In re Genaw Estate, Docket No. 284214.

• Citation: 285 Mich. App. 660,776 N.W.2d 917
• Decision Date: 06 October 2009
• Docket Number: Docket No. 284214.
• Parties: In re GENAW ESTATE.
• Court: Court of Appeal of Michigan (US)

776 N.W.2d 917

285 Mich. App. 660

In re GENAW ESTATE.

Docket No. 284214.

Court of Appeals of Michigan.

Submitted July 14, 2009, at Detroit.

Decided October 6, 2009, at 9:00 a.m.

Heyboer & Floyd, P.L.L.C. (by David R. Heyboer), Port Huron, for plaintiff.

Miller Johnson (by D. Andrew Portinga and J. Michael Smith), Grand Rapids, for defendants.

Before: TALBOT, P.J., and FITZGERALD and HOEKSTRA, JJ.

TALBOT, P.J.

Defendant Unum Life Insurance Company, appeals as of right the order granting summary disposition in favor of plaintiff, Gaylord Genaw, Jr., as personal representative of the Genaw Estate (the Estate). We affirm.

I. FACTUAL AND PROCEDURAL HISTORY

This action involves the erroneous payment of insurance proceeds to defendant Cindy Genaw (Genaw), the ex-wife of plaintiff's decedent. In 2001, the decedent obtained an insurance policy with Unum valued at $111,000 and designated Genaw as his beneficiary. The decedent and Genaw divorced on July 3, 2006. Their judgment of divorce specifically contained a waiver provision, which extinguished both parties' respective interests in any insurance policy on the other's life. Only days after the entry of the divorce judgment, the decedent was killed in an automobile accident. His beneficiary designation on the life insurance policy with Unum had not been changed.

On October 2, 2006, a loss report was completed that listed Genaw as the claimant and designated her relationship to the decent as an "ex-spouse." Approximately two weeks later, Genaw filed a claim for benefits and indicated on the form that the decedent was divorced. A death certificate, which indicated decedent's marital status as divorced, was also submitted with a copy of the benefits claim. Upon receipt of the claim information, Unum conducted an investigation and determined that benefits were payable pursuant to its policy. Shortly after receiving a copy of the beneficiary designation form, which continued to list Genaw as the policy beneficiary, Unum remitted payment to her in the full amount of the policy.

Approximately one month later, plaintiff was appointed the personal representative of the decedent's estate and became aware of the existence of the Unum policy. Plaintiff contacted Unum on January 16, 2007, seeking to claim the policy benefits on behalf of the Estate. Unum denied the claim on the ground that the policy had already been discharged. Plaintiff initiated litigation against Genaw and Unum to recover the monies remitted by Unum for the Estate. The trial court granted partial summary disposition in favor of plaintiff against Genaw in the amount of $111,000. The trial court ordered that the funds remaining in Genaw's bank account that Unum had paid her, which amounted to $42,659.54, be seized and held in escrow in partial satisfaction of the judgment.¹ In addition, the trial court granted partial summary disposition in favor of plaintiff against Unum in the amount of $111,000, with a setoff for $42,659.54, the amount recovered from Genaw. This appeal focuses exclusively on the interpretation and meaning of the statutory language comprising MCL 552.101(2).

II. STANDARD OF REVIEW

The goal of statutory interpretation is to discern and give effect to the intent of the Legislature from the statutes plain language. Houdek v. Centerville Twp., 276 Mich.App. 568, 581, 741 N.W.2d 587 (2007). If the meaning of a statute is clear and unambiguous, then judicial construction to vary the statutes plain meaning is not permitted. Id. The Legislature is presumed to have intended the meaning it plainly expressed. Watson v. Bureau of State Lottery, 224 Mich.App. 639, 645, 569 N.W.2d 878 (1997). Further, a court must look to the object of the statute, the harm it is designed to remedy, and apply a reasonable construction that best accomplishes the purpose of the statute. Statutory language should be construed reasonably, keeping in mind the purpose of the act. Id. (citation omitted). "We are bound to interpret plain statutory language as written." Dawe v. Dr. Reuvan Bar-Levav & Assoc., PC, 279 Mich.App. 552, 569, 761 N.W.2d 318 (2008), lv. gtd. 483 Mich. 999, 764 N.W.2d 569 (2009).

III. ANALYSIS

MCL 552.101(2) states, in its entirety:

Each judgment of divorce or judgment of separate maintenance shall determine all rights of the wife in and to the proceeds of any policy or contract of life insurance, endowment, or annuity upon the life of the husband in which the wife was named or designated as beneficiary, or to which the wife became entitled by assignment or change of beneficiary during the marriage or in anticipation of marriage. If the judgment of divorce or judgment of separate maintenance does not determine the rights of the wife in and to a policy of life insurance, endowment, or annuity, the policy shall be payable to the estate of the husband or to the named beneficiary if the husband so designates. However, the company issuing the policy shall be discharged of all liability on the policy by payment of its proceeds in accordance with the terms of the policy unless before the payment the company receives written notice, by or on behalf of the insured or the estate of the insured, 1 of the heirs of the insured, or any other person having an interest in the policy, of a claim under the policy and the divorce. Emphasis added.

As discussed by this Court in Metropolitan Life Ins. Co. v. Church, 150 Mich.App 539, 544-545, 389 N.W.2d 124 (1986):

The purpose of the 1939 amendment to MCL 552.101 . . . was to resolve the situation where a divorced wife could inadvertently receive the proceeds of a forgotten policy.

"Prior to the addition in 1939 of the above-quoted portion of the statute to MCLA § 552.101, the wife was entitled to the proceeds of the policy when she remained the designated primary beneficiary after a divorce. Ancient Order of Hibernians v. Mahon (1922), 221 Mich. 213 190 N.W. 696 and Guarantee Fund Life Association v. Willett (1927), 241 Mich. 132 216 N.W. 369. The effect of the amendment, as stated in the title to the statute, in the judgment of divorce, and, in the statute itself, was to affect the interest of the wife in the insurance policy and thus cure the situation where a divorced wife could inadvertently receive the proceeds of a perhaps forgotten policy. `Inadvertently receive' should be stressed for the statute does not prohibit the husband or divorce judgment itself from retaining or renaming the wife as the primary beneficiary. It simply requires affirmative action on the part of the court or husband to retain the divorced wife as the primary beneficiary and thus eliminate what could be, and usually appears to be, the inadvertent payment of the life insurance proceeds to a divorced wife." Starbuck v. City Bank & Trust Co., 384 Mich. 295, 299, 181 N.W.2d 904 (1970) (emphasis in original).

Clearly, the purpose of the statute is to resolve inconsistencies and problems that originated in family law when an ex-spouse waived his or her right to a policy of insurance (or other benefit) but a change in beneficiary was not effectuated. This is evidenced by the language that precedes the disputed portion of the statutory subsection imposing a requirement that all judgments of divorce include provisions clarifying the rights of former spouses to retain an interest in certain identified benefits or policies.

On appeal, it is the contention of Unum, which the dissent adopts, that the language of MCL 552.101(2) does not encompass notice of a claim asserted by a beneficiary, and that the information provided by Genaw, which merely alerted Unum to the existence of a divorce without submission of an actual copy of the judgment or its explicit terms, was insufficient to place the insurer on notice or to impose liability for a payment of the insurance proceeds that was consistent with the policy's beneficiary designation. However, such an interpretation is not consistent with the actual language of the statute because it improperly inserts wording that does not exist into the statutory provision.

The statutory language absolves an insurance company from liability for payment of the policy proceeds to the designated beneficiary unless it "receives written notice . . . of a claim under the policy and the divorce." The statute requires only notice "of a claim . . . and the divorce." The statutory requirement that notice of the existence of a divorce be provided does not equate to a mandate that an actual copy of the document or detailed information regarding the content of a judgment of divorce be submitted in conjunction with the filing of a claim. This is consistent with the definition of "notice" provided in caselaw as

"whatever is sufficient to direct attention. . . to prior rights or equities of a third party and to enable him to ascertain their nature by inquiry. Notice need only be of the possibility of the rights of another, not positive knowledge of those rights. Notice must be of such facts that would lead any honest man, using ordinary caution, to make further inquiries in the possible rights of another in the property." Royce v. Duthler, 209 Mich.App. 682, 690, 531 N.W.2d 817 (1995), quoting Schepke v. Dep't of Natural Resources, 186 Mich.App. 532, 535, 464 N.W.2d 713 (1990).

Interpreting the statute as merely requiring the providing of notice of the existence of a divorce is consistent with its language and fulfills the intended purpose of precluding the inadvertent payment of benefits to the wrong person.

In addition, the statutory language allows such notice to be provided "by or on behalf of the insured or the estate of the insured, 1 of the heirs of the insured, or any other person having an interest in the policy." (Emphasis added.) Through a strained path of reasoning, the dissent and Unum contend that "any other person having an interest in the policy" excludes a named beneficiary. However, that is inconsistent with the statutory language. The wording is not...