Dubois v. Smith

• Decision Date: 08 November 1991
• Docket Number: No. 90-512,90-512
• Citation: Dubois v. Smith, 135 N.H. 50, 599 A.2d 493 (N.H. 1991)
• Parties: George M. DUBOIS and another v. Judith (Dubois) SMITH.
• Court: New Hampshire Supreme Court

Page 493

599 A.2d 493

135 N.H. 50

George M. DUBOIS and another v.Judith (Dubois) SMITH.

No. 90-512.

Supreme Court of New Hampshire.

Nov. 8, 1991.

Beaumont, Mason & Campbell P.A., Salem (Bernard H. Campbell on the brief and orally), for plaintiffs.

Sakellarios & Associates, Manchester (Kathleen Mulcahey-Hampson on the brief and orally), for defendant.

THAYER, Justice.

The defendant, Judith (Dubois) Smith, appeals the Superior Court's (Dickson, J.) decision to award the proceeds of certain life insurance policies, of which she was the named beneficiary, to the plaintiffs, the five sons (the Dubois brothers) of the decedent-insured, based on the language of the decedent's first divorce decree.The issue presented is whether in this State the rights of a named beneficiary to the proceeds of a life insurance policy may be superseded by the provisions of a divorce decree.We affirm in part and reverse in part.

Smith argues that neither of the decedent's two divorce decrees impairs her claim to the proceeds.For the reasons set forth below, we hold that the decedent, Antoine Dubois, owned two severable insurance policies.In addition, we hold that while the language of the first divorce decree entitles the Dubois brothers to the proceeds of one policy, neither decree divests Smith of her entitlement to the proceeds of the other policy.

In 1967, Antoine Dubois's employer gave him a certificate of life insurance as a perquisite to employment.He named his then-wife, Marie Dubois, and their five sons (they had no daughters) as primary and contingent beneficiaries, respectively.In April 1976, Antoine made his son Donald primary beneficiary, leaving the other sons contingent beneficiaries and deleting Marie's name entirely from the list.Three months later, Antoine again changed beneficiaries, restoring the original designations.Antoine and Marie were divorced in mid-1977, and the divorce decree incorporated their agreement that "Antoine Dubois shall make his children the beneficiaries of his insurance policies, share and share alike."The record, however, indicates that Antoine never did so.

Following the divorce, Antoine Dubois made no change in the list of designated beneficiaries until March 5, 1980, when he substituted the name of his new bride, Judith Anne(Covey) Dubois, for that of his ex-wife, Marie.A month later, on April 1, 1980, he limited the contingent beneficiaries to one son, George.Smith testified that he explained to her "that he wanted to leave his life insurance where it would be used responsibly because he knew I had a need for it, that he wanted me to have it, that he did not feel his children were responsible....[H]e wanted them to be self-supporting."Antoine Dubois lived nine more years, but made no further changes to his list of beneficiaries.When his employer issued him another certificate of life insurance, dated April 14, 1980, he designated beneficiaries by simply referencing the April 1, 1980 beneficiary designations.

Judith and Antoine Dubois separated in mid-1980 and were divorced the following year.(She later became Judith Smith.)They agreed that Judith should have a modest alimony award in one lump sum and several personal items given to the couple as wedding gifts.As for Antoine, the parties stipulated that:

"All other property not disposed of above is awarded to [Antoine] free and clear of any claim of [Judith].This specifically includes the real property located at 13 Asbury St, Salem, N.H....Neither party makes any claim for alimony against the other beyond what is set forth [above]."

No other provisions of the agreement are relevant to this case.

In 1985, Antoine wrote a letter to his attorneys (the same attorneys who represent his sons in this appeal) entitled "Last Will and Testament."It states that

"I'll express my wishes using my own words, but mindful that those wishes will probably require rephrasing to carry the spirit of my wishes into a proper and final legal document.So, the final phrasing is not important.The spirit it conveys legally is.If any of my wishes are not legally proper, disregard them and go on with the document....The text in the remaining pages covers the essence of my wishes."

Antoine Dubois then wrote: "To the best of my knowledge, there are no outstanding financial, legal or moral obligations relative to [my] ex-wives.I pray for them daily, I wish them well, but I feel no obligation to make any provisions for them in this document."

In the portion of the letter captioned "ASSETS AND LIABILITIES," Antoine described his "two insurance policies," and declared: "That insurance money, whatever it is, would constitute the greatest part of my estate."Several specific instructions concerning his personal property appear in the "SPECIFIC LEGACIES"section, followed by references to his car and apartment furnishings under "GENERAL LEGACIES."His insurance policies, however, receive no more mention.No evidence was presented below to indicate whether Antoine Dubois's attorneys told him that life insurance proceeds are not considered part of a decedent's estate, or whether they decided to simply "disregard [this erroneous assumption] and go on with the document."

Judith Smith testified that she met Antoine Dubois briefly in 1987, at which time he learned of her dire "economic straits."Antoine died unmarried two years later, leaving Judith Smith as the named primary beneficiary.Smith testified she was not aware that Antoine Dubois had not removed her name from his list of beneficiaries, and was surprised to learn of her status at his death.

The plaintiffs, the Dubois brothers, brought this declaratory judgment action in January 1990 against Smith and Antoine Dubois's former employer.In May 1990, the superior court granted Prudential Insurance Company's (Prudential) request to be substituted as co-defendant in place of the former employer.Prudential is the insurance company responsible for payment of the proceeds at issue here.Four months later, the court dismissed Prudential from this suit.The court declared that "[t]he defendant(Prudential) shall pay the proceeds of the two policies into court on September 24, 1990 with interest to that date and an accounting as to each policy."(Emphasis added.)Prudential complied, writing one check in the amount of $46,315.15 and another in the amount of $51,461.28.Each check referenced a different policy.Smith objected to Prudential's dismissal, arguing that the insurance company's records were needed to resolve the issue of severability.

On October 5, 1990, the superior court ruled that the plaintiffs are entitled to all of the proceeds of Antoine Dubois's insurance policies.The court made no reference to the divorce stipulation of Antoine Dubois and Judith Smith, and declined to rule on Smith's several requests for findings of fact and rulings of law.It also failed to address Smith's argument that there are two, severable insurance policies, and that Antoine's first divorce decree applies to only one of them.Instead, the court simply stated:

"To allow Antoine Dubois to change beneficiaries would violate the intent of the parties at the time of the [first] divorce and stipulation.The obvious intent of the stipulation was that the children be the recipients of the decedent's insurance death benefits.A Court of equity will regard the decedent as having done that which he was obligated to do and, therefore, treat the policies as equitably assigned to those who should have been named as beneficiaries--the five sons of Antoine Dubois."

Smith appeals this ruling.

Before we address the main questions of entitlement to the insurance proceeds, we must discuss the issue of severability; that is, whether there are two insurance policies at issue here, or one.The Dubois brothers argue that no evidence was presented to confirm the existence of two divisible insurance policies or to indicate that, assuming severability, Antoine Dubois could have named a different beneficiary for each policy.Smith responds that the insurance policies themselves, as admitted into evidence, confirm that the policies are severable.We agree.

First we note that Antoine Dubois's insurance policies are described in two entirely separate pieces of paper (hereinafter referred to as "certificates"), held together only by a staple.Each purports, on its face, to be a "Group Insurance Certificate," and each has a place on the face of the document to list the employee's name, the certificate number, the date, and the beneficiary.Although the certificate number is the same on each certificate, closer inspection reveals that this number is simply the employee's social security number.Both certificates do, however, contain the same pre-printed group insurance policy number.One certificate is dated January 1, 1967, and describes a policy for basic life insurance.The other, dated April 14, 1980, describes both basic and supplementary life insurance, and contains provisions not found in the earlier certificate.

On the last page of each certificate is a "Record of Beneficiary Changes."The earlier certificate's record contains several entries, the last being a reference to a form dated April 1, 1980.This form, attached to the certificate, records Antoine Dubois's last change of beneficiaries, from his five sons as shared contingent beneficiaries to his son George as sole contingent beneficiary (Smith's name is retained as primary beneficiary).The later certificate's change of beneficiary record is blank.Instead, the face of the certificate simply references the April 1, 1980 form on the line marked "Beneficiary."

Our examination of the certificates persuades us that there are indeed two severable insurance policies, and that Antoine Dubois's second policy was not effective until April 14, 1980.The superior court's order regarding Prudential's dismissal, as well as Prudential's response to that order,...