Central States, Southeast and Southwest Areas Health and Welfare Fund v. Winn
| Decision Date | 08 January 1990 |
| Docket Number | No. 89-2080,89-2080 |
| Citation | 908 F.2d 966 |
| Parties | Unpublished Disposition NOTICE: Fourth Circuit I.O.P. 36.6 states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Fourth Circuit. CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS HEALTH AND WELFARE FUND, Plaintiff, v. Pauline M. WINN, Defendant-Appellant, Betty P. Winn, Defendant-Appellee. . Argued: |
| Court | U.S. Court of Appeals — Fourth Circuit |
Appeal from the United States District Court for the Western District of North Carolina, at Asheville. Richard L. Voorhees, District Judge. (CA 88-49-C-A).
Robert Glenn Cunningham, Jr., Stepp, Groce & Cosgrove, Hendersonville, N.C., argued, for appellant.
Elizabeth M. Warren, Roberts, Stevens & Cogburn, P.A., Asheville, North Carolina, argued, for appellee; Max O. Cogburn, Roberts, Stevens & Cogburn, P.A., Asheville, North Carolina, on brief.
W.D.N.C.
REVERSED AND REMANDED.
Before POWELL, Associate Justice (Retired), United States Supreme Court, sitting by designation, and DONALD RUSSELL and WILKINS, Circuit Judges.
This is a dispute over the proceeds of a life insurance policy. Walter Winn, the deceased, was previously married to Betty Winn. While they were married, Walter had properly designated Betty as the beneficiary of a life insurance policy that he had taken out with Central States. In December of 1983, Walter and Betty were divorced, and Walter married Pauline the following January.
On January 17, 1984, shortly after Walter's marriage to Pauline, the following letter was allegedly signed by Walter: The record does not reflect who drafted this letter; however, Pauline has admitted that she typed it. Although this letter allegedly was sent to Central States, Central States claimed that it did not receive it. Furthermore, even if this letter was genuine, it did not comply with the precise policy provisions for changing the beneficiary of the life insurance policy. In fact, the policy provisions for changing the beneficiary were never satisfied by Walter.
Several years after this request for a change, Walter died. Both the first and second wives claimed the proceeds. The insurance company filed this action for interpleader, and paid the insurance proceeds into the district court. This action is in federal court on the basis of diversity jurisdiction, and the law of North Carolina applies. Below, the magistrate recommended that the first wife receive the proceeds, and this recommendation was adopted by the district judge. We find that this decision resulted from a misunderstanding of North Carolina law, and reverse and remand for further consideration consistent with this opinion.
North Carolina recognizes the rule that when an insurer files a declaratory judgment in the nature of interpleader, strict compliance with the terms of the policy governing the changing of the beneficiary is not required, and the court should determine who is entitled to the policy's proceeds by applying general equitable principles. Widows Fund of Sudan Temple v. Umphlett, 246 N.C. 555, 99 S.E.2d 791 (1957); Fidelity Bankers Life Ins. Co. v. Dortch, 79 N.C.App. 378, 339 S.E.2d 38, rev'd on other grounds, 318 N.C. 378, 348 S.E.2d 794 (1986). In that situation, the intent of the policy owner should be determinative. Id. *
The federal magistrate agreed that this rule is part of the law of North Carolina. However, the magistrate found that this rule is not applicable in the case at bar: "[T]he court concludes that such rule is not applicable in this case because, upon the death of the insured, legal rights vested in the beneficiary that could not be defeated by the insurer by the subsequent filing of the interpleader action." For that reason, the magistrate recommended that Betty (the first wife) was entitled to the proceeds, and this position was adopted by the district court.
The analysis of the magistrate is incorrect. If this analysis were proper, the interpleader rule would be a nullity. This misunderstanding by the lower court arises from a misinterpretation of the leading North Carolina case, Dortch, supra.
In that case, Dortch had a insurance policy in which he had properly designated his wife as beneficiary. The policy was a part of his Keogh account, which was held by Central Bank. Due to the nature of a Keogh account, Central Bank was the owner of the policy, while the deceased maintained the right to request that the bank change the beneficiary of the policy. Under the policy's terms, only the owner of the policy could make a change...
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