Glass v. U.S.
| Decision Date | 11 December 1974 |
| Docket Number | No. 74-1127,74-1127 |
| Citation | 506 F.2d 379 |
| Parties | Carolyn J. GLASS and Mary E. Glass, as mother and next of kin of Kenneth Eldon Glass, minor, Plaintiffs-Appellees, v. UNITED STATES of America, Defendant and Third-Party Plaintiff-Appellant, v. Rebecca Frances GLASS, Third-Party Defendant-Appellee. |
| Court | U.S. Court of Appeals — Tenth Circuit |
H. I. Aston, Tulsa, Okia. (Ed. R. Crockett, Tulsa, Okla., on the brief), for plaintiffs-appellees.
David V. Seaman, Civ. Div., Dept. of Justice, Washington, D.C. (Carla A. Hills, Asst. Atty. Gen., Washington, D.C., Nathan G. Graham, U.S. Atty., Tulsa, Okla., and Morton Hollander, Civ. Div., Dept. of Justice, Washington, D.C., on the brief), for plaintiff-appellant.
Edward O. Monnet, Tulsa, Okla., for third-party defendant-appellee.
Before SETH, McWILLIAMS and BARRETT, Circuit Judges.
The United States of America, Defendant and Third-Party Plaintiff, appeals from an adverse judgment after trial to the court. A summary of the pertinent facts will facilitate our review.
On April 9, 1967, Elliott M. Glass died as a result of a gunshot wound. At the time of his death, Glass was insured under a $10,000 National Service Life Insurance (NSLI) policy issued under the auspices of the Veterans Administration (V.A.). Under the terms of the policy, Elliott's second wife, Rebecca Frances Glass, Third-Party Defendant herein, was the primary beneficiary, and the children of his first marriage, 1 Carolyn J. and Kenneth Eldon Glass, Plaintiffs herein, were the contingent beneficiaries.
On May 8, 1967, Rebecca filed a claim, as primary beneficiary, for the policy proceeds. The claim as filed stated that Elliott's death was the result of homicide. On June 19, 1967, a grand jury returned an indictment against Rebecca for the murder of Elliott. Thereafter, on July 3, 1967, the V.A. was notified by the District Attorney's office that Rebecca had been charged with murder.
Notwithstanding the notification it had received that Rebecca had been indicted, the V.A., on February 7, 1968, after a thorough examination and investigation, concluded that Rebecca would not be brought to trial. Accordingly, the V.A. entered an administrative decision awarding Rebecca the policy proceeds. This action was taken without affording notice to the Plaintiffs, as contingent beneficiaries. Payment was tendered to Rebecca by the V.A. on February 21, 1968.
On June 17, 1968, Rebecca was found guilty of murder without malice of Elliott. On August 16, 1968, Carolyn and Kenneth made an informal claim upon the V.A. for the policy proceeds as contingent beneficiaries. A formal claim was filed pursuant to NSLI regulations on October 11, 1968. This claim was denied on June 12, 1970, and Carolyn and Kenneth filed suit against the United States on April 23, 1971. On September 9, 1971, Rebecca was interpled as a Third-Party Defendant.
After trial to the court, the court found, inter alia:
6. On July 3, 1967, the Veteran's Administration received a letter from the District Attorney's Office of Farrant County, Texas, advising the Veteran's Administration that the primary beneficiary was charged with the murder of Elliott M. Glass.
7. That after a field examination was made by the Veteran's Administration-- an administrative decision was rendered in favor of the widow. No notice was given to any of the secondary beneficiaries for any hearing.
8. The Veteran's Administration, in the instant case, either made a determination not to, or failed to file an interpleader action.
The court also held as a matter of law:
6. Ordinarily payment made by the insurance policy to the person entitled to the proceeds, in good faith, and without knowledge of facts vitiating his claim will protect the insurer and will discharge the insurer of all further liability; but payment made, voluntarily, with full knowledge of that facts, or notice, putting it on inquiry will not allow an insurance company to recover proceeds paid . . ..
7. The Court concludes, as a matter of law . . . that the Plaintiffs are entitled to recover the insurance proceeds from the Defendant.
8. The Court further finds, as a matter of law, that the Defendant is not entitled to judgment over against the Third-Party Defendant.
On appeal the United States contends that: (1) the Trial Court erred in awarding NSLI proceeds to the contingent beneficiaries, under the circumstances of the case; and (2) the Government is entitled to a judgment over against the widow (Rebecca) for the insurance money that she received.
Appellant United States contends that the Trial Court erred in awarding the NSLI proceeds to the contingent beneficiaries, Carolyn and Kenneth Glass, under the circumstances of this case. Appellant recognizes the well established rule that no person should be permitted to profit from his own wrong, and that a designated beneficiary should not be allowed to receive policy proceeds after killing the insured. The United States also agrees that Rebecca's state conviction was 'properly admissible in this case, to be duly considered . . . with the entire file.' From these two predicates the United States argues, however, that a state conviction does not bind a federal court, that such a conviction may be disregarded in a subsequent insurance suit if the facts warrant, and that the 'unusual facts and circumstances of this case should have led the court to disregard the conviction.'
Appellant argues that it paid Rebecca when she was the only claimant; that she was paid prior to her conviction; that the contingent beneficiaries did not file a claim and did not object when Rebecca was paid; that their delay in submitting their claim 'has obviously prejudiced the Government'; that the contingent beneficiaries 'stood idly by' and are therefore estopped; and that the administrative decision of the V.A. should be accorded great weight by this court because it did not abuse its discretion in awarding the policy proceeds to Rebecca. We cannot agree.
Appellate courts will afford great weight to administrative decisions properly rendered by agencies vested with the authority to so act, and will not set aside a decision unless it is arbitrary, capricious, and an abuse of...
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