Miller v. Paul Revere Life Ins. Co.

• Decision Date: 12 October 1972
• Docket Number: No. 42336,42336
• Citation: 81 Wn.2d 302,501 P.2d 1063
• Parties: Alice K. MILLER, Individually and as Administratrix of the Estate of Walter A. Miller, Jr., Deceased, Respondent, v. PAUL REVERE LIFE INSURANCE COMPANY, a corporation, Appellant.
• Court: Washington Supreme Court

Page 302

81 Wn.2d 302

501 P.2d 1063

Alice K. MILLER, Individually and as Administratrix of the Estate of Walter A. Miller, Jr., Deceased, Respondent, v. PAUL REVERE LIFE INSURANCE COMPANY, a corporation, Appellant.

No. 42336.

Supreme Court of Washington, En Banc.

Oct. 12, 1972.

MacGillivray, Jones, Clarke, Schiffner & Johnson, Henry E. Stiles, II, Spokane, for appellant.

Dellwo, Rudolf & Grant, William J. Grant, Spokane, for respondent.

ROSELLINI, Associate Justice.

In this action, the surviving spouse of an insured sought and was awarded judgment against the insurer for the full amount of the proceeds of the insurance which it had previously paid to the named beneficiary, the mother of the insured. The insurer has appealed.

The insured was a laborer belonging to a union which had obtained from his employers an agreement to provide life insurance for eligible employees. An eligible employee was given a card upon which to designate the beneficiary of the life insurance applicable to him, and was given a brochure explaining the insurance program. The premiums were paid by the employer, and many of them in this instance were paid before the marriage of the insured, but we assume for the purposes of this opinion that the insurance benefits were community property.

The respondent's husband had been single at the time he first became eligible for insurance benefits under the policy issued by the appellant, and he had designated his mother as beneficiary. He married the respondent about 2 years before his accidental death on August 30, 1969. Before his death, the respondent was aware of the existence of the insurance and had seen the brochure, but did not know that her husband had designated someone other than herself as beneficiary.

Upon the death of the insured, the respondent assumed that she would be paid the insurance proceeds and took no action to assert a claim until more than a month later, when she went to the union hall and inquired about the insurance proceeds. She was advised that the money had been paid by the appellant to the insured's mother.

She contacted an attorney shortly thereafter, and the attorney made demand upon the appellant for payment of the proceeds of the policy, claiming that the respondent was entitled thereto under the community property law of this state. The appellant refused to honor this demand, and this lawsuit followed.

It is the position of the appellant that, when it paid the beneficiary designated by the insured without notice of an adverse claim to the proceeds, it performed its duty under the contract of insurance and under the laws of this state and that it had no duty to a third party whose claim was not asserted until after payment of the proceeds had been made.

The appellant's position is correct.

It is the general rule that when the insurer makes payment of the proceeds of insurance to the person who by the policy is the proper recipient, such payment is a discharge of the liability of the insurer. 5 Couch on Insurance § 27.177 (2d ed. 1960).

The statutes of this state are in harmony with this general principle. RCW 48.18.370 provides:

Whenever the proceeds of, or payments under a life or disability insurance policy, heretofore or hereafter issued, become payable and the insurer makes payment thereof in accordance with the terms of the policy, or in accordance with any written assignment thereof pursuant to RCW 48.18.360, the person then designated in the policy or by such assignment as being entitled thereto, shall be entitled to receive such proceeds or payments and to give full acquittance therefor, and such payment shall fully discharge the insurer from all claims under the policy unless, before payment is made, the insurer has received at its home office, written notice by or on behalf of some other person that such other person claims to be entitled to such payment or some interest in the policy.

This statute was called to the attention of the trial court, but that court was of the opinion that the appellant had a duty to investigate and determine whether the spouse of the deceased claimed an interest in the proceeds, since it had notice of the fact that he was married, that fact and the address of his spouse appearing on the death certificate, a copy of which was furnished the appellant.

We find in law no basis for the imposition of such a duty. The statute provides that the insurer may pay the named beneficiary unless it has notice of an adverse Claim. Notice of the existence of a possible claimant is not notice of the existence of a claim. The appellant was entitled to rely upon the plain language of RCW 48.18.370, and also upon RCW 48.18.440, which deals with the rights of a spouse in insurance policies and provides, inter alia:

(2) In any life insurance policy heretofore or hereafter issued upon the life of a spouse the designation heretofore or hereafter made by such spouse of a beneficiary in accordance with the terms of the policy, shall create a presumption that such beneficiary was so designated with the consent of the other spouse, but only as to any beneficiary who is the child, parent, brother, or sister of either of the spouses.

We recognized in National Bank of Commerce of Seattle v. Lutheran Brotherhood, 40 Wash.2d 790, 246 P.2d 843 (1952), that this provision was probably enacted for the benefit of insurers. The manifest legislative purpose in adopting this and RCW 48.18.370 was to facilitate the prompt payment of the proceeds of insurance policies to the named beneficiaries.

The validity of RCW 48.18.440 has not been assailed in this action. The trial court did indicate that, in its opinion, to give effect to the section would deprive the respondent of her property without due process of law. The respondent, while appearing to rely upon the trial court's rationale to support the judgment, cites no authorities to sustain it.

The opinion of the trial court and the respondent's brief suggest a theory that these statutes were enacted inadvertently and were not meant to be given effect in the courts.

It is well settled that the legislature may validly provide that proof of one fact shall constitute prima facie evidence of another. Quoting from Mobile, Jackson & Kansas City R.R. v. Turnipseed, 219 U.S. 35, 31 S.Ct. 136, 55 L.Ed. 78 (1910), this court in State v. Spiller, 146 Wash. 180, 185, 262 P. 128, 130 (1927), said:

'That a legislative presumption of one fact from evidence of another may not constitute a denial of due process of law or a denial of the equal protection of the law it is only essential that there shall be some rational connection between the fact proved and the ultimate fact presumed, and that the inference of one fact from proof of another shall not be so unreasonable as to be a purely arbitrary mandate. So, also, it must not, under guise of regulating the presentation of evidence, operate to preclude the party from the right to present his defense to the main fact thus presumed. . . .'

Again quoting from a decision of the United States Supreme Court (United States v. Gainey, 380 U.S. 63, 85 S.Ct. 754, 13 L.Ed.2d 658 (1965)), we noted in State v. Higgins, 67 Wash.2d 147, 406 P.2d 784 (1965), that the question whether there is a rational connection between the fact proved and the fact presumed is an empirical one, and that in matters not within specialized judicial competence or completely commonplace, significant weight should be accorded the capacity of the legislative body to "amass the stuff of actual experience and cull conclusions from it." 67 Wash.2d at 152, 406 P.2d at 787.

It is not suggested that there is no rational basis for an assumption that, where a married person has designated a close relative other than his or her spouse as beneficiary of a life insurance policy, he has done it with the consent of the other spouse. The relationship between husband and wife is assumed to be one of trust and confidence and affection, and since the institution of marriage has been embraced by the majority of the population for so many hundreds of years, the legislature was certainly entitled to find that ordinarily these factors are present in that relationship. We also can observe the fact that there are other family relationships which are of concern to married people as well as to single people, and not infrequently married persons will agree to make some insurance proceeds payable to an elderly, disabled, incompetent, dependent, or indigent family member, or to one who simply is the recipient of their affection.

The legislature could consider the dilemma which would confront an insurer...