Metropolitan Life Ins. Co. v. Manning

• Decision Date: 19 October 1977
• Docket Number: No. 1181,D,1181
• Citation: 568 F.2d 922
• Parties: METROPOLITAN LIFE INSURANCE COMPANY, Plaintiff, v. Edward MANNING, Defendant-Appellee, and Thomas Gaines, Jr., Defendant-Appellant. ocket 77-7053.
• Court: U.S. Court of Appeals — Second Circuit

Page 922

568 F.2d 922

METROPOLITAN LIFE INSURANCE COMPANY, Plaintiff, v. Edward MANNING, Defendant-Appellee and Thomas Gaines, Jr., Defendant-Appellant.

No. 1181, Docket 77-7053.

United States Court of Appeals, Second Circuit.

Argued June 10, 1977.

Decided Sept. 8, 1977.

Rehearing Denied Oct. 19, 1977.

Thomas Gaines, Jr., New Rochelle, N. Y., defendant-appellant Pro Se.

Steven Cohn, Carle Place, N. Y. (Dean & Falanga, Carle Place, N. Y., on the brief), for defendant-appellee Edward Manning.

Before FRIENDLY, TIMBERS and MESKILL, Circuit Judges.

TIMBERS, Circuit Judge:

At stake on this appeal from a judgment entered in the Southern District of New York, Charles H. Tenney, District Judge, adopting a report of Magistrate Harold J. Raby, are the proceeds of a $10,000 federal employees' group life insurance policy which was owned by the deceased, Irene Penn Manning, at the time of her death on September 28, 1975. The district court awarded the insurance proceeds to her second husband, Edward Manning. Her first husband, Thomas Gaines, Jr., appeals. We affirm, but on different grounds than those relied on by the magistrate and adopted by the district court.

I.

Prior to their marriage on August 20, 1941, Irene had met Gaines in New Rochelle, New York, where the two resided separately. In the summer of 1941 they travelled to Missouri to visit Gaines' family. Because Gaines' mother would not allow Gaines and Irene to stay at the family house together unless they were married, they went to Kansas City where they were married by a justice of the peace. After a further two weeks in Missouri, Gaines and Irene returned to New Rochelle where they took up residence together. In 1943 Gaines left his wife to take a war-related job in up-state New York. Shortly after Gaines left her, Irene moved to Bridgeport, Connecticut, where she had found employment. According to Gaines' testimony, he sent his wife no money. At Irene's request, Gaines visited her in 1947 or 1948, at which time Irene sought a reconciliation. Gaines refused. He never again visited or communicated with Irene.

Manning met Irene in the early 1950's when the latter lived in New York City and shared an apartment with Manning's sister. Later Manning and Irene both moved to Connecticut. They were married on December 31, 1956, by a minister in Montgomery County, Maryland. Thereafter they lived together in Connecticut until Irene's death. She had been employed by the Veterans Administration Hospital in West Haven since 1968. Incident to that employment she obtained the insurance policy here at issue. Manning testified that he learned of Gaines' existence only after Irene's death when the Veterans Administration informed Manning of Gaines' competing claim for the insurance proceeds.

Gaines testified that, although he never communicated with Irene following her unsuccessful attempt at reconciliation, he kept himself informed of her doings and whereabouts. He knew that Irene married Manning in 1956, that they lived together as husband and wife, that they eventually bought a house in their joint names in Stratford, Connecticut, and that they maintained a joint bank account. He also knew that Irene obtained employment with the Veterans Administration Hospital. He apparently also learned of her insurance, for he submitted to the Veterans Administration a claim for the insurance proceeds on the day after Irene's funeral.

Faced with conflicting claims for the life insurance proceeds, the group insurance carrier, plaintiff Metropolitan Life Insurance Company, instituted this interpleader action against Manning and Gaines in the Southern District of New York by depositing the policy proceeds with the clerk of the District Court. Judge Tenney on May 4, 1976 referred the matter to Magistrate Raby who, after a two day hearing, filed his report on October 6, 1976. Judge Tenney adopted the report. Judgment was entered in favor of Manning, from which Gaines now appeals.

II.

The magistrate found that the 1941 marriage of Gaines to Irene had not been legally terminated when in 1956 Manning and Irene took vows of marriage. This finding was based on Gaines' testimony that he never had been divorced from Irene, and his further testimony that he had searched the records of Westchester County, New York, and Fairfield County, Connecticut, without finding any divorce decree naming him or Irene. The magistrate nevertheless concluded that Manning was entitled to the insurance proceeds. The magistrate recognized that Irene had not formally designated a beneficiary in her application for federal employees' group life insurance in accordance with 5 U.S.C. § 8705 (1970). ¹ The application form indicated however that if no beneficiary was designated the proceeds would be paid according to a statutory schedule which gave first priority to a widow or widower. Moreover on Irene's employment application forms she had indicated that Edward Manning was her "husband". The magistrate therefore found that, "(h)ad Irene been informed that in order to make absolutely certain that in the event of her death the proceeds of the policy would go to the person she designated as her 'husband' in her employment application, i. e., Edward Manning, she should have made a formal designation of beneficiary, she would have made such designation."

Relying on Sears v. Austin, 292 F.2d 690 (9 Cir.), cert. denied, 368 U.S. 929 (1961), the magistrate held that, in the circumstances of this case where documentary evidence conclusively established that Irene intended Manning to be her beneficiary, her failure to make a formal designation was not controlling. In the magistrate's view the legal invalidity of the marriage of Manning to Irene was not relevant, since the statutory scheme of preference was not called into play except insofar as it established Irene's intent that the man she held out to be her husband should receive the proceeds of her insurance.

In our view the magistrate was not warranted in supplanting the statutory preference scheme with extrinsic evidence of Irene's intent, she having failed formally to designate a beneficiary. Judgment nevertheless properly was entered for Manning because Gaines did not present sufficient evidence to rebut the Connecticut presumption in favor of the validity of the second marriage, a presumption which applies even where there is no proof of a divorce. Moreover even if the invalidity of the second marriage had been proven, it would be given sufficient legal effect under Connecticut law to qualify Manning as the widower within the meaning of § 8705 and to defeat Gaines' claim on the facts of the instant case.

III.

Pursuant to § 8705(a) group life insurance proceeds are payable

"(f)irst, to the beneficiary or beneficiaries designated by the employee in a signed and witnessed writing received before death in the employing office . . . . For this purpose, a designation, change, or cancellation of beneficiary in a will or other document not so executed and filed has no force or effect. . . . "

Clearly Irene did not designate a beneficiary "in a signed and witnessed writing received before death in the employing office". The magistrate's reliance upon other evidence that Irene intended Manning to be her beneficiary was misplaced no matter how probative in other than the instant statutory context.

Sears v. Austin, supra, relied on by the magistrate, held that a valid holographic will, which clearly was intended to be a designation of a beneficiary to the proceeds of federal insurance, was effective as such. In United States v. Pahmer, 238 F.2d 431, 433 (2 Cir. 1956), cert. denied, 352 U.S. 1026 (1957), we observed that "the cases are legion which hold that in judging of the efficacy of the attempted change of beneficiary 'the courts brush aside all legal technicalities in order to effectuate the manifest intention of the insured'.", quoting Roberts v. United States, 157 F.2d 906, 909 (4 Cir. 1946), cert. denied, 330 U.S. 829 (1947). Congress however intended to overrule "this long, unbroken line of authority", United States v. Pahmer, supra, 238 F.2d at 433, ² when in 1966 it amended what is now § 8705(a) to add the sentence: "For this purpose, a designation, change, or cancellation of beneficiary in a will or other document not so executed and filed has no force or effect." Pub.L. 89-373, 80 Stat. 78 (1966). ³ The Senate Report on the amendment commented specifically on the Ninth Circuit's decision in Sears:

"The equities in Sears may have prompted the court of appeals to disregard the civil service regulation and the general intent of the statute in order to comply with the insured's wishes, but the precedent established in that case could, if generally followed, result in administrative difficulties for the Civil Service Commission and the insurance companies and, more important, seriously delay paying insurance benefits to survivors of Federal employees.

"To clarify Congress' intent, H.R. 432 (enacted as Pub.L. 89-373) rewrites section 4 to state clearly that the order of precedence set out in that section shall prevail over any extraneous document designating a beneficiary unless the designation has been properly received by the employing office . . . ." Senate Rep.No.1064, 89th Cong., 2d Sess. (1966), quoted in 2 U.S.Code Cong. & Admin.News, 2070, at 2071 (1966).

Congress intended to establish, for reasons of administrative convenience, an inflexible rule that a beneficiary must be named strictly in accordance with the statute, irrespective of the equities in a particular case. Federal courts uniformly have so held since the 1966 amendment. Stribling v. United States, 419 F.2d 1350, 1353-54 (8 Cir. 1969); Adams v. Macy, 314 F.Supp. 399, 400-01 (D.Md.1970); Pekonen v. Edgington, 298 F.Supp. 158 (E.D.Cal.1969). While the facts in these cases may show less clearly than in the case of Irene an intent on the part of the insured that a person not formally...