McKissick v. McKissick, 8984

• Citation: 560 P.2d 1366,93 Nev. 139
• Decision Date: 14 March 1977
• Docket Number: No. 8984,8984
• Parties: Blair McKISSICK et al., Appellants and Cross-Respondents, v. Dorothy McKISSICK, Individually and as Administratrix of the Estate of Howard F. McKissick, Jr., Respondent and Cross-Appellant.
• Court: Supreme Court of Nevada

Page 1366

560 P.2d 1366

93 Nev. 139

Blair McKISSICK et al., Appellants and Cross-Respondents, v. Dorothy McKISSICK, Individually and as Administratrix of the

Estate of Howard F. McKissick, Jr., Respondent and

Cross-Appellant.

No. 8984.

Supreme Court of Nevada.

March 14, 1977.

Rehearing Denied April 13, 1977.

Beckley, Singleton, DeLanoy, Jemison & Reid, Chartered, Las Vegas, for appellants and cross-respondents.

Reggio, Walker & Wooster, Reno, for respondent and cross-appellant.

Bissett & Logar, Reno, for Estate of Howard F. McKissick, Jr.

OPINION

THOMPSON, Justice.

The former wife and children of Howard F. McKissick, Jr., commenced separate actions, later consolidated, against Dorothy McKissick, Howard's second wife and the administratrix of his estate. Their objective was to secure a judgment against the estate for accrued child support with interest which became due in the six years preceding Howard's death; to impress a constructive trust for the benefit of the children upon the proceeds of life insurance policies in Howard's name; and, to have the court declare that a time certificate of deposit for $385,000 issued to 'Howard F. McKissick, Jr., and/or Dorothy McKissick' was an asset of Howard's estate subject to claims of creditors, and thereafter distributable to his heirs at law.

The district court entered judgment against Howard's estate for accrued child support and interest in the amount of $46,219.96. No appeal is taken from that judgment. The district court impressed a constructive trust over proceeds of life insurance, but limited that trust to $50,000. The district court declared that the time certificate of deposit was held in joint tenancy by Howard and Dorothy prior to Howard's death, and became Dorothy's property by operation of law.

Barbara and the children have appealed from the ruling limiting the constructive trust to $50,000, contending that all life insurance proceeds should be subject to the trust. They also appeal from the judgment that the time certificate of deposit is joint tenancy property. By cross-appeal, Dorothy contends that the district court erred when it impressed a constructive trust upon the proceeds of Howard's life insurance policies.

Barbara McKissick (now Jemison) married Howard F. McKissick, Jr., on October 25, 1953. There were four children of their union; Blair, born October 9, 1954; Bruce, born December 9, 1955; John, born March 7, 1958; and Molly, born September 8, 1959. Their marriage was dissolved by divorce on April 29, 1964. They entered into a property settlement agreement which the court approved and made part of the decree.

The provision of the agreement regarding insurance is quoted below. ¹ The district court found that the primary purpose of that provision was to provide for the future support and education of the minor children.

Dorthy McKissick and Howard were married in 1965. An accident caused Howard's death on October 24, 1973. He died intestate. During their marriage they acquired valuable real property which they held in joint tenancy, and later sold to Harrah Realty Company. From part of the proceeds of that sale they purchased a time certificate of deposit in the amount of $385,000. That certificate was issued by the First National Bank of Nevada to 'Howard F. MaKissick, Jr., and/or Dorothy McKissick.' The district court found the certificate to be in a form to be paid to the survivor. Howard's estate is insolvent if the time certificate of deposit became Dorothy's as his surviving joint tenant.

1. As noted, Howard agreed to 'maintain the life insurance policy presently insuring his life.' That insurance was described as a policy with the Equitable Life Insurance Company of America in the face amount of $50,000. Barbara was to be the irrevocable beneficiary. The evident purpose was to provide for the future support and education of their children.

When the agreement was made Howard did not have a life insurance policy with the Equitable Life Insurance Company of America in the face amount of $50,000. There was no such company. Nor did he then have life insurance in that amount. However, at that time, there were in existence three policies 'presently insuring his life' with a total face value of $40,000. At the time of his death those policies named Dorothy, his second wife, beneficiary. Accidental death benefits increased those policies to $112,848.59 which sum Dorothy has received.

The district court found that Howard intended to provide life insurance for the benefit of Barbara and the children in the amount of $50,000, and that the court in its divorce decree so intended. The misdescription of the policy in the property settlement agreement resulted from a mistake and was deemed by the court to be a clerical, as distinguished from a judicial error. Clearly, the error in describing the insurance 'presently insuring his life' may not be attributed to judicial discretion, or as an incorrect result in the exercise of a judicial function. Marble v. Wright, 77 Nev. 244, 362 P.2d 265 (1961). The error in describing the insurance was clerical in nature since it did not occur as a consequence of the exercise of a judicial function. ² Clerical errors may be corrected at 'any time.' NRCP 60(a); Alamo Irrigation Co. v. United States, 81 Nev. 390, 404 P.2d 5 (1965). Consequently, the court ruled that Dorothy held $50,000 of the insurance money paid to her as constructive trustee for the uses and purposes expressed in the property settlement agreement.

It was permissible for the court to conclude that the property settlement agreement expressed an intention on the part of Howard to provide life insurance for the benefit of Barbara and the children. To conclude otherwise would attribute to Howard an intention to defraud Barbara and the children. There is nothing in the record to suggest such an evil purpose.

The divorce decree obligated Howard to maintain insurance with Barbara as the irrevocable beneficiary. ³ This constituted an equitable assignment for her benefit. Chilwell v. Chilwell, 40 Cal.App.2d 550, 105 P.2d 122 (1940); Murphy v. Travelers Insurance Co., 534 F.2d 1155 (5th Cir. 1976); General American Life Insurance Co. v. Rogers, 539 S.W.2d 693 (Mo.Ct.App. 1976). He violated the agreement and decree when he designated his second wife, Dorothy, as the beneficiary of the insurance policies. In such circumstances it is permissible to conclude, as did the district court, that the second wife holds the insurance proceeds in a constructive trust for the first wife. Salinas v. Salinas, 187 Misc. 509, 62 N.Y.S.2d 385 (1946). The problem remains however, as to the extent of that trust. The district court limited the trust to $50,000 since that was the sum mentioned in the property settlement agreement.

We believe that the court erred in so limiting the trust. The figure of $50,000 in the insurance paragraph of the property settlement was a part of the misdescription of the life insurance 'presently insuring his life.' He did not have life insurance in that amount. Notwithstanding this mistake, it is clear that Howard intended to secure his obligation to provide for the support and education of his children in the event of his untimely death by means of the life insurance he had when the agreement was made. ⁴ Consequently, Barbara and the children are entitled to the proceeds of that insurance including the increase in amount by reason of Howard's accidental death since such increase properly belongs to the person or persons for whose benefit the insurance was required to be carried. Odom v. Prudential Insurance Company of America, 173 Or. 435, 145 P.2d 480 (1944); Newton v. Newton, 472 P.2d 718 (Ct.App.Colo.1970). We, therefore, conclude that the life insurance proceeds received by Dorothy in the amount of $112,848.59 are held by her as constructive trustee for the benefit of Barbara and the children.

2. On October 4, 1973, Dorothy purchased a time certificate of deposit from the First National Bank of Nevada. It was issued in the names of 'Howard F. McKissick, Jr., and/or Dorothy McKissick.' There was no written agreement between Howard and Dorothy with respect to the creation of a joint tenancy in the time certificate of deposit. Neither did the certificate itself contain language of joint tenancy or survivorship.

The purchase of the time certificate was from funds realized by Howard and Dorothy from the sale of real property they had held as joint tenants. Dorothy intended for the time certificate to be in joint tenancy with Howard. The bank officer with whom she dealt indicated that the certificate was in proper form to accomplish that end.

The first question arising from these circumstances is whether the certificate was 'in form to be paid to the survivor' within the meaning of NRS 663.015. ⁵ The district court held that it was. We do not agree.

NRS 111.065(2) provides that 'a joint tenancy in personal property may be created by a written transfer, agreement or instrument.' A writing is required. Weinstein v. Sodaro, 91 Nev. 638, 541 P.2d 531 (1975). The word 'may' in the context of this statute is mandatory. California Trust Co. v. Bennett, 33 Cal.2d 694, 204 P.2d 324 (1949). Thus, we here must determine whether the written time certificate of deposit to 'Howard F. McKissick, Jr., and/or Dorothy McKissick' is 'in a form to be paid to the survivor.'

This court has ruled that in order for a joint tenancy to exist in a chose in action (promissory note and mortgage) the instruments must so provide. Newitt v. Dawe, 61 Nev. 472, 133 P.2d 918 (1943). In that case the note was payable 'to William J. Dawe or Sue A. Hazell Zewitt.' The court found no basis for holding that a joint ownership was intended. And, in In re Condos's Estate, 70 Nev. 271, 266 P.2d 404 (1954), in the decedent's personal ledger he described bonds as 'U.S. bonds (Paul Condos or Ellen Condos).' The court wrote: 'It is impossible to read from the...