Sentry Life Insurance v. Chuchanis
| Decision Date | 03 February 2014 |
| Docket Number | 2013-CV-01591 |
| Parties | SENTRY LIFE INSURANCE, Plaintiff, v. ANDREW CHUCHANIS, et al., Defendant(s) |
| Court | Ohio Court of Common Pleas |
JUDGMENT ENTRY
This case involves a dispute about who is entitled to receive life insurance proceeds. Sentry Life Insurance Company has deposited the proceeds with the Court and been dismissed from the case. Both of the remaining parties have filed for Summary Judgment.
Facts:[1]
Sentry Life Insurance company (" Sentry") issued life insurance policy number 73-05927-71 (the " Policy") to Tracy Veach Lytle Brown (" Tracy") in 1991. In March, 2013, Tracy died, thus giving rise to a $100, 000 payout under the Policy. In June, 2013, because two different people claimed entitlement to the proceeds, Sentry filed an interpleader action, obtained approval to deposit the funds and deposited $102, 161.36 with the Court.
In 1991, at the time Sentry issued the Policy to Tracy, she selected Andrew Chuchanis (" Chuchanis") as the Policy's beneficiary and Christine Veach (" Veach") as the contingent beneficiary. In October 1998, seven years after obtaining the Policy, Tracy sent Sentry a letter indicating that she had gotten married, she had a name change, and she wanted to change her primary beneficiary from Chuchanis to her new husband, Richard Lytle. That same letter requested that Sentry send her confirmation of the changes.
Later that month, Sentry responded to Tracy's letter, in pertinent part, as follows: " Enclosed is the form that is needed to change the beneficiary designations on your life insurance policy." The letter enclosed a change of beneficiary form that required Tracy to list the name and address of her beneficiaries, sign in front of a witness who is not a beneficiary of the Policy, and provide the witness's signature. The Sentry letter and form were sent to Tracy at her then-current address--the same address where she received the quarterly premium invoices that she paid.
The Policy provision regarding change of beneficiaries reads as follows:
Tracy never completed the change of beneficiary form Sentry sent to her in October, 1998. Richard Lytle (the person Tracy named in her letter to Sentry) died in 2000. In 2001, Tracy married John Brown. Later that year, Tracy sent a request to change her name as a result of that marriage. In response, Sentry mailed Tracy another change of beneficiary form. This form was also sent to Tracy's then-current address. Again, Tracy did not respond.
On at least two occasions after the paperwork at issue in this case- once in 2009 and once in 2011- Tracy told her good friend that she still loved Chuchanis and that she intended him to have the Policy proceeds in the event of her death. (See Affidavit of Laliberte.)
After Tracy died, both Chuchanis and Veach sent letters to Sentry claiming entitlement to the Policy proceeds.
Standard of Review:
Summary judgment is appropriate where no genuine issues of material fact exist and the undisputed facts entitle the moving party to judgment as a matter of law. Civ. R. 56(C); Harless v. Willis Day Warehousing, Co., Inc., 54 Ohio St.2d 64, 375 N.E.2d 46 There mere existence of some factual disputes, if not material, will not defeat a motion for summary judgment. Buckeye Union Ins. Co. v. Consol, Stores Corp. (10th Dist. 1990), 68 Ohio App.3d 19, 22-23, 587 N.E.2d 391.
The parties do not dispute that the named beneficiary of the Policy is Chuchanis. The Policy's definition of " Beneficiary" reads, in pertinent part, as follows:
" Beneficiary- The beneficiary of this policy is named in the application."
Chuchanis was the party so-named. The parties do not dispute the fact that Sentry never recorded any beneficiary change.
Generally, there is a presumption that the named beneficiary of a life insurance policy has the right to recover proceeds upon the insured's death. See Papenhagen v. Estate of Papenhagen, 6th Dist. Lucas Cty. App. No. L-85-446, 1986 WL 13181 (Nov. 21, 1986), citing Ferguson v. Owens, 9 Ohio St.3d 223, 9 Ohio B. 565, 459 N.E.2d 1293 (1984). In a dispute over entitlement to life insurance proceeds, the person who is not the named beneficiary generally has the burden of establishing a right to the proceeds. See e.g. Cannon v. Hamilton, 174 Ohio St. 268, 189 N.E.2d 152 (1983). Thus, because Veach is not the named beneficiary, she has the burden of showing a right to the proceeds. In this case, Veach argues that her right is based on a validly executed change of beneficiary.
" Ordinarily, a change of beneficiary in a policy of life insurance is accomplished by following the procedure directed in the policy." Cannon v. Hamilton, 174 Ohio St. 268, ¶ 2 of syllabus (1963). In this case, the Policy contains a provision specifying that beneficiary changes require " satisfactory written notice" to Sentry. (Policy at p. 4.) It is apparent from the undisputed facts that written notice satisfactory to Sentry was use of Sentry's form, which had certain requirements such as providing the beneficiary's name, address, and relationship; completing the form in ink; signing the form in the presence of a witness; and obtaining that witness's signature. Tracy failed to complete and return the written notice that would have been satisfactory to Sentry.
The failure to strictly follow the Policy requirements regarding beneficiary change is not, however, fatal to Defendant Veach's claims. To change beneficiaries named in a life insurance policy, without strictly following the Policy provisions, the insured must do the following: 1) clearly express an intent to name certain new beneficiaries; and 2) accomplish such in a matter that substantially complies with the policy provisions about how to effectuate a change. Allstate Life Ins. Co. v. Lardner, 8th Dist. Cuyahoga App. No. 60373, 1992 WL 80052 (April 16, 1992).
Intent:
In this case, there is evidence that the insured, Tracy, clearly expressed an intent to change beneficiaries. The October, 1998 letter she sent to Sentry, requesting to change her beneficiary from Chuchanis to her then-husband, Mr. Lytle, is evidence of a clear intent to change beneficiaries.
Defendant Chuchanis challenges the evidence by arguing that Tracy abandoned her intent. Indeed, there is evidence that Tracy abandoned her intent to name Lytle as the beneficiary in place of Chuchanis. Tracy told Jennifer Laliberte in both 2009 and 2011 that she loved Chuchanis and intended for Chuchanis to have the Policy proceeds in the event of her death.[2]
Defendant Chuchanis further argues that Tracy's letter requested Sentry to send confirmation, it contemplated further action and was not a clear expression of intent to change beneficiaries.
In terms of evaluating the Motions for Summary Judgment, with evidence on both sides, neither party prevails on the " clearly expressed intent" element.
Substantial Compliance:
When an insured does not follow policy provisions for changing beneficiaries, the Court must determine whether there is substantial compliance with the provisions sufficient to effectuate the change. See e.g. Pipe Fitters' Local No. 392 v. Huddle, ...
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