Gerhard v. Travelers Ins. Co.

• Decision Date: 07 November 1969
• Citation: 107 N.J.Super. 414,258 A.2d 724
• Parties: Mildred GERHARD, individually and Grace Ballistreri and Moses Davis, Executors of the Estate of Herbert C. Pollard, Deceased, Plaintiffs, v. The TRAVELERS INSURANCE COMPANY, an Insurance Corporation, California-Texas Corporation, a Foreign Corporation, and Cornelia M. Harris, also known as Cornelia M. Pollard, Defendants.
• Court: New Jersey Superior Court

Page 414

107 N.J.Super. 414

258 A.2d 724

Mildred GERHARD, individually and Grace Ballistreri and Moses Davis, Executors of the Estate of Herbert C Pollard, Deceased, Plaintiffs, v. The TRAVELERS INSURANCE COMPANY, an Insurance Corporation California-Texas Corporation, a Foreign Corporation, and Cornelia M. Harris also known as Cornelia M Pollard, Defendants.

Superior Court of New Jersey, Chancery Division.

Nov. 7, 1969.

Lebson & Prigoff, Englewood, for plaintiffs (Milton Prigoff, Englewood, appearing).

Norman S. Costanza, Hackensack, for defendant Travelers Ins. Co.

Morrison, Lloyd & Griggs, Hackensack, for defendant California-Texas Corp. (William R. Morrison, Hackensack, appearing).

LORA, J.S.C.

This is an action in which plaintiffs Mildred Gerhard, the daughter and sole beneficiary under the will of decedent Herbert Carson Pollard, and Grace Ballistreri and Moses Davis, executors of the estate of Herbert Carson Pollard, whose letters testamentary issued in Baltimore County, Maryland, bring suit on a life insurance policy which the deceased had held with defendant Travelers Insurance Company. Declaration is sought that either Mildred Gerhard or, in the alternative, the deceased's estate is entitled to the policy proceeds.

Defendant California-Texas Corporation (Caltex) obtained a group disability and death benefit insurance policy from Travelers. The deceased, an employee of Caltex until 1959, was an insured under the group policy and, on September 20, 1951, while in Sumatra-Indonesia designated 'Cornelia Meerbeek Pollard, wife' as his beneficiary by filing with Caltex a change of beneficiary form which provided: 'And the right is reserved to revoke this designation and subject to due notice to the Employer to nominate a new beneficiary.'

Paragraph two of the 'Provisions' in the policy provided the manner in which the named beneficiary could be changed. That paragraph reads as follows:

2. Change of beneficiary. Any employee insured hereunder may designate a new beneficiary at any time by filing with the employer a written request for such change on forms furnished by the company, but such change shall become effective only upon endorsement thereof by the Employer on the insurance record card at the office of the Employer where the records of the Employee's insurance under this policy are maintained.

Upon such endorsement, the change shall relate back to and take effect as of the date the Employee signed such request whether or not the Employee is living at the time of such endorsement but without prejudice to the Company on account of any payment made by it before such endorsement.

The certificate of insurance held by decedent, dated October 1, 1952, refers to the terms, conditions and provisions of the group life insurance policy covering employees of Caltex issued by Travelers and states that a sum determined in accordance with the 'Plan of Insurance' in said policy is payable to 'Cornelia M. Pollard, wife as beneficiary,' and that 'Payment of the amount of the Employee's insurance under said Policy shall be made to the beneficiary designated by the Employee * * *.' On the reverse side, and under the heading 'Beneficiaries,' the certificate further provides:

Under the group policy the Employee has the right to change the beneficiary. If there be no beneficiary designated by the Employee or surviving at the death of the Employee, the group policy provides that payment shall be made as follows: To the wife or husband of the Employee, if living at the death of the Employee; if no wife or husband of the Employee be then living, to the surviving children of the Employee * * *.

However, the certificate itself does not set forth the manner in which a change of beneficiary is to be effectuated.

It is uncontroverted that the deceased never filed a written request to change beneficiary or a designation of beneficiary according to the provision in the policy, other than the one of September 20, 1951. However, on October 8, 1964 the deceased obtained a divorce from Cornelia Pollard in Circuit Court No. 2 of Baltimore City, Maryland. The divorce decree incorporated a separation agreement entered into on June 23, 1964, wherein Cornelia Pollard waived any further rights in the property of the deceased, the pertinent part reading as follows:

3. Pending the final decree of the Court, neither party will interfere with the rights or privileges of the other, and neither party will claim any rights in the ownership or property of the other, and all claims to each other's property Is (sic) expressly waived.

4. That the provisions of this stipulation shall be incorporated in any decree or order passed by the Court having jurisdiction of the matter.

It is clear there was no discussion of the insurance at the time of the divorce or at the time of the separation agreement, Mrs. Pollard, who was not represented by counsel, simply stating she was surrendering her rights to everything her husband had.

The insured Pollard died on April 7, 1965, and on April 14, 1965 Moses Davis, an executor of decedent's estate, notified Caltex in writing of Pollard's death and enclosed a copy of the executors' appointment by the Orphans Court of Baltimore County. Subsequently, on April 19, 1965, Davis discussed the matter further with Caltex on the telephone.

By letter dated April 20, 1965 Caltex referred to Davis' letter of April 14, 1965 and telephone conversation of April 19, 1965, but stated their records 'confirm that Cornelia M. Pollard, wife--is the designated beneficiary in connection with death benefits payable under the company's insured Annuity and Group Life Insurance Plans. We will contact Mrs Pollard directly.'

On April 21 or 22, 1969, Davis wrote H. F. McCabe, the Caltex benefits adviser, requesting that Caltex withhold any notification to the named beneficiary, Mrs. Pollard, due to the stipulation in the separation agreement and the divorce decree, by the terms of which neither party thereto 'claimed any interest in the rights or estate of the other.'

The following day Davis wrote a letter to the New York Claim Division of Travelers, notifying them

* * * to continue the demand of Mrs. Gerhard that she has been designated beneficiary of the above issued certificated by her father, Herbert C. Pollard during the month of February, 1965, and that these certificated (sic) were given her as a inter vivos gift, and that I was present in the office of Mr. H. F. McCabe, Benefits Adviser of the Caltex Corporation when this matter was discussed with your representative or company over the telephone yesterday. Since I have furnished Mr. McCabe with copy of the Will of Mr. Pollard and the Stipulation in the divorce proceeding divorcing him from Cornelia Pollard, I am sure that you will find that Mrs. Gerhard is the rightful claimant under this policy.

Despite such notification by Davis and a subsequent visit to Caltex by Davis and Mrs. Gerhard, during which Davis expressed his intention to collect on the policy because he had possession of the same and Mrs. Gerhard had an Inter vivos gift of the policy, and despite McCabe's telephone conversation regarding the policy with Travelers in their presence, Caltex nonetheless notified Cornelia Pollard of her status as named beneficiary and stated that if she would forward a death certificate, they would pay her the proceeds. Caltex advised Travelers of Herbert Pollard's death and of the divorce. Thereafter Caltex forwarded Travelers a copy of the deceased's death certificate and a notarized proof of claim statement by Cornelia Pollard requesting payment of the insurance benefits through Caltex. Thereupon, on June 14, 1965, Travelers paid the insurance benefits to Cornelia Pollard.

After the deceased divorced plaintiff Mildred Gerhard's mother and subsequently married Cornelia Pollard, plaintiff saw very little of him. However, in February 1965, having learned that her father was 'emotionally ill' and living alone following the divorce from his second wife, she brought her father from Baltimore to her home in New Jersey where he lived until his death in April 1965.

The testimony adduced by plaintiff concerning an Inter vivos gift of the insurance certificate by the deceased to the plaintiff was contradictory. Mrs. Gerhard testified that after Moses Davis drew up the will for her father and it was executed in Baltimore on February 23, 1965, she brought him back to New Jersey that same day and thereupon, in New Jersey, the deceased handed his insurance policies (certificate) to plaintiff, saying, 'These are my policies and I want you to have them.' Plaintiff testified that she thereafter had the policies in her possession continuously until, after decedent's death on April 7, 1965, she turned them over to attorney Davis when she brought her father's body back to Baltimore for burial.

This account is at variance with that of Davis in this regard. He testified that he received the policies (including the certificate here involved) on February 23, 1965 at the time the deceased signed his will in Davis' Baltimore law office, first saying that Pollard delivered the policies to him, but then stating he thought that plaintiff handed him the policies to hold. In any event, he further testified he put them in the file in his office, simply noting at the time that defendant Mrs. Pollard was designated as beneficiary on the certificate. At best, the testimony leaves the court with considerable doubt that there was in fact an Inter vivos gift of the certificate. It would appear that Davis had possession of the certificate. However, a finding of the existence or nonexistence of an Inter vivos gift is not necessary for a determination of entitlement to the proceeds of the policy.

Cornelia Pollard is not a party to this action. Although the amended complaint named Cornelia Pollard as a party defendant, plaintiffs were unable to serve her in New Jersey and, since Mrs. Pollard is not a...