United States v. Donall, 72-1313.

• Decision Date: 19 September 1972
• Docket Number: No. 72-1313.,72-1313.
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Anna Mae (Houdek) DONALL, Defendant-Appellant, and Mary Barbara Houdek and Camille Sam Abood, administrator of the Estate of Henry J. Houdek, Deceased, Defendants-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

466 F.2d 1246 (1972)

UNITED STATES of America, Plaintiff-Appellee, v. Anna Mae (Houdek) DONALL, Defendant-Appellant, and Mary Barbara Houdek and Camille Sam Abood, administrator of the Estate of Henry J. Houdek, Deceased, Defendants-Appellees.

No. 72-1313.

United States Court of Appeals, Sixth Circuit.

September 19, 1972.

William L. Mackay, Lansing, Mich., for appellant; Newman & Mackay, Lansing, Mich., on brief.

Camille Sam Abood, Lansing, Mich., for appellees; Abood, Abood & Abood, Lansing, Mich., on brief.

Before WEICK and CELEBREZZE, Circuit Judges, and O'SULLIVAN, Senior Circuit Judge.

CELEBREZZE, Circuit Judge.

This action was brought in the nature of a bill of interpleader by the United States, seeking resolution of conflicting claims for the proceeds of a National Service Life Insurance (NSLI) policy on the life of Henry J. Houdek, deceased. See generally 38 U.S.C. §§ 701-725, 784(a) (1970).

The NSLI policy, in the amount of $10,000, was issued to Henry J. Houdek with an effective date of March 5, 1951. He named his then wife, Anna Mae Houdek, as principal beneficiary and his mother, Mary Barbara Houdek, as contingent beneficiary.

Henry J. Houdek and Anna Mae Houdek were divorced on June 17, 1955, in the Ingham County, Michigan, Circuit Court, with no children having been born from that marriage. Henry remarried on June 1, 1957, was borne a son by his second wife, and was again divorced in February 1968. Anna Mae similarly remarried after her divorce from Henry.

Henry J. Houdek died on December 23, 1969, without having changed his first wife, Anna Mae, and his mother, Mary Barbara, as principal and contingent beneficiaries, respectively, under the NSLI policy.

Defendant-Appellant, Anna Mae (Houdek) Donall, filed a claim for the proceeds of the NSLI policy as the named principal beneficiary thereunder. Defendant-Appellee, Mary Barbara Houdek, claimed the proceeds of the policy as contingent beneficiary, asserting that Anna Mae (Houdek) Donall was divested of any interest in the policy by the terms of the June 17, 1955, divorce decree and under Mich.Stat.Ann. § 25.131.¹

Upon facts stipulated by the parties, the District Court granted Mary Barbara Houdek's motion for summary judgment. The Court held that the decedent's mother was entitled to the proceeds of the policy "pursuant to Michigan Statutes,² pursuant to the Decree,³ pursuant to all intents and purposes, the obvious intents and purposes of the parties." (Footnotes added.) We reverse.

It is well established that questions respecting the proper beneficiaries under NSLI policies are governed by federal law rather than state divorce law or state court divorce decrees. See, e. g., Hoffman v. United States, 391 F.2d 195 (9th Cir. 1968); McCollum v. Sieben, 211 F.2d 708 (8th Cir. 1954); Morgan v. United States, 315 F.Supp. 213 (E.D.Ky.1969); Fitzstephens v. United States, 189 F.Supp. 919 (D.Wyo. 1960); Eldin v. United States, 157 F. Supp. 34 (S.D.Ill.1957). Cf. Wissner v. Wissner, 338 U.S. 655, 70 S.Ct. 398, 94 L.Ed. 424 (1950); Dyke v. Dyke, 227 F.2d 461 (6th Cir. 1955), cert. denied, 352 U.S. 850, 77 S.Ct. 70, 1 L.Ed.2d 61 (1956) (rejecting state property law in determining proper beneficiary under NSLI policies).

In Wissner v. Wissner, supra, 338 U.S. at 658, 70 S.Ct. at 400, the Supreme Court set the foundation for this rule by emphasizing that the controlling section of the National Service Life Insurance Act 38 U.S.C. § 717(a) (1970) for purposes of the present case explicitly establishes the right of the insured to designate and change beneficiaries as he chooses:

"Thus Congress has spoken with force and clarity in directing that the proceeds belong to the named beneficiary and no other."

Just as the community property laws of California could not prevent the named beneficiary from receiving the NSLI policy proceeds in the Wissner case, so Mich.Stat.Ann. § 25.131 and the language of the state court's divorce decree cannot prevent Anna Mae (Houdek) Donall from receiving the proceeds as named principal beneficiary in the present case.

Nor is there any evidence to suggest that Henry J. Houdek either intended to, or attempted to, remove Anna Mae (Houdek) Donall as principal beneficiary. In this respect, we recognize that literal compliance with the requirements for written notice to the Veterans Administration is not always necessary in order to effectively change a beneficiary under a NSLI policy. Rather, as noted in Mitchell v. United States, 165 F.2d 758, 760 (5th Cir. 1948), "in war-risk insurance cases involving change of beneficiary the courts will brush aside all legal technicalities in order to effectuate the manifest intent of the insured." See also Stone v. United States, 272 F.2d 746 (5th Cir. 1959); Hawkins v. Hawkins, 271 F.2d 870 (5th Cir. 1959); United States v. Pahmer, 238 F.2d 431 (2d Cir. 1956), cert. denied, 352 U.S. 1026, 77 S.Ct. 592, 1 L.Ed. 2d 597 (1957); Legatie v. United States, 40 F.R.D. 114, 118-119 (E.D.N.Y.1966). Nonetheless, and notwithstanding the District Court's unfounded reference to the "obvious intents and purposes of the parties," the record is barren of any evidence of Henry J. Houdek's intent to change beneficiaries under his NSLI policy.⁴

We conclude that the District Court erred in granting summary judgment for Mary Barbara Houdek. In view of the stipulated facts upon which both parties moved for summary judgment, Anna Mae (Houdek) Donall, as the named principal beneficiary, is entitled to the proceeds of the NSLI policy as a matter of law. This result may or may not be consistent with speculation as to the insured's intent. In the absence of any evidence respecting that intent, however, it is the only result which gives effect to the insured's power to designate the beneficiary of his choice—a power which Congress has explicitly established under the National Service Life Insurance Act, as amended, 38 U.S.C. § 717(a) (1970). See Wissner v. Wissner, supra, 338 U.S. at 658, 70 S.Ct. 398, 94 L.Ed. 424.

The judgment of the District Court is therefore reversed, and the case is remanded with...