves. Martinez v. Media–Paymaster Plus/Church of Jesus Christ of Latter-Day Saints , 2007 UT 42, ¶ 46, 164 P.3d 384 ("[W]e look first to the statute's plain language with the primary objective of giving effect to the legislature's intent."). In looking at the relationship between sections 75–2–804 and 30–3–5(1)(e), we look at the provisions in the context of the entire statutory scheme. See LPI Servs. v. McGee , 2009 UT 41, ¶ 11, 215 P.3d 135 ("We read the plain language of the statute as a whole[ ] and interpret its provisions in harmony with other statutes in the same chapter and related chapters." (alteration in original) (citation omitted)). Ms. Snyder urges us to look at the legislative history of section 30–3–5(1)(e), arguing that the legislature enacted this provision in order to "carv[e] out life insurance policies and annuities from the revocation-by-divorce prescription of § 75–2–804." However, we decline to look at the legislative history here because "[w]hen the plain meaning of the statute can be discerned from its language, no other interpretive tools are needed." LPI Servs. , 2009 UT 41, ¶ 11, 215 P.3d 135.

¶11 The notice provisions in section 30–3–5(1)(e) are clear, and the plain meaning of the statute can be determined from its language. A conditional departure from the presumption of revocation in section 75–2–804 is provided in section 30–3–5(1)(e). Where the judge is aware that "either party owns a life insurance policy or an annuity contract," the statute requires the judge issuing the decree of divorce to include

an acknowledgement by the court that the owner:
(i) has reviewed and updated, where appropriate, the list of beneficiaries;
(ii) has affirmed that those listed as beneficiaries are in fact the intended beneficiaries after the divorce becomes final; and
(iii) understands that if no changes are made to the policy or contract, the beneficiaries currently listed will receive any funds paid by the insurance company under the terms of the policy or contract.

UTAH CODE § 30–3–5(1)(e). When implemented, this statute reverses the...

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