in Re Pellegrini Estate
332285
| Mich. Ct. App. | Jun 15, 2017Background
- Decedent Loretta Pellegrini attempted to change the beneficiary on an annuity/insurance contract by signing and mailing a request-for-service form.
- Pellegrini’s agent mailed the signed form to the insurance company; the company received the form and acknowledged receipt but did not process it before Pellegrini’s death.
- The company cited two deficiencies: one missing page that contained no information and the estate being listed redundantly as both primary and contingent beneficiary.
- The policy’s change-of-beneficiary provision required a “signed written request filed with the Company” and stated “No change will take effect unless the Company receives such signed written request.”
- The Estate sued (probate court) seeking recognition of the beneficiary change; the probate court granted summary disposition for the Estate, finding substantial compliance.
- The insurer appealed; the Court of Appeals reviewed contract interpretation de novo and affirmed the probate court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Pellegrini complied with the contract’s change-of-beneficiary requirement | Pellegrini (Estate) argued that mailing a signed written request that the company received satisfied the contract and constituted substantial compliance | Insurer argued that because it did not process the form and the form had deficiencies, the change did not take effect | Court held Pellegrini substantially complied: the company’s receipt of the signed written request satisfied the contract’s unambiguous “receives” language |
| Whether strict/formal compliance is required where contract prescribes method for change | Estate: substantial compliance is sufficient under Michigan law | Insurer: processing/complete form required to effect change | Court held strict compliance not required; substantial compliance governs and was met |
| Effect of trivial defects in submitted form | Estate: defects were minor and did not defeat the clear signed intent to change beneficiary | Insurer: defects prevented proper change and required processing | Court held defects trivial; the signed request still unequivocally expressed intent and met the contract’s requirement |
| Role of company action before processing (i.e., any payment or action taken) | Estate: no intervening company action prevented change; receipt controls | Insurer: failure to process means no effective change before decedent’s death | Court held receipt (possession) controls under the contract language; lack of processing did not defeat substantial compliance |
Key Cases Cited
- Aetna Life Ins Co v. Brooks, 96 Mich. App. 310 (substantial compliance with change-of-beneficiary requirements suffices)
- Dogariu v. Dogariu, 306 Mich. 392 (designations effective only by following policy provisions; substantial compliance standard)
- Innovation Ventures LLC v. Liquid Mfg. Corp., 499 Mich. 491 (contract interpretation begins with the contract’s plain language)
- Hastings Mut. Ins. Co. v. Safety King, Inc., 286 Mich. App. 287 (use dictionary meaning when contract terms are undefined)
- Harris v. Metropolitan Life Ins. Co., 330 Mich. 24 (insurer’s procedural requirements do not defeat a clear written change request)