Delores A. Papenhagen v. Estate of Ted A. Papenhagen
| Decision Date | 21 November 1986 |
| Docket Number | 86-LW-3086,L-85-446 |
| Parties | Delores A. PAPENHAGEN, Appellant, v. Estate of Ted A. PAPENHAGEN, et al., Appellees. |
| Court | Ohio Court of Appeals |
Appeal from Lucas County Common Pleas Court; No. CV 84-1916.
DECISION AND JOURNAL ENTRY
This cause comes on appeal from a judgment of the Lucas County Court of Common Pleas, wherein, judgment was granted in favor of appellees. The facts giving rise to this appeal can be summarized as follows.
Ted and Delores A. Papenhagen were divorced on December 31, 1979. In order to secure satisfaction of the $50,000 property settlement, $50,000 lump sum alimony award, monthly sustenance alimony payments of $1,150 through September 1980 and $1,650 through December 1990, and $140 per week in child support for the three Papenhagen children, the parties agreed and the divorce court adopted as part of its order the following paragraph:
The record indicates that at the time of the divorce Ted Papenhagen was insured by the Metropolitan Life Insurance Company under a group policy in the amount of $200,000, which contained a conversion provision enabling Mr. Papenhagen to convert the group policy into an individual policy in the amount of up to $200,000. He was also insured under an Aetna Life Insurance Company group policy, in the amount of $10,000; under a National Fidelity Insurance Co. policy in the amount of $100,000; and under another National Fidelity Insurance Co. policy in the amount of $50,000. Finally during the proceedings below it was revealed that Mr. Papenhagen also held an additional insurance policy with Metropolitan Life Insurance, No. 13500-G, in the amount of $10,000 naming Delores Papenhagen as the beneficiary and effective on September 1, 1971.
On March 11, 1980, Ted Papenhagen married Lynne Papenhagen, one child being born as issue of their marriage. On October 31, 1980, Mr. Papenhagen canceled the $10,000 Aetna policy. Thereafter, on January 1, 1984, Mr. Papenhagen purchased another Aetna policy in the amount of $20,000 and designated his second wife, Lynne, as the beneficiary. On December 30, 1981, Mr. Papenhagen exercised the conversion privilege existing under the Metropolitan Group policy, converting it into a $100,000 individual policy. The new individual policy also bore the name of Lynne Papenhagen as beneficiary. No evidence was offered below as to the disposition of the National Fidelity policies.
There is ample evidence in the record to the effect that neither Delores nor Lynne Papenhagen were aware of Mr. Papenhagen's actions with regard to the insurance policies.
The record demonstrates that after the divorce, Ted Papenhagen experienced financial difficulties with his automobile dealership. Additionally, it also demonstrates that Mr. Papenhagen had serious health problems sometime after the divorce which necessitated his hospitalization. These difficulties caused significant arrearages in the child support, alimony and lump sum payments ordered pursuant to the divorce. The record also reveals that Delores Papenhagen, being a financially comfortable person in her own right, chose not to bring an arrearages action against Mr. Papenhagen as she was aware of her former husband's health and financial problems. Indeed, it appears that Delores Papenhagen even extended loans to her former husband in an effort to assist him toward a more secure financial status.
Ted Papenhagen died on June 26, 1984. Upon her application, his second wife Lynne Papenhagen was appointed executrix of the Mr. Papenhagen's estate. Approximately one month after Mr. Papenhagen's death, the Aetna and Metropolitan Life Insurance Companies paid to Lynne Papenhagen the amounts of $20,000 and $102,588.60, respectively, under the policies in which she had been named the beneficiary.
Shortly thereafter, Delores Papenhagen brought suit against the estate of Ted Papenhagen and Lynne Papenhagen claiming a superior right to the proceeds of the Metropolitan and Aetna insurance policies. By way of a partial summary judgment, Delores Papenhagen was awarded the $10,000 proceeds from the Metropolitan Life Insurance policy No. 13500-G naming her as beneficiary. The case proceeded to trial on appellant's claim to the remaining Metropolitan and Aetna policy proceeds. On December 20, 1985, the trial court awarded judgment to appellee Lynne Papenhagen stating, in part, that Delores Papenhagen had not demonstrated by clear and convincing evidence a superior right to the insurance proceeds in question.
From that judgment, appellant filed a timely notice of appeal, citing the following as her assignments of error:
Initially, we note that paragraph seven of the divorce decree, mandating that Ted Papenhagen maintain the insurance policies for the benefit of Delores Papenhagen, is somewhat confusing. As indicated supra, it appears that there was no $100,000 Metropolitan Life Insurance policy in existence at the time of the divorce decree. Rather, it appears that Mr. Papenhagen held a group life insurance policy in the amount of $200,000 with Metropolitan Life Insurance Company and a $100,000 life insurance policy with National Fidelity Insurance Co. at the time of the divorce. Subsequent to the divorce, the Metropolitan Life Insurance policy existing at the time of the divorce was converted into a $100,000 individual policy. It is unclear whether the $100,000 figure in the divorce decree was misstated or whether the wrong insurance company was named therein. In any event, the terms of the divorce decree clearly mandate that Delores Papenhagen was to have the benefit of $110,000 in life insurance proceeds to secure the payment of other monies due her under the divorce order. In view of the divorce decree's mandates and the fact that this cause involves equitable principles, this decision will address itself to Delores Papenhagen's entitlement to that amount of life insurance proceeds regardless of the obvious misstatement in the divorce decree.
Appellant's first, second, fourth and fifth assignments of error will be discussed concurrently as they all address the propriety of the trial court's award of the insurance proceeds to Lynne Papenhagen, the named beneficiary.
Generally, there is a presumption that the beneficiary named in any insurance policy has a right to receive the proceeds thereof upon the death of the insured. See, Ferguson v. Owens (1984), 9 Ohio St.3d 223, 225, citing Katz v. Ohio Natl. Bank (1934), 127 Ohio St. 531. In the instant appeal, appellant claims a superior equitable right to the insurance proceeds in question due to the provisions of a separation agreement entered into by her and the deceased and which were incorporated into their divorce decree. As a result of her claimed superior equitable right, appellant asks that the proceeds be converted into a constructive trust in her favor.
A constructive trust has been defined as a trust that:
" " * * * arises contrary to intention and in invitum, against one who, by fraud, actual or constructive, by duress or abuse of confidence, by commission of wrong, or by any form of unconscionable conduct, artifice, concealment, or questionable means, or who in any way against equity and good conscience, either has obtained or holds the legal right to property which he ought not, in equity and good conscience, hold and enjoy. It is raised by equity to satisfy the demands of justice. * * * ' "
Ferguson v. Owens, supra, at 225, quoting 76 American Jurisprudence 2d (1975) 446, Trusts, Section 221. See, also, Croston v. Croston (1969), 18 Ohio App.2d 159.
Further refining the definition of and outlining the circumstances under which a constructive trusts may be imposed, the court in Ferguson later stated that " * * * a constructive trust may also be imposed where it is against the principles of equity that...
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