American United Life Ins. Co. v. Peffley, 572A220

• Decision Date: 04 October 1973
• Docket Number: No. 572A220,572A220
• Parties: AMERICAN UNITED LIFE INSURANCE COMPANY, Appellant (Defendant below), v. Becky A. PEFFLEY (Sanders), Appellee (Plaintiff below).
• Court: Indiana Appellate Court

Page 651

301 N.E.2d 651

158 Ind.App. 29

AMERICAN UNITED LIFE INSURANCE COMPANY, Appellant (Defendant below), v. Becky A. PEFFLEY (Sanders), Appellee (Plaintiff below).

No. 572A220.

Court of Appeals of Indiana, Second District.

Oct. 4, 1973.

Ralph A. Cohen, Harry T. Ice, Ice, Miller, Donadio & Ryan, Indianapolis, for appellant (defendant below)

Daniel F. Cummings, Miles & Cummings, Indianapolis, for appellee (plaintiff below).

BUCHANAN, Presiding Judge.

CASE SUMMARY

Because the Marion County Circuit Court entered judgment on the evidence in favor of Plaintiff-Appellee, Becky Peffley (Becky), as beneficiary of a group life insurance policy issued by Defendant-Appellant, American United Life Insurance Company (AUL), it appeals, alleging that certain evidence was improperly excluded which would have required submission of the case to the jury on the issue as to whether the insured changed beneficiaries under the policy prior to his death.

We reverse.

FACTS

The facts and evidence most favorable to Becky as Appellee and in support of the judgment are:

Ronald Peffley (Decedent) and his first wife, Louise Peffley (Louise), were divorced in 1964. Shortly thereafter the Decedent married Plaintiff-Appellee Becky Peffley (Becky).

In 1965, American United Life Insurance Company (AUL) issued a group life insurance policy to Decedent's employer, the School Board of the City of Indianapolis, under which Decedent's life was insured for $12,000. Becky was originally named as beneficiary, subject to the following provision in the policy relating to beneficiary changes:

'BENEFICIARY. The Employee may change the beneficiary from time to time without the beneficiary's consent by filing a written notice of such change through the Employer.'

Decedent and Becky were divorced in December, 1967, approximately ten months prior to his death in October, 1968.

Following Decedent's death, AUL paid the entire proceeds of the policy to Louise (Decedent's first wife), basing its action upon copies of documents in its files which indicated that the beneficiary had been changed by him three months prior to his death. These copies consisted of three documents:

Exhibit C: A form transmittal letter from AUL to Decedent's employer stating that enclosed changeriders had Exhibit D: AUL's change-rider form acknowledging receipt of a change card from the Decedent and certifying the designated beneficiary to be Louise.

been prepared designating a new beneficiary and correcting the name of the insured as requested by the Decedent.

Exhibit E: AUL's change-rider form acknowledging correction of Decedent's name on the policy from Ronald C. Peffley to C. Ronald Peffley.

Becky subsequently brought suit against AUL to recover the proceeds of the policy, after having been informed by AUL that it did not possess the original written notice (change card) executed and signed by the decedent.

At trial, AUL produced the above-mentioned documents (Exhibits, C, D and E) in order to show that the Decedent had filed the written notice of beneficiary change (change card) in accordance with the terms of the policy, thus operating to divest Becky of her interest in the insurance proceeds. As a foundation, AUL produced its assistant corporate counsel and a supervisor of group policies who identified the exhibits as those found in AUL's office files and testified to the following internal procedure governing policy changes initiated by an insured:

A printed 'change card' is obtained by the insured from his employer, completed and mailed to AUL. Upon receipt, its contents are reviewed by an AUL employee, who then prepares the transmittal letter and change-rider documents. These forms reflect any changes appearing on the change card. The originals of the documents are sent to the employer-policyholder along with the change card. Carbon copies are kept in AUL's files although no such copies of the change card are retained.

Following AUL's offer of these exhibits and Becky's objections thereto, the following stipulation was entered into the record by the parties:

'It is stipulated by and between the parties that the original of the change of beneficiary card . . . respecting Mr. Peffley, if there was a card . . . has been searched for diligently in the files and at the office of American United Life Insurance Company in their files and in the files at the offices of the Indianapolis School Board Commissioners, the decedent's employer, that these searches failed to reveal any such card and it cannot be found at any of those places.' (Emphasis supplied.)

The trial judge nevertheless sustained the objection and excluded these three documents (Exhibits C, D and E) without stating his reasons therefor. An attempted reoffer later in the trial suffered the same fate.

AUL also offered into evidence Exhibit G, a copy of Decedent's certificate of insurance (hereinafter referred to as 'the policy') found among his private papers. Upon the face of the policy was the following memorandum, printed in pencil beside Becky's name as beneficiary:

'CHANGED 7/8/68 TO C. LOUISE PEFFLEY.'

Louise and Decedent's friend both testified to their familiarity with Decedent's block printing and identified the hand printing as Decedent's.

After offering the policy (Exhibit G) into evidence, AUL further offered a promissory note (Exhibit J), which Louise testified was executed by the Decedent as an exemplar of his hand printing to further authenticate the memorandum.

These exhibits (G and J) were also excluded by the trial judge.

At the end of AUL's case, Becky moved for judgment on the evidence, which motion was granted by the trial judge, who thereupon discharged the jury and entered judgment for Becky on her claim.

ISSUES

The following issues are presented by this appeal:

ISSUE ONE. Did the trial court errorneously exclude, as secondary evidence, copies of AUL's business cords (Exhibits C, D and E) indicating that a change of beneficiary was effected by Decedent prior to his death?

ISSUE TWO. A. Was the Decedent's hand-printed private memorandum on his copy of the policy (Exhibit G) properly excluded as violative of the hearsay rule, and

B. Was the promissory note (Exhibit J) purportedly executed by Decedent properly excluded as irrelevant?

As to ISSUE ONE, Becky contends that AUL's transmittal letter and change-rider forms were properly excluded under the 'best evidence' rule, claiming the exhibits were offered to prove the contents of the change card which was not itself produced by AUL as the best proof of the beneficiary change. In addition, she argues that this evidence, if admitted, would have had the effect of varying the terms of the policy, thereby violating the parol evidence rule.

AUL contends these documents are relevant evidence of a change in beneficiaries, having been consummated by written notice from the Decedent. AUL argues that such documents as these are admissible as its business records which could not have been prepared except by receipt of the change card from the Decedent. Further-more, it rejects Becky's contention that the 'best evidence' rule is operative to exclude this evidence, arguing that the change card was not in its possession and was proven lost after a diligent search was conducted.

As to ISSUE TWO--A, Becky contends that the printed memorandum (Exhibit G) was inadmissible as a declaration by the Decedent (presumably basing her contention on the rule excluding hearsay evidence, although no such specific reference is found in her brief on appeal). She further claims the exhibit is inadmissible under the 'best evidence' and parol evidence rules, for the same reasons advanced by her under ISSUE ONE.

AUL disputes these assertions and claims that Exhibit G was a properly authenticated hand printing of the Decedent, admissible to show that he had, by his own hand, noted the change of beneficiaries upon the face of his policy.

As to ISSUE TWO--B, Becky maintains that the sample of Decedent's printing (Exhibit J) was so far removed from the issues involved at trial that its exclusion was justifiable for the reason that it was irrelevant.

AUL argues that the printing exemplar was admissible so that the jury could employ it as a basis of comparison with the printing upon the policy (Exhibit G) and satisfy itself that the memorandum on the policy was, in fact, printed by the Decedent.

DECISION

As both issues concern exclusion of evidence, our decision should be prefaced by recitation of familiar principles governing appellate review of error created by wrongfully excluded evidence.

In general, an exclusionary ruling will not be found erroneous if sustainable on any valid theory, regardless of the grounds asserted by the parties at trial. See, Eckman v. Funderburg (1915) 183 Ind. 208, 108 N.E. 577; Lengyel v. Hecht (1968) 143 Ind.App. 660, 242 N.E.2d 135. Once found to be erroneous, however, rejection of evidence which is vital to an appellant's case is necessarily prejudicial. Dollman v. Pauley, (1931) 202 Ind. 387, 174 N.E. 729; Northern Indiana Public Service Co. v. McClure, (1940) 108 Ind.App. 253, 24 N.E.2d 788; Plymouth Savings & Loan Ass'n No. 2 v. Kassing, (1919) 72 Ind.App. 1, 125 N.E. 488.

So, our pursuit is of valid theories on which the trial court's exclusion of the proffered evidence in question might be justified.

ISSUE ONE.

CONCLUSION--It is our opinion that the trial court committed reversible error in excluding AUL's tendered file documents (Exhibits C, D, and E) indicating a change of beneficiary from Becky to Louise was effected prior to Decedent's death.

Relevancy

If Exhibits C, D, and E are relevant, they should be admitted into evidence so that the jury may have before it all evidence which logically tends to establish or give weight to a factual issue in the case unless objectionable on other grounds. Warrenburg v. State, (1973) Ind., 298 N.E.2d 434; Kavanagh v. Butorac, (1966) 140 Ind.App. 139, 221 N.E.2d 824.

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