Court Opinion

ID: 2971033
Source: CourtListenerOpinion
Date Created: 2015-09-22 16:27:28.538862+00
Date Added: 2024-06-11T11:43:33.203818
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            Pursuant to Sixth Circuit Rule 206            2        Terry, et al. v. LaGrois, et al.            No. 02-1969
    ELECTRONIC CITATION: 2004 FED App. 0004P (6th Cir.)
                File Name: 04a0004p.06                        Before: GUY and GILMAN, Circuit Judges; REEVES,
                                                                               District Judge.*
UNITED STATES COURT OF APPEALS                                                   _________________
              FOR THE SIXTH CIRCUIT                                                   COUNSEL
                _________________
                                                          ARGUED: Randy J. Wallace, OLSMAN, MUELLER &
CORA JEAN TERRY ,                  X                      JAMES, Berkley, Michigan, for Appellants. Paul M.
                                                          Stoychoff, RUSSELL & STOYCHOFF, Troy, Michigan, for
             Plaintiff-Appellee, -                        Appellees. ON BRIEF: Jules B. Olsman, OLSMAN,
                                    -
                                    -  No. 02-1969        MUELLER & JAMES, Berkley, Michigan, for Appellants.
METROPOLITAN LIFE                   -                     Paul M. Stoychoff, RUSSELL & STOYCHOFF, Troy,
INSURANCE COMPANY ,                  >                    Michigan, for Appellees.
                                    ,
           Defendant-Appellee, -
                                                                                 _________________
          Third Party Plaintiff, -
                                    -                                                OPINION
            v.                      -                                            _________________
                                    -
                                    -                        RONALD LEE GILMAN, Circuit Judge. This case arises
DAVID M. LA GROIS ,
                                    -                     out of a dispute over the proceeds of a group life insurance
CHRISTOPHER J. GAMBLE , and -                             policy. Earline Lynn Gamble, a United States Postal Service
DANIEL R. GAMBLE ,                  -                     employee, was insured under the Federal Employees Group
                    Third Party -                         Life Insurance Act (FEGLIA). She presumably intended to
        Defendants-Appellants. -                          designate her sister, Cora Terry, as the sole beneficiary of the
                                    -                     policy, but Gamble signed the designation-of-beneficiary
                                   N                      form with only her first name, failed to date the form, and
       Appeal from the United States District Court       neglected to check a box acknowledging that she had signed
      for the Eastern District of Michigan at Detroit.    in the presence of the two witnesses. When Gamble died,
No. 01-71780—Lawrence P. Zatkoff, Chief District Judge.   Terry and Gamble’s three sons filed competing claims for the
                                                          life insurance proceeds. The sons argued that Gamble’s
               Argued: December 3, 2003                   designation of Terry as the sole beneficiary was defective,
                                                          resulting in the sons becoming the proper beneficiaries under
          Decided and Filed: January 7, 2004              FEGLIA’s default provisions. On cross-motions for summary
                                                          judgment, the district court ruled in favor of Terry. For the

                                                               *
                                                               The Honorable Danny C. Reeves, United States District Judge for
                                                          the Eastern District of Kentucky, sitting by designation.

                            1
No. 02-1969               Terry, et al. v. LaGrois, et al.   3    4      Terry, et al. v. LaGrois, et al.          No. 02-1969

reasons set forth below, we AFFIRM the judgment of the            raised the possibility of multiple liability for MetLife, the
district court.                                                   company offered to interplead the insurance proceeds and
                                                                  brought a cross-claim against Gamble’s three sons. MetLife
                    I. BACKGROUND                                 argued that because Gamble had signed the designation-of-
                                                                  beneficiary form with only her first name, rather than her full
  The United States Postal Service made available to Gamble       name, it was “unable to determine the proper beneficiary to
a group life insurance policy pursuant to FEGLIA, 5 U.S.C.        receive the life insurance benefits.” The company thus asked
§§ 8701-8716. Gamble applied for the policy, issued by            the court to take control of the $197,000 in life insurance
Metropolitan Life Insurance Company (MetLife), in May of          proceeds and to release MetLife from the conflicting claims
1994. On a separate form titled “Designation of Beneficiary,”     of Gamble’s three sons and her sister Terry. None of the rival
Gamble named her sister, Cora Terry, as the policy’s sole         claimants objected to MetLife’s interpleader request.
beneficiary. But in making this election, Gamble signed only
her first name “Earline” in the space provided on the form for      Terry moved for summary judgment against MetLife in
her signature. She also neglected to date the form and to         December of 2001, arguing that she was entitled to the life
check a box confirming that she had signed the form in the        insurance proceeds as a matter of law. Gamble’s sons
presence of the two witnesses. Two unrelated individuals,         responded by filing their own motion for summary judgment,
however, did in fact sign as witnesses in the space provided.     contending that they were entitled to the life insurance
The Postal Service acknowledged receipt of the form in June       proceeds because Gamble’s signature was allegedly
of 1994.                                                          inadequate and because she had failed to date the designation
                                                                  form. They again made no mention of Gamble’s failure to
  When Gamble died in March of 2001, a controversy arose          check the “witness” box.
between her three sons and her sister over who was entitled to
the $197,000 in proceeds of the life insurance policy. Each         The district court granted Terry’s motion for summary
side filed claims for death benefits with the Office of Federal   judgment in July of 2002, reasoning that
Employees’ Group Life Insurance. Gamble’s sons contended
that the designation of beneficiary was defective because             [a]lthough Ms. Gamble failed to sign her full name, two
Gamble had signed only her first name and had not dated the           witnesses were present to watch her authenticate the
form. They did not raise the issue of their mother’s failure to       document. Under § 8705, individuals, other than the
check the “witness” box.                                              beneficiary, are required to witness the insured party’s
                                                                      signature on the Designation of Beneficiary form. This
  The statute provides that if the insured does not properly          requirement ensures that the insured party actually and
designate a beneficiary, then FEGLIA benefits will be                 willfully signed the document. The Court finds that Ms.
distributed according to an order of precedence specified in          Gamble would not have summoned these witnesses nor
the statute. Gamble’s sons are the preferred individuals in the       would the witnesses have freely signed the form had Ms.
event that Gamble failed to properly designate another                Gamble not intended to authenticate the Designation of
beneficiary.                                                          Beneficiary form.
 In May of 2001, Terry sued MetLife for the proceeds of           No mention was made by the district court of the sons’
Gamble’s life insurance policy. Because the rival claims          argument regarding the failure of Gamble to date the form.
No. 02-1969               Terry, et al. v. LaGrois, et al.     5   6      Terry, et al. v. LaGrois, et al.             No. 02-1969

  This appeal followed.                                                First, to the beneficiary or beneficiaries designated by the
                                                                       employee in a signed and witnessed writing received
                      II. ANALYSIS                                     before death in the employing office or, if insured
                                                                       because of receipt of annuity or of benefits under
A. Standard of review                                                  subchapter I of chapter 81 of this title as provided by
                                                                       section 8706(b) of this title, in the Office of Personnel
   We review a district court’s grant of summary judgment de           Management. For this purpose, a designation, change, or
novo. Therma-Scan, Inc. v. Thermoscan, Inc., 295 F.3d 623,             cancellation of beneficiary in a will or other document
629 (6th Cir. 2002). Summary judgment is proper where                  not so executed and filed has no force or effect.
there exists no genuine issue of material fact and the moving
party is entitled to judgment as a matter of law. Fed. R. Civ.         Second, if there is no designated beneficiary, to the
P. 56(c). In considering a motion for summary judgment, the            widow or widower of the employee.
district court must construe all reasonable inferences in favor
of the nonmoving party. Matsushita Elec. Indus. Co. v.                 Third, if none of the above, to the child or children of the
Zenith Radio Corp., 475 U.S. 574, 587 (1986). The central              employee and descendants of deceased children by
issue is “whether the evidence presents a sufficient                   representation.
disagreement to require submission to a jury or whether it is
so one-sided that one party must prevail as a matter of law.”          Fourth, if none of the above, to the parents of the
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52                  employee or the survivor of them.
(1986).
                                                                       Fifth, if none of the above, to the duly appointed
B. FEGLIA                                                              executor or administrator of the estate of the employee.
   “Congress enacted FEGLIA in 1954 to provide low-cost                Sixth, if none of the above, to other next of kin of the
group life insurance to Federal Employees.” Metro. Life Ins.           employee entitled under the laws of the domicile of the
Co. v. Christ, 979 F.2d 575, 576 (7th Cir. 1992) (quotation            employee at the date of his death.
marks omitted). The provision of the Act relevant to the
present case is 5 U.S.C. § 8705(a), which governs the                Congress amended FEGLIA in 1966 to tighten up the
designation of a beneficiary. If the insured does not designate    requirements for designating a beneficiary. Prior to the
a beneficiary, the proceeds of the life insurance policy are to    amendment, the statute simply required that the insured
be paid according to the order of precedence mandated by the       designate a beneficiary in a “writing received in the
statute. Section 8705(a) provides in pertinent part as follows:    employing office prior to death,” S. Rep. No. 89-1064,
                                                                   reprinted in 1966 U.S.C.C.A.N. 2070, 2071, rather than a
  Except as provided in subsection (e), the amount of              “signed and witnessed writing received before death.”
  group life insurance and group accidental death insurance        5 U.S.C. § 8705(a). (Emphasis added.) FEGLIA was
  in force on an employee at the date of his death shall be        amended as a reaction to cases that looked to a decedent’s
  paid, on the establishment of a valid claim, to the person       “manifest intent,” rather than to strict compliance with civil
  or persons surviving at the date of his death, in the            service regulations, in determining the proper beneficiary.
  following order of precedence:                                   See S. Rep. No. 89-1064 at 2071.
No. 02-1969               Terry, et al. v. LaGrois, et al.   7    8      Terry, et al. v. LaGrois, et al.              No. 02-1969

  One such case was the Ninth Circuit’s decision in Sears v.          The equities in Sears may have prompted the court of
Austin, 292 F.2d 690 (9th Cir. 1961). Cecil Sears worked for          appeals to disregard the civil service regulation and the
the Internal Revenue Service (IRS) and, as a federal                  general intent of the statute in order to comply with the
employee, received life insurance coverage through FEGLIA.            insured’s wishes, but the precedent established in that
Id. at 690. At the time of his death, Sears had not complied          case could, if generally followed, result in administrative
with the civil service regulations in designating a beneficiary       difficulties for the Civil Service Commission and the
of his life insurance policy. The policy explained that Sears         insurance companies and, more important, seriously
had the option of designating a beneficiary by securing “the          delay paying insurance benefits to survivors of Federal
proper form . . . from the U.S. Civil Service Commission,” id.        employees.
at 691, but, in the event that Sears did not designate a
beneficiary, the life insurance proceeds would be paid                To clarify Congress’ intent, H.R. 432 rewrites section 4
according to a statutory order of preference. Although Sears          to state clearly that the order of precedence set out in that
did not designate a beneficiary in writing using the U.S. Civil       section shall prevail over any extraneous document
Service Commission’s form, he did designate a beneficiary in          designating a beneficiary unless the designation has been
a handwritten will. The will, which was apparently neither            properly received in the employing office or by the Civil
witnessed nor filed with the IRS prior to Sears’s death,              Service Commission.
provided in pertinent part as follows:
                                                                  S. Rep. 89-1064, reprinted in 1966 U.S.C.C.A.N. 2070, 2071.
  In all due respect for my son and adopted daughter,             This court has recognized that with the 1966 amendments to
  Robert Cecil and LaVonne[,] I must remember the time            FEGLIA, “Congress, on administrative efficiency grounds,
  and care given to me by Karen when I was very ill and           abolished the manifest intent test” that prevailed in Sears.
  had no one to help me except her. For this I am                 Huff v. Metro. Life Ins. Co., 675 F.2d 119, 122 (6th Cir.
  requesting that all my personal belongings in my                1982).
  apartment . . . [including] my insurance policy with the
  Federal Government . . . be given to Mrs. Karen Austin.         C. Gamble’s designation of a beneficiary

Id.                                                                  On appeal, Gamble’s sons argue that the following three
                                                                  errors in their mother’s designation-of-beneficiary form
  After Sears died, his two children and Austin filed             render her designation invalid: (1) the signature of “Earline”
competing claims to Sears’s life insurance proceeds. The          rather than her full name, (2) her failure to date the
Ninth Circuit held that Austin was entitled to the proceeds,      designation form, and (3) her failure to check the box
reasoning that the fact that Sears “did not make his original     acknowledging that she signed the form in the presence of the
designation in the exact manner set forth in the policy[]         two witnesses. The sons therefore claim entitlement to the
should not prevent his definite intention, manifested by the      life insurance proceeds because, in the absence of a
affirmative act of drawing up a will, from being given effect.”   designated beneficiary, they are the preferred beneficiaries
Id. at 695. When Congress amended FEGLIA in 1966, it              according to the order of precedence set forth in
discussed the Ninth Circuit’s holding in Sears as a primary       5 U.S.C. § 8705(a).
motivating factor for the change:
No. 02-1969               Terry, et al. v. LaGrois, et al.    9    10   Terry, et al. v. LaGrois, et al.             No. 02-1969

  Because the sons raise the issue of Gamble’s failure to             Unlike in Hightower and Thomas, Gamble did not fail to
check the “witness” box for the first time on appeal, we           sign her designation-of-beneficiary form, and, unlike in Ward,
decline to consider this point. See United States v. Ninety-       her form was properly witnessed and timely filed. Her
Three (93) Firearms, 330 F.3d 414, 424 (6th Cir. 2003)             signature is admittedly unusual, but, as the district court
(“This court has repeatedly held that it will not consider         noted, FEGLIA “is silent regarding the sufficiency of an
arguments raised for the first time on appeal unless our failure   insured’s signature on a Designation of Beneficiary form.”
to consider the issue will result in a plain miscarriage of        Nothing in the statute requires an insured to sign her full
justice.”) (quotation marks omitted). Furthermore, even if the     name; it simply requires a signed and witnessed writing. As
sons had not waived this argument, we would have concluded         the district court recognized, a wide variety of “signatures” in
that it lacks merit for the same reason that their argument        other contexts are considered to be legally valid:
concerning Gamble’s failure to date the form lacks merit, i.e.,
the statute does not impose either requirement as a condition        Plaintiff also cites the Court to: MICH. COMP. LAWS
of making a valid designation. FEGLIA simply mandates a              § 440.1201(39) (1979) (defining “signed” as “any
“signed and witnessed writing received before death in the           symbol executed or adopted by a party with present
employing office.” 5 U.S.C. § 8705(a). Under the present             intention to authenticate a writing, including a carbon
circumstances, where the sons have not challenged what               copy of his or her signature.”) RESTATEMENT (SECOND)
appears on the form to be their mother’s properly witnessed          OF CONTRACTS § 134 (“The signature to a memorandum
signature, we have no basis to believe that our failure to           may be any signature made or adopted with an intention,
consider the effect of the unchecked box “will result in a plain     actual or apparent, to authenticate the writing as that of
miscarriage of justice.” Id. at 424.                                 the signor.”) and 2 Corbin, Contracts §§ 520-526 (1952)
                                                                     (“A signature may consist of part or all of the signor’s
   This leaves us with the sons’ remaining contention that           name, even though misspelled or abbreviated to initials
Gamble’s incomplete signature invalidates her designation of         only.”).
beneficiary. To support their position, the sons cite
Hightower v. Kirksey, 157 F.3d 528 (7th Cir. 1998), Thomas           The sons argue, however, that the law governing the
v. Metropolitan Life Insurance Co., No. 99-1908, 1997 WL           sufficiency of signatures for contract purposes is inapposite
159426 (D.C. Cir. Feb. 24, 1997) (unpublished decision), and       in the context of FEGLIA. But they fail to explain their
Ward v. Stratton, 988 F.2d 65 (8th Cir. 1993), to demonstrate      contention and do not cite any supporting authority. They
that other circuits have demanded strict compliance with           further point out that “[i]t would stand to reason that any rule
FEGLIA’s requirements for designating a beneficiary. All           articulated by a court to govern the provisions of FEGLIA
three cases, however, are easily distinguishable on their facts.   should conform to, and ultimately serve, the end purpose for
In Hightower and Thomas, the insured employees totally             which Congress drafted and enacted FEGLIA.” We fully
failed to sign the designation-of-beneficiary form. The            agree. But unlike Gamble’s sons, we see no reason why the
Eighth Circuit in Ward, on the other hand, held that neither of    understanding of what constitutes a signature under the UCC
two attempts to change the designated beneficiary had any          and general contract law does not conform to or serve the end
force or effect because the first form attempting to do so was     purposes for which Congress drafted FEGLIA.
not witnessed and the second was received after the insured
had died.                                                            As reflected in the Senate Report when FEGLIA was
                                                                   amended in 1966, see S. Rep. No. 89-1064, reprinted in 1966
No. 02-1969               Terry, et al. v. LaGrois, et al.   11

U.S.C.C.A.N. 2070, 2071, the concern of Congress was to
avoid the “administrative difficulties” inherent in allowing
unspecified “extraneous document[s]” designating a
beneficiary to be considered. There was no concern
expressed about the completeness of the insured’s signature
in the space provided on the approved form.
  Surely no court would declare any signature less than
“Earline Lynn Gamble” to be invalid. If “Earline L. Gamble”
would have been sufficient, or even “Earline Gamble,” then
why not simply “Earline”? Because Gamble’s abbreviated
signature appears in the proper space on the designation-of-
beneficiary form duly filed with the Postal Service, and no
one questions either the authenticity of her signature or the
fact that it was properly witnessed, we see no reason not to
give the designation its full effect. In sum, we find no
justification for distinguishing between what is a sufficient
signature under both the UCC and general contract law from
what is sufficient under FEGLIA.
D. The sons’ standing to bring this appeal
  Terry argues, as an alternate basis to affirm the judgment of
the district court, that the sons lack standing to bring this
appeal for a variety of procedural reasons. A previous panel
of this court, however, denied Terry’s motion to dismiss the
appeal on this basis. Terry v. LaGrois, No. 02-1969 (6th Cir.
Nov. 5, 2002) (unpublished order). Because we have no
reason to disturb that ruling, and because we have concluded
that Terry should prevail on the merits, we have no need to
address her alternative basis for recovery.
                    III. CONCLUSION
  For all of the reasons set forth above, we AFFIRM the
judgment of the district court.