State ex rel. Perdue v. Nationwide Life Ins. Co.

• Decision Date: 16 June 2015
• Docket Number: No. 14–0100.,14–0100.
• Citation: 236 W.Va. 1,777 S.E.2d 11
• Parties: STATE of West Virginia ex rel. John D. PERDUE, Plaintiff Below, Petitioner v. NATIONWIDE LIFE INSURANCE COMPANY, et al., Defendants Below, Respondents.
• Court: West Virginia Supreme Court

236 W.Va. 1

777 S.E.2d 11

STATE of West Virginia ex rel. John D. PERDUE, Plaintiff Below, Petitioner

v.NATIONWIDE LIFE INSURANCE COMPANY, et al., Defendants Below, Respondents.

No. 14–0100.

Supreme Court of Appeals of West Virginia.

Submitted April 8, 2015.

Decided June 16, 2015.

Patrick Morrisey, Esq., Attorney General, Dan Greear, Esq., Chief Deputy Attorney, Jennifer Greenlief, Esq., Assistant Attorney General, Office of the West Virginia Attorney General, Anthony J. Majestro, Esq., Special Assistant Attorney General, Powell & Majestro, PLLC, Timothy C. Bailey, Esq., Special Assistant Attorney General, Bucci Bailey & Javins LC, Charleston, WV, Margaret M. Murray, Esq., Pro Hac Vice, Murray & Murray CO., L.P.A., Sandusky, OH, for Petitioner.

Sandra B. Harrah, Esq., Hill, Peterson, Carper, Bee & Deitzler, PLLC, Charleston, WV, Robert P. Krenkowitz, Esq., Pro Hac Vice, Tucson, AZ, for Amicus Curiae Xerox State & Local Solutions, Inc., d/b/a Xerox Unclaimed Property Clearinghouse.

Jonathan R. Mani, Esq., Mani Ellis & Layne, PLLC, Charleston, WV, Lynden Lyman, Esq., Pro Hac Vice, Concord, MA, for Amicus Curiae National Association of Unclaimed Property Administrators.

John H. Tinney, Jr., Esq., James K. Tinney, Esq., John K. Cecil, Esq., The Tinney Law Firm, PLLC, Charleston, WV, for Respondents Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company.

Alexander Macia, Esq., Spilman Thomas & Battle, PLLC, Charleston, WV, Phillip E. Stano, Esq., Pro Hac Vice, Wilson G. Barmeyer, Esq., Pro Hac Vice, Brendan Ballard, Esq., Pro Hac Vice, Sutherland Asbill & Brennan LLP, Washington, DC, for Respondents New York Life Insurance Company; Lincoln National Life Insurance Company; Erie Family Life Insurance Company; New York Life Insurance and Annuity Corporation; The Western and Southern Life Insurance Company; Western–Southern Life Assurance Company; Primerica Life Insurance Company; Ohio National Life Assurance Corporation; Provident Life & Accident Insurance Company; Pacific Life Insurance Company; Colonial Life & Accident Insurance Company; American Family Life Assurance Company of Columbus, GA; and Lafayette Life Insurance Company.

Terrence D. O'Hare, Esq., Pro Hac Vice, J. Scott Paul, Esq., Pro Hac Vice, McGrath North Mullin & Kratz PC LLO, Omaha, NE, for Respondent Physicians Life Insurance Company.

Steuart H. Thomsen, Esq., Pro Hac Vice, Wilson G. Barmeyer, Esq., Pro Hac Vice, Sutherland Asbill & Brennan LLP, Washington, DC, for Respondents Farm Family Life Insurance Company; Reliastar Life Insurance Company; and Horace Mann Life Insurance Company.

John M. Aerni, Esq., Pro Hac Vice, Adam J. Kaiser, Esq., Pro Hac Vice, Winston & Strawn LLP, New York, NY, for Respondents Bankers Life & Casualty Company and Colonial Penn Life Insurance Company.

Loren E. Hayes, Esq., Spilman Thomas & Battle, PLLC, Charleston, WV, for Respondent United of Omaha Life Ins. Co.

Bruce M. Jacobs, Esq., Spilman Thomas & Battle, PLLC, Charleston, WV, Markham R. Leventhal, Esq., Pro Hac Vice, Irma Reboso Solares, Esq., Pro Hac Vice, Jorden Burt LLP, Miami, FL, for Respondents Monumental Life Insurance Company and Transamerica Life Insurance Company.

Angela D. Herdman, Esq., Mary Jane Pickens, Esq., Andrew S. Dornbos, Esq., Spilman Thomas & Battle, PLLC, Charleston, WV, Edwin G. Schallert, Esq., Pro Hac Vice, DeBevoise & Plimpton LLP, New York, NY, for Respondents Prudential Insurance

Company of America and Pruco Life Insurance Company.

Maeve O'Connor, Esq., Pro Hac Vice, DeBevoise & Plimpton LLP, New York, NY, for Respondents Teachers Insurance & Annuity Association of America and Principal Life Insurance Company.

Timothy J. O'Driscoll, Esq., Pro Hac Vice, Drinker Biddle & Reath LLP, Philadelphia, PA, for Respondent Gerber Life Insurance Company.

Jason P. Gosselin, Esq., Pro Hac Vice, Laura M. Zulick, Esq., Pro Hac Vice, Drinker Biddle & Reath LLP, Philadelphia, PA, for Respondents Allstate Life Insurance Company; Lincoln Benefit Life Company; and Penn Mutual Life Insurance Company.

Douglas A. Scullion, Esq., Pro Hac Vice, Laura Leigh Geist, Esq., Pro Hac Vice, Dentons U.S. LLP, San Francisco, CA, for Respondent Lincoln Heritage Life Insurance Company.

Thomas F.A. Hetherington, Esq., Pro Hac Vice, Blaire Bruns Johnson, Esq., Pro Hac Vice, Edison, McDowell & Hetherington LLP, Houston, TX, for Respondent Boston Mutual Life Insurance Company.

Jeffrey M. Wakefield, Esq., Danielle Waltz Swann, Esq., Flaherty Sensabaugh Bonasso PLLC, Charleston, WV, for Protective Life Ins. Co., West Coast Life Ins. Co., Sun Life Assurance Co. of Canada, Riversource Life Ins. Co.

Thomas J. Butler, Esq., Pro Hac Vice, Jeffrey M. Grantham, Esq., Pro Hac Vice, Maynard Cooper & Gale PC, Birmingham, AL, for Respondent Riversource Life Insurance Co., and American General Life & Accident Ins. Co.

Jeffrey M. Wakefield, Esq., Danielle Waltz Swann, Esq., Flaherty Sensabaugh Bonasso PLLC, Charleston, WV, Jeffrey M. Grantham, Esq., Pro Hac Vice, Maynard Cooper & Gale PC, Birmingham, AL, for Respondent Sun Life Assurance Company of Canada and Riversource Life Ins. Co.

Katharine A. Weber, Esq. Pro Hac Vice, Maynard Cooper & Gale PC, Birmingham, AL, for Respondents Protective Life Insurance Company and West Coast Life Insurance Company.

Jared M. Tully, Esq., Frost Brown Todd LLC, Charleston, WV, for Respondents Metropolitan Life Insurance Company; Metlife Investors USA Insurance Company; New England Life Insurance Company; Liberty Life Insurance Company; Metlife Insurance Company of Connecticut; General American Life Insurance Company; and The State Life Insurance Company.

Frank E. Simmerman, Jr., Esq., Chad L. Taylor, Esq., Simmerman Law Office, PLLC, Clarksburg, WV, for Respondents Genworth Life and Annuity Insurance Company; Combined Insurance Company of America; Genworth Life Insurance Company; and North American Company for Life and Health Insurance.

Thomas J. Hurney, Jr., Esq., Michael M. Fisher, Esq., Stephen M. LaCagnin, Esq., Seth P. Hayes, Esq., Charleston, WV, Ellen M. Dunn, Esq., Pro Hac Vice Sutherland Asbill & Brennan LLP, New York, NY, for Respondent AXA Equitable Life Insurance Company.

Lee Murray Hall, Esq., Jenkins Fenstermaker, PLLC, Huntington, WV, for Respondent Hartford Life and Annuity Insurance Company.

Ancil G. Ramey, Esq., Steptoe & Johnson, PLLC, Huntington, WV, William E. Galeota, Esq., Steptoe & Johnson, PLLC, Morgantown, WV, for Respondent Massachusetts Mutual Life Insurance Company.

Carrie Goodwin Fenwick, Esq., Goodwin & Goodwin, LLP, Charleston, WV, for Respondent Guardian Life Insurance Company of America.

Robert L. Massie, Esq., Nelson Mullins Riley & Scarborough LLP, Huntington, WV, for Respondent USAA Life Insurance Company.

Opinion

BENJAMIN, Justice:

The West Virginia State Treasurer, John D. Perdue, appeals the order entered by the Circuit Court of Putnam County on December 27, 2013, that dismissed with prejudice sixty-three complaints he filed separately against insurance companies doing business in West Virginia. The complaints alleged, inter alia, that the insurers have unlawfully retained life insurance proceeds unclaimed by State residents, in contravention of the West Virginia Uniform Unclaimed Property Act of 1997, W. Va.Code §§ 36–8–1 to –32 (the “Act”). The Act, according to the Treasurer, manifestly designates him the legal custodian of such proceeds. The circuit court adopted the contrary view that the insurers' obligations under the Act are defined not by its clear and unequivocal provisions, but instead by the contractual terms of the life insurance policies taken out by the insureds. Because the circuit court's interpretation failed to give force and effect to the plain meaning of the words used in the Act, thereby frustrating clear legislative intent, we reverse the dismissal order and remand these matters for further proceedings.

I. FACTUAL AND PROCEDURAL BACKGROUND

The Act designates the Treasurer as its administrator. See W. Va.Code § 36–8–1(1) (1997). In his role as administrator, the Treasurer is entitled to take custody of property presumed to have been abandoned if, inter alia, the apparent owner's last known address is in West Virginia. See id. §§ 36–8–4, –4(1). An “apparent owner” under the Act is “a person whose name appears on the records of a holder as the person entitled to property held, issued or owing by the holder.” Id. § 36–8–1(2). A holder, in turn, is “a person obligated to hold for the account of, or deliver or pay to, the owner” any property subject to the Act. Id. § 36–8–1(6). The insurance companies do not dispute their status as holders for purposes of this appeal.

Whether specific property may be presumed abandoned is determined by resort to the Act. In the context of the dispute before us, section 2 of the Act provides:

(a) Property is presumed abandoned if it is unclaimed by the apparent owner during the time set forth below for the particular property:

....

(8) Amount owed by an insurer on a life or endowment insurance policy or an annuity that has matured or terminated, three years after the obligation to pay arose or, in the case of a policy or annuity payable upon proof of death, three years after the insured has attained, or would have attained if living, the limiting age under the mortality table on which the reserve is based[.]

Id. § 36–8–2(a), –2(a)(8) (1997) (emphasis added). With respect to the foregoing provision, the Treasurer's position is easily understood: an insurer's obligation to pay the beneficiary of a life insurance policy arises when the insured dies.¹

An insurer in possession of presumptively abandoned life insurance proceeds—like any holder of comparable property—must annually file a verified report with the Treasurer, which, inter alia, describes the property and provides the identity and last known address of the apparent owner. See W. Va.Code §§ 36–8–7 (1997). Within sixty to one hundred twenty days prior to filing the report, the insurer is required in most cases to attempt to...