Prudential Ins. Co. of America v. Smith

• Decision Date: 10 June 1985
• Docket Number: No. 84-4497,84-4497
• Citation: 762 F.2d 476
• Parties: The PRUDENTIAL INSURANCE COMPANY OF AMERICA, Plaintiff, v. Anne Marie SMITH, Defendant-Appellant, v. Irene M. SMITH, Defendant-Appellee. Summary Calendar.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 476

762 F.2d 476

The PRUDENTIAL INSURANCE COMPANY OF AMERICA, Plaintiff, v. Anne Marie SMITH, Defendant-Appellant, v. Irene M. SMITH, Defendant-Appellee.

No. 84-4497

Summary Calendar.

United States Court of Appeals Fifth Circuit.

June 10, 1985.

Bernard W.N. Chill, Sr., Luke Dove, Jackson, Miss., for defendant-appellant.

Robert P. Thompson, Jackson, Miss., for defendant-appellee.

Appeal from the United States District Court for the Southern District of Mississippi.

Before RUBIN, RANDALL, and TATE, Circuit Judges.

TATE, Circuit Judge:

This interpleader action involves the competing claims of two former wives of a deceased serviceman, Sergeant Terry Joe Smith, to be the beneficiary, as his "widow," of a Servicemen's Group Life Insurance ("SGLI") policy issued to the deceased serviceman. ¹ See 38 U.S.C. Secs. 765 et seq. ² The competing claimants are: Anne Marie Smith ("Anne Marie"), the first wife of the deceased serviceman; and Irene M. Smith ("Irene"), to whom the serviceman was subsequently married, after securing a divorce from Anne Marie, and with whom the serviceman was living at the time of his death. Anne Marie, the first wife, contends that the divorce was invalid, for procedural defects, and that therefore she was the "lawful spouse," and consequently the widow, of Sergeant Smith when he died, despite his later ceremonial marriage to Irene.

Anne Marie appeals from judgment recognizing Irene, the second wife, as the intended beneficiary. Anne Marie contends (1) that the divorce was invalid and therefore, under the SGLI statute, she was the "lawful spouse" and beneficiary of the policy; and (2) that, in affording weight to the actual intent of the insured serviceman rather than literally applying the statutory definitions, the district court followed principles applicable to servicemen's policies issued under the National Service Life Insurance Act ("NSLI"), 38 U.S.C. Secs. 701 et seq. (a servicemen's life insurance program applicable to an earlier period of military service), rather than the more stringent standards applicable to a SGLI policy, such as the present, as provided by Stribling v. United States, 419 F.2d 1350 (8th Cir.1969), and succeeding jurisprudence.

We affirm. Like the district court, we conclude that it is unnecessary to determine the validity of Sergeant Smith's divorce from Anne Marie. We hold that the district court properly determined, under principles applicable to SGLI policies, that the beneficiary of Sergeant Smith's policy was Irene, based on official forms filed prior to his death that clearly showed his intent to designate Irene in particular--not merely his "widow"--as his beneficiary.

I.

The pertinent facts are undisputed. Smith entered the United States Army and married Anne Marie in Mississippi in 1974. In early 1977, Sergeant Smith transferred to Germany and never saw Anne Marie again. In 1978, he filed an action in Mississippi for divorce from Anne Marie, and the divorce decree was entered in September 1978. Sergeant Smith then married Irene in New Jersey in December 1978, and thereafter they lived together as man and wife until Smith's death in November 1980.

Prior to his divorce from Anne Marie, Sergeant Smith had executed appropriate forms for filing in his military records showing her to be his wife and providing that his lawful wife was his beneficiary under his SGLI policy. After his divorce and second marriage to Irene, as will be shown more fully below, Sergeant Smith executed and filed three forms with his military records that unmistakably showed that he regarded Irene as his lawful wife and that he intended for her to be the beneficiary of his SGLI policy.

Before setting forth these circumstances, we outline the statutory provisions with regard to the beneficiaries of SGLI policies. By 38 U.S.C. Sec. 770(a), ³ the statutory scheme provides that precedence shall be given, first, to the beneficiary "designated [by the serviceman] by a writing received prior to death" with the military services. If no such beneficiary has been so designated, the statute provides for an order of precedence; first, to the "widow or widower;" then, if there be none, to a child or children or to (if predeceased) their descendants; then, if none of the previous apply, to the parents; and, finally, if none of the above apply, to the administrator or next of kin. The administrative regulations provide that a serviceman may designate "any " person or entity as beneficiary, 38 C.F.R. Sec. 9.16(a), and that "[a]ny designation or change of beneficiary] ... will take effect only if it is in writing, signed by the insured and received prior to the death of the insured by his or her uniformed service," id., Sec. 9.16(d). ⁴

A form is provided whereby a serviceman may elect not to take the statutory $20,000 coverage of a SGLI policy and whereby he may designate his beneficiary. The form, entitled "Servicemen's Group Life Insurance Coverage," is numbered as VA Form 29-8266. The record reflects that Sergeant Smith had executed such a form during his first marriage to Anne Marie, accepting the statutory coverage and apparently (it is not in the record) designating as beneficiary his lawful spouse (Anne Marie, at the time). After his divorce and re-marriage to Irene, Sergeant Smith executed another such form, which will be described below.

The divorce decree between Sergeant Smith and Anne Marie, his first wife, was entered September 28, 1978. On December 12, 1978 he was formally married to Irene, the second wife. On December 19, seven days later, Sergeant Smith executed for his military records another form, a "Record of Emergency Data" (Defense Department Form 93). In this form, he designated his wife as Irene, and he had a note that on 28 September 1978 he was divorced from Anne Marie. See Exhibit I-3. The form instructions note that "[t]his extremely important form is to be used by you to show the names and addresses of your spouse, children, parents" in order, inter alia, "to designate beneficiaries for certain benefits if you die." The sergeant did not at this time execute a new SGLI change of beneficiary, although a notation on his emergency data form indicates that quite possibly he considered his previous designation of his lawful spouse as beneficiary sufficient to designate his new wife as such.

Nevertheless, while stationed in Germany, on September 10, 1980, he subsequently executed on the same day both a new "Servicemen's Group Life Insurance Election Form" (VA Form 29-8286), see Exhibit I-1, and a new "Record of Emergency Data" form (DD Form 93), see Exhibit I-2. ⁵ In the latter, again, he showed Irene his wife, and for the blank, "Insurance," a notation was included: "See VA Form 29-8286" (which had been simultaneously executed that day).

The "Servicemen's Group Life Insurance Election" form (VA Form 29-8286) executed by Sergeant Smith on September 10, 1980, simultaneously with the other documents, in Part 1 provided for the coverage and in Part 2 provided for the designation of beneficiaries. As to the latter, the instructions stated that the serviceman should insert "By Law" in his own handwriting if he wished the law as to his beneficiaries to apply as explained on the reverse side. As there explained, in the absence of other designation of beneficiary, the "widow" would under 38 U.S.C. Sec. 770(a) (quoted in full in note 3 above) be the beneficiary "by law." For purposes of the SGLI act, "The terms 'widow' or 'widower' means a person who is the lawful spouse of the insured member at the time of his death." 38 U.S.C. Sec. 765(7). Sergeant Smith inserted under the beneficiary designation space, "By Law."

II.

After a bench trial, the district court found as a fact that, under the circumstances shown, Sergeant Smith regarded Irene as his lawful spouse and intended by the documents executed to make her his life insurance beneficiary. The district court pointed out that the divorce decree had been granted on September 28, 1978, and that at the time Sergeant Smith executed the designation of his beneficiary to be his lawful spouse on September 10, 1980, he had under the record evidence no reason to suspect that his first wife, Anne Marie, questioned the divorce, which had long since been mailed to her. (Although Anne Marie did file a petition to set aside the decree in August 17, 1979, the record reflects that Sergeant Smith, in Germany, was not served and did not receive notice until November 14, 1980, or afterwards, shortly before he died on November 30, 1980.)

If Sergeant Smith's actual intent is determinative (as we find it is, under the present circumstances), then the district court's finding that the decedent intended to change any other designation of beneficiary and to make Irene, his second wife, his beneficiary is subject to review under the clearly erroneous standard. John Hancock Mutual Life Insurance Company v. Dutton, 585 F.2d 1289, 1296 (5th Cir.1978); Taylor v. United States, 244 F.2d 799, 799 (5th Cir.1957); Shack v. United States, 234 F.2d 934, 937 (5th Cir.1956). See Fed.R.Civ.P. 52(a). The district court's finding is clearly not erroneous.

III.

On her appeal, Anne Marie, the first wife, contends that the district court erred as a matter of law in according such weight to the actual intent of the decedent as to whom he designated as his beneficiary. She contends that under the strict construction required of a SGLI policy, the district court was required to interpret literally Sergeant Smith's designation of his beneficiary as "by law," which under the instructions accompanying the beneficiary-designation form designated his "widow", i.e., his "lawful spouse," at the time of his death. The appellant Anne Marie thus argues that this "by law" designation made it requisite for the district court to determine who was the decedent's "lawful" spouse, which in turn required a determination of the validity or not of the decedent's divorce...