Court Opinion

ID: 7075179
Source: CourtListenerOpinion
Date Created: 2022-07-24 08:10:30.499545+00
Date Added: 2024-06-11T16:12:44.310191
License: Public Domain

ROBB, Judge,
dissenting
I respectfully dissent from the majority's conclusion that the trial court properly granted summary judgment in favor of Katherine's husband, Robert. I believe that a genuine issue of material fact exists as to whether Katherine substantially complied with the terms of the life insurance policy in her attempt to effect to change the beneficiary.
Generally, a beneficiary's interest in the proceeds of an insurance policy vests at the time of death of the insured. Wolf v. Wolf, 147 Ind.App. 240, 259 N.E.2d 98, 95 (1970). We have previously explained:
Where no power of disposition is reserved in the insured in the ordinary life insurance policy, the beneficiary, upon the issuance and acceptance of the policy, acquires a vested right, which cannot be impaired without the beneficiary's consent. Where, however, by the terms of the policy the right is reserved to the assured to change the beneficiary at will, then the original beneficiary acquires no vested interest in the policy, and has but a mere expectancy until after the death of the assured.
Burnett v. Mutual Life Ins. Co., 66 Ind. App. 280, 114 N.E. 232, 234-35 (1916), trams. denied. Although Robert was listed as the beneficiary, the insurance policy allowed Katherine to change the beneficiary at will. See R. 68. Where the policy or the contract of life insurance contains the right of the insured to change the benefi-clary, such right must be exercised in the manner provided in such policy or contract. Hoess v. Cont'l Assurance Co., 180 Ind.App. 562, 164 N.:E.2d 125, 129 (1960). Therefore, an examination of the insurance policy must be made in order to determine the procedure for effecting a change of beneficiary.
The change of beneficiary provision 2 of the insurance policy provides in pertinent part that:
You may change the beneficiary at any time. Any request to name or change the beneficiary must be in writing on a form acceptable to us and signed by you. After we receive the request at our home office, the change will take effect on the date you signed it. A beneficiary change will be without prejudice to us for any payment we made before we receive notice in our home office.
R. 63. In Indiana, contracts for insurance are generally subject to the rules of interpretation applicable to other contracts. Eli Lilly & Co. v. Home Ins. Co., 482 N.E.2d 467, 470 (Ind.1985). As such, if the policy language is clear and unambiguous, it should be given its plain and ordinary meaning. Id. To apply the rules of construction favoring the non-drafter of insurance contract terms, the language must be ambiguous or of doubtful meaning. Id. An insurance policy is ambiguous only if reasonable persons may honestly differ as to the meaning of its language. Id. Furthermore, terms in an insurance contract may not be construed in a manner which is repugnant to the purposes of the policy as a whole. Property Owners Ins. Co. v. *792Hack, 559 N.E.2d 396, 402 n. 5 (Ind.Ct. App.1990).
According to the terms of the insurance policy, a change of beneficiary is effected when it: (1) is in writing; (2) in an acceptable form; (8) signed by the insured; and (4) received by the home office.3 R. 63. The plain and unambiguous language of the insurance policy does not require that the change of beneficiary be submitted to the home office of the insurance company prior to Katherine's death. In fact, the insurance policy explicitly states that after the home office of the insurance company receives the change of beneficiary, the form will be backdated to the date Katherine signed the change of beneficiary. See id. Therefore, I believe that a change of beneficiary is valid under the terms of the insurance policy if the home office of the insurance company receives it within a "reasonable time"4 after Katherine's death. I must therefore examine the facts and cireumstances of the present case in order to determine whether a genuine issue of material fact exists regarding whether Katherine substantially complied with the terms of the insurance policy in her attempt to effect a change of beneficiary.
We have previously stated that substantial compliance with the requirements of an insurance policy is sufficient to change a beneficiary so long as the insured has done everything within his power to effect such a change. Quinn v. Quinn, 498 N.BE.2d 1812, 1818 (Ind.Ct.App.1986). Whether an insured has done everything within his power is a question of fact. Borgman v. Borgman, 420 N.E.2d 1261-1263 (Ind.Ct.App.1981), trans. denied. Here, Katherine obtained a change of beneficiary from her hospice nurses and directed her sister to type out the change of beneficiary from her husband to her niece. Prior to her death, Katherine gave the change of beneficiary in a sealed envelope to her sister with instructions to give the envelope to Gilbertson of the VNA "if something happens." R. 308. The VNA was her previous employer through whom she had obtained the insurance. Thirteen days after Katherine's death and prior to the insurance company paying the proceeds to someone else, her sister gave the sealed envelope containing the change of beneficiary form to Gilbertson. The majority may well be concerned with finding a change of beneficiary that has not been "delivered" to anyone. I believe that these are not the facts we have here but would certainly be a factual question of intent of the insured or substantial compliance with the contract. Because the insurance policy did not require that the home office of the insurance company receive the change of beneficiary within Katherine's lifetime, I believe that the question of whether Katherine substantially complied with the terms of the insurance policy is for the finder of fact.
I would reverse the grant of summary judgment in favor of Robert.

. I note that it is in the interest of insurance companies to require and to follow certain specified procedures in the change of beneficiaries of its policies so that they may pay over benefits to persons properly entitled to them without being subject to claims by others of whose rights they had no notice or knowledge. Cook v. Equitable Life Assurance Society of U.S., 428 N.E.2d 110, 115 (Ind.Ct.App.1981). Moreover, it is in the interest of beneficiaries themselves to be entitled to prompt payment of benefits by insurance companies which do not withhold payment until the will has been probated in the fear of later litigation which might result from having paid the wrong party. Id.

. I note that Indiana Code section 27-1-12-14(a) provides that: Any person whose life is insured by any life insurance company may name as his payee or beneficiary any person or persons, natural or artificial, with or without an insurable interest, or his estate. Such designation at the option of the insured may be made either revocable or irrevocable, and the option elected shall be set out in and shall be made a part of the application for the certificate or policy of insurance. When the right of revocation has been reserved, the person whose life is insured, subject to any existing assignment or policy, may at any time designate a new payee or beneficiary, with or without reserving the right of revocation, by filing written notice thereof at the home office of the corporation, accompanied by the policy for suitable endorsement thereon.

. I believe that equity demands the "reasonable time" requirement. It would be inequitable to consider a change of beneficiary valid if the home office of the insurance company received the change of beneficiary after a significant time period had expired since the insured's death.