Sun Life v. Ver Kuilen , 144 Mich. App. 612 ( 1985 )

D. E. Holbrook, Jr., J.

Sun Life of Canada (plaintiff) instituted this action for interpleader when both decedent’s former wife and his widow claimed the proceeds of one life insurance policy covering the deceased husband, Robert. This appeal as of right is brought solely by the former wife, Mary Ann, who protests only the trial judge’s conclusion that Robert’s estate was not liable for cash surrendering a life insurance policy on which she was listed as a beneficiary. Mary Ann contends that Robert had violated the terms of their divorce judgment. The divorce agreement provided in pertinent part that:

"5. INSURANCE:

"The Plaintiff, MARY ANN VerKUILEN, hereby agrees to transfer free and clear unto ROBERT A. VerKUILEN, any and all right, title and interest that she may have in and to those certain life insurance policies, insuring his life, identified as follows:

"Prudential Life Insurance Policy #28-610-717, dated January 1st, 1962 in the face amount of $10,000.00;

"Knights of Columbus Insurance Policy #C-97891, dated November 6th, 1960 in the face amount of $10,000.00;

"Provided however, that ROBERT A. VerKUILEN hereby agrees with MARY ANN VerKUILEN that she will remain as the principal beneficiary named in said life insurance policies as she is now.”

Several weeks after the divorce, Robert surrendered his Prudential policy for a cash value of approximately $2,000. Mary Ann alleges that this surrender violated the divorce judgment. She believes that the above clause implies that Robert was required to maintain these policies.

This is an issue of first impression. Does a judgment designating a beneficiary imply that the policy must be maintained? This is not the situation that occurred in Morris v Morris, 365 Mich 365; 112 NW2d 500 (1961), where the judgment clearly provided that the policies must be maintained in full force and effect. Rather, the clause itself states that Mary Ann was to relinquish all right, title and interest in the policies. Robert did not change the beneficiary, he merely exercised one of the right incident to ownership, i.e., cash surrendering. Isaac Van Dyke Co v Moll, 241 Mich 255, 258; 217 NW 29 (1928), and Fischer v Northwestern Mutual Life Ins Co, 267 Mich 6, 12; 255 NW 337 (1934).

Mary Ann was represented by counsel in the divorce proceedings and a provision requiring Robert to have maintained the policies could have been added. We can find no authority that would prevent Robert from borrowing on the policies, cash surrendering them or letting the policies lapse. See MCL 500.4060; MSA 24.14060 and MCL 500.4062; MSA 24.14062. Accordingly, we find no error in the trial court’s decision.

Affirmed. Costs to appellee.