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holding that even though the former spouse was not removed as beneficiary on any of the life insurance policies, where the "release" language of the property settlement agreement was construed to encompass the former spouse's expectancy interest, allowing the former spouse to recover as beneficiary "would do violence to the parties' obvious intent, an intent we are bound to honor"
Summary of this case from Childers v. ChildersOpinion
No. C-833
Decided February 14, 1977. Rehearing denied March 7, 1977.
Action to determine whether proceeds of life insurance policies are payable to estate of decedent or to his divorced wife. Trial court ruled in favor of estate. The court of appeals, 36 Colo. App. 393, 543 P.2d 535, reversed, awarding decedent's divorced wife the proceeds and certiorari was granted.
Reversed
1. INSURANCE — Proceeds — Determination — Divorced Wife — Beneficiary — Property Settlement Agreement — Controlling. In action to determine whether proceeds of insurance policies were payable to estate of decedent or to his divorced wife, where property settlement agreement covered all of the property rights and all claims of every kind and nature in and to the moneys and other assets of every kind and nature, held, under these circumstances, divorced wife was not entitled to entire policy proceeds on husband's death but only those calculable by reference to divorce decree, notwithstanding that she was named as beneficiary and decedent never assigned any of the policies to her pursuant to agreement, and despite the fact that he did not change beneficiary of any of the policies on his subsequent marriage.
Certiorari to the Colorado Court of Appeals
Bradley, Campbell Carney, John G. Brant, for petitioner.
Holme Roberts Owen, John R. Webb, John L. Kane, Jr., for respondent.
Petitioner, Ludmilla McEndaffer, administratrix of the estate of her late husband, Donald M. McEndaffer, sought review of the decision of the court of appeals in In re Estate McEndaffer, 36 Colo. App. 393, 543 P.2d 535, which awarded decedent's first wife, respondent Anna Mae McEndaffer, the proceeds of certain life insurance policies. We granted certiorari and now reverse the court of appeals' decision.
The facts are fully set forth in the opinion of the court of appeals. In brief, the record shows that Donald M. and Anna Mae McEndaffer were divorced on August 11, 1970. The divorce decree incorporated a settlement agreement between the parties, covering alimony, property settlement, and the like. In part, the agreement provided:
"* * * [T]he parties have now mutually agreed between themselves upon a full, final and complete settlement of all of their property rights * * *.
* * * *
"It is agreed that * * * this Agreement * * * will be considered as full, final and complete adjudication and settlement of all the property rights of the parties hereto and in any manner arising or resulting or to result from said marriage relationship, or otherwise, and in consideration of the settlement thus made, each of the parties hereto will, and does hereby, waive any and all claims of every kind or nature in and to the monies, real and personal property, and other assets of every kind or nature that might be due to either from the other or the estate of the other as widow or husband, by right of inheritance, widow's allowance, or otherwise * * *."
At the time of the settlement agreement, the decedent had thirteen life insurance policies on his life, each of which named respondent as beneficiary, and the total amount of which was $92,500. As a part of the settlement agreement, decedent agreed to maintain life insurance on his life for the benefit of respondent in an amount of not less than $6,000 for each year remaining until respondent reached the age of sixty-two years, at which time the obligation of decedent to carry such insurance would terminate. Decedent agreed to irrevocably assign such insurance policies to the respondent, and the respondent in turn agreed to reassign to decedent $6,000 of insurance each year on her birthday.
After the divorce, decedent remarried and, upon his death, his widow, the petitioner, was appointed administratrix of his estate.
Decedent never assigned any of the insurance policies to respondent pursuant to the settlement agreement, and despite his subsequent marriage he did not change the beneficiary of any of the policies. Consequently, on decedent's death respondent, as beneficiary, claimed the entire proceeds of these policies, which then totalled $68,000.
While admitting that respondent was entitled to $24,000 of the insurance proceeds under the property settlement agreement, petitioner disputed respondent's claim to the entire proceeds.
The question of who was entitled to the balance of approximately $44,000 was submitted to the district court for determination on an agreed statement of facts. The court found:
"[t]hat the intention of the parties in entering into the property settlement agreement was to effect a complete settlement of the property rights of the parties and contained an express waiver of all claims from the other party, or his or her estate.
"[t]hat the decree of divorce governs the rights of the parties to the proceeds from the above listed insurance policies."
Accordingly, the district court awarded $24,000 of the proceeds to respondent and the rest to decedent's estate.
The court of appeals reversed the district court judgment and awarded the entire proceeds to the respondent. Relying on Mullenax v. Nat'l Reserve, 29 Colo. App. 418, 485 P.2d 137, the court found that respondent had not specifically waived her rights as beneficiary by the property settlement agreement.
[1] We do not find Mullenax, supra, controlling. The facts of that case are distinguishable from the present case. There, the wife waived "all of her right, title and interest in and to any and all other property presently standing in the name of her husband * * *." This language was held not to encompass her interest as beneficiary, which, until her husband's death, was a "mere expectancy."
Here, respondent's waiver sweeps much more broadly. It covers "all of the property rights" and "all claims of every kind and nature in and to the * * * other assets of every kind and nature * * *." To construe their agreement as anything less than a full and final disposition of all property, claims, interests and expectancies would do violence to the parties' obvious intent, an intent we are bound to honor. Ilfeld Co. v. Taylor, 156 Colo. 204, 397 P.2d 748.
On similar facts, the Supreme Court of Kansas adopted the same view in Hollaway v. Selvidge, 219 Kan. 345, 548 P.2d 835. After examining the parties' settlement agreement, the court concluded:
"* * * Here the settlement was sufficiently comprehensive in nature to demonstrate an intent to embrace and settle all the parties' affairs of whatever nature. * * * As was said by Judge John Minor Wisdom in Stone v. United States, 5th Cir., 272 F.2d 746 * * * '. . . [T]he agreements were meant to accomplish the same object: to wipe the slate clean between the parties.'"
Our conclusion is also buttressed by Dudley v. Franklin Life Ins. Co., 250 Ore. 51, 440 P.2d 363, and In re Wiedemann's Estate, 239 Cal. App.2d 269, 48 Cal. Rptr. 558.
Moreover, it is significant that the language of the divorce settlement in Mullenax, supra, did not contain any specific provisions for maintenance of insurance, as did the settlement agreement here being considered. It is clear that the insurance policies in effect at the time of the settlement agreement, although not specifically delineated in the agreement, were marital assets, and that the settlement agreement was intended, as indicated by the language of the agreement, to "* * * be considered as [a] full, final and complete adjudication and settlement of all of the property rights of the parties hereto and in any manner arising or resulting or to result from said marriage relationship, or otherwise * * *."
Accordingly, we reverse the judgment and remand to the court of appeals with directions to affirm the judgment of the district court.
MR. JUSTICE GROVES and MR. JUSTICE CARRIGAN dissent.
MR. CHIEF JUSTICE PRINGLE does not participate.