Adams v. Jefferson-Pilot Life Ins. Co.

• Decision Date: 05 February 2002
• Docket Number: No. COA00-1484.,COA00-1484.
• Citation: 558 S.E.2d 504,148 N.C. App. 356
• Court: North Carolina Court of Appeals
• Parties: Tammy Michele ADAMS, Plaintiff, v. JEFFERSON-PILOT LIFE INSURANCE COMPANY, Charles Eric Adams, April Adams Gardin, and Kelly Adams Honeycutt, Defendants.

558 S.E.2d 504

148 NC App. 356

Tammy Michele ADAMS, Plaintiff, v. JEFFERSON-PILOT LIFE INSURANCE COMPANY, Charles Eric Adams, April Adams Gardin, and Kelly Adams Honeycutt, Defendants.

No. COA00-1484.

Court of Appeals of North Carolina.

February 5, 2002.

Adams, Hendon, Carson, Crow & Saenger, P.A. by George Ward Hendon, Asheville, for plaintiff-appellee.

Morris, York, Williams, Surles & Barringer, L.L.P. by Gregory C. York and Keith B. Nichols, Charlotte, for Jefferson-Pilot Life Insurance Company.

Floyd & Jacobs, L.L.P. by Robert V. Shaver, Jr., Greensboro, for defendant-appellants Charles Eric Adams, April Adams Gardin, and Kelly Adams Honeycutt.

BIGGS, Judge.

Charles Edward Adams (Adams) died on 25 November 1999, in possession of a $300,000 life insurance policy. This appeal arises from a dispute over who is the rightful beneficiary of this policy. Adams's children, Charles Eric Adams, April Adams Gardin, and Kelly Adams Honeycutt (defendants), appeal from a summary judgment order entered in favor of Adams's second wife, Tammy Michele Adams (plaintiff). We affirm the trial court.

The facts are as follows: In 1983, Adams purchased a $100,000 life insurance policy with Jefferson-Pilot Life Insurance Company (Jefferson-Pilot), naming Jacqueline Adams, to whom he was then married, as the beneficiary. In 1988, he increased the policy's value to $300,000. In 1997, following his divorce from Jacqueline, Adams executed a change of beneficiary which designated defendants as primary beneficiaries. In 1999, after marrying plaintiff, Adams executed another change of beneficiary, and named plaintiff as the primary beneficiary.

To accomplish the 1999 change of beneficiary, Adams contacted Rebecca Lytle (Lytle), an agent of Jefferson-Pilot. Adams and Lytle met at a local restaurant owned by plaintiff, where Lytle provided Adams with a Jefferson-Pilot form for change of beneficiary. Adams read the form, signed it in the presence of Lytle and four restaurant employees, and then returned the form to Lytle. Lytle later testified that this completed Adam's responsibilities with regard to effecting a change of beneficiary.

Jefferson-Pilot's usual practice is for the insurance agent to deliver the completed change of beneficiary form to the office administrator of the local branch office. The administrator forwards the form to the company's home office in Greensboro, where it is endorsed and filed in the company's permanent records. In this case, when Lytle submitted Adams's completed form to her branch office, the office administrator pointed out that Lytle had used a form which, in addition to changing the beneficiary, also stated that the settlement would be paid in installments unless otherwise indicated. This was an official Jefferson-Pilot form, approved for use by the company; thus, it could have been filed immediately with the home office. However, the office administrator suggested that Lytle might call Adams, and confirm that he had intended the default settlement payout option as indicated on the change of beneficiary form. Lytle called Adams several times during the following three weeks, but did not reach him. Lytle and Adams had no further communication, and when Adams died on 25 November 1999, Lytle still had not mailed the form to the home office. The form was sent to the home office after Adams's death.

On 26 January 2000, plaintiff filed a complaint against Jefferson Pilot and defendants, seeking to recover the proceeds of the life insurance policy. On 3 April 2000, defendants filed an answer, counterclaim, and cross claim, asserting that they were the rightful beneficiaries of the life insurance policy. Plaintiff amended her complaint on 2 May 2000, and added a claim of negligence against Jefferson-Pilot. Both parties also filed summary judgment motions, each claiming to be the rightful beneficiary as a matter of law.

The trial court entered summary judgment in favor of plaintiff on 19 September 2000. Its order stated that:

[T]his Judgment determines that the October 27, 1999, Change of Beneficiary was effective to name Plaintiff as the beneficiary of the insurance policy on the life of Charles Edward Adams issued by Defendant Jefferson-Pilot Life Insurance Company which is the subject of this action[.]

Defendants appealed from this order on 10 October 2000. Defendant Jefferson-Pilot did not appeal, and has filed a brief in support of plaintiff's position.

Defendants argue that the trial court erred by granting summary judgment in favor of plaintiff. Summary judgment is appropriate if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law." N.C.G.S. § 1A-1, Rule 56(c) (1999). "An issue is material if the facts alleged would constitute a legal defense, or would affect the result of the action, or if its resolution would prevent the party against whom it is resolved from prevailing in the action." Koontz v. City of Winston-Salem, 280 N.C. 513, 518, 186 S.E.2d 897, 901 (1972). "[T]he party moving for summary judgment has the burden of establishing the lack of any triable issue of fact." Pembee Mfg. Corp. v. Cape Fear Constr. Co., 313 N.C. 488, 491, 329 S.E.2d 350, 353 (1985). Furthermore, "the evidence presented by the parties must be viewed in the light most favorable to the non-movant." Bruce-Terminix Co. v. Zurich Ins. Co., 130 N.C.App. 729, 733, 504 S.E.2d 574, 577 (1998). Therefore, on appeal:

[i]t is well established that the standard of review of the grant of a motion for summary judgment requires a two-part analysis of whether, `(1) the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, show that there is no genuine issue as to any material fact; and (2) the moving party is entitled to judgment as a matter of law.'

Von Viczay v. Thoms, 140 N.C.App. 737, 738, 538 S.E.2d 629, 630 (2000), aff'd, 353 N.C. 445, 545 S.E.2d 210 (2001) (citations omitted).

We first examine whether the record presents genuine issues of material fact. Both parties moved for summary judgment on the issue of their respective claims to the proceeds of Adams's life insurance policy. Each party based its claim upon the same sequence of events: Adams's 1997 designation of defendants as beneficiaries; Adams's 1999 execution of a change of beneficiary form naming plaintiff; and Lytle's failure to send the form to Jefferson Pilot's home office before Adams's death. Neither party has challenged the accuracy or authenticity of the documents establishing the occurrence of these events. Although the parties disagree on the legal significance of the established facts, the facts themselves are not in dispute. Consequently, we conclude that "there is no genuine issue as to any material fact" surrounding the trial court's summary judgment order.

We next consider whether the trial court correctly determined that plaintiff "is entitled to a judgment as a matter of law." In the instant case, defendants do not dispute that Adams desired to change beneficiaries, nor that he signed a Jefferson Pilot form intended to memorialize this change. However, defendants contend that they are the rightful beneficiaries of Adams's life insurance policy because, although Adams executed a change of beneficiary form, it was not received by Jefferson-Pilot's home office prior to Adams's death. We disagree with this contention.

A beneficiary's interest vests upon the death of the insured. Fertilizer Co. v. Godley, 204 N.C. 243, 167 S.E. 816 (1933); Smith v. Principal Mut. Life Ins. Co., 131 N.C.App. 138, 505 S.E.2d 586 (1998), cert. denied, 350 N.C. 99, 533 S.E.2d 470 (1999). Defendants argue that their interest in the policy vested when Adams died, notwithstanding Adams's attempted change of beneficiary. In support of their position, defendants cite language in the policy stating that "[t]he Beneficiary may be changed by written request satisfactory to the Company filed at its home office. Any change will take effect on the date of the written request if the Insured is alive at that time."

Defendants first contend that the phrase "alive at that time" can only refer to the date on which the home office endorses the request for change of beneficiary, and that because Adams was not alive on the date that Jefferson Pilot endorsed and filed the form, the change of beneficiary did not take effect on the date of Adams's written request. Defendants argue that "any Insured is always alive at the time of signing such a form." However, this argument assumes that the insured is also the policy's owner, which is not always the case. See Fidelity Bankers Life Ins. Co. v. Dortch, 318 N.C. 378, 348 S.E.2d 794 (1986) (insured lacked authority to designate change of beneficiary where policy was owned by bank, not by insured). Defendant cites no authority for this Court to alter the plain meaning of the disputed language and we find no such authority. Thus we conclude that the change of beneficiary is given effect on the date that the policy owner completes and signs a Jefferson Pilot change of beneficiary form, provided that the insured is alive on the date of the written request. In this case, Adams was both the owner and the insured, and clearly was alive at the time he executed the change of beneficiary form. Therefore, this policy language supports giving effect to the change of beneficiary as of the date he signed the Jefferson Pilot form provided by Lytle.

Defendants also point to language in the change of beneficiary form stating that a change is "effected by recordation by the Company in its Home Office." They contend that Lytle's failure to send the completed form to the home office prevented the company from executing the filing and recordation procedures for a change of beneficiary before Adams's death. They...