# FILED April 15, 1998 Cecil W. Crowson Appellate Cou rt Clerk 

### IN THE COURT OF APPEALS OF TENNESSEE AT NASHVILLE

TOMMY NEAL HOLT, Deceased ) ) Plaintiff, ) ) VS. ) ) MARILYN KAY HOLL

INGSWORTH ) HOLT, ) ) Defendant/Third-Party Plaintiff/ ) and Counter-Def

endant/ ) Appellee, ) ) Appeal No. ELLIOTT NATHAN HO LT, ) 01-A-01-9707-PB-00314

) Third Party Plaintiff and Counter- ) Davidson Probate Defendant/Appellee, ) No. 89D-1593 ) VS. ) ) VICKIE LEWI

S, Administrator Ad ) Litem for the E

state of Sophia Hol

t, ) ) Third Party Defendant and ) Cross-Defendant/Appellant ) ) In Re: Proceeds of Old Line Life ) Insurance Company of America ) Policy Number 1878593L )
APPEALED FROM THE PROBATE COURT OF DAVIDSON COUNTY

AT NASHVILLE, TENNESSEE THE HONORABLE FRANK G. CLEMENT, JUDGE

FOR APPELL

EES: FOR APPELLANT: JOHN G. DOAK, SR. JOHN L. WHIT FIELD, JR. 2525 Lebanon Road 95 White Bridge Road Nashville, Tennessee 37214 Nashville, Tennessee 37205

AFFIRMED AND REMANDED

BEN H. CANTRELL, JUDGE CONCUR: TODD, P.J., M.S. KOCH, J.- 2 - 

## O P I N I O N
In a marital disso

luti on agreement, Tommy Neal Holt agreed to pr ocure a $100,000 life insurance policy and name his ex-wife as ben ef iciary, to h

old the proceeds

in trust for their minor child. when he subsequently obtained a life policy , he named

his mother
as beneficiary

instead. The Proba

te Court of Davidso

n County orde

red the procee

ds paid to the ex-wife as truste

e. We affirm.

I.
Tommy Nea l Holt and Marily n Kay Holt ha

d one child, Elliott N

athan Holt, born on June 27, 1978. The parents divorced in 1990 and the divor

ce court incorpo

rated their marital dissolution agreement in the final dec r ee. In addition to giving the wife primary physical custody of

the child and setting child support to bepaid by the husband, the agreement divided the pro pert y and apportioned the marital debt. In section XII of the agreement the parties agree

d as follows: The Husband a

nd Wi fe agree that the

Husband shall maintain and keep in full force and effect a life insurance policy in the amount

of one hundred thousand dollars ($100,000.00) to securehis obligations for the payment of child support and other debts as set out i

n this Agr

eement. T

he Husban

d and Wi f e agree that the parties’ child, Elliott Nathan Holt, shall be named as the sole and ir

revoc able beneficiary of the Husband’s one hundredthousand dollars ($100,000.00) life insurance policy as set out in this Agreement. The Husband and Wife agree that the Wife will be namedas Truste e for the benefi t of the parties’ minor child. In her capacity as Trustee, the Wife

shallbe, and is hereby authorized and directed to use the proceeds to provide genera lly for the child’s health, education and support. The Husband and Wife further agree that any moni

es in the Wife’s possession as Trustee for the benefit o f the parties’ min

or child will be given to the parties’ minor child at age twe

nty five with all proceeds that are remaining in trust for the benefit of the child to be paid over to th

e child at the child’s twenty-f ifth bir thd ay.

At the time of the divorce M r. Holt did no t have any life insurance. In 1992, when he and his son were living with his mother, he obtained a $50,000 policy but named his mother as th e beneficiary. In 1995, as one of the benefits furnished by a new employ er, Mr. Holt obt ain ed a $ 40, 000 pol icy a nd n ame d hi s so n as the ben efi cia ry. When Mr. Holt died on- 3 -

January 12, 1996, the proceeds of the $40,000 policy were paid to his son, and they are not part of this controversy.

Marily n Kay Holt filed a complaint in the divorce court to enforce the final decree, and have the p roceeds of the $ 50,000 pol icy paid to the clerk of the court pendi ng a final hearing. The complaint named So phia Holt, Mr. Holt’s mother, and the insurance company as defendants.

The insurance company

interplead the funds and was dismissed from any fu rth er l iab ili ty.

Sophia Holt died before proces s could be served on her. She left a

will in which she beque athed all of h er property to Vickie Lewis. Ms. L ewis was named administrator ad litemof Sophia Holt’s estate, and made her appearance in this case. Both sides filed motions for summary judgme nt, and the trial judge held that Sophia Holt had been named beneficiary of the policy to hold the proceeds for the use and benefit of her grandson, Elliot

t Nathan Holt; that Tommy Neal

Holt intended to substitute his mother a s trustee in

place of his ex-wife. The court therefore ordered the proceeds paid to Marilyn Ka y Holt, to hold them and apply them in accordance

with the marital dis solution agreem ent.

II.

It is well settled in thi

s state that an ag

reement wit

hi n a marital dissolution agreement,

to keep an existing insurance policy in force with the other sp ouse as the ben efi cia ry, deprives the policy owner of the right to change the beneficiary. See Goodrich v. Massachusetts

Mutual Life

Ins. Co. , 240 S.W.2d 263 (Tenn. App. 1951). This result is based
on estoppel by

judgment or on a theory that the beneficiary spouse acquired a

vested interest in the proceeds of the policy. Id
. at 270. See also Bell v. Be ll , 896 S.W.2d 559 (Tenn. App. 1994); First National Bank v. MutualBenefit Life Ins. Co. , 732 S.W.2d 278 (Tenn. App. 1987); Herrington v. Boatright , 633 S.W.2d 781 (Tenn. App. 1982).

The appellant relies onan unreported case by the Eastern Section of this court which held that where th e policy wa

s not in existence at t

he time of the divor

ce, the oth

e r- 4 -

spouse did not acquire a vested interes tin any particular policy. Brooks v. Brooks , No. 03A01- 9309-CH-00323, Knoxville, March 3, 1994 ( perm. to appeal

denied July 11, 1994). In Brooks , the court affirmed the lower court’sdeterm ination that the fir st wife did not have

an interest in a policy the deceased obtained after the divorce, in whichhe designated his second wife as the beneficiary. We distinguished Brooks in the subsequent case of Moore v . Moore , N o. 01A 01-9603-CH-00139, Nashville, Sept. 13, 1996 ( perm. to appeal granted

Jan. 27, 1 997 , dismissed Feb. 10, 1997), a

nd held that the ex-wi fe did obtain a vested interest in a policy subsequently

acqu ire d wi th h er as the ben efi cia ry, but which had been changed at the time of the insured’s death. We said, “W e are of the opinion

that plaintiff obta

ined a vested inte

rest in the insurance proceeds once Mr. Moore complied with the court’s order.” Id. at *3.

Of course, this case is not like either Brooks or Moore . But to dismiss the appellee’s claim

solely on the vested rights theory would ignore the theory of estoppel on which the Goodrich court also relied. If the de ceased had l ived he could have been compelled to designate his ex-wife as the beneficiary under the policy. A d onee benefici ary under the subsequently-acquired

policy stands on no higher ground than he did. Goodrich , 240 S.W.2d at 270. This assumes that the designated beneficiary did not acquire a ve sted interest based upon a valuable consideration. See First National Ban k v. Mutual Benefit Life Ins. Co. , 732 S.W.2d 278 (Tenn. App. 1987).

The result we reach

in this case

is i n li ne w ith sev eral max ims of eq uit y, notably that “Equity con

siders done that w

hich should have be

en done.” Apply

ing that maxim, “Agreements

based on a valuable consideration are, in equ ity, consid

ered, in the interests of the person entitled to

their performan

ce, as performe

d, and performe

d at th e time whe n, and in the manner in which, they ought to have been performed.” Gibson’s Suits in Chan cery , 6th ed. § 21. When no other r

ights intervene to cut off theequitable interest, the courts will enforce the equity. Wallace v. P’Pool , 4 Tenn. App. 30 (1926).

We are satisfied

that the lower court’s judgment should be affirme

d. The cause is remanded to the Probate Court of Davidson County for any fu rth er pr ocee din gs ne cess ary. Tax the costs on appe

al to the appellan

t.- 5 - ____________________________ BEN H. CANTRELL, JUDGE

CONCUR:

_______________________________ HENRY F. TODD, PRESIDING JUDGE MIDDLE SECTION

_____________________________ WILLIA M C. KOCH, JR., JUDGE