Shrader v. Equitable Life Assur. Soc. of U.S.

• Citation: 20 OBR 343,20 Ohio St.3d 41,485 N.E.2d 1031
• Decision Date: 27 November 1985
• Docket Number: No. 85-184,85-184
• Parties: , 20 O.B.R. 343 SHRADER, Appellee, v. EQUITABLE LIFE ASSURANCE SOCIETY OF the UNITED STATES; Wolford et al., Trustees, Appellants.
• Court: United States State Supreme Court of Ohio

Page 41

20 Ohio St.3d 41

485 N.E.2d 1031, 20 O.B.R. 343

SHRADER, Appellee, v. EQUITABLE LIFE ASSURANCE SOCIETY OF the UNITED STATES Wolford et al., Trustees, Appellants.

No. 85-184.

Supreme Court of Ohio.

Nov. 27, 1985.

Syllabus by the Court

The identity of a person who intentionally and feloniously causes the death of another can be established in a civil proceeding in order to prevent the wrongdoer from receiving the proceeds of the deceased's life insurance policy.

On October 22, 1981, Jean M. Shrader was strangled to death in a parking garage in downtown Columbus, Ohio. No criminal charges have ever been filed as a result of this killing. On May 3, 1982, the deceased's husband, appellee, John J. Shrader, filed suit in the Court of Common Pleas of Franklin County against Equitable Life Assurance Society of the United States ("Equitable"). Shrader alleged that Equitable had insured his wife's life, and that as the primary beneficiary of the insurance policy, he was "entitled to payment of the entire proceeds which became payable at the time of the death of Jean M. Shrader."

Equitable filed an answer and counterclaim stating it held two policies on Jean Shrader's life with death benefits totalling $109,484.93. Equitable also averred that "the primary beneficiary under each of these policies was [appellee] John J. Shrader, husband of the decedent, and the secondary beneficiary was Dale E. Wolford, father of the decedent." The insurance company then stated that John Shrader and Dale Wolford both claimed the life insurance benefits and that "by reason of the aforesaid conflicting and adverse claims, The Equitable is in doubt as to which of the parties is entitled to the proceeds of the aforesaid life insurance policies and cannot safely pay said proceeds to any of the parties without the danger of possible multiple liability." Equitable then deposited $109,484.93 with the common pleas court and prayed that John Shrader and Dale Wolford, "be required to interplead and settle among themselves their rights or claims to the proceeds due under the life insurance policies * * *."

The trial court released Equitable from any liability in excess of the $109,484.93 it had deposited with the court, and ordered that Dale Wolford be joined as a party defendant. Dale Wolford then assigned all his right, title and interest in the insurance proceeds to the Jean M. Wolford Charitable Trust. The trustees of that trust, Dale Wolford and his wife, Leah Wolford, appellants herein, were then joined as party defendants.

On June 16, 1982, the Wolfords filed an answer and counterclaim, each of which stated that Shrader was not entitled to receive the insurance proceeds because he had "intentionally and feloniously" killed his wife. The Wolfords prayed that the insurance proceeds on deposit with the court be paid to the Jean M. Wolford Charitable Trust.

On July 14, 1982, Shrader filed a motion asking the common pleas court to dismiss the Wolfords' answer and counterclaim on the ground they failed to state a claim or defense upon which relief could be granted. He asserted that even if the facts stated in the answer and counterclaim were true, he could not be denied the insurance money unless he had previously pled guilty to or been convicted of aggravated murder, murder or voluntary manslaughter. On October 13, 1982, Shrader's motion to dismiss was overruled.

In April 1983, upon motion for disqualification by Shrader, the trial court judge recused himself from the case and a second judge was appointed to take his place. Shrader then filed a motion which, inter alia, asked the court to reconsider its previous decision not to dismiss the Wolfords' answer and counterclaim. The motion for reconsideration was overruled by the second trial judge.

As the case proceeded toward trial, it became clear that the only disputed factual issue appeared to be whether Shrader intentionally and feloniously killed his wife. Prior to trial, Shrader's deposition was taken and he testified at length about his contacts with Danny R. Kinser. Shrader claimed that Kinser had seen certain marks on Shrader's hands before the October 22, 1981 killing. This was significant because the Wolfords contended that Shrader received the marks while strangling his wife. Shrader answered all questions about Kinser without invoking his right against self-incrimination.

The trial of this case began on July 25, 1983. The Wolfords introduced evidence regarding the marks on Shrader's hands. Shrader was called on cross-examination and testified that Kinser had told him he had seen the marks on Shrader's hands before the killing. Shrader called Kinser on rebuttal and he testified as Shrader said he would. After Kinser was released as a witness, he informed the Wolfords that his testimony had been untruthful and that Shrader had offered him a large sum of money if he would perjure himself.

At that point, the Wolfords' attorney sought to ask Shrader more questions about his relationship with Kinser. Shrader refused to answer any questions with regard to his contact with Kinser and, for the first time during the course of the litigation, invoked his right against self-incrimination. The trial court found that Shrader had waived his Fifth Amendment rights by voluntarily taking the witness stand and testifying about his contacts with Kinser, and ordered him to testify. When he refused, the trial court ordered him incarcerated until he was willing to comply with the court's order.

Shrader took an immediate appeal to the Court of Appeals for Franklin County pursuant to this court's decision in Smith v. Bd. of Trustees (1979), 60 Ohio St.2d 13, 396 N.E.2d 743 . In Shrader v. Equitable Life Assur. Soc. (1983), 10 Ohio App.3d 277, 461 N.E.2d 1339, the appellate court found that Shrader had voluntarily waived his right against self-incrimination, but said the trial court erred by incarcerating him.

"Here, more appropriate means are available to satisfy the competing constitutional and procedural rights than that chosen by the trial court. Under the circumstances, the trial court had at least two other alternatives: (1) to strike all testimony pertinent to the matter to which Shrader refuses to testify, or (2) to render judgment for failure to comply with the court's order upon his claim or in the nature of default for failing to defend upon the adverse party's claim. See Civ.R. 41(B)(1) and 55(A)." Shrader, supra, at 281, 461 N.E.2d 1339.

On remand, Shrader continued to refuse to testify on the ground his answers might tend to incriminate him. The common pleas court then rendered judgment against Shrader on his claim and for the Wolfords on their counterclaim. The court ordered that the money Equitable had deposited with the court be paid to the Jean M. Wolford Charitable Trust.

A sharply divided panel of the court of appeals reversed. The majority recognized the well-settled rule in Ohio that the beneficiary of a life insurance policy cannot recover thereon when the death of the insured is caused by the intentional and felonious act of the beneficiary. The court also held, however, that a civil case cannot be used to determine whether the beneficiary actually killed the insured. The majority concluded that " * * * public policy supports the determination that the identity of the killer be established in a criminal proceeding, if available, rather than in a civil proceeding. * * *"

The cause is now before this court pursuant to the allowance of a motion to certify the record.

Albers & Albers and James S. Albers, Columbus, for appellee.

Vorys, Sater, Seymour & Pease, John C. Elam, James E. Phillips and F. James Foley, Columbus, for appellants.

DOUGLAS, Judge.

I

The first issue in this case is whether R.C. 2105.19, dealing with persons prohibited from benefiting from the death of another, is applicable in this case. That provision states:

"(A) No person who is convicted of or pleads guilty to a violation of or complicity in the violation of section 2903.01 [aggravated murder], 2903.02 [murder], or 2903.03 [voluntary manslaughter] of the Revised Code * * *shall in any way benefit by the death. All property of the decedent, and all money, insurance proceeds, or other property or benefits payable or distributable in respect of the decedent's death, shall pass or be paid or distributed as if the guilty person had predeceased the decedent * * *." (Emphasis added.)

It is undisputed that John Shrader has never been convicted of, or pled guilty to, any of the homicides enumerated in the above provision. Indeed, he has never been charged with any criminal homicide offense. Since Shrader is presumed innocent of any criminal violation until his guilt is established by proof beyond any reasonable doubt, see Taylor v. Kentucky (1978), 436 U.S. 478, 483, 98 S.Ct. 1930, 1933-34, 56 L.Ed.2d 468, he cannot be said to be a "guilty person." Since R.C. 2105.19 only operates to prevent certain criminals from reaping the fruits of their crimes, and since John Shrader does not fall into that category of persons, the statute is not applicable in this case.

Shrader argues that R.C. 2105.19 provides the exclusive method for disqualifying a beneficiary from receiving life insurance proceeds. A familiar principle of statutory construction, however, is that a statute should not be construed to impair pre-existing law in the absence of an explicit legislative statement to the contrary. Isbrandtsen Co. v. Johnson (1952), 343 U.S. 779, 783, 72 S.Ct. 1011, 1014-15, 96 L.Ed. 1294; Frantz v. Maher (1957), 106 Ohio App. 465, 471-472, 155 N.E.2d 471 . All that R.C. 2105.19(A) does or purports to do is to eliminate the necessity to prove that the beneficiary of a policy of life insurance committed such an act, when the beneficiary has been convicted of or has pled guilty to one of the specifically enumerated homicide offenses. There is no indication that the General Assembly or any case law...