Title: Bowers v. Bowers
Citation: 637 S.W.2d 456
Docket Number: N/A
State: Tennessee
Issuer: Tennessee Supreme Court
Date: August 16, 1982

637 S.W.2d 456 (1982) Clifford Earl BOWERS, Jr., Martee Montique Bowers, and Anthony Lamar Bowers, b/n/f Cheryl Yvonne Bowers, Appellees, v. Lula C. BOWERS, Appellant. Supreme Court of Tennessee, at Nashville. August 16, 1982. Jim H. Wachter, Madison, for appellant. Cleve Weathers, Bruce, Weathers &amp; Dughman, Nashville, for appellees. FONES, Justice. The single issue in this case is whether a property settlement agreement incorporated in a divorce decree, wherein wife released husband from all claims arising out of the marital relationship and waived any other rights not provided for therein, should be construed as effecting a change in beneficiary of husband's life insurance, where *457 wife was still the named beneficiary under the policy at the date of husband's death, thirty-four days after the divorce. Clifford Bowers, decedent, had life insurance through his employer with the Equitable Life Assurance Society in the amount of $16,000. The policy, which was taken out prior to the divorce litigation, named his wife Lula C. Bowers, defendant here, as sole beneficiary of the proceeds and the beneficiary had not been changed prior to the fatal accident. The life insurance policy contained a double indemnity provision in the event of accidental death. Defendant received the first $16,000 in accordance with the terms of the policy prior to any objection by plaintiffs. Defendant spent this initial $16,000 in proceeds to pay the funeral expenses for decedent, to make a downpayment on a new car, to remodel a portion of the family home and to pay clothing and medical expenses for herself and the children in addition to other minor expenditures. Plaintiff, a sister of decedent brought suit in behalf of the two children, as alleged intended beneficiaries of the second $16,000 payable under the double indemnity provisions of the insurance policy. The learned trial judge awarded defendant the total proceeds of the policy as named beneficiary. The majority of the Court of Appeals reversed the trial judge, holding The Court of Appeals further found defendant had not rebutted the presumption and awarded the proceeds from the life insurance double indemnity clause to plaintiff. The majority regarded as significant the language of the settlement agreement that "each party relinquishes to the other any rights or claims not provided for herein," and the fact that wife was represented by counsel at the time of the execution of the agreement and husband was not represented by counsel; that he was in good health at the time and the unforeseen accident occurred a short time after the divorce. The majority reasoned that husband, untrained in the law, would not understand the "formal requirements to change the beneficiary of a life insurance policy," and found it more likely that, "a layman reading a property settlement agreement with the same or similar language ... would believe ... that each spouse had in fact relinquished all rights that he or she had in the property of the other." Judge Cantrell in his dissenting opinion reached the conclusion that being the beneficiary of a husband's life insurance was not a right or claim arising out of the marital relationship and thus was not "relinquished" or "waived" by the property settlement agreement and therefore the proceeds of the policy passed to the wife by insurance contract law. We believe the dissent expresses the better view, and quote the essence of that opinion as follows: This issue is one of first impression in this State and there is respectable authority in other jurisdictions that supports either result. See, Western &amp; Southern Life Insurance Co. v. Hague, 74 Ohio L.Abs. 259, 140 N.E.2d 89 (1956), Romero v. Melendez, 83 N.M. 776, 498 P.2d 305 (1972) cited by the majority opinion of the Court of Appeals. However, Prudential Insurance Company v. Weatherford, 49 Or. App. 835, 621 P.2d 83 (1980) has a factual situation very similar to the present case. In Weatherford the husband's life insurance was maintained by his employer. The marriage ended in a divorce decree incorporating a property settlement prepared by the wife's attorney which purported to constitute a "full, complete and final property settlement." The husband was accidentally killed six days later leaving his former spouse as named beneficiary of the life insurance proceeds. The Weatherford court concluded that evidence with respect to the parties' intent as to disposition of the insurance proceeds was not inconsistent with the property settlement so as to necessitate a variance in the written terms naming the beneficiary of the insurance policy. Id. 621 P.2d at 86. See also Dressen v. Coleman, 531 S.W.2d 201 (Tex. Civ.App. 1975); McClain v. Beder, 25 Ariz. App. 231, 542 P.2d 424 (1975); and also Marquet v. Aetna Life Ins. Co., 128 Tenn. 213, 224, 159 S.W. 733 (1913). In Hergenrather v. State Mutual Life Assurance Company of Worcester, 79 Ohio App. 116, 68 N.E.2d 833 (1946), wife remained as beneficiary of husband's life insurance for a period of two years following the entry of a divorce decree approving a property settlement wherein wife relinquished all claims against husband arising out of the marital relationship in language even more comprehensive than appears in the settlement agreement in the instant case. It was the contention of husband's estate that by the terms of the separation agreement wife had relinquished and forfeited her rights as beneficiary under the policy. The essence of the Ohio Court's response was as follows: It is our view that the property settlement agreement had no force and effect whatever upon the life insurance policy and neither the agreement nor the divorce terminated wife's status as named beneficiary in the policy or her right to receive the proceeds. The judgment of the Court of Appeals is reversed and that of the trial court affirmed and this cause is remanded to the trial court for enforcement of the appropriate judgment. Costs are adjudged against plaintiffs. HARBISON, C.J., and COOPER, BROCK and DROWOTA, JJ., concur.