Title: In re Estate of Price

State: vermont

Issuer: Vermont Supreme Court

Document:

In re Estate of Price (2005-173); 180 Vt. 548; 904 A.2d 1196

2006 VT 62

[Filed 07-Jul-2006]

                                 ENTRY ORDER

                                 2006 VT 62

                      SUPREME COURT DOCKET NO. 2005-173

                             OCTOBER TERM, 2005


  In re Estate of Gregory G. Price    }          APPEALED FROM:
                                      }
                                      }          Chittenden Superior Court  
                                      }
                                      }
                                      }          DOCKET NO. S0908-04 CnC

                                                 Trial Judge: Richard W. Norton

             In the above-entitled cause, the Clerk will enter:

       ¶  1.  Plaintiff Susan Teaford appeals from the superior court's
  order granting summary judgment in favor of defendant Lucille Price,
  thereby allowing defendant to retain $50,000 she received as beneficiary of
  a life insurance policy of decedent Gregory Price. (FN1)  The order on appeal
  reversed the decision of the probate court, which had allowed plaintiff's
  claim to the full amount of the insurance proceeds.  We agree with the
  result reached by the probate court and reverse the decision of the
  superior court.

       ¶  2.  Plaintiff married decedent in 1976.  They had two children:
  Andrew, born on September 5, 1980, and Emily, born on February 14, 1985. 
  Emily has a developmental disability and cannot live independently. 
  Plaintiff is her guardian.

       ¶  3.  Plaintiff and decedent were divorced in Virginia in 1988. 
  Paragraph 8(d) of the separation agreement governing the divorce required
  that: 

    The Husband shall maintain a policy of life insurance insuring him
    and shall name the children of the parties as beneficiary and
    shall keep such policy in full force and effect until his
    obligation herein to support the children of the parties shall
    cease.  The amount of said insurance shall be no less than One
    Hundred Thousand Dollars.  

  This provision was added in its final form through an addendum which also
  modified decedent's child support obligation as follows:

    The Husband agrees to pay to the Wife for the support,
    maintenance, and education of each of the children . . . the sum
    of Two Hundred Fifty Dollars ($250.00), per month, . . .
    commencing with April 1, 1988 and continuing until each of said
    children attains the age of eighteen (18) years, or sooner becomes
    fully employed, married, or otherwise becomes fully emancipated.  

       ¶  4.  In 1991, decedent married defendant, and the couple moved to
  Vermont.  After Andrew reached majority in 1998, decedent changed the
  beneficiary designation of the life insurance policy, making plaintiff (as
  Emily's guardian) and defendant co-beneficiaries.  Decedent did not attempt
  to modify the separation agreement between him and plaintiff, nor did he
  seek court approval of the new beneficiary designation.  

       ¶  5.  On January 21, 2003, decedent and defendant divorced. 
  Decedent died on February 5, 2003, during the nisi period.  Emily had not
  yet attained majority at the time of decedent's death.

       ¶  6.  Defendant was appointed executrix of decedent's estate. 
  After the insurance proceeds were paid as per the changed beneficiary
  designation-$50,000 to plaintiff as Emily's guardian and $50,000 to
  defendant-plaintiff presented a timely claim to the estate on Emily's
  behalf for the $50,000 paid to defendant.  Defendant, as executrix,
  disallowed the claim, and plaintiff appealed to the probate court.  The
  probate court allowed the claim, directing defendant to pay plaintiff
  $50,000.  The court held that the separation agreement between decedent and
  plaintiff provided for neither division of the policy proceeds nor a
  unilateral change of beneficiaries.  It interpreted the agreement as
  requiring decedent to maintain the beneficiary designations called for in
  the agreement until his support obligation as to both children expired, or
  until decedent obtained a court order allowing a change.

       ¶  7.  Defendant appealed the probate court's ruling to the superior
  court.  Both parties moved for summary judgment.  The superior court
  reversed the probate court ruling and granted summary judgment for
  defendant, allowing her to keep the $50,000 she had received as a
  beneficiary of the life insurance policy.  Noting that the separation
  agreement's requirement to maintain the life insurance policy had a
  termination date-namely, the endpoint of decedent's obligation to support
  the children-the court concluded that "the parties did not intend to make
  this benefit a property settlement but rather intended it as a means to
  protect the children's support."  The court went on to opine that when
  Andrew reached majority "any right he might have had to the life insurance
  money ended."  At that point, the court held, decedent was free to name
  another beneficiary. 

       ¶  8.  On appeal, plaintiff argues that a noncustodial parent cannot
  unilaterally reduce a support payment when each child of the marriage
  reaches majority, absent a court order.  Therefore, because the life
  insurance provision at issue was intended to secure decedent's support
  obligation for the children, he could not name a new beneficiary without a
  court order. (FN2)  Defendant counters that the insurance provision, like
  the child support provision, was divisible by its terms and thus terminated
  as to each child when the support obligation to that child terminated. 
  Defendant also contends that Emily received the full benefit of the
  bargain-decedent made all of his support payments on her behalf, and she
  received the $50,000 due under the insurance provision. 

       ¶  9.  This Court reviews a summary judgment ruling de novo,
  employing the same standard applied by the trial court.  Hardwick Recycling
  & Salvage, Inc. v. Acadia Ins. Co., 2004 VT 124, ¶ 14, 177 Vt. 421,