Court Opinion

ID: 8959969
Source: CourtListenerOpinion
Date Created: 2022-11-27 09:36:51.817755+00
Date Added: 2024-06-11T17:10:10.804073
License: Public Domain

SLOVITER, Circuit Judge,
dissenting.
I view this case as much more troubling than do my colleagues, and my analysis therefore proceeds along a different route.
I do not disagree with the majority that the Pennsylvania statute, 23 Pa.Stat.Ann. § 401(i), can be read to authorize the Pennsylvania Common Pleas Court to require a party to a divorce proceeding to change the beneficiary of an existing policy of insurance. Appellant’s argument that the statute only empowers the state court to maintain the status quo stems from too strained an interpretation of the statutory language to be persuasive. I would hesitate to construe the state statute in a manner that would preclude state courts from ever exercising their equitable power to decide, in an appropriate case, that a parent should be required to alter an existing policy beneficiary designation in favor of a minor child. Thus, were it clear from this record that the Court of Common Pleas of Lehigh County, after taking into account the relevant considerations relating to the affected parties, had decided that Thomas Bammer, Jr. should change the designation on the insurance policy in question in favor of his minor children, I would not dissent.
However, I see no basis in the record for the majority’s conclusion that the Court of Common Pleas in fact exercised its power to require Mr. Bammer to designate his children as the beneficiaries of the SMA policy. That conclusion is inconsistent with the majority’s recognition that the Common Pleas Court had no knowledge of the existence of the SMA policy.
It appears to me that the most plausible view of the record is that the recommendation of the Master, to require Mr. Bammer to designate his children as beneficiaries in his “current policies of life insurance,” referred only to the three policies in existence at that time. Since the SMA policy had not been purchased at the time of the Master’s report, the Master could not have intended his order to encompass that policy. When the Common Pleas Court, eight and one-half months later, adopted almost verbatim the Master’s recommendation in this regard and directed Mr. Bammer to designate the children “on his present policies of life insurance,” the court must have been referring to the same policies to which the Master referred because there is nothing in the court’s order or the Master’s recommendation to suggest that either contemplated any later acquired insurance.
Because there is no mechanism by which we can refer to the state court the factual question of what it intended by its order, I agree with the district court that the issue before the federal court in the interpleader action was who should receive the policy proceeds. However, I believe that the district court erred as a matter of law in attempting to predict what the Common Pleas Court would have ruled in this case. Our obligation to predict what the state courts would rule in diversity cases is limited to questions of state law. Here, the issue is not a legal one, but merely which of the contesting parties is entitled to the policy under the circumstances of this case.
I see nothing in the statute to support the majority’s statement that “the applicable state law ... requires us to regard Mr. Bammer’s children as the beneficiaries of [the SMA] policy,” Maj. op. at 917 (emphasis added), and the majority offers no support for that statement. There is a vast difference between construing the statute to authorize the state court to require designation of the children as beneficiaries of the policy, which is what the authorities relied on by the majority support, and construing the statute to require the court to do so.
In this situation, it appears to me that the policy designation must control. Absent the overriding right of a state court in a divorce proceeding to order a different designation, I can see no reason not to follow the intent of the purchaser of an insurance policy with respect to the beneficiary of that policy, and here that intent is indisputable because Mary Ann Piller was named as the beneficiary.
The district court stated that including the SMA policy in the court’s decree comports with the legislative intent. Although the legislature did express a policy to mitigate the harm to children caused by di*921vorce, it also had a policy, made explicit by its definition of “marital property” to exclude other property acquired after separation until the date of the divorce, see 23 Pa.Stat.Ann. § 401(e)(4), to enable parties who have separated to begin a new life. Thus, permitting Mr. Bammer to designate Ms. Piller, with whom he had been living following his final separation from his wife, as his beneficiary on a policy purchased four years after they had been living together certainly does not contravene any legislative policy.
Nor are the equities against Ms. Piller so strong as to require overriding Mr. Bam-mer’s designation. Ms. Piller testified, and the majority concedes that it is undisputed, that the insurance premiums were paid out of the funds that she and Mr. Bammer pooled to pay their joint living expenses. The insurance policy was not purchased in contemplation of Mr. Bammer’s death, since the record discloses that he died suddenly at the age of 43 while driving. Finally, the district court’s reference to Mr. Bammer’s failure to appeal the Lehigh County court’s order as a factor militating against giving effect to his intent is unreasonable. There is no evidence to suggest that Mr. Bammer even suspected that the court’s order applied to the subsequently purchased SMA policy. Mr. Bammer could reasonably have believed that the court’s order merely adopted the Master’s recommendation in this respect. In fact, had the court issued its decree within four months after it received the Master’s recommendation, instead of inexplicably waiting eight and one-half months to do so, it would have had no power to affect the designation of the SMA policy beneficiary because its authority was limited to insurance policies then in existence, and the SMA policy was not purchased until four and one-half months after the Master’s recommendation.
Under these circumstances, it appears to me that the district court abused its discretion in directing that Mr. Bammer’s own beneficiary designation should be disregarded and the proceeds of the policy paid to others, even if those others were Mr. Bammer’s minor children. I would therefore reverse and direct that the policy proceeds be awarded to the named beneficiary in accordance with Mr. Bammer’s intent.