Turnmire v. Turnmire
| Decision Date | 07 November 2022 |
| Docket Number | CA2021-12-165 |
| Parties | Martha TURNMIRE, Appellant, v. Marsha TURNMIRE, Appellee. |
| Court | Ohio Court of Appeals |
Kirkland & Sommers, Co., and James R. Kirkland, Dayton, and Mickenzie R. Grubb, for appellant.
Law Office of David A. Chicarelli Co., LPA, and David Allen Chicarelli, for appellee.
{¶ 1} Plaintiff-appellant, Martha Turnmire, appeals the decision of the Butler County Court of Common Pleas granting summary judgment in favor of defendant-appellee, Marsha Turnmire, on her claims of unjust enrichment, breach of contract, conversion, and fraud. For the reasons outlined below, we affirm the trial court's decision.
{¶ 2} In May 2005, John and Martha Turnmire were granted a dissolution of their marriage by a Florida court.1 John had retired from service in the military and participated in the Survivor Benefit Plan (SBP), which, upon the service member's death, provides an annuity payable monthly to the retired service member's designated beneficiary. John also had a Veterans Group Life Insurance (VGLI) policy through the military.2 At the time of the divorce, the designated beneficiary of the SBP annuity and the VGLI policy was John's wife, Martha. The dissolution decree ordered John to keep Martha the beneficiary of both:
The dissolution decree also ordered John to pay Martha alimony (spousal support). Later that same year, John married Marsha.
{¶ 3} In 2008, John asked the Florida court to reduce his alimony obligation. The following year, after a hearing, the trial court agreed to do so. The 2009 modification order again ordered John to keep Martha as the designated beneficiary of the SBP and the beneficiary of his VGLI policy:
{¶ 4} In November 2020, John died, with Marsha as his surviving spouse. It was then Martha discovered that John not only had reduced the VGLI policy to $50,000 but also, in 2007, had changed the beneficial interest in the proceeds, leaving Marsha the bulk of proceeds and Martha only a $5,000 annuity. In addition, Marsha, as the surviving spouse, began receiving monthly payments from the SBP annuity because Martha had never been elected as the beneficiary.
{¶ 5} Martha filed an action against Marsha asserting claims of unjust enrichment, breach of contract, conversion, and fraud. Martha sought to impose a constructive trust over the VGLI proceeds and the SBP payments. The parties filed cross-motions for summary judgment. The trial court concluded that federal law preempted the state law embodied in the Florida dissolution decree as to the beneficial interests in the VGLI policy and the SBP annuity and concluded that it had no authority to order an equitable remedy that circumvented federal law. The court therefore granted Marsha's motion for summary judgment and denied Martha's motion.
{¶ 6} Martha appealed.
{¶ 7} Martha's sole assignment of error alleges that the trial court erred by granting Marsha's motion for summary judgment and denying her motion. Martha contends that she is entitled to the VGLI proceeds and to the SBP annuity. We note that she does not allege that Marsha is at all culpable in these matters. And based on the record, we agree that it appears Marsha is innocent of any wrongdoing. Her role was entirely passive.
{¶ 8} Summary judgment, under Civ.R. 56(C), is appropriate if the moving party shows "(1) that there is no genuine issue as to any material fact; (2) that the moving party is entitled to judgment as a matter of law; and (3) that reasonable minds can come to but one conclusion, and that conclusion is adverse to the party against whom the motion for summary judgment is made, who is entitled to have the evidence construed most strongly in his favor." Harless v. Willis Day Warehousing Co. , 54 Ohio St.2d 64, 66, 375 N.E.2d 46 (1978).
{¶ 9} We first consider the VGLI proceeds. The federal Servicemembers’ Group Life Insurance Act (SGLIA), 38 U.S.C. 1965 et seq., makes life insurance coverage available to members of the military. When a service member leaves the military, SGLI coverage terminates, and the service member may convert the policy into a new policy under the VGLI program. See 38 U.S.C. 1968(a)(1), 1977. The provisions of the SGLIA that control the beneficiaries of the insurance also apply to VGLI policies. See 38 U.S.C. 1970(a). Simply put, "[f]ederal law and federal regulations bestow upon the service member an absolute right to designate the policy beneficiary" and to change the beneficiary at any time. Ridgway v. Ridgway , 454 U.S. 46, 59-60, 102 S.Ct. 49, 70 L.Ed.2d 39 (1981). See also 38 U.S.C. 1917(a) (); 38 C.F.R. 9.4(b) (). In addition, an anti-attachment provision in the SGLIA shields insurance payments to a beneficiary from "claims of creditors" and states that the payments "shall not be liable to attachment, levy, or seizure by or under any legal or equitable process whatever, either before or after receipt by the beneficiary." 38 U.S.C. 1970(g).
{¶ 10} The Supreme Court held in Ridgway that these SGLIA provisions "prevail over and displace inconsistent state law," which includes the state law embodied in a divorce decree. In Ridgway , the Court considered the preemptive effect in a factual situation almost identical to the one in the present case. At the time of the parties’ divorce, the former wife was the designated beneficiary of the husband's SGLIA policy. The husband agreed that he would maintain the policy for the benefit of the parties’ children, and his agreement was incorporated into the divorce decree. The husband soon remarried and changed the policy's beneficiary designation, directing the proceeds to be paid as specified "by law," which, under the SGLIA's order of precedence, begins with the surviving spouse. After the husband died, both his former wife and his surviving spouse filed claims for insurance proceeds. The former wife argued that the surviving spouse had been unjustly enriched and that under state law a constructive trust should be imposed on the proceeds for the children's benefit. But the Supreme Court rejected this argument, concluding that the SGLIA preempts the divorce decree. The Court held invalid the decree's provision restricting the husband's right to change his SGLI policy beneficiary. The Court also held that the imposition of a constructive trust on the proceeds was inconsistent with the SGLIA's anti-attachment provision.
"Any diversion of the proceeds," explained the Court, "by means of a court-imposed constructive trust would * * * operate as a forbidden ‘seizure’ of those proceeds." Ridgway at 60, 102 S.Ct. 49. In sum, the Court found that " ‘Congress has spoken with force and clarity in directing that the proceeds belong to the named beneficiary and no other.’ " Id. at 56, quoting Wissner v. Wissner , 338 U.S. 655, 658, 70 S.Ct. 398, 94 L.Ed. 424 (1950). It matters not, said the Court, that the husband "misdirected property over which he had exclusive control" and "[i]n doing so, * * * deprived the [former wife and his children] of benefits to which they were entitled under state law." Id. at 59, fn. 8.
{¶ 11} Martha does not dispute any of this. What she contends is that an exception to preemption in cases of fraud applies in this case. The Supreme Court recognized this exception in Free v. Bland , 369 U.S. 663, 82 S.Ct. 1089, 8...
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