Peckham v. METROPOLITAN LIFE INSURANCE COMPANY, 183-68.

• Citation: 415 F.2d 312
• Decision Date: 10 September 1969
• Docket Number: No. 183-68.,183-68.
• Parties: W. T. PECKHAM, Administrator of the Estate of Goldie W. Swinney, Plaintiff-Appellee, v. METROPOLITAN LIFE INSURANCE COMPANY, an Insurance Corporation, Defendant, and Edith Swinney, Defendant-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

415 F.2d 312 (1969)

W. T. PECKHAM, Administrator of the Estate of Goldie W. Swinney, Plaintiff-Appellee, v. METROPOLITAN LIFE INSURANCE COMPANY, an Insurance Corporation, Defendant, and Edith Swinney, Defendant-Appellant.

No. 183-68.

United States Court of Appeals Tenth Circuit.

September 10, 1969.

Fred R. Vieux, Augusta, Kan., for plaintiff-Appellee.

Gerald L. Michaud, Wichita, Kan. (Orval I. Fisher, Wichita, Kan., with him on brief) for defendant-appellant.

Before MURRAH, Chief Judge, and PHILLIPS and HICKEY, Circuit Judges.

MURRAH, Chief Judge.

In this Kansas diversity case, the plaintiff-appellee, Goldie W. Swinney,¹ seeks the proceeds of a group insurance policy. The policy was issued by Metropolitan Life Insurance Company for the benefit of employees of Socony-Mobil Oil Company, Inc. The deceased, William J. Swinney, was employed by Mobil at the time of his death and admittedly covered by the group policy.

The real dispute is between Goldie Swinney (the first wife) and Edith Swinney (the second wife). Goldie Swinney was married to the deceased for a number of years and designated as beneficiary under the group policy during their marriage. In October, 1958, Goldie Swinney was awarded a divorce by the Kansas District Court wherein a property division was made by court decree. In pertinent part, the state court ordered that Goldie Swinney "shall remain as beneficiary under a certain group life insurance policy on Mr. Swinney's life * * * for a period of not less than ten years. * * * Mr. Swinney shall maintain and pay the premiums on said policy for said period and shall retain * * * Goldie W. Swinney as beneficiary thereunder in the full amount as provided in said policy, and Mr. Swinney shall execute and sign any and all necessary agreements, assignments or other instruments to effectuate and carry out this provision."

Mr. Swinney carried out this provision until 1963 when he executed a change of beneficiary form in favor of his second wife, Edith Swinney. Apparently no notice of this change was given to Goldie Swinney. As named beneficiary, Edith Swinney claims all three benefits under the policy, i.e. life insurance benefits, annuity benefits, and survivorship benefits. Goldie Swinney claims the same benefits by virtue of the divorce decree.

After a full hearing, Judge Theis awarded the life insurance and annuity benefits to Goldie Swinney and survivorship benefits to Edith Swinney. The survivorship benefits were not funded by insurance at the time of the divorce and no appeal is taken from this part of the judgment. Edith Swinney appeals from that portion of the judgment awarding any benefits to Goldie Swinney. With minor exceptions to be noted, we affirm the judgment.

The decisive issue presented on appeal is the legal effect of the divorce decree vis-a-vis critical provisions of the group policy. No Kansas cases have been found directly in point. Our own research has disclosed two cases, however, where the court gave effect to a divorce decree vesting one spouse with the rights of a beneficiary in a non-assignable group policy as against the named beneficiary. See Equitable Life Assurance Soc. v. Wilkins, 44 F.Supp. 594 (E.D.N.Y.1942) and Metropolitan Life Ins. Co. v. Richardson, 27 F.Supp. 791 (W.D.La.1939). (The latter case treated the identical group policy here involved.) See also Metropolitan Life Ins. Co. v. Enright, 231 F.Supp. 275 (S.D.Calif.1964); Sbisa v. Lazar, 78 F.2d 77 (5th Cir. 1935); Candler v. Donaldson, 272 F.2d 374 (6th Cir. 1959); Goodrich v. Massachusetts Mutual Life Ins. Co., 34 Tenn. App. 516, 240 S.W.2d 263 (1951); Aetna Life Ins. Co. v. Creel, 390 S.W.2d 522 (Tex.Civ.App.1965); and 2 Appleman, Insurance Law and Practice § 961 p. 587. These authorities uniformly demonstrate a manifest respect for the divorce decree. And rightly so, since it is deeply rooted in the equities of domestic relations. And cf. Prudential Ins. Co. v. Rader, 98 F.Supp. 44 (D.C.Minn.1951) where a property settlement obligating the husband to maintain a life insurance policy was enforced even though not incorporated into the divorce decree. Couch on Insurance 2d § 27:116.

The principles of these cases seem well in line with Kansas authority. In Tivis v. Hulsey, 148 Kan. 892, 84 P.2d 862 (S. Ct.1938) the court gave effect to an oral contract wherein the insured, for valuable consideration, agreed to name the plaintiff beneficiary of a life insurance policy procured under a group insurance plan. The court permitted the plaintiff to recover from the named beneficiaries on what appears to be a trust fund theory. Only one case relied upon by Edith Swinney appears to be...