Kornacki v. Mutual Life Ins. Co. of New York

• Decision Date: 22 July 1993
• Citation: 600 N.Y.S.2d 788,195 A.D.2d 847
• Parties: Luana KORNACKI, Respondent, v. MUTUAL LIFE INSURANCE COMPANY OF NEW YORK, Defendant and Third-Party Plaintiff; Tamara Munio, Third-Party Defendant-Appellant.
• Court: New York Supreme Court — Appellate Division

Page 788

600 N.Y.S.2d 788

195 A.D.2d 847

Luana KORNACKI, Respondent, v. MUTUAL LIFE INSURANCE COMPANY OF NEW YORK, Defendant and Third-Party Plaintiff Tamara Munio, Third-Party Defendant-Appellant.

Supreme Court, Appellate Division Third Department.

July 22, 1993.

Buchyn, O'Hare, Werner & Gallo (Robert J. Gallamore, of counsel), Schenectady, for third-party defendant-appellant.

Litz & Litz (Frank J. Litz, of counsel), Schenectady, for respondent.

Before WEISS, P.J., and LEVINE, MERCURE, MAHONEY and CASEY, JJ.

LEVINE, Justice.

Appeal from an order of the Supreme Court (Lynch, J.), entered March 24, 1992 in Schenectady County, which, inter alia, granted plaintiff's cross motion for a declaration that she was entitled to life insurance proceeds held by defendant.

In 1970 defendant issued a life insurance policy insuring the life of Donald Anderson (hereinafter the insured), then two years and seven months of age. The policy was purchased by the insured's father, who designated himself as the beneficiary and also designated himself as the policy's "rightsholder", i.e., the person having the right, inter alia, to change the policy's beneficiary and to assign the policy. The father further stipulated that the insured's uncle would be the rightsholder in the event of his own death before the insured's 21st birthday, and that upon attaining age 21 the insured would automatically become the policy's rightsholder.

The insured's father died in 1976, following which the insured's uncle duly changed the beneficiary under the policy to plaintiff, the insured's mother. In January 1986, defendant received a change of rights form purportedly signed by the insured's uncle changing the rightsholder under the policy from the insured's uncle to the insured. In October 1987, the insured, then 20 years and 4 months of age, filed a change of beneficiary request substituting third-party defendant, his fiancee, as the beneficiary under the policy.

The insured died March 4, 1990 as the result of injuries sustained in an automobile accident. Plaintiff and third-party defendant each filed a claim with defendant for the proceeds of the policy. When defendant declined to pay the proceeds to either claimant, plaintiff brought this action and defendant commenced an interpleader third-party action against third-party defendant. After issue was fully joined, defendant moved pursuant to CPLR 1006(f) for authorization to pay the proceeds of the policy into court and then be discharged from liability. Plaintiff cross-moved for a declaratory judgment that she was entitled to the proceeds and submitted on the motion the affidavit of the insured's uncle that the purported January 1986 designation by him of the insured as the rightsholder under the policy was a forgery. Supreme Court granted plaintiff's cross motion for a declaration that she was entitled to the proceeds of the policy but reserved decision regarding the precise amount due her. This appeal by third-party defendant followed.

On appeal, third-party defendant's primary argument is that defendant, in assuming here the role of a mere stakeholder of the proceeds of the policy, waived the policy's requirements regarding any change in beneficiary and, therefore, the proceeds should be equitably distributed in accordance with the intent of the insured (citing, Lopez v. Massachusetts Mut. Life Ins. Co., 170 A.D.2d 583, 566 N.Y.S.2d 359; Kane v. Union Mut. Life Ins. Co., 84 A.D.2d 148, 445 N.Y.S.2d 549). Third-party defendant further argues that the insured's October 1987 submission to defendant of a written request to substitute her as the beneficiary of the policy clearly manifested his intent...