Am. Family Life Assurance Co. of Columbus v. Parker

• Citation: 178 N.E.3d 859
• Decision Date: 10 January 2022
• Docket Number: SJC-13090
• Parties: AMERICAN FAMILY LIFE ASSURANCE COMPANY OF COLUMBUS v. Joann PARKER & another.
• Court: United States State Supreme Judicial Court of Massachusetts

178 N.E.3d 859

AMERICAN FAMILY LIFE ASSURANCE COMPANY OF COLUMBUS

v.Joann PARKER & another.¹

SJC-13090

Supreme Judicial Court of Massachusetts, Plymouth.

Argued September 8, 2021.

Decided January 10, 2022.

Daniel A. Capodilupo, Norwell, for Dawn Diana-Parker.

Edmund P. Hurley, for Joann Parker.

Present: Budd, C.J., Gaziano, Lowy, Cypher, Kafker, Wendlandt, & Georges, JJ.

KAFKER, J.

Sean Parker purchased a life insurance policy naming his then wife, Dawn Diana-Parker, as the primary beneficiary, and his mother, Joann Parker, as alternative beneficiary. Sean² and Dawn divorced, but Sean did not amend his beneficiary designation. After Sean's death, his insurer, American Family Life Assurance Company of Columbus (AFLAC), filed this interpleader action in Superior Court to determine whether the Massachusetts Uniform Probate Code's "Revocation of probate and nonprobate transfers by divorce" provision, G. L. c. 190B, § 2-804, terminated Dawn's beneficiary status by operation of law. The motion judge entered summary judgment in favor of Joann. We affirm.

1. Background. We summarize the facts based on the evidence that was before the motion judge. Sean and Dawn were married in 1999. The marriage produced two sons, who are still minors. In late 2010, Sean purchased a twenty-year term life insurance policy with a $100,000 death benefit through his employer. The primary beneficiary was Dawn. Sean's mother, Joann, was the sole alternative beneficiary. The policy also contained a "spouse rider" and a "child rider," essentially sub-policies on Dawn's and the sons’ lives with Sean as beneficiary, supported by additional premiums. The policy did not mention the effect of a divorce on Sean's beneficiary designation. According to Dawn, shortly after taking out the policy Sean lost his job, and she began paying the premiums out of her "sole account" at his direction.

Sean and Dawn divorced in 2016. The parties, representing themselves, declared their personal assets and submitted a separation agreement based on a court-provided form to the Probate and Family Court. Sean agreed to pay Dawn $163.50 per week in child support, and both spouses waived alimony. The agreement stated that the "Husband and Wife have already divided between themselves all of their personal property and are satisfied that the division was fair." The agreement specifically referenced the couple's cars and credit card debt, but it did not mention Sean's life insurance policy. It did so even though the form, in its child support section, contained options to include an agreement for the spouses to maintain life insurance in favor of their children rather than their spouse, which were not selected. The separation agreement also contained an integration clause stating, "The parties have included in this Agreement their entire understanding. No spoken or written statement outside this Agreement was relied on by either party in signing the Agreement."

According to Dawn, Sean instructed her to continue making payments on the policy until he died in 2018. Dawn then filed a "Proof of Death -- Beneficiary's Statement" with AFLAC and a death certificate that listed Sean as divorced and Dawn as his "Last Spouse." Upon learning that the couple had divorced, AFLAC requested a copy of the divorce decree and any property settlements with Sean so it could review her claim. It informed Dawn, through her counsel, that her rights were extinguished because "AFLAC was not aware of the existence of any express agreement pertaining to the distribution of the life insurance proceeds."

Attempts to settle between the two putative beneficiaries failed. AFLAC directed Joann to file a beneficiary statement through her daughter and attorney-in-fact, Paige F. Staples, so it could file an interpleader action.

AFLAC commenced the action in June 2019. AFLAC subsequently deposited with the court the insurance proceeds, with interest, and was discharged from the case. The remaining parties filed cross motions for summary judgment, focusing primarily on whether G. L. c. 190B, § 2-804, applied retroactively. In support of her arguments, Dawn filed an affidavit and discovery responses indicating that she continued to pay the premiums at Sean's direction and that he intended for the proceeds to be used to support her and their sons.³ Although both parties requested a hearing, the motion judge decided the matter on the papers.⁴ The judge held that § 2-804 applied to Sean's policy, and granted summary judgment for Joann.

Dawn appealed following the entry of judgment. Afterward, Dawn filed a motion for reconsideration, expressly arguing for the first time that she fell into § 2-804 ’s contractual exception, based on an oral contract with Sean. The judge denied the motion for reconsideration, noting that any predivorce oral agreement did not survive the integrated separation agreement, and that a postdivorce oral agreement did not "supersede[ ]" § 2-804. This court granted direct appellate review sua sponte.

2. Discussion. a. Standard of review. We review a grant of summary judgment de novo. Conservation Comm'n of Norton v. Pesa, 488 Mass. 325, 330, 173 N.E.3d 333 (2021). Summary judgment will be granted if there is "no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law." Mass. R. Civ. P. 56 (c), as amended, 436 Mass. 1404 (2002). Whether the motion judge erred in her interpretation of § 2-804 and its retroactive effect are "[q]uestions of statutory construction" and therefore "questions of law, to be reviewed de novo" (citation omitted). Concord v. Water Dep't of Littleton, 487 Mass. 56, 60, 164 N.E.3d 178 (2021). We review "the same record as the motion judge." Meyer v. Veolia Energy N. Am., 482 Mass. 208, 211, 121 N.E.3d 1221 (2019). "Because the parties filed cross motions for summary judgment, we view the evidence in the light most favorable to the party against whom summary judgment was entered." Conservation Comm'n of Norton, supra.

b. Legal background. At common law, divorce or annulment did not affect posthumous transfers. See Sveen v. Melin, ––– U.S. ––––, 138 S. Ct. 1815, 1819, 201 L.Ed.2d 180 (2018) ; Hertrais v. Moore, 325 Mass. 57, 61, 88 N.E.2d 909 (1949). See also G. L. (Ter. Ed.) c. 191, § 9 (providing for revocation of previous will upon marriage but not divorce). The onus was on the donor to revoke or amend any instruments in favor of an ex-spouse or ex-spouse's relatives, despite the obvious inference that, in most cases, the divorce would affect the decedent's testamentary plans for these people. See Sveen, supra (describing how maintaining divorced spouse as beneficiary is generally inconsistent with intent of donor). As divorce became increasingly common, State legislatures, following the lead of Uniform Probate Code,⁵ enacted automatic revocation-on-divorce provisions. Id. The change came first to wills. See, e.g., G. L. c. 191, § 9, as amended by St. 1976, c. 515, § 6, repealed by St. 2008, c. 521, § 10; Uniform Probate Code § 2-508 (1969).

Thereafter, the Uniform Probate Code and State legislatures chose to address "the recognition that will substitutes and other inter-vivos transfers have so proliferated that they now constitute a major, if not the major, form of wealth transmission." Uniform Probate Code, art. II, prefatory note (2006). See Langbein, The Nonprobate Revolution and the Future of the Law of Succession, 97 Harv. L. Rev. 1108, 1110-1111 (1984). For these nonprobate assets, including life insurance, the rule had until that point remained that "the burden is on the insured to effect a change in beneficiary in accordance with the terms of the policy." Stiles v. Stiles, 21 Mass. App. Ct. 514, 515 n.3, 487 N.E.2d 874 (1986), citing Acacia Mut. Life Ins. Co. v. Feinberg, 318 Mass. 246, 250–251, 61 N.E.2d 122 (1945).

That would change with the passage of § 2-804, a national model provision that would eventually appear in the Massachusetts Uniform Probate Code. It states:

"Except as provided by the express terms of a governing instrument, a court order, or a contract relating to the division of the marital estate made between the divorced individuals before or after the marriage, divorce, or annulment, the divorce or annulment of a marriage:

"(1) revokes any revocable (i) disposition or appointment of property made by a divorced individual to the individual's former spouse in a governing instrument ...."

G. L. c. 190B, § 2-804 (b ). See Uniform Probate Code § 2-804(b) (2006).

According to the Uniform Law Commission, the section was intended to "unify the law of probate and nonprobate transfers" and to "cover ‘will substitutes’ such as revocable inter-vivos trusts, life-insurance and retirement-plan beneficiary designations, transfer-on-death accounts, and other revocable dispositions ..." (emphasis added). Uniform Probate Code § 2-804 comment (2006).⁶

The Massachusetts act, like the national model, also contained retroactivity provisions. As relevant here, the Massachusetts version stated:

"Except as provided elsewhere in this act, on the effective date of this act [March 31, 2012]:^[7]

"1. this act shall apply to pre-existing governing instruments, except that it shall not apply to governing instruments which became irrevocable prior to the effective date of this act ...."

St. 2008, c. 521, § 43 (1). See Uniform Probate Code § 8-101(b)(1). The act also provided in another subsection that

"any rule of construction or presumption provided in this act applies to governing instruments executed before the effective date unless there is a clear indication of a contrary intent, except that it shall not apply to governing instruments which became irrevocable prior to the effective date of this act."

St. 2008, c. 521, § 43 (5). See Uniform Probate Code § 8-101(b)(5) (2006) (equivalent provision of model code).

c. Scope of § 2-804. Dawn argues first that § 2-804 does not cover life insurance policies or beneficiary designations. This is...