Insurance--change of beneficiary--divorce decree
The trial court properly granted defendant's motion for
summary judgment on an action seeking a declaration that the
proceeds of a life insurance policy belonged to the estate of
decedent under the terms of a divorce decree rather than the
beneficiary in the policy, decedent's ex-wife, where the language
of the decree did not sufficiently show an intent to divest
defendant as beneficiary in that it did not specifically refer to
life insurance, decedent never attempted to change the
beneficiary in the four years after the divorce, and decedent and
defendant remained friends after their divorce and continued to
maintain a joint checking account. Appeal by plaintiff from judgment entered 23 February 1998
by Judge W. Russell Duke, Jr. in Wayne County Superior Court.
Heard in the Court of Appeals 13 January 1999.
Earl Whitted, Jr. and D. Lynn Whitted for plaintiff-
appellant.
Phillip E. Williams for defendant-appellee.
WALKER, Judge.
Thomas Eugene McLamb (“decedent”) and Sharon D. McLamb
(“defendant McLamb”) were married on 2 August 1986. On 1 July
1988, decedent purchased a life insurance policy from defendant
United of Omaha Life Insurance Company in the amount of $50,000
and named defendant McLamb as the beneficiary of the policy.
Decedent and defendant McLamb were divorced on 21 May 1992. The
divorce decree approved by the trial court stated the following:
It is decreed that the estate of the parties
be divided as follows:
Petitioner [decedent] is awarded the
following as Petitioner's sole and separate
property, and Respondent [defendant McLamb]
is hereby divested of all right, title and
interest in and to such property:
. . .
(2) Any and all insurance, pensions,
retirement benefits and other benefits
arising out of Petitioner's employment with
the United States Air Force.
Decedent died testate on 14 September 1996 without ever
having
executed a change of beneficiary on his life insurance policy.
On 19 November 1996, plaintiff Daughtry, sister of decedent and
in her capacity as Executrix of decedent's estate, filed this
action seeking a declaration that the proceeds of the life
insurance policy belonged to the estate of the decedent.
Defendant McLamb answered asserting she was entitled to the
proceeds since she remained the beneficiary under the policy.
At a hearing on defendant McLamb's motion for summary
judgment, the trial court found:
4. That aside from the divorce decree cited
by the plaintiff there was no factual
allegation or claim of intention by the
decedent to change the designation of
defendant Sharon McLamb as the beneficiary of
the life insurance policy at issue.
5. That the divorce decree in question does
not specifically refer to “life insurance”
and refers only to insurance “arising out of
[decedent's] employment with the United
States Air Force.”
The trial court granted defendant McLamb's motion for
summary judgment after concluding that “there is no genuine issue
of material fact, and that defendant Sharon McLamb is entitled to
judgment as a matter of law.”
On appeal, plaintiff contends the trial court erred ingranting summary judgment. Summary judgment is proper when there
is no genuine issue as to any material fact and the moving party
is entitled to judgment as a matter of law. Beckwith v.
Llewellyn, 326 N.C. 569, 573, 391 S.E.2d 189, 191, rehearing
denied, 327 N.C. 146, 394 S.E.2d 168 (1990). The burden is on
the movant to establish the lack of a genuine issue of material
fact. Seay v. Allstate Insurance Co., 59 N.C. App. 220, 221-22,
296 S.E.2d 30, 31 (1982). The evidence is viewed in the light
most favorable to the non-moving party with all reasonable
inferences drawn in favor of the non-movant. Whitley v.
Cubberly, 24 N.C. App. 204, 206-07, 210 S.E.2d 289, 291 (1974).
Plaintiff argues that the language of the divorce decree
shows that defendant McLamb intended to relinquish any rights she
may have had in decedent's life insurance policy.
This Court has held that a divorce should not annul or
revoke the beneficiary designation in a life insurance policy.
DeVane v. Insurance Co., 8 N.C. App. 247, 251, 174 S.E.2d 146,
148 (1970). In DeVane, the defendant was designated as
beneficiary in her husband's life insurance policy. Id. at 248-
49, 174 S.E.2d at 146-47. The defendant and her husband divorced
and he remarried prior to his death; however, he failed to change
the beneficiary on the policy. Id. There, the plaintiff (the
husband's second wife) argued that the separation agreemententered into by the defendant and her husband prior to their
divorce constituted a revocation of the designation of the
defendant as the beneficiary on the life insurance policy. Id.
The separation agreement provided that the defendant
“relinquishes and quitclaims” to her husband all rights to his
property. Id. This Court found the separation agreement was not
a sufficient revocation of the first wife as the beneficiary of
the policy and held that since the husband failed to exercise a
change in the beneficiary that indicated his intention not to
effect such a change. Id. at 148, 174 S.E.2d at 250. In
addition, in Tobacco Group Ltd. v. Trust Co., 7 N.C. App. 202,
206, 171 S.E.2d 807, 810 (1970)(quoting 4 Couch on Insurance 2d §
27:114), this Court stated:
General expressions or clauses in a property
settlement agreement between a husband and
wife. . . are not to be construed as
including an assignment or renunciation of
expectancies, and a beneficiary therefore
retains his status under an insurance policy
if it does not clearly appear from the
agreement that in addition to the segregation
of the property of the spouse it was intended
to deprive either spouse of the right to take
under the insurance contract of the other. .
. .
Here, the language in the parties' divorce decree does not
sufficiently show that it was the intention of the parties to
divest defendant McLamb as beneficiary on the policy. As thetrial court found, the divorce decree does not specifically refer
to “life insurance,” but instead refers only to insurance
“arising out of [decedent's] employment with the United States
Air Force.” In addition, in the four years since the divorce,
the decedent never attempted to change defendant McLamb as the
beneficiary. Also, the evidence showed that the decedent and
defendant McLamb remained friends after their divorce and
continued to maintain a joint checking account. When no attempt
is made during the decedent's lifetime to change the beneficiary,
the named beneficiary has acquired vested rights to the policy
benefits. Smith v. Principal Mut. Life Ins. Co., 131 N.C. App.
138, 140, 505 S.E.2d 586, 588 (1998).
The plaintiff failed to present evidence to show that the
decedent ever intended to change defendant McLamb as the
beneficiary on the life insurance policy. Therefore, since there
is no genuine issue of material fact, the trial court properly
granted defendant's motion for summary judgment.
Affirmed.
Judges LEWIS and TIMMONS-GOODSON concur.
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