Duhame by Corrigal v. Duhame

• Decision Date: 20 December 1989
• Docket Number: No. 89-0148,89-0148
• Citation: 154 Wis.2d 258,453 N.W.2d 149
• Parties: Edward Joseph DUHAME, and Lori Ann Duhame, by their Guardian ad Litem, Kevin CORRIGAL, Plaintiffs-Respondents, v. Elaine DUHAME, Defendant-Appellant, Aetna Life Insurance Company, Defendant.
• Court: Wisconsin Court of Appeals

Page 149

453 N.W.2d 149

154 Wis.2d 258

Edward Joseph DUHAME, and Lori Ann Duhame, by their Guardian ad Litem, Kevin CORRIGAL, Plaintiffs-Respondents, v. Elaine DUHAME, Defendant-Appellant Aetna Life Insurance Company, Defendant.

No. 89-0148.

Court of Appeals of Wisconsin.

Submitted on Briefs Nov. 20, 1989.

Opinion Released Dec. 20, 1989.

Opinion Filed Dec. 20, 1989.

Stern, Caviale & Stern on the briefs, Kenosha, for defendant-appellant.

Kevin Corigall of Phillips, Richards & Mayew, S.C., on the brief, Kenosha, for plaintiffs-respondents.

Before BROWN, P.J., and SCOTT and NETTESHEIM, JJ.

NETTESHEIM, Judge.

Elaine Duhame, primary beneficiary of an insurance policy insuring the life of her deceased husband, Clyde, appeals from a summary judgment which construed a divorce stipulation in an earlier action between Clyde and his former wife. Based upon its construction of the stipulation at summary judgment, the trial court then imposed a constructive trust against the policy proceeds in favor of Clyde's minor children from the former marriage.

The resolution of this case turns on the interpretation of the following language in the divorce stipulation entered into between Clyde and his former wife, Dixie:

3. That the plaintiff shall pay through the Clerk of this Court for transmittal to the defendant the sum of Thirty-five dollars ($35.00) per week as and for the support of the minor children, to be allocated between them and to be paid weekly until further order of the court or the emancipation of said minor children. In addition thereto, the plaintiff shall keep said minor children as beneficiaries of all life insurance available to him at his place of employment, and shall keep said minor children as participants of all health, and accident insurance policies available to him at his place of employment. [Emphasis added.]

This language was incorporated into the judgment of divorce.

Despite their other differences, the parties do not dispute that the trial court could appropriately decide this case at summary judgment. In fact, both parties moved for summary judgment, putting the case in a posture where both parties waived their right to a full trial of the issues, Powalka v. State Mut. Life Assurance Co. of America, 53 Wis.2d 513, 518-19, 192 N.W.2d 852, 854 (1972), and permitted the trial court to decide the legal issue presented. Streiff v. American Family Mut. Ins. Co., 114 Wis.2d 63, 64-65, 337 N.W.2d 186, 187 (Ct.App.1983), rev'd on other grounds, 118 Wis.2d 602, 348 N.W.2d 505 (1984). The construction of a stipulation is a question of law. See Oostburg State Bank v. United Sav. & Loan Ass'n, 125 Wis.2d 224, 234, 372 N.W.2d 471, 476 (Ct.App.1985), aff'd, 130 Wis.2d 4, 386 N.W.2d 53 (1986); see also Schmitz v. Grudzinski, 141 Wis.2d 867, 871, 416 N.W.2d 639, 641 (Ct.App.1987).

We review the court's determination of the legal issue de novo. Bank of Sun Prairie v. Esser, 151 Wis.2d 11, 18, 442 N.W.2d 560, 562 (Ct.App.1989). In addition, whether to impose the remedy of a constructive trust sounds in equity. Richards v. Richards, 58 Wis.2d 290, 296, 206 N.W.2d 134, 137 (1973). Our standard of review for such a determination is one of abuse of discretion. Mulder v. Mittelstadt 120 Wis.2d 103, 115, 352 N.W.2d 223, 228 (Ct.App.1984). Therefore, we employ two standards of review on this appeal. We first review de novo the trial court's construction of the divorce stipulation as a question of law. We then review the trial court's ultimate decision to impose a constructive trust under abuse of discretion standards.

When the divorce was granted on April 28, 1978, Clyde maintained the policy at issue in this case through his employer, American Motors Corporation. Four days later, pursuant to the directive of the judgment, Clyde named his two minor children as beneficiaries on the policy. On June 23, 1979, Clyde married Elaine. On July 9, 1984, Clyde removed the minor children and substituted Elaine as the primary beneficiary. On February 1, 1986, Clyde retired from American Motors. On December 3, 1987, Clyde died.

Before we turn to the interpretation of the language of the stipulation, we make an important initial observation. Although the language of the stipulation is ambiguous on a number of fronts, it does require that two threshold factors be satisfied before a change in beneficiary is prohibited: (1) the insurance must be "support-related"; and (2) the insurance must be "employment-related." The trial court determined that the insurance was "support-related" because the language at issue was included in the support provisions of the stipulation and judgment and was recited as an additional aspect of Clyde's support obligation. The court also determined that the insurance was "employment-related," because the policy was retained and carried over into his retirement by Clyde.

Elaine does not appear to dispute that the insurance language of the stipulation is "support-related." We agree. As noted by the trial court, the language is recited in the support section of the divorce judgment. It immediately follows the recital of Clyde's weekly support obligation and is introduced by the phrase, "In addition thereto." From this we affirm the trial court's determination that the insurance provision in this stipulation was intended as an additional aspect of Clyde's support obligation.

Nonetheless, Elaine contends that the language of the stipulation clearly and unambiguously permitted Clyde to execute the change in beneficiary because the children are not recited as the exclusive beneficiaries under the policy. Regardless of whether this language is clear or ambiguous, we conclude that the supreme court has already rejected the functional equivalent of this argument in Estate of Boyd, 18 Wis.2d 379, 118 N.W.2d 705 (1963). There, the trial judge denied a request for a constructive trust under language similar to that here because the divorce judgment contained no express prohibition against a change in beneficiary. The supreme court rejected this argument, noting that the proper inquiry was what the parties intended by the language used in the stipulation. Id. at 380-81, 118 N.W.2d at 705-06.

The language at issue here was the result of a stipulation between the parties to the divorce. A stipulation is in the nature of a contract and the trial court must seek a construction which will effectuate what appears to have been the intention of the parties. Richards, 58 Wis.2d at 295, 206 N.W.2d at 136. ¹ In Boyd, the supreme court rejected an argument that the stipulation permitted the insured to change the beneficiary at will because such construction would have meant that "the parties intended to stipulate to something valueless and that the judgment based thereon was intended to mirror such emptiness." Boyd, 18 Wis.2d at 381, 118 N.W.2d at 706. Boyd rejected such a construction as unreasonable. Id.

The summary judgment record on this question consists of the language of the stipulation itself and Dixie's uncontroverted affidavit. This latter material is in the nature of parol and extrinsic evidence on the question of the parties' intent. Capital Invs., Inc. v. Whitehall Packing Co., 91 Wis.2d 178, 190, 280 N.W.2d 254, 259 (1979). Dixie's uncontroverted affidavit recites that the insurance provision "was negotiated and agreed upon for the purpose of providing support to Edward and Lori [the minor children] in the event of Clyde J. Duhame's death." Acceptance of Elaine's argument that Clyde was free to change or add beneficiaries at will would mean that Clyde and Dixie negotiated and stipulated "to something valueless and that the judgment based thereon was intended to mirror such emptiness." Boyd compels rejection of this interpretation.

Next, Elaine contends that the imposition of the constructive trust was an abuse of discretion because Clyde was retired from American Motors Corporation when the change in beneficiary occurred. Therefore, Elaine reasons that the policy was not "available to him [Clyde] at his place of employment" within the meaning of the stipulation. This raises the question of whether the insurance is "employment-related."

A contract is ambiguous when it is reasonably susceptible of more than one meaning. Schmitz, 141 Wis.2d at 871, 416 N.W.2d at 641. Under the terms of this stipulation, we deem it ambiguous whether employment-related insurance which is retained and carried over into retirement constitutes insurance "available to him at his place of employment." Therefore, the trial court properly looked to the intent of the parties. Richards, 58 Wis.2d at 295, 206 N.W.2d at 136.

Before reviewing the trial court's determination on this question,...