Evanisa S. Fox v. Lincoln Financial Group and Mary Ellen Scarpone , 439 N.J. Super. 380 ( 2015 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-3189-13T4
EVANISA S. FOX,
APPROVED FOR PUBLICATION
Plaintiff-Appellant,
February 24, 2015
v. APPELLATE DIVISION
LINCOLN FINANCIAL GROUP,
Defendant,
and
MARY ELLEN SCARPONE,
Defendant-Respondent.
_______________________________________
Submitted January 28, 2015 - Decided February 24, 2015
Before Judges Alvarez, Waugh, and Carroll.
On appeal from the Superior Court of New
Jersey, Chancery Division, General Equity
Part, Morris County, Docket No. C-156-13.
Michael Patrick Carroll, attorney for
appellant.
Fox Rothschild LLP, attorneys for respondent
(Benjamin R. Kurtis, on the brief).
The opinion of the court was delivered by
CARROLL, J.A.D.
This appeal involves competing claims to a life insurance
policy (the policy) issued by defendant Lincoln Financial Group
(Lincoln) to decedent, Michael G. Fox. Following Michael's1
death, his wife, plaintiff Evanisa Fox,2 and his sister,
defendant Mary Ellen Scarpone, both sought to collect the policy
proceeds. On February 6, 2014, the trial court dismissed
Evanisa's complaint, effectively awarding the proceeds to
Scarpone, who was the designated beneficiary under the policy.
On appeal, Evanisa urges us to adopt a "bright-line" rule that
marriage creates a "presumptive right" to a spouse's life
insurance benefits, thereby revoking any contrary premarital
beneficiary designation made by the deceased spouse. We reject
Evanisa's broad public policy argument, and hold that her
marriage to Michael, without more, is insufficient to defeat
Scarpone's beneficiary status.
The facts are straightforward. Michael purchased the
policy in 1992. Initially, he designated his then-wife, Gail,
as primary beneficiary, and his brother, Kenneth, as contingent
beneficiary. Michael and Gail subsequently divorced, and in
1996 Michael executed an insurance company form designating
1
Because decedent and plaintiff share a common surname, we refer
to them by their first names in this opinion for purposes of
clarity. In doing so, we intend no disrespect.
2
Evanisa is alternatively spelled Evanisia on certain documents
included in the record.
2 A-3189-13T4
Scarpone as sole beneficiary.3 This change comported with the
terms of the policy, which expressly provides:
Beneficiary – At any time prior to the death
of the Insured, the Owner may name or change
a revocable beneficiary. . . . A change of
the Owner or beneficiary must be made in
writing. To be binding on the Company, the
change must be signed by the Owner and any
irrevocable beneficiary and must be filed at
the Home Office.
Michael married Evanisa, a Brazilian national, on July 28,
2012. On September 26, 2012, Michael executed a Form I-130
petition to sponsor Evanisa's citizenship application. Along
with the petition, Michael executed a Form I-864 Affidavit of
Support4 in which he agreed to support his wife at 125 percent of
the poverty level. This support obligation expressly terminated
upon Michael's death, and the I-864 form specifically informed
him "Therefore, if you die, your [e]state will not be required
3
Chubb Life Insurance Company originally issued the policy and
the change of beneficiary form. At some point prior to the
commencement of this action Lincoln assumed the policy.
4
The Immigration and Nationality Act forbids admission to the
United States of any alien who is likely at any time to become a
public charge. 8 U.S.C.S. § 1182(a)(4)(A); see also 8 U.S.C.S.
§§ 1601(2)(A), (5). This provision is implemented by requiring
a person who sponsors an alien for admission to execute an
affidavit of support. 8 C.F.R. §§ 213a.2(a), (b); see also 8
U.S.C.S. § 1182(a)(4)(C)(ii). The affidavit, the contents of
which are specified in 8 U.S.C.S. § 1183a, is in the form of a
contract between the sponsor and the United States, 8 C.F.R. §
213a.2(d), called Form I-864.
3 A-3189-13T4
to take responsibility for [Evanisa's] support after your
death."
On November 9, 2012, before the citizenship petition was
approved, Michael died in a work-related automobile accident.
It is undisputed that, prior to his death, Michael did not
submit a new change of beneficiary form to Lincoln, nor did he
make any effort to designate Evanisa as beneficiary under the
policy.
Evanisa filed this suit against Scarpone, the designated
beneficiary, and Lincoln, as issuer of the policy.5 The
complaint asserted among other things that Michael's marriage to
plaintiff effected a change in beneficiary as a matter of law,
and sought to declare Evanisa the sole beneficiary of the
policy.
In lieu of filing an answer, Scarpone moved to dismiss the
complaint for failure to state a claim. Evanisa opposed the
motion, and cross-moved for summary judgment. In a September 4,
2013 certification, Evanisa averred:
Upon our marriage, we commenc[ed]
living together as husband and wife. My
husband represented to me that he would, as
conditions permitted, ensure that my name
went on various accounts, that I was named
the beneficiary of his life insurance
5
Lincoln deposited the proceeds of the policy into court and was
then dismissed from the suit.
4 A-3189-13T4
policies and other, similar programs. My
understanding, though, is that to become a
holder of most joint accounts, certainly any
bank accounts, one must have a Social
Security number. And, although I had
applied, with my husband's assistance, for a
Social Security number, I had not yet
received one as of the date of his death.
. . . .
[It] will be extremely difficult for me
to survive without his financial support.
The death benefit is modest in any event.
It comes to slightly more than two years of
the salary my husband was earning at the
time of his death. Other than the
insurance, the [e]state is very modest.
In a reply certification,6 Evanisa added that she receives
workers' compensation benefits attributable to Michael's work-
related accidental death. She also expressed concern that
Michael's estate might become liable for a student loan of
approximately $38,000 that Michael guaranteed for Scarpone's
daughter.
The trial court heard oral argument on both motions on
February 6, 2014. Analogizing to Vasconi v. Guardian Life Ins.
Co. of Am., 124 N.J. 338 (1991), Evanisa argued that the court
should apply a "bright[-]line, Vasconi-type test." Counsel
posited that, where an insured designates someone else as a
6
The certification included in Evanisa's appendix is unsigned
and undated. However, Scarpone does not question its
authenticity.
5 A-3189-13T4
policy beneficiary, and the insured thereafter marries, "there
should be a presumption that [the insured] intended to revoke
that [earlier policy] designation." Counsel conceded, however,
that he was "[un]able to find a single New Jersey case"
supporting this proposition.
In an oral opinion, the court examined well-settled case
law, which requires some objective showing that the deceased
intended to change the policy's beneficiary. The judge
determined that the complaint failed to allege facts suggesting
that such a showing could be made. He also found no duty
obligating Michael to support Evanisa following his death. The
judge then issued implementing orders denying Evanisa's motion
for summary judgment, and dismissing her complaint with
prejudice.
On appeal, Evanisa presents a singular point for our
consideration:
POINT ONE: PLAINTIFF, AS THE SPOUSE OF THE
DECEDENT, IS ENTITLED TO THE PROCEEDS OF THE
INSURANCE POLICY
Stated differently, Evanisa argues that the appeal presents "a
very simple question: should . . . the law of insurance
contracts[] reflect the changed circumstances attendant to
marriage in the same way it reflects changed circumstances with
respect to divorce?" Again analogizing to Vasconi, she contends
6 A-3189-13T4
that, "just as divorce presumptively disqualifies a former
spouse from receiving anything, marriage ought to result in a
presumption that she receives everything." Applied to the facts
of this case, she asserts that Scarpone should have the burden
of establishing that Michael's failure to change the beneficiary
designation was intentional.
The facts in this matter are "essentially undisputed and
the judge's decision was based upon the legal conclusions he
drew from those facts. We owe no deference to the judge's
interpretation of the law." Whitfield v. Bonanno Real Estate
Grp., 419 N.J. Super. 547, 552 (App. Div. 2011) (citing Atl.
Mut. Ins. Co. v. Hillside Bottling Co., 387 N.J. Super. 224, 231
(App. Div.), certif. denied, 189 N.J. 104 (2006)).
Generally, an insured can change the beneficiary on an
insurance policy only by notifying the insurer in accordance
with the policy, or by substantially complying with the policy's
provisions.
The traditional rule regarding change of
beneficiary designations under a life
insurance policy is that . . . the interest
of the designated beneficiary . . . is a
vested property right, payable if he [or
she] survives the insured, which can be
divested only by a change of beneficiary in
the mode and manner prescribed by the
[policy]. Thus, ordinarily, [a]
demonstrated intention to change
beneficiaries is insufficient if not
7 A-3189-13T4
executed in the manner prescribed in the
policy for effecting such a change.
[DeCeglia v. Estate of Colletti, 265 N.J.
Super. 128, 133 (App. Div. 1993)
(alterations in original) (citations and
internal quotation marks omitted).]
This general rule may be modified where there is "substantial
compliance" with the method prescribed in the policy to change
the beneficiary. See Haynes v. Metro. Life Ins. Co., 166 N.J.
Super. 308, 313 (App. Div. 1979). "Substantial compliance"
requires an insured to make "every reasonable effort to effect a
change of beneficiary." Ibid. Thus, it is well-established
that only under limited circumstances will a designated
beneficiary be denied the right to receive the insurance
proceeds. Czoch v. Freeman, 317 N.J. Super. 273, 285 (App.
Div.), certif. denied, 161 N.J. 149 (1999).
Our Supreme Court recognized a limited exception to the
general rule in Vasconi, where decedent's ex-wife and decedent's
estate made competing claims to his life insurance policy.
Previously, decedent and his wife had divorced, and had executed
a property settlement agreement that provided for a mutual
waiver of all claims, including claims against each other's
estate. Nonetheless, at the time of decedent's death, his ex-
wife remained the named beneficiary of his policy. On these
facts, the Court held that:
8 A-3189-13T4
[W]hen spouses divorce and enter into a
property-settlement agreement that purports
to settle "all questions pertaining to their
respective interests in distribution of the
marital assets," the proceeds of a life-
insurance policy subject to the lifetime
control of one spouse should ordinarily be
considered as encompassed within the terms
of the settlement agreement. Such a
settlement agreement and waiver of interest
in the property of the deceased spouse
should be regarded as presumptively revoking
the nonprobate transfer of the insurance
proceeds.
[Vasconi, supra, 124 N.J. at 346.]
On appeal, as she did before the trial court, Evanisa
relies heavily on Vasconi. She argues that this case represents
the "reciprocal" of Vasconi. Thus, like the event of divorce in
Vasconi, marriage should trigger a presumption that each spouse
thereby intends to make the other the primary beneficiary under
any life insurance policy, absent evidence of contrary intent.
In analogizing to Vasconi, Evanisa misstates and broadens
its holding. The Court in Vasconi did not glean from the mere
fact of the insured's divorce an intent to change the
beneficiary designation on his insurance policy. Rather, the
court held that "[a] beneficiary designation must yield to the
provisions of a separation agreement expressing an intent
contrary to the policy provision." Id. at 347.
We had occasion to revisit the manner in which a
beneficiary change can be accomplished in DeCeglia. There the
9 A-3189-13T4
decedent, Colletti, had previously designated his mother and
sister as beneficiaries on various life insurance policies.
DeCeglia, supra, 265 N.J. Super. at 131. Subsequent to those
beneficiary designations, Colletti began cohabiting with
plaintiff DeCeglia, who became pregnant soon thereafter. Ibid.
Colletti became concerned about providing for DeCeglia and his
child should something happen to him. Consequently, he
communicated with a law firm about the preparation of a will
under which DeCeglia would be the beneficiary. He also spoke
with his insurance agent about designating DeCeglia as the
beneficiary and purchasing additional coverage. However,
Colletti died unexpectedly before a will could be drafted or he
was able to meet with his insurance agent to effectuate a change
in his beneficiary designation. Id. at 131-32.
On these facts, the trial court concluded that Colletti
intended to make DeCeglia the beneficiary on the policies. Id.
at 132. In addition, it concluded that, under Vasconi, it was
appropriate to effectuate decedent's intent even though it had
not been formalized by the execution of a change of beneficiary
form or other writing. Ibid.
In reversing that portion of the trial court's judgment, we
concluded that Colletti's verbal expressions of intent to change
10 A-3189-13T4
the beneficiary designations under his life insurance policies
were ineffective. Id. at 133. We reasoned:
The trial court read Vasconi broadly to
change prior New Jersey law requiring
"substantial compliance" with the
beneficiary designation of an insurance
policy and instead to establish "the
proposition that the real polestar should be
the intent of the insured owner." Moreover,
the trial court indicated that the intent to
change a beneficiary designation can be
established solely from a decedent's verbal
expressions of intent without formalization
in any kind of writing.
We believe that the trial court's
reading of Vasconi was overly broad.
Vasconi involved the interpretation of a
formally executed agreement between the
policyholder and beneficiary which purported
to settle "all questions pertaining to their
respective interests in distribution of the
marital assets," which presumably included
the insurance policy. The present case does
not involve any comparable written agreement
between the policyholder and beneficiaries,
or any form of written communication from
the policyholder to the insurer expressly
requesting a change in his beneficiary
designations. Instead, decedent simply
expressed an intent to change his
beneficiary designations, which he was told
would require the execution of insurance
company forms to effectuate. Such a verbal
expression of intent does not constitute
substantial compliance with the provisions
of insurance policies requiring execution of
change of beneficiary forms.
[Id. at 135.]
In the second part of our opinion, we determined that
Colletti had an obligation to pay child support under the New
11 A-3189-13T4
Jersey Parentage Act, N.J.S.A. 9:17-38 to -59. Thus, we allowed
DeCeglia to pursue a claim for child support from the proceeds
of the policies. Id. at 133, 137-41.
In the present case, relying on her interpretation of
Vasconi, Evanisa urges us to expand existing law to create a
"bright-line" rule that an insured who marries thereby intends
to designate his or her spouse as beneficiary on his or her life
insurance policy, thus usurping any prior beneficiary
designation. We decline to do so, and would instead leave so
drastic a change to the Legislature. In this regard, we note
that the Legislature has acted in N.J.S.A. 3B:3-14 to provide
that divorce automatically revokes a disposition of property
made by a divorced individual to his former spouse in a
governing instrument which, by definition, includes an insurance
policy. N.J.S.A. 3B:1-1. It could similarly pass legislation
granting presumptive beneficiary rights to a spouse upon
marriage should it determine to do so.
The Legislature has also enacted N.J.S.A. 3B:5-15, which
provides an intestate share to a surviving spouse
unintentionally omitted from a premarital will, based on the
rebuttable presumption that the decedent would have provided for
him or her. Notably, however, the omitted spouse statute
applies only to wills, and does not extend to nonprobate assets
12 A-3189-13T4
such as a life insurance policy. We presume that in enacting
the statute, the Legislature was aware of this distinction. In
any event, it is within the province of the Legislature to
expand the statute to provide an omitted spouse with an
intestate share of life insurance proceeds, or to enact some
other appropriate statutory remedy.
Having rejected plaintiff's public policy argument, we next
conclude that, under the facts presented, Evanisa did not
establish that Michael clearly demonstrated the intent to comply
with the insurer's procedures for changing the beneficiary. We
agree with the trial judge that the manifestation of any such
intent here is far less compelling than the unsuccessful efforts
made by the decedent in DeCeglia to effectuate such a change.
The record is totally devoid of evidence that Michael attempted
to do so. Instead, the facts point in an opposite direction.
They suggest that Michael, knowing that he was obliged to inform
the insurer to effect a change in beneficiary, and having done
so in the past, failed to take any steps toward that end.
Further, there is no evidence that Michael sought to make or
change a will to provide for Evanisa, or designated her as a
13 A-3189-13T4
joint owner on his bank accounts.7 All we have is Evanisa's
statement that Michael orally represented to her that he would,
"as conditions permitted," make such provisions for her.
"[M]ere verbal expression of an intent to change a beneficiary
designation is ineffective." DeCeglia, supra, 265 N.J. Super.
at 136.
Finally, Evanisa cites Michael's commitment to support her
in sponsoring her citizenship application as justification for
receiving the policy proceeds. However, the trial court
correctly found that Michael was under no duty to support
Evanisa or provide a life insurance policy for her, as such
support obligation terminated upon his death pursuant to the
express terms of the Form I-864 support affidavit.
Affirmed.
7
Evanisa's appendix includes bank statements issued during the
brief period of the marriage, which are solely in Michael's
name.
14 A-3189-13T4