Court Opinion

ID: 3052461
Source: CourtListenerOpinion
Date Created: 2015-10-13 23:42:31.19744+00
Date Added: 2024-06-11T11:41:16.241771
License: Public Domain

FOR PUBLICATION
  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

LIFE INSURANCE COMPANY OF NORTH         
AMERICA, a Pennsylvania
corporation,
                         Plaintiff,           No. 07-55308
                                        
                v.                              D.C. Nos.
GLORIA IRENE ORTIZ, an individual,          CV-05-07347-MLR
             Defendant-Appellant,           CV-05-08117-MLR
GRACIELA ELENA ORTIZ, an
individual,
              Defendant-Appellee.
                                        

LIFE INSURANCE COMPANY OF NORTH         
AMERICA, a Pennsylvania
corporation; RELIANCE STANDARD
LIFE INSURANCE COMPANY,
                          Plaintiffs,
                  v.                          No. 07-55331
GLORIA IRENE ORTIZ, an individual,             D.C. Nos.
              Defendant-Appellant,          CV-05-08117-R
GRACIELA ELENA ORTIZ, an                     CV-05-07347-R
individual,                                    OPINION
                Defendant-Appellee,
                 and
J.J.O., a minor; JAVIER A. ORTIZ,
Sr.; GRACIELA CASTANO ORTIZ,
                        Defendants.
                                        

                             9791
9792             LIFE INSURANCE COMPANY v. ORTIZ
         Appeal from the United States District Court
            for the Central District of California
          Manuel L. Real, District Judge, Presiding

                     Argued and Submitted
               June 4, 2008—Pasadena, California

                       Filed August 1, 2008

 Before: Alex Kozinski, Chief Judge, Ruggero J. Aldisert,*
          and Dorothy W. Nelson, Circuit Judges.

                      Per Curiam Opinion;
                Dissent by Chief Judge Kozinski

   *The Honorable Ruggero J. Aldisert, Senior United States Circuit Judge
for the Third Circuit, sitting by designation.
9794           LIFE INSURANCE COMPANY v. ORTIZ

                         COUNSEL

Robert A. Foster, II, Robert A. Foster II Law Offices, Irvine,
California, for the defendant-appellant.
               LIFE INSURANCE COMPANY v. ORTIZ              9795
John V. Gaule, Oddenino & Gaule, Arcadia, California, for
the defendant-appellee.

                          OPINION

PER CURIAM:

   This case involves an interpleader action over the life insur-
ance proceeds for an officer killed in the line of duty.
Although Luis Gerardo Ortiz’s ex-wife, Gloria Ortiz, was des-
ignated as beneficiary, Graciela Ortiz argues that divorce
extinguished Gloria Ortiz’s expectancy interest. The district
court awarded the life insurance proceeds to the estate for
intestate division among Graciela Ortiz and the decedent’s
two sons. We reverse and remand.

     FACTUAL AND PROCEDURAL BACKGROUND

   On August 2, 1998, Luis Gerardo Ortiz (“Jerry”) desig-
nated his wife, Gloria Ortiz (“Gloria”), as the beneficiary of
his life insurance policies with Life Insurance Company of
North America and Reliance Standard. Jerry and Gloria sepa-
rated in March 2002, and the Superior Court of California
entered a Judgment on Reserved Issues in their divorce on
December 15, 2004. The Judgment on Reserved Issues
awarded “[a]ll right, title and interest in any and all of Peti-
tioner’s retirement/pension, 457(b) plans, 401(k) plans or
other deferred benefits in [Jerry]’s name” to Jerry. The docu-
ment also included a pre-printed notice indicating that “[i]t
does not automatically cancel the rights of a spouse as benefi-
ciary on the other spouse’s life insurance policy.”

   In February of 2005, Jerry’s divorce attorney sent an exit
letter advising him to “reaffirm and/or change any beneficia-
ries on any . . . insurance policies.” The attorney also spoke
with Jerry after the divorce judgment issued and urged him to
9796             LIFE INSURANCE COMPANY v. ORTIZ
change the beneficiaries of his life insurance policies immedi-
ately. Jerry indicated that “he intended to go and look into
those policies” and “again assured [her] that he would.”
Despite these assurances, Jerry did not attempt to change the
written beneficiary designations on file with Life Insurance
Company of North America and Reliance Standard.1

   Jerry married Graciela Ortiz (“Graciela”) on May 28, 2005.
Jerry did not work May 28-31 because of the marriage and the
honeymoon. On June 24, 2005, Jerry died as a result of a gun-
shot wound to the head while on duty. The term life insurance
payment that funded Jerry’s coverage at the time of death was
withdrawn from his May paycheck. The life insurance compa-
nies deposited life insurance and accidental death benefits
totaling $518,483.13 with the clerk of the court.

   The life insurance companies instituted an interpleader
action naming Gloria and Graciela as defendants. The district
court judge found that the life insurance policies became
Jerry’s separate property at the time of his divorce from Glo-
ria. The judge also found that Jerry expressed an intent to
name Graciela as his beneficiary, but he died intestate before
he could make that change. Accordingly, the judge awarded
the proceeds of the policies to the estate to be split equally
between Graciela and Jerry’s two sons. The district court
denied a motion to stay the judgment pending appeal, but this
court granted an unopposed application for an emergency stay
order.

       JURISDICTION AND STANDARD OF REVIEW

   The district court derived jurisdiction from 28 U.S.C.
§ 1332 because the parties are diverse and the amount in con-
troversy exceeds $75,000 exclusive of interest and costs. We
  1
    Both companies required written notice to change the designated bene-
ficiary.
               LIFE INSURANCE COMPANY v. ORTIZ              9797
find jurisdiction over this appeal of the final judgment pursu-
ant to 28 U.S.C. § 1291.

  The interpretation of a divorce judgment is a matter of law,
which we review de novo. Lowenschuss v. Selnick, 170 F.3d
923, 929 (9th Cir. 1999).

                         DISCUSSION

I.   DIVORCE JUDGMENT

   [1] Under California law, we look to the language of the
property settlement agreement to determine whether the
agreement extinguishes the expectancy interests of life insur-
ance beneficiaries. Life Ins. Co. of N. Am. v. Cassidy, 676
P.2d 1050, 1053 (Cal. 1984). “[G]eneral language in a marital
settlement agreement will not be construed to include an
assignment or renunciation of the expectancy interest con-
ferred on the named beneficiary of an insurance policy or a
will unless it clearly appears that the agreement was intended
to deprive either spouse of such a right.” Id. A property settle-
ment covering all property and releasing all claims may be
found to include a life insurance expectancy interest, “but
where the language is not broad enough to encompass such an
expectancy . . . the wife may still take as beneficiary if the
policy so provides.” Thorp v. Randazzo, 264 P.2d 38, 40 (Cal.
1953).

   [2] We find that the language of the divorce judgment
between Jerry and Gloria Ortiz did not extinguish Gloria’s
expectancy interest in Jerry’s life insurance proceeds. The text
of the relevant Judgment on Reserved Issues did not contain
a single direct reference to life insurance policies. Although
one could read the provision awarding “[a]ll right, title and
interest in any and all of Petitioner’s retirement/pension,
457(b) plans, 401(k) plans or other deferred benefits” to
encompass life insurance policies, it was not clearly apparent
that the provision encompassed beneficiary status. Unlike in
9798            LIFE INSURANCE COMPANY v. ORTIZ
Thorp, the judgment did not “clearly indicate[ ] that the par-
ties’ attention had been directed to the expectancy of the
insurance proceeds, and that it was intended that plaintiff
waive all interest therein, present and future.” 264 P.2d at 41.
Thus the divorce judgment was insufficient to waive benefi-
ciary status because it is not clear from the text of the agree-
ment that such status was contemplated and intentionally
waived.

   Additionally, the context of the Judgment on Reserved
Issues suggests that the parties did not extinguish beneficiary
status. The document contained a pre-printed notice that “[i]t
does not automatically cancel the rights of a spouse as benefi-
ciary on the other spouse’s life insurance policy.” This notice,
while not dispositive, provided information regarding the
additional steps required to alter life insurance beneficiaries.
We can infer that Jerry and his attorney did not expect the
judgment to terminate Gloria’s beneficiary status because
Jerry’s attorney advised him to “reaffirm and/or change any
beneficiaries on any . . . insurance policies” in her exit letter.
Jerry also indicated that he understood the necessity of chang-
ing his named beneficiary when he spoke with his attorney in
February. The pre-printed notice on the judgment form and
the record evidence regarding Jerry’s state of mind support
our conclusion that the divorce judgment did not extinguish
Gloria’s expectancy interest.

  We distinguish this case from Meherin v. Meherin, 222
P.2d 305 (Cal. Ct. App. 1950). In Meherin, a property settle-
ment agreement terminated a wife’s expectancy interests by
assigning “all of her right, title and interest in and to said poli-
cy” and further requiring her “to execute any instrument or
documents required by the husband or the [ ] Insurance Com-
pany to carry out the intention of this paragraph.” Id. at 306.
Unlike the Ortiz divorce judgment, the agreement in Meherin
specifically referenced the insurance policy. Id. The agree-
ment also referenced the documentation required by the hus-
band or the insurance company to change the beneficiary and
                LIFE INSURANCE COMPANY v. ORTIZ              9799
the wife’s interests in post-death recovery. Id. Finally, the
agreement in Meherin was a complete settlement whereas the
Ortiz document was only a Judgment on Reserved Issues. The
Meherin agreement clearly indicated that the parties directed
their attention to expectancy interests and intended to waive
those interests; the Ortiz judgment did not.

   [3] For the foregoing reasons, we find that Gloria’s expec-
tancy interest survived the divorce. In light of this finding, we
hold that the district court erred when it relied on Jerry’s post-
divorce intent to terminate Gloria’s expectancy interests. In
both Cassidy and Thorpe, the court only looked to the dece-
dent’s post-divorce intent after it determined that the language
of the divorce decree terminated the expectancy interest. In
Cassidy, the agreement “waive[d] and relinquish[ed] any
expectancy that was not thereafter reaffirmed,” and the court
looked to evidence of post-divorce intent to determine
whether the failure to change the beneficiary designation con-
stituted a reaffirmation of the expectancy interest. 676 P.2d at
1055-56. In Thorpe, the waiver of future interests in life insur-
ance policies and post-death benefits was explicit, and the
court considered intent for the limited question of whether the
failure to change the beneficiary amounted to a post-divorce
confirmation of the designation. 264 P.2d at 41-42. This case
is distinguishable from both Cassidy and Thorpe, thus the dis-
trict court’s reliance on post-divorce intent was misplaced.

II.   CHANGE OF BENEFICIARY

   [4] As a general rule, California requires a change to a ben-
eficiary designation to be made in accordance with the terms
of the policy. “[I]f it is not, no change is accomplished, unless
whatever occurred in that respect comes within one of more
of the three exceptions to the rule.” Cook v. Cook, 111 P.2d
322, 328 (Cal. 1941). The three exceptions are (1) when the
insurer waives strict compliance with its own rules regarding
the change; (2) when it is beyond the insured’s power to com-
ply literally with the insurer’s requirement; or (3) when the
9800           LIFE INSURANCE COMPANY v. ORTIZ
insured has done all that he could to effect the change but dies
before the change is actually made. Id.

  [5] Only the third exception is potentially applicable to this
case. The Supreme Court of California interpreted this third
exception, stating:

    We think that where the insurer is not contesting the
    change the rule is not to [be] applied rigorously and
    where the insured makes every reasonable effort
    under the circumstances, complying as far as he is
    able with the rules, and there is a clear manifestation
    of intent to make the change, which the insured has
    put into execution as best he can, equity should
    regard the change as effected.

Pimentel v. Conselho Supremo de Uniao Portugueza do
Estado da California, 57 P.2d 131, 134 (Cal. 1936). Thus,
one’s intent to change a beneficiary designation must be
clearly manifested and put into motion as much as practicable.
See Manhattan Life Ins. Co. v. Barnes, 462 F.2d 629, 633 (9th
Cir. 1972) (“California demands that substantial steps be
taken to actually change a beneficiary before the formal
requirements of the contract may be ignored.”).

   [6] In this case, both insurance companies required written
notification of change of beneficiary and Jerry took no steps
toward providing such notification. Jerry’s lawyer stressed the
necessity of changing the designation in both her exit letter
and an informal meeting. Jerry indicated that he understood
and intended to change the designation; however, he took no
action in the four months between the finalization of the
divorce and his death. At any point following the finalization
of his divorce, Jerry could have named Graciela, his two sons,
or anyone else as the beneficiary of his policies. Jerry’s inac-
tion does not amount to substantial steps to change his benefi-
ciary; therefore we find that the original designation of Gloria
                 LIFE INSURANCE COMPANY v. ORTIZ                  9801
Ortiz remained valid. Thus the district court erred by relying
on intent to circumvent a valid beneficiary designation.

III.   COMMUNITY PROPERTY SHARE

   [7] Although we find that the beneficiary designation nam-
ing Gloria was valid, we note that Graciela retains a commu-
nity property interest of 6.45% of the life insurance proceeds.2
This percentage represents a one-half interest in the four days’
earnings that funded the final thirty-one day term of Luis’s
term life insurance.

                           CONCLUSION

   We REVERSE and REMAND for the district court to
award 93.55% of the disputed life insurance proceeds to Glo-
ria Ortiz and 6.45% to Graciela Ortiz.

KOZINSKI, Chief Judge, dissenting:

   The majority reaches a senseless, unjust and cruel result by
awarding half a million dollars to the former wife of a peace
officer felled in the line of duty, leaving the officer’s widow
and children out in the cold. We don’t need to do this. The
law, the facts, the equities, common sense and the district
court’s findings all support the just result here: giving the pro-
ceeds of the service life insurance policies meant to protect
the officer’s loved ones to the people he actually loved.

   The majority pettifogs its way through the California
caselaw, finding ways to distinguish this case and that, but
loses sight of the key facts that support the district court’s
judgment: Gloria Ortiz—the woman who will get the windfall
  2
    Gloria conceded this issue at oral argument, so we do not analyze it
further.
9802            LIFE INSURANCE COMPANY v. ORTIZ
under the majority’s stilted reasoning—had given up all inter-
est in the policies at the time of her divorce from Deputy
Ortiz. She had no interest in the policies anyway because they
were for term insurance and thus built up no cash value.
Every month’s coverage was paid for by premiums deducted
that month from Deputy Ortiz’s paycheck. After the divorce,
Gloria had no interest in the deputy’s income. To award Glo-
ria the proceeds, one must believe that Deputy Ortiz meant to
spend a chunk of his salary buying insurance for the benefit
of his estranged wife instead of his wife and sons.

   Breadwinners buy life insurance to provide financial secur-
ity for their dependents. Deputy Ortiz had no reason to pro-
vide financial security for a woman who wasn’t his dependent
and whom, by all accounts, he despised. Which is what the
district court found after a trial. It’s true that Deputy Ortiz had
not yet changed the beneficiary designation on his policies
when he was killed. But the delay wasn’t very long, and cer-
tainly doesn’t compel a finding that Deputy Ortiz meant to
leave Gloria a pot of gold and his wife and sons a lump of
coal.

   The delay was, in any event, entirely understandable. While
the deputy could have changed the beneficiary designation
after his divorce in February, he prudently waited for Graciela
to become his wife. The two wedded at the end of May and,
after a short honeymoon, Deputy Ortiz returned to work. He
didn’t rush to change the beneficiary designation on his poli-
cies, probably because he didn’t imagine he’d be killed three
weeks later. Deputy Ortiz, like the rest of mankind, must have
believed that he had plenty of time. Imprudent, perhaps, but
very human. Who amongst us hasn’t put off dealing with
wills or other unpleasantries that remind us of our mortality?
Is this the kind of mistake that should deprive Deputy Ortiz’s
wife and children of the insurance he maintained for their
security? Surely not—at least not in California today.

   The California courts have dealt with very similar situa-
tions for over half a century and have invariably awarded pol-
               LIFE INSURANCE COMPANY v. ORTIZ              9803
icy proceeds as intended by the decedent. Thorp v. Randazzo,
264 P.2d 38 (Cal. 1953), is typical. The decedent was
divorced from his former wife who, through a consent decree,
gave up “all claims to any benefits that she may have at pres-
ent, or which may hereafter be derived from the . . . life insur-
ance policies upon the life of [the husband].” Id. at 39. The
former wife was the beneficiary of two policies; the husband
changed the beneficiary on one but not the other. The former
wife sought the proceeds “as the named beneficiary on the
policy at the time of deceased’s death.” Id. at 40. The trial
court ruled against her and awarded the proceeds to the hus-
band’s estate.

   The California Supreme Court recognized that “[t]he fail-
ure of the husband to exercise his power to change the benefi-
ciary ordinarily indicates that he does not wish to effect such
a change.” Id. (citations omitted). Nevertheless, it affirmed the
trial court because “each case must be decided upon its own
facts.” Id. (citations omitted). Thorp presented a much closer
case than ours because the husband there did change the bene-
ficiary on one policy but not the other. The most plausible
inference would have been that he wanted the ex-wife to
remain as beneficiary of the policy he didn’t change. Even so,
the trial court found that he did intend to change the benefi-
ciary, and the state supreme court deferred to that finding.

   Thorp distinguished Grimm v. Grimm, 157 P.2d 841 (Cal.
1945), which had reached the opposite result. The only mate-
rial difference between the cases was that the trial court in
Grimm found that the decedent hadn’t intended to change the
beneficiary, while the trial court in Thorp found that he had.
In each case, the state supreme court deferred to the trial
court’s findings.

   Thorp was followed two decades later by Life Ins. Co. of
N. Am. v. Cassidy, 676 P.2d 1050 (Cal. 1984), where the Cali-
fornia Supreme Court again affirmed a trial court judgment in
9804           LIFE INSURANCE COMPANY v. ORTIZ
favor of the estate and against the former wife. The court
ruled:

    We have concluded that the designation of appellant
    as beneficiary was superseded as of the date the par-
    ties entered into a marital settlement agreement
    which comprehensively disposed of all the rights and
    obligations between them. By terms of the agree-
    ment each waived all rights to take any property
    whatsoever at the death of the other unless such right
    was conferred by an instrument executed after the
    date of the agreement. The evidence produced at
    trial clearly shows that the fact appellant remained
    the named beneficiary of the subject insurance pol-
    icy was not the result of an intent by the deceased to
    make a new gift of the benefits of the policy to his
    former spouse, but was contrary to his expressed
    intent that she be removed as beneficiary of all
    insurance policies on his life. We therefore affirm
    the judgment of the trial court.

Id. at 1051 (emphasis added). As the underscored language
makes clear, the dispositive issue in Cassidy was the dece-
dent’s intent, with the beneficiary designation constituting but
one indication of that intent, and not even a very significant
one.

   Chief Justice Bird dissented in Cassidy because she thought
the evidence that the decedent intended to cut off the former
wife’s rights under the policy was very weak. Bird empha-
sized that “Mr. Cassidy’s executor failed to offer any evi-
dence as to Mr. Cassidy’s intentions during the lengthy period
between July of 1975 and Mr. Cassidy’s death in December
of 1976.” Id. at 1059. The Chief Justice’s dissent makes it
very clear that the record in Cassidy was far flimsier than the
record here: Deputy Ortiz made his statement about intending
to remove his former spouse from the policies more forcefully
and far closer to his untimely death than did Mr. Cassidy. Yet
                LIFE INSURANCE COMPANY v. ORTIZ               9805
the Cassidy court upheld the finding of the trial court in favor
of the estate and against the named beneficiary, while my col-
leagues reverse.

   The California intermediate appellate courts have been
even more forgiving of human frailty. In Meherin v. Meherin,
222 P.2d 305 (Cal. Ct. App. 1950), a case the majority is at
pains to distinguish, the ex-wife waived “all of her right, title
and interest in and to said policy and the interest and benefits
therein.” Id. at 306. Here, Gloria gave up “all right, title and
interest” in Deputy Ortiz’s retirement plans and “other
deferred benefits.” No one, not even Gloria, claims that her
interest in the policies survived the divorce; she relies entirely
on the fact that Deputy Ortiz didn’t change the beneficiary
designation. The majority nitpicks at factual distinctions
between our case and Meherin, but none of them matter
because the trial court in both cases found that the decedent
intended to change the beneficiary. If we were the triers of
fact, we could make whatever findings we pleased. But we’re
not, so we must accept the district court’s finding that Deputy
Ortiz did not intend for Gloria to be the beneficiary of his life
insurance policies. This makes our case materially indistin-
guishable from Meherin, and yet my colleagues reach the
opposite result.

   Finally, the California Court of Appeal in Snyder v. Snyder,
242 Cal. Rptr. 597 (Ct. App. 1987), reached the same result
on a surprisingly thin record. Snyder involved a contribution
savings plan with the deceased husband’s employer, Rock-
well. The husband “never changed the beneficiary designation
of the Rockwell savings plan,” which named his former
spouse. Id. at 598. Nor did the husband even say that he
intended to make a change. The trial court nonetheless found
against the ex-wife and in favor of the estate. In affirming that
finding, the appeals court acknowledged:

    [There is] no testimony . . . with respect to [the hus-
    band’s] intention to change the beneficiary designa-
9806           LIFE INSURANCE COMPANY v. ORTIZ
    tion. There is, however, documentary evidence of his
    intent to supersede the original beneficiary designa-
    tion: his will. Furthermore, we can see no reason
    why [the husband] would have wanted to make a gift
    to [his ex-wife] of the plan’s proceeds. From a prac-
    tical standpoint, any desire to retain [her] as benefi-
    ciary could have been implemented by submitting a
    postdivorce designation to that effect.

Id. at 600 (emphasis added). As the opinion makes clear,
however, the will made no mention of the savings plan; it
merely designated the new wife as the estate’s residuary lega-
tee. Id. at 598. Snyder thus relied only on the court’s own
sense of what the husband probably wanted, not on anything
he actually said. Indeed, the court found that his failure to re-
designate the former wife as beneficiary was sufficient proof
that he didn’t intend for her to take the savings plan.

   There are two important things to note about the California
cases, both of which my colleagues overlook. The first is that
the designation of a beneficiary in a life insurance or similar
plan is not very significant when there’s been an intervening
divorce. The California courts seem to understand, as the
majority here does not, that a divorce rearranges all property
relationships and, as to property acquired after the divorce,
what really matters is how the deceased intended to distribute
it. Every single case, including Grimm, and Chief Justice
Bird’s dissent in Cassidy, treats the decedent’s intent as the
dispositive question. In this case, Deputy Ortiz was killed in
the line of duty right after his wedding, leaving him virtually
no time to make the change; even Chief Justice Bird—who
dissented in Cassidy largely because 20 months elapsed
between the divorce and the husband’s death—would be per-
suaded that Deputy Ortiz meant to leave the policy proceeds
to his estate. Second, every one of the majority opinions
affirms the judgment of the trial court, even on a paper-thin
record. We are seriously out of step with the California cases
by reversing the district court here.
                LIFE INSURANCE COMPANY v. ORTIZ              9807
    What does the majority offer against this cavalcade of con-
trary authority? There is, of course, the fact that Deputy Ortiz
was warned by his lawyer to change the beneficiary designa-
tions on his policies. But so what? Most of the decedents in
the California cases knew that they should change the benefi-
ciary designation. See, e.g., Thorp, 264 P.2d at 39
(“[D]eceased had discussed with his attorney his intention to
change the policy so as to make it payable to his estate.”);
Cassidy, 676 P.2d at 1051 (“Both parties were fully advised
by their own counsel.”). Had they taken the most sensible and
prudent course of action, we wouldn’t be reading about them
in the opinions of the California courts. Here too, the advice
given by Deputy Ortiz’s lawyer was sound; had he followed
it, he would have saved his family a great deal of aggravation,
uncertainty and money.

   But this doesn’t mean—as the majority claims—“that
[Deputy Ortiz] and his attorney did not expect the judgment
to terminate Gloria’s beneficiary status.” Maj. op. at 9798.
Setting aside the fact that inferences about the parties’ state of
mind are the province of the trial court, the majority is simply
wrong: Deputy Ortiz and his lawyer may well have believed
that the divorce settlement did cut off Gloria’s interest in the
policy—as it surely was meant to—and yet thought it prudent
to change the beneficiary designation so as to avoid the delay,
expense and grief of the current situation. The majority over-
reaches by reading anything more into their conversation.

   The majority’s reliance on the divorce decree’s pre-printed
notice is a makeweight. The notice was not part of the decree
—it appeared below the judge’s signature line—and could
have had no legal effect on the relationship between the par-
ties. It was good advice, and one wishes Deputy Ortiz had
taken it. But a boilerplate notice in fine print at the bottom of
a two page form can’t possibly undermine the finding that
Deputy Ortiz was not insuring his life for Gloria’s benefit.

  The majority tries to make something of the fact that Dep-
uty Ortiz had a “partial” settlement, whereas the settlement in
9808           LIFE INSURANCE COMPANY v. ORTIZ
some California cases, such as Meherin, was “complete.”
Maj. op. at 9798-99. This may be a distinction, but it makes
no difference. The settlement here covered “all remaining
issues” of property between Deputy Ortiz and Gloria. It was
partial only because it didn’t deal with child “custody, visita-
tion, [and] [ ] support,” which the parties left for a separate
consent decree. Why this should matter, the majority does not
explain.
   Finally, the majority cites to a series of cases which hold
that a beneficiary designation is binding, unless the deceased
complied with the insurer’s terms for changing the designa-
tion or was unable to do so. Maj. op. at 9799-9800 (citing
Manhattan Life Ins. Co. v. Barnes, 462 F.2d 629 (9th Cir.
1972); Cook v. Cook, 111 P.2d 322 (Cal. 1941); Pimentel v.
Conselho Supremo De Uniao Portugueza Do Estado Da Cali-
fornia, 57 P.2d 131 (Cal. 1936)). These cases are inapposite
because none of them deals with the effect of a divorce
decree. Were the cases the majority relies on in this section
applicable to a situation such as ours, they would conflict with
Thorp, Cassidy, Meherin and Snyder.
   I might understand my colleagues’ herculean efforts to
swim against the current of California caselaw if they were
straining to avoid an irrational and unjust result. But what
sense is there in spinning fine distinctions to perpetrate an
injustice? The wife of a man who put his life on the line to
protect us will lose the protection he thought he had provided
for her; his children will be left with nothing. As his lawyer
predicted, I fully expect we’ll hear Deputy Ortiz yelling from
his grave when the majority issues its opinion.
   After trial, the district court made clear findings and
reached a just result that fulfilled Deputy Ortiz’s fair expecta-
tions and protected his wife and children. Only a procrustean
attachment to legal formalism could lead my colleagues to
overturn the district court and reach an unconscionable result.
Deputy Ortiz, and the family he intended to support, deserve
better. Sadly, I must dissent.