In re Gaylord Genaw, Sr. Estate, ___Mich App___ (2009), #284214, 10/6/09
Return to Probate Review MenuIn 2001, the decedent obtained an insurance policy with Unum Life Insurance Company valued at $111,000 and designated his wife, Cindy Genaw, as his beneficiary. The decedent and Genaw divorced on July 3, 2006. The divorce judgment specifically contained a waiver provision which extinguished both parties’ respective interests in any insurance policy on the other’s life. Shortly after the divorce, the decedent was killed in an automobile accident. His beneficiary designation on the life insurance policy with Unum had not been changed.
On October 2, 2006, a loss report was completed that listed Genaw as the claimant and designated her relationship to decedent as an “ex-spouse.” Shortly thereafter Genaw filed a claim for benefits and indicated on the form that the decedent was divorced. His death certificate was also submitted with the claim indicating that decedent was divorced. Unum conducted an investigation and determined that benefits were payable pursuant to its policy. Shortly after receiving a copy of the beneficiary designation form which continued to list Genaw as the policy beneficiary, Unum remitted payment to her in the full amount of the policy.
Approximately one month later, a personal representative was appointed for decedent’s Estate. The personal representative became aware of the existence of the Unum policy and made a claim on behalf of the estate on January 16, 2007. Unum denied the claim based upon the policy already having been discharged by payment to Genaw. The personal representative then sued Genaw and Unum to recover the monies remitted to Unum for the Estate. The probate court granted partial summary disposition in favor of the personal representative against Genaw in the amount of $111,000. The probate court ordered that the funds remaining in Genaw’s bank account in the amount of $42,659 paid to her by Unum be seized and held in escrow in partial satisfaction of the judgment. In addition, the probate court granted partial summary disposition in favor of personal representative against Unum in the amount of $111,000, with a set off for $42,659, the amount recovered from Genaw. Unum appealed. The appeal focused exclusively on the interpretation and meaning of MCL 552.101(2).
MCL 552.101(2) states:
Each judgment of divorce or judgment of separate maintenance shall determine all rights of the wife in and to the proceeds of any policy or contract of life insurance, endowment, or annuity upon the life of the husband in which the wife was named or designated as beneficiary, or to which the wife became entitled by assignment or change of beneficiary during the marriage or in anticipation of marriage. If the judgment of divorce or judgment of separate maintenance does not determine the rights of the wife in and to a policy of life insurance, endowment, or annuity, the policy shall be payable to the estate of the husband or to the named beneficiary if the husband so designates. However, the company issuing the policy shall be discharged of all liability on the policy by payment of its proceeds in accordance with the terms of the policy unless before the payment the company receives written notice, by or on behalf of the insured or the estate of the insured, 1 of the heirs of the insured, or any other person having an interest in the policy, of a claim under the policy and the divorce. (Emphasis added)In affirming the probate court, the Court of Appeals began by stating that the purpose of MCL 552.101 is to resolve the situation where a divorced wife could inadvertently receive the proceeds of a forgotten insurance policy. They rejected the contention of Unum and the dissent, that the language of MCL 552.101(2) does not encompass notice of a claim asserted by a beneficiary and that the information provided by Genaw, which merely alerted Unum to the existence of a divorce without submission of an actual copy of the judgment or its explicit terms, was insufficient to place the insurer on notice or to impose liability for payment of the insurance proceeds consistent with the policy’s beneficiary designation. As to who may provide such notice, the Court of Appeals pointed out the phrase, “or any other person having an interest in the policy” would certainly include the beneficiary of the policy. The statute is purposefully broad and encompassing and requires an inclusive definition of who may satisfy the definition of “any other person having an interest in the policy”. As to the information provided, the Court of Appeals pointed out that the statute only required notice “of a claim... and the divorce.” It did not require detailed information. Interpreting the statute as merely requiring notice of the existence of a divorce fulfills the intended purpose of the statute of trying to preclude the inadvertent payment of benefits to the wrong person.
In the present case, Unum received a claim from Genaw which specifically acknowledged both her status as the ex-wife of the decedent and the existence of a divorce. This was enough to require Unum to investigate further before remitting payment of the benefits to the designated beneficiary. Pursuant to the statute, an insurance company is only “discharged” from the imposition of liability if it pays the benefits in accordance with the policy designation and does not receive written notice of claim and a divorce. The Court of Appeals held that the information was submitted by a proper party and was sufficient to meet the notice requirements imposed by the statutory language. Therefore, Unum was not automatically absolved of its liability for payment of the proceeds to the designated beneficiary.
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