Opinion
Jan. 19, 1975.
Editorial Note:
This case has been marked 'not for publication' by the court.
Page 1295
Wells & Snydal, Max Snydal, Fort Morgan, for defendant-appellant.
No appearance for plaintiff.
James A. Littlepage, Denver, for defendant-appellee.
PIERCE, Judge.
This case comes to us on a record comprised of an agreed statement of facts submitted by the parties and approved by the trial judge and a partial transcript of a previously filed action which is alleged to have a bearing on the correct determination of this action.
In 1947, Franklin Life Insurance Company (Franklin) issued a life insurance policy to Joseph Perko, Jr. (Joseph) insuring his life. At that time the defendant-appellant, Joseph's wife Gertrude L. Perko (Gertrude), was designated as primary beneficiary.
Subsequently, Joseph and Gertrude were divorced and entered into a property settlement agreement in June 1955 which made no mention of the life insurance policy involved in this action. The divorce became final in December of 1955.
On several occasions from March until May of 1956, Joseph attempted to change the policy to make Louis Perko the primary beneficiary, but Franklin refused to execute the change of beneficiary because Joseph was unable to surrender the policy to Franklin. Joseph explained to the company that the policy was in the possession of Gertrude and that she refused to deliver the policy to him. He offered to furnish any affidavits, bonds, or other documents which Franklin might require to establish that Gertrude had no interest in the policy, and asserted that the sole reason for his inability to comply with all the requirements of the company for change of beneficiary was the refusal of Gertrude to surrender the policy. On May 2, 1956, he informed the company that he had done everything possible to comply with their regulations and believed that under law the change of beneficiary was effective as of that date.
In May of 1956 Joseph filed a motion, attendant to the divorce action, in the district court of Jefferson County, alleging ownership of the policy and asking for an order requiring Gertrude to deliver the policy to him. This motion was stricken for lack of jurisdiction.
In June of 1963 Joseph filed an action in Jefferson County, again alleging ownership of the policy in himself and wrongful possession by Gertrude, and demanding the return of the policy. Venue of this action, which was in the nature of replevin, was changed to Washington County. This action was dismissed, 'with prejudice,' in August of 1965.
Joseph died on November 9, 1971. At that time the policy still showed Gertrude as the sole beneficiary. Subsequently both Gertrude and Louis Perko claimed the proceeds of the policy. Franklin filed this interpleader action naming both claimants as defendants and deposited the proceeds from the policy into court.
In the interpleader action the trial court found, among other things, the following:
1. The property settlement did not divest Joseph of his ownership rights in the property.
2. Subsequent to the divorce decree, Gertrude refused to surrender the policy to Joseph.
3. 'That on or about April 20, 1956, Joseph Perko, Jr., by and through George Lerg mailed a change of beneficiary from to the plaintiff (Franklin) together with a letter explaining that the policy could not be returned because Mrs. Perko was wrongfully withholding it and offering to 'furnish any necessary affidavits, bonds or otherwise to show that Gertrude L. Perko has no interest whatsoever in this policy, but simply refuses to surrender it.''
4. 'That a change of beneficiary can be effected without surrendering the life insurance policy itself, even though the terms of the policy require that it be surrendered, if the insured had substantially complied with the requirements for effecting a change of beneficiary. Finnerty v. Cook, 118 Colo. 310 (,195 P.2d 973) (1948).'
5. 'That as a matter of law, Joseph Perko, Jr. substantially complied with the requirements for effectuating a change of beneficiary and that his failure to totally comply was caused by Gertrude L. Perko.'
The court then awarded the proceeds of the policy to Louis Perko, who is now deceased and who has been replaced by Billy J. Phillips as defendant-appellee. Certrude appeals, principally claiming that the dismissal with prejudice of the 1963 suit was Res judicata as to ownership of the policy and the right to possession. Franklin has not entered an appearance in this appeal.
The pleadings and that portion of the record of the 1963 action which are before this court indicate that the dismissal was based on lack of prosecution. This dismissal, being with prejudice, operated as an adjudication upon the merits. C.R.C.P. 41(b)(1).
Therefore, assuming, without deciding, that Phillips is a party against whom collateral estoppel may be asserted, See Pomeroy v. Waitkus, Colo., 517 P.2d 396, the judgment in the 1963 suit would collaterally estop Phillips from relitigating the issue of who owned and had the right to possess the insurance policy N August of 1965. See Hudson v. Western Oil Fields, Inc., 150 Colo. 456, 374 P.2d 403. However, this case does not involve the ownership and right of possession of the insurance policy in 1965, but rather who was the beneficiary at date of death which in turn concerns the issue as to whether the beneficiary was changed in 1956. Since the issues decided by the 1965 dismissal and the issues present in this case are not identical, Phillips is not estopped by the 1965 judgment. Pomeroy v. Waitkus, Supra; Hickey v. Anheuser-Busch Brewing Ass'n, 36 Colo. 386, 85 P. 838.
There is sufficient evidence in the record to justify the trial court's conclusion that, on or before May 2, 1956, Joseph who the owner of the policy with the right of possession and that, as of that date, he changed the beneficiary under the authority of Finnerty v. Cook, 118 Colo. 310, 195 P.2d 973. The record does not indicate that Gertrude ever changed the beneficiary thereafter prior to the death of Joseph. The court was therefore correct in determining that Louis was entitled to the insurance proceeds. See 5 G. Couch, Cyclopedia of Insurance Law s 28:41 (2d ed. R. Anderson).
We have examined Gertrude's other assignments of error and find them derivative of her estoppel argument and thus without merit.
Judgment affirmed.
RULAND, J., concurs.
VanCISE, J., dissents.
VanCISE, Judge (dissenting):
I am unable to agree with the legal conclusion of the trial court that the insured Joseph Perko (Joseph) 'substantially complied with the requirements for effectuating a change of beneficiary' and the conclusion of this court that '(t)here is sufficient evidence in the record to justify the trial court's conclusion that, on or before May 2, 1956, Joseph was the owner of the policy with the right of possession and that, as of that date, he changed the beneficiary under the authority of Finnerty v. Cook, 118 Colo. 310, 195 P.2d 973.' Accordingly, I would reverse the judgment and remand the cause with directions to enter judgment for the plaintiff, Gertrude L. Perko.
The instant case is entirely different from Finnerty v. Cook, Supra. Finnerty involved an American serviceman who died in a Japanese prisoner of war camp in the Philippine Islands during World War II. As a prisoner, he was under very severe restrictions. He was allowed to correspond only with his family, was not permitted to write his insurance company, and had no access to his business papers. Under those circumstances he wrote to his mother two postal cards. In each he asked for her to arrange for a change of beneficiary from his wife to his mother. This information was forwarded to the insurance company. The company declined to make the substitution because of Cook's failure to comply with specific provisions of the policy when such compliance was a physical impossibility. On these facts, the court laid down the rule that 'equity will declare a substitution When and only when, the intention of the insured is established beyond question And he has done everything possible under the circumstances to effectuate that intention.' (emphasis added)
In contrast, in the instant case the insured Joseph, on or before May 2, 1956, had not 'done everything possible.' See Fox v. Hawkins, 140 Colo. 438, 344 P.2d 973. Thereafter, to establish his ownership and right to possession of the policy, he sought court help, first in the original divorce action (refused by the court because 'it does not have jurisdiction') and then in a separate law suit--and he lost! The effect was an adjudication on the merits of the claims of Gertrude and Joseph that he was not the owner of the policy and was not entitled to possession of it. Thus, the dispute, which had been unresolved from the time of the 1955 divorce until the 1965 decision, was settled and the judgment in that case 'is conclusive of the rights of the parties in any subsequent suit on the same claim' and is binding on their privies. Pomeroy v. Waitkus, Colo., 517 P.2d 396.
I see no reason under the facts of this case to make any exception to the general rule in cases involving changes in beneficiary designations. Where a life insurance policy allows beenficiary changes and where the right to make the change has been reserved in the owner of the policy, the interest of a named beneficiary can be defeated only in the manner prescribed in the policy. Muller v. Penn Mutual Life Insurance Co., 62 Colo. 245, 161 P. 148; Johnson v. New York Life Insurance Co., 56 Colo. 178, 138 P. 414.
Even if Joseph were the owner (and by the adjudication he was not), he did not comply with the policy provisions. The policy was not presented to the company for endorsement of the change, and no endorsement was ever made. The company refused to recognize the attempted change absent presentation of the policy. No change of beneficiary was accomplished, and the original beneficiary, Gertrude, should receive the proceeds.