Court Opinion

ID: 2709473
Source: CourtListenerOpinion
Date Created: 2014-08-05 15:16:16.512611+00
Date Added: 2024-06-11T10:01:26.219777
License: Public Domain

In the

United States Court of Appeals
               For the Seventh Circuit

No. 12-1840

M INNESOTA L IFE INSURANCE C OMPANY
                                                               Plaintiff,
                                  v.

A RLENE K AGAN,
                                                 Defendant-Appellee,
                                  v.

T AMMY K AGAN, et al.,
                                             Defendants-Appellants.

             Appeal from the United States District Court
        for the Northern District of Illinois, Eastern Division.
              No. 1:10-cv-06003—Ruben Castillo, Judge.

     A RGUED O CTOBER 24, 2012—D ECIDED JULY 31, 2013

 Before P OSNER, W OOD , and T INDER, Circuit Judges.
 T INDER, Circuit Judge.

                                   I
  An unexpected death can often unite family members
in their grief, bringing them closer together and helping
2                                             No. 12-1840

them to overlook previous differences. But for the
Kagans, an unexpected death in 2009 seemed to have
just the opposite effect, fueling the flames of an already
burning feud among family members. The decedent,
Allen Kagan, suffered a fatal heart attack while doing
yard work on December 2, 2009, after years of heart
problems and a prior open-heart surgery. Allen left
behind a wife of three years, Arlene, as well as three
adult children from a previous marriage, Tammy, Scott,
and Richard. At the time of Allen’s death, Tammy and
her children lived with Allen and Arlene, and the
tensions resulting from three generations plus a step-
mother living under the same roof appear to be the
source of the present family feud. According to Arlene,
the blame for these tensions lie with Tammy and her
children, who “on numerous occasions . . . verbally
f[ought] . . . and scream[ed] profanities” at Allen and at
each other. In contrast, according to Tammy, the blame
lies entirely with Arlene, who “fought constantly”
with Allen to the point that Allen and Arlene had to
seek marriage counseling.
   Regardless of who was initially to blame, these intra-
family tensions escalated upon Allen’s death. Allen had
written a will bequeathing $100,000 and a grave site to
Arlene. Arlene, however, was never able to collect this
bequest as Allen’s valuable assets had all passed outside
of probate, leaving his estate with insufficient funds.
Allen had designated his three children as the bene-
ficiaries of the majority of his assets, which included a
home, life insurance policies, retirement accounts, and
other savings accounts. In fact, the sole asset for
No. 12-1840                                              3

which Allen had not specifically designated a beneficiary
was the life insurance policy at issue in this case.
  Allen received this life insurance policy as part of his
compensation package from SuperValu, where he had
worked as a pharmacist since 2007. The policy, which
was issued by Minnesota Life Insurance Company, pro-
vided $74,000 in basic coverage and $341,000 in supple-
mental coverage. In the event that the policyholder
failed to designate a beneficiary by his date of death, the
proceeds would pass to the policyholder’s spouse by
default. On the date of Allen’s death, Minnesota Life
had never received any indication that Allen wished
to designate a beneficiary. Minnesota Life had never
received a change-of-beneficiary form from Allen,
nor does it appear that Allen had ever sent a change-of-
beneficiary form to Minnesota Life.
  Nonetheless, it appears that Allen may have filled out
a change-of-beneficiary form prior to his death. In the
days immediately following Allen’s death, Tammy,
Scott, and Richard (hereinafter “the children”) found
a change-of-beneficiary form that was allegedly com-
pleted by their father on August 15, 2008—more than
a year before his death—but never submitted to
Minnesota Life. This form designated the children as
the beneficiaries to the SuperValu policy, excluding
Arlene entirely. The children submitted this form to
Minnesota Life through their attorney on December 23,
2009, approximately three weeks after their father’s
death. Arlene, in turn, submitted a claim to Minnesota
Life through her attorney on February 1, 2010, claiming
4                                             No. 12-1840

to be the policy’s sole beneficiary by default. And so
the present dispute over the proceeds from the
SuperValu policy began.
   Over seven months passed, yet Arlene and the
children were never able to reach an agreement about
how to distribute the SuperValu policy proceeds. Conse-
quently, Minnesota Life filed this interpleader action
under 28 U.S.C. § 1332 and Fed. R. Civ. P. 22, asking
the federal district court to allow Minnesota Life to
deposit the disputed proceeds with the court, to
discharge Minnesota Life from any further liability
under the SuperValu policy, to determine the proper
beneficiary of the policy, and to award Minnesota Life
its costs from bringing the action. The district court
granted judgment to Minnesota Life the next day,
directing it to deposit the policy proceeds “with the
Clerk of the Court in an interest bearing account.” Arlene
and the children then resumed their fight over the
policy proceeds in the federal district court.
  This fight continued for almost a year until both
Arlene and the children filed cross-motions for sum-
mary judgment in the summer of 2011. On March 13,
2012, the district court granted Arlene’s motion and
denied the children’s motion. Even if Allen had filled
out a change-of-beneficiary form on August 15, 2008, as
the children alleged, the district court found that Allen
had neither exactly complied nor substantially complied
with the SuperValu policy’s requirements for changing
beneficiaries since he had never mailed the completed
form to Minnesota Life during the fifteen months before
No. 12-1840                                                  5

his death. Thus, Arlene, the default beneficiary, was
entitled to the proceeds of the SuperValu policy.
  The children filed a timely appeal of the district court’s
grant of summary judgment to Arlene. Although the
children initially expressed an intent to appeal both the
district court’s grant of summary judgment to Arlene
and the district court’s denial of summary judgment
to them, they have subsequently abandoned the appeal
regarding their motion for summary judgment. The
children now request that we reverse the district court’s
decision on Arlene’s motion and remand the case for
trial. For the reasons that follow, we decline the
children’s request and affirm the judgment of the
district court.

                              II
  Before we can discuss the merits of this case, we
must first ensure that our appellate jurisdiction is se-
cure. We pointed out a procedural irregularity in the
district court’s disposition of the case at the outset of
this appeal, in accordance with our “obligation to
examine [appellate] jurisdiction sua sponte, even if the
parties fail[ed] to raise a jurisdictional issue.” Wingerter v.
Chester Quarry Co., 185 F.3d 657, 660 (7th Cir. 1998). The
children brought this appeal pursuant to 28 U.S.C. § 1291,
which gives us jurisdiction over “appeals from all final
decisions of the district courts.” But as soon as we
looked at the decision of the district court in this case,
we became concerned that it was not, in fact, final.
6                                                No. 12-1840

   A district court’s decision is final if “the district court
has finished with the case.” Chase Manhattan Mortg. Corp.
v. Moore, 446 F.3d 725, 726 (7th Cir. 2006). The district
court’s initial order entering judgment in favor of
Arlene and against the children (issued on March 13,
2012) certainly sounded final. Explicitly dismissing the
case “in its entirety,” the initial order even described
itself as a “final and appealable order.” Despite this
language, however, the order was not the last one
issued by the district court prior to appeal. On March 27,
2012, the district court entered an order amending
the March 13th order. Shortly after her victory on the
merits, Arlene filed a motion to amend the judgment
under Fed. R. Civ. P. 59(e), disputing the amount of
interest that Minnesota Life had paid on the SuperValu
policy proceeds since Allen’s death. In response to
Arlene’s motion, the district judge amended the judg-
ment by “reserv[ing] jurisdiction to resolve any dispute
between the Plaintiff Minnesota Life . . . and Claimant-
Defendant Arlene Kagan of the proper amount of
interest to be paid under the policy.”
  The language of the district court’s amended order
troubled us because it suggested that the district court
had not actually finished with the case. Despite the
fact that the court had resolved all disputes between
Arlene and the children, it appeared that an active
dispute still remained between Arlene and Minnesota
Life. Furthermore, the amended order indicated that
the district court still considered Minnesota Life to be a
party fully before the court, despite its earlier order
“grant[ing] judgment in favor of the Plaintiff, Minnesota
No. 12-1840                                               7

Life.” For these reasons, we ordered the parties to file
jurisdictional memoranda stating why the March 27th
amended order was a final decision for the purposes of
28 U.S.C. § 1291, and thus, appealable to our court.
  A single statement in Arlene’s jurisdictional memoran-
dum resolved our concerns: “Arlene contacted
Minnesota Life and received an explanation of how the
interest was determined. After due consideration, it
appears Minnesota Life has paid the proper amount of
policy interest due under the terms of the policy. There-
fore, Arlene disclaims any intent to seek further amend-
ment of the judgment.” With this statement, Arlene
ended the one dispute that remained in the case after
the March 27th amended order, “ ‘leav[ing] nothing for
the court to do but execute the judgment.’ ” ITOFCA, Inc.
v. MegaTrans Logistics, Inc., 235 F.3d 360, 363 (7th Cir.
2000 (quoting Coopers & Lybrand v. Livesay, 437 U.S. 463,
467 (1978)).
  Previously, we have found a party’s repudiation of
any potentially remaining claims sufficient to convert a
district court’s nonfinal order into a final, appealable
one for the purposes of § 1291. In fact, this situation
has arisen several times before our court in the context
of an appeal from a district court’s dismissal of a claim
without prejudice. Dismissals without prejudice are
normally nonfinal for the purposes of § 1291 “because
the plaintiff remains free to refile his case.” Mostly Memo-
ries, Inc. v. For Your Ease Only, Inc., 526 F.3d 1093, 1097
(7th Cir. 2008). Still, as long as the party “explicitly
agrees . . . to treat the dismissal of the claim as having
8                                                No. 12-1840

been with prejudice”—in other words, the party agrees
not to refile the claim in the district court in the event
of an unsuccessful appeal—we have found jurisdiction
secure for the appeal to proceed. Nat’l Inspection &
Repairs, Inc. v. George S. May Int’l Co., 600 F.3d 878, 883
(7th Cir. 2010) (finding jurisdiction over an appeal
secure once “the parties submit[ted] a revised statement
regarding their respective intent not to pursue the[]
claims” dismissed by the district court without preju-
dice); see also India Breweries, Inc. v. Miller Brewing Co.,
612 F.3d 651, 657 (7th Cir. 2010) (finding jurisdiction
over an appeal secure once the appellee agreed “unequivo-
cally [to] dismiss[] its counterclaims with prejudice
after [our court] pressed the matter at oral argument”).
  In reaching these prior decisions, we have hearkened
back to the legislative purpose for enacting the § 1291
finality requirement: to “prevent[] the debilitating effect
on judicial administration caused by piecemeal appeal
disposition of what is, in practical consequence, but a
single controversy.” Coopers, 437 U.S. at 471 (quotation
and citation omitted). Once a party repudiates all poten-
tially remaining (or refileable) claims, “[t]he risk of piece-
meal appeals from the district court . . . [becomes] nonex-
istent,” and any concern about the effect on judicial
administration disappears. Mostly Memories, 526 F.3d
at 1097. Here, since Arlene has repudiated her claim
for additional interest against Minnesota Life, which
was the only issue still awaiting resolution by the
district court, the risk of a later, piecemeal appeal in
this case is similarly nonexistent.
No. 12-1840                                              9

  As a result, we find Arlene’s repudiation of her remain-
ing dispute with Minnesota Life sufficient to ensure
that the March 27th amended order is a final decision
for the purposes of 28 U.S.C. § 1291. By “fully extinguish-
ing all lingering claims” before the district court, India
Breweries, 612 F.3d at 657, Arlene has eliminated from
the case any “remaining elements . . . apt to come back
on a second appeal.” First Health Grp. Corp. v. BCE Emergis
Corp., 269 F.3d 800, 801 (7th Cir. 2001). Because the
last order issued by the district court is now properly
characterized as a final decision under § 1291, we
have jurisdiction to hear this appeal.

                            III
  Having determined that our jurisdiction is secure
under 28 U.S.C. § 1291, we turn now to the merits.
Because the district court granted summary judgment
to Arlene, we review the district court’s disposition
de novo, “construing the evidence and all reasonable
inferences in favor of” the children, who are “the party
against whom the motion under consideration [wa]s
made.” Duable Mfg. Co. v. U.S. Dep’t of Labor, 578 F.3d
497, 501 (7th Cir. 2009) (quotation and citation omitted).
The children argue that summary judgment was inap-
propriate here because “a question of fact existed con-
cerning Allen’s intentions in changing the beneficiary”
of the SuperValu policy. The terms of the SuperValu
policy stipulated the requirements that were necessary
before Allen could successfully change the policy’s benefi-
ciary:
10                                                 No. 12-1840

     An insured can add or change beneficiaries if all
     of the following are true:
     (1) the insured’s coverage is in force; and
     (2) we have written consent of all irrevocable
         beneficiaries; and
     (3) the insured has not assigned the ownership
         of his or her insurance.
     A request to add or change a beneficiary must be
     made in writing. All requests are subject to our
     approval. A change will take effect as of the date
     it is signed, but will not affect any payment
     we make or action we take before receiving an
     insured’s notice.
The written form provided to policyholders by
Minnesota Life for enacting such a change—entitled
“Beneficiary Designation and Change Request”—provides
the following instructions:
     1.   Print or type in the space below, the full name,
          relationship to the employee and share %
          of each beneficiary to be named.
     2.   Sign and date the completed form and return
          it to Minnesota Life.
     3.   The designation applies to your Basic and
          any Optional coverage.
     4.   Call 1-866-293-6047 with questions.
  Because we must draw all reasonable inferences in
favor of the children at this stage, we assume that the
No. 12-1840                                              11

completed Beneficiary Designation and Change Request
form found by Allen’s children after his death is not a
forgery. That is, we assume that Allen actually filled
out a Change Request form, naming his children as benefi-
ciaries, on August 15, 2008. But the children have not
presented any evidence whatsoever suggesting that
Allen returned this Change Request form to Minnesota
Life. Therefore, we assume that Allen filled out the
Change Request form on August 15, 2008, but for
some reason, never sent it into Minnesota Life.
   The parties agree that Illinois law governs the resolu-
tion of this case. Under Illinois law, “[w]here the insurer
has specified in the policy the method for changing
the beneficiary, some type of compliance with the
policy terms is required.” Hoopingarner v. Stenzel, 768
N.E.2d 772, 776 (Ill. App. Ct. 2002). Of course, exact
compliance with policy terms will effectuate a change
in an insurance policy’s beneficiaries; however, in
Illinois, “exact compliance with the terms of the policy is
not necessary” to effectuate a change. Aetna Life Ins. Co.
v. Wise, 184 F.3d 660, 664 (7th Cir. 1999). Recognizing
that “technical compliance with the policy provisions is
solely for the benefit of the insurer, to protect it
from paying the wrong person and being forced to
pay twice,” Illinois courts recognize the doctrine of sub-
stantial compliance. Travelers Ins. Co. v. Smith, 435
N.E.2d 1188, 1190 (Ill. App. Ct. 1982). As long as a policy-
holder has shown sufficient “intent to make the change
[in beneficiaries] and positive action towards effecting
that end,” this doctrine allows courts to overlook a policy-
holder’s failure to comply with every detail of a policy’s
12                                                 No. 12-1840

terms. Dooley v. James A. Dooley Assocs. Emps. Ret. Plan,
442 N.E.2d 222, 227 (Ill. 1982). Thus, under Illinois law,
Allen’s actions on August 15, 2008, successfully changed
the beneficiaries of the SuperValu policy if either (1) his
actions exactly complied with the policy’s requirements
for changing beneficiaries, or (2) they substantially com-
plied with the policy’s requirements for changing benefi-
ciaries. We review both possibilities below.

                               A
   In order to determine whether Allen’s completion of
the Beneficiary Designation form on August 15, 2008,
constituted exact compliance with the SuperValu
policy’s terms, we must first interpret the policy’s terms.
This insurance policy is a contract, and in Illinois, inter-
preting “the meaning of contract language . . . presents
a question of law.” Gallagher v. Lenart, 874 N.E.2d 43, 50
(Ill. 2007). Moreover, standard principles of contract
law apply to the interpretation of Illinois contracts:
     The primary objective in construing a contract is
     to give effect to the intent of the parties. A court
     must initially look to the language of a contract
     alone, as the language, given its plain and ordinary
     meaning, is the best indication of the parties’
     intent. Moreover, because words derive their
     meaning from the context in which they are
     used, a contract must be construed as a whole,
     viewing each part in light of the others. The intent
     of the parties is not to be gathered from detached por-
No. 12-1840                                               13

   tions of a contract or from any clause or provision
   standing by itself. If the language of the contract
   is susceptible to more than one meaning, it is
   ambiguous. In that case, a court may consider
   extrinsic evidence to ascertain the parties’ intent.
Id. at 58 (emphasis added) (citations omitted). With
these general principles in mind, we turn back to the
language of the SuperValu policy.
  Both parties acknowledge that Allen did not designate
a beneficiary upon receipt of the SuperValu policy, so by
the terms of its default provision, Arlene was, in effect,
the presumptive beneficiary, subject to any subsequent
designation or changes. Moreover, neither party disputes
whether Allen was eligible to change the beneficiaries
of the SuperValu policy on August 15, 2008. Allen’s
coverage under the policy was currently in force, and
the policy had no irrevocable beneficiaries. Nor had
Allen previously assigned his ownership in the policy.
Therefore, under the policy’s terms, Allen was free to
change its beneficiaries. The parties’ dispute instead
centers on the meaning of the following clause, con-
tained within the policy’s death benefit information
section: “A request to add or change a beneficiary must
be made in writing. All requests are subject to our ap-
proval. A change will take effect as of the date it is
signed, but will not affect any payment we make or
action we take before receiving an insured’s notice.”
  Using this language, the children argue that Allen
need not have personally sent the Beneficiary Designa-
tion form into Minnesota Life in order to change the
14                                            No. 12-1840

beneficiaries of the SuperValu policy. All that the
policy required, according to the children, was for Allen
to make a request “in writing,” which he did by com-
pleting the Beneficiary Designation form. The change
in beneficiaries, according to the policy’s terms, “t[ook]
effect as of the date it [was] signed,” August 15, 2008.
Nothing in the policy’s terms states that Allen himself
had to return the form to Minnesota Life, and nothing
in the policy’s terms limits the amount of time after
completion in which the form had to be returned to
Minnesota Life. In fact, the death benefit information
section never discusses returning the form to Minnesota
Life. The children’s counsel conceded at oral argument
that the form would have to be returned at some point
in order to make Minnesota Life aware of a change
in beneficiaries. Indeed, the children would be remiss
not to make such a concession given that the instruc-
tions on the Beneficiary Designation form itself tell
the policyholder to “[s]ign and date the completed
form and return it to Minnesota Life.” But in the absence
of explicit policy terms regulating the manner of the
form’s return, the children argue that when and how
the form must be returned is a question for the jury.
  The terms of the SuperValu policy, as the district
court correctly pointed out, are hardly “a model of clar-
ity.” Yet the children do seem to have a point when the
phrase, “A change will take effect as of the date it is
signed,” is viewed in isolation. By itself, this phrase
suggests that all a policyholder needs to do is complete
and sign the Beneficiary Designation form in order to
change beneficiaries. Under this line of reasoning, as
No. 12-1840                                              15

long as Minnesota Life receives the form before it is
obligated to pay the death benefit to the policyholder’s
beneficiaries, the company should not care who sent
back the Beneficiary Designation form, how they sent
it back, or when they sent it back.
  But it is inappropriate to view a phrase contained
within a contract in isolation; “a contract must be con-
strued as a whole, viewing each part in light of the oth-
ers.” Gallagher, 874 N.E.2d at 58. Words derive their
meaning not just from dictionary definitions but also
from context. Bd. of Trade of City of Chicago v. Dow Jones
& Co., Inc., 456 N.E.2d 84, 90 (Ill. 1983). When the
phrase, “A change will take effect as of the date it is
signed,” is read in context of the rest of the policy terms,
it becomes clear that a policyholder’s responsibilities
do not end after completing and signing the Beneficiary
Designation form. Rather, the signing of a Beneficiary
Designation form is merely the first step in “request[ing]
to add or change a beneficiary.” And that request is
not guaranteed to be successful; on the contrary, the
request is “subject to [Minnesota Life’s] approval.” The
juxtaposition of the words “request” and “approval”
with the phrase in question indicates that new
beneficiaries are not set in stone as soon as a policy-
holder completes and signs a form. Additional action
is required; a policyholder must request Minnesota
Life’s approval for the desired change. But in the present
case, there is no evidence that Allen ever attempted
to request Minnesota Life’s approval.
  Thus, after considering the language of the death
benefit information section as a whole, we believe that
16                                              No. 12-1840

the phrase, “A change will take effect as of the date it
is signed,” must mean that only an approved change
will take effect as of the date it is signed. In other words,
a change that follows all policy requirements—
including the policyholder submitting a request for
Minnesota Life’s approval—will take effect as of the
date it is signed. Our interpretation of this phrase in
the death benefit information section of the SuperValu
policy is bolstered once we also consider the instruc-
tions for policyholders printed on the Beneficiary
Change form. This form tells policyholders to return
the form to Minnesota Life after signing, dating, and
completing the form. Once again, these instructions
suggest that a policyholder’s responsibilities do not end
upon completion of the Beneficiary Designation
form; something more is required to add or change a
beneficiary. Yet Allen never did anything more; he stopped
after signing, dating, and completing the Beneficiary
Designation form.
  Because Allen stopped after completion of the Benefi-
ciary Designation form, he did not exactly comply with
the SuperValu policy’s terms. Both the death benefit
information section of the policy and the instructions
provided on the Beneficiary Designation form itself
indicated that Allen needed to send the form back to
Minnesota Life. But Allen never did. Therefore, Allen
complied with only some—but not all—of Minnesota Life’s
requirements for changing beneficiaries. Since Allen
failed to comply exactly with Minnesota Life’s require-
ments for changing beneficiaries, the most that the
children can hope for is that Allen substantially
No. 12-1840                                               17

complied with Minnesota Life’s requirements. We turn
to an analysis of substantial compliance now.

                             B
  Even though Allen did not exactly comply with the
SuperValu policy’s requirements for changing beneficia-
ries, exact compliance is not required in Illinois. Like most
other states, Illinois recognizes the doctrine of substantial
compliance when assessing whether a policyholder has
successfully changed beneficiaries. Travelers, 435 N.E.2d
at 1190. Under this doctrine, which “by its very nature
contemplates something less than actual compliance,”
Metro. Life Ins. Co. v. Johnson, 297 F.3d 558, 568 (7th Cir.
2002), a policyholder’s failure to follow all “technical
requirements will not defeat the clear and manifested
intention . . . to change a beneficiary designation.” Aetna,
184 F.3d at 664. Still, proving substantial compliance
in Illinois is not easy; it requires showing (1) “a
clear expression of the insured’s intention to change
beneficiaries,” and (2) a “concrete attempt [by the
insured] to carry out his intention as far as was rea-
sonably in his power.” Dooley, 442 N.E.2d at 227 (quota-
tions and citations omitted). Determinations of sub-
stantial compliance are generally reserved for the jury;
however, a judge may appropriately grant summary
judgment on a substantial compliance issue when the
policyholder “clearly failed to comply substantially
with the requirements for changing a beneficiary.”
Hoopingarner, 768 N.E.2d at 776.
18                                             No. 12-1840

  The parties spend much time arguing about the first
element of substantial compliance—that is, whether
Allen made a clear expression to change beneficiaries. In
support of their arguments, the parties submit evidence
about the contentious nature of Allen’s relationship
with each of his family members. The children claim
that Allen had a bad relationship with Arlene, which is
why Allen completed the Beneficiary Designation
form. Meanwhile, Arlene claims that Allen had a bad
relationship with his children, which is why Allen
never returned the Beneficiary Designation form to Min-
nesota Life. Fortunately, we need not assess which party
is telling the truth or whose evidence is stronger. In
fact, we need not evaluate the first element at all since
Allen’s actions clearly do not satisfy the second ele-
ment of a substantial compliance claim.
   By filling out the Beneficiary Designation form on
August 15, 2008, Allen arguably expressed some intention
to change the beneficiaries of the SuperValu policy from
Arlene to his children. But as Illinois case law makes
clear, Allen did not carry out this intention “as far as
was reasonably in his power.” Dooley, 442 N.E.2d at 227.
In Dooley, James A. Dooley, a former justice on the
Illinois Supreme Court, met with his accountants
twelve days before his death regarding a change in the
beneficiaries of his retirement plan. Justice Dooley con-
cluded this meeting by remarking that “there [wa]s no
hurry about” making the necessary changes because
“ ‘[t]here [we]re other things that [he was] more
interested in that [the accountants] could take care of.’ ”
Id. at 225. Less than two weeks later, Justice Dooley
No. 12-1840                                            19

died without ever drawing up or signing a formal docu-
ment (as he had done in the past) that changed the benefi-
ciaries of his retirement plan. Under these circum-
stances, the Illinois Supreme Court upheld the trial
court’s decision that Justice Dooley had neither exactly
nor substantially complied with the requirements for
changing beneficiaries. Id. at 226. In reaching this
holding, the Illinois Supreme Court reasoned, “The evi-
dence here clearly indicates decedent was contemplating
changing beneficiaries and had done some work in that re-
gard. However, the evidence can also be considered as
indicating he knew his work was not complete.” Id. at 227
(emphasis added). Quoting 5 Couch, Insurance § 28:75,
at 179 (2d ed. 1960), the court continued, “ ‘The mere
fact that the insured takes preliminary steps with the
intent of ultimately effecting a change of beneficiary
does not in itself constitute substantial compliance and
a change of beneficiary does not result therefrom.’ ”
Dooley, 442 N.E.2d at 227.
  Like Justice Dooley, Allen was apparently con-
templating a change in beneficiaries for the SuperValu
policy and “had done some work in that regard.” Id. It
seems unlikely that Allen would have taken the time to
complete the Beneficiary Designation form on August 15,
2008, unless he was seriously considering a change.
But also like Justice Dooley, Allen “knew his work
was not complete.” Id. In the fifteen months following
his completion of the Beneficiary Designation form,
Allen never sent the form into Minnesota Life—
despite explicit instructions printed on the form telling
him to do so. Even if we were to assume that Allen some-
20                                            No. 12-1840

how missed these very obvious printed instructions,
Allen still should have known that “his work was not
complete.” Id. The children’s own evidence demon-
strates that Allen was quite adept at changing the benefi-
ciaries of his assets. According to Tammy’s affidavit,
Allen had successfully named the children as the bene-
ficiaries to four other life insurance policies and two
retirement accounts during his lifetime. Because of his
experience with these other assets, Allen must have
been well aware that he needed to mail the Beneficiary
Designation form into Minnesota Life in order to
change its beneficiaries.
  Examining a more recent Illinois case, Hoopingarner,
768 N.E.2d 772, only strengthens our conclusion that
Allen’s actions fell short of doing “everything within his
power to effectuate a change in life insurance policy
beneficiaries.” Aetna, 184 F.3d at 664. In Hoopingarner,
the decedent executed a change-of-beneficiary form,
naming her housekeeper as the new beneficiary to her
annuity policy, but never sent the form into the policy’s
management company, New York Life. 768 N.E.2d at
775. As the decedent’s health was failing two-and-a-
half years later, the housekeeper realized that the
decedent had never sent in the form. The housekeeper
asked her friend to send a copy of the executed change-of-
beneficiary form to New York Life, which arrived
shortly before the decedent’s death. Under these facts,
the Appellate Court of Illinois found that the decedent
had not substantially complied with the requirements
for changing the annuity’s beneficiary because she had
“never sent the change of beneficiary form to New York
No. 12-1840                                             21

Life or furnished any information to New York Life
regarding a desire to change the beneficiary of the annu-
ity.” Id. at 776.
  In spite of facts that are highly reminiscent of the case
at hand, Hoopingarner—according to Allen’s children—is
distinguishable from this case because the Hoopingarner
annuity unambiguously required policyholders to “fur-
nish[] the necessary information to” New York Life.
Id. Moreover, the Hoopingarner annuity did not contain
any claims that a “change w[ould] take effect as of the
date it is signed.” Perhaps the terms of the Hoopingarner
annuity were more clearly written than the terms of the
SuperValu policy at issue in this case. Nonetheless, the
children cannot get around the fact that the form
here contained explicit, visible instructions for policy-
holders to “return it to Minnesota Life” upon completion.
   For all of these reasons, we find that Allen did
not substantially comply with the SuperValu policy’s
requirements for changing beneficiaries. He had fifteen
months before his death to return the completed form
to Minnesota Life, but he never did. Before his death,
Allen had returned the change-of-beneficiary forms for
all the other insurance and retirement policies he
held. Thus, if Allen truly intended to change the bene-
ficiaries of the policy at issue, he should have known
to return the Beneficiary Designation form to Minnesota
Life. And he should have done it with some haste,
given that he was not well at the time of the form’s com-
pletion on August 15, 2008. Allen had suffered from
heart problems for years and had even undergone a
22                                              No. 12-1840

prior open-heart surgery—making a sudden, fatal heart
attack a real possibility—and yet something kept him
from sending the completed form into Minnesota Life
during the remaining fifteen months of his life. Some-
thing prevented Allen from doing “everything within
his power to effectuate a change in life insurance policy
beneficiaries.” Aetna, 184 F.3d at 664. That something
also prevents us from making a finding of substantial
compliance.

                             IV
  In addition to asking for an affirmance of the district
court, Arlene asks our court for sanctions against the
children for filing a “frivolous appeal” under Fed. R. App.
P. 38. Although we ultimately side with Arlene on the
merits, we cannot agree with her characterization of the
children’s appeal as “frivolous.” An appeal is frivolous
if “ ‘the result is obvious or when the appellant’s
argument is wholly without merit.’ ” Ins. Co. of W. v. Cnty.
of McHenry, 328 F.3d 926, 929 (7th Cir. 2003) (quoting
Grove Fresh Distribs. v. John Labatt, Ltd., 299 F.3d 635, 642
(7th Cir. 2002)). Characterizing the children’s appeal as
“utterly hopeless,” Arlene emphasizes in her motion
for sanctions that the children’s appeal was motivated
solely by their “sheer obstinacy” and personal animosity
towards her.
  While we do not doubt that a great deal of personal
animosity exists between the two parties in this case, we
believe that Arlene exaggerates the “hopelessness” of
the children’s appeal. The phrase, “A change will take
No. 12-1840                                             23

effect as of the date it is signed,” contained within the
SuperValu policy terms is challenging to interpret and—as
demonstrated by the length of this opinion—has taken
us many pages to explain. The district court correctly
characterized the terms of this policy as “not a model
of clarity.” As a result, “it was not a foregone conclu-
sion that we would interpret [the policy’s] language in
the same way as the district judge.” Ins. Co. of W., 328
F.3d at 929. Under such circumstances, we remind the
parties that “[i]t is within the sound discretion of this
court to decide whether to impose sanctions.” Id. This
discretion here guides us to conclude that characterizing
the children’s appeal as lacking a good faith basis in fact
or law, which is the hallmark of a frivolous appeal,
would be inappropriate. See id. (refusing to grant
sanctions against appellant when the basis of the
appeal involved an “ambiguity” in the language of an
insurance policy). Consequently, we A FFIRM the judg-
ment of the district court for appellee Arlene Kagan,
but we D ENY Arlene’s motions for sanctions.

                          7-31-13