Metropolitan Life Insurance Co. v. Melin
2017 U.S. App. LEXIS 5750
| 8th Cir. | 2017Background
- Mark Sveen named his then-wife Kaye Melin primary beneficiary of a 1998 life insurance policy; his children were contingent beneficiaries. Sveen divorced Melin in 2007 and never changed the designation.
- Minnesota amended its probate code in 2002 to make beneficiary designations to a former spouse automatically revoked by divorce (revocation-upon-divorce statute) and applied that rule to life insurance.
- Sveen died in 2011 with Melin still listed as primary beneficiary; the insurer filed an interpleader. Melin and Sveen’s children each claimed the proceeds.
- The district court awarded the proceeds to the children, applying the Minnesota revocation-upon-divorce statute. Melin challenged the statute’s retroactive application as violating the Contract Clause.
- The Eighth Circuit reversed, holding Whirlpool Corp. v. Ritter controls and that retroactive application of the statute impairs contractual expectations formed when the policy was issued.
Issues
| Issue | Plaintiff's Argument (Melin) | Defendant's Argument (Sveen/Children) | Held |
|---|---|---|---|
| Standing to raise constitutional challenge | Melin (contested beneficiary) has third-party standing because she would suffer concrete injury and enforces the decedent’s contract | Sveens argued Melin lacked standing as a non-party | Held: Melin has third-party standing (injury, close relation to decedent’s rights, hindrance by decedent’s death) |
| Whether retroactive application violates Contract Clause | Melin: retroactive revocation impairs policyholder’s contractual expectations and obligations | Sveens: Whirlpool is distinguishable; Minnesota law and exceptions mean no unconstitutional impairment | Held: Retroactive application violates Contract Clause; Whirlpool controls |
| Relevance of Minnesota property/beneficiary rules and statutory exceptions | Melin: policyholder’s expectations under law at contract formation control, not beneficiary’s vested interest or statutory opt-outs | Sveens: Minnesota law denies beneficiaries vested interest; statute permits opt-out/renaming, mitigating impairment | Held: These distinctions are immaterial; impairment is to policyholder expectations and opt-outs do not cure retroactivity problem |
| Remedy / Disposition | Melin sought enforcement of original beneficiary designation | Sveens sought application of statute to award proceeds to children | Held: Judgment reversed and case remanded for proceedings consistent with holding that retroactive application is unconstitutional |
Key Cases Cited
- Whirlpool Corp. v. Ritter, 929 F.2d 1318 (8th Cir. 1991) (retroactive revocation-upon-divorce statute violated Contract Clause because it disrupted policyholder expectations)
- Walker v. Hartford Life & Accident Ins. Co., 831 F.3d 968 (8th Cir. 2016) (standard of review for constitutional questions on appeal)
- Dayton Dev. Co. v. Gilman Fin. Servs., Inc., 419 F.3d 852 (8th Cir. 2005) (third‑party beneficiary and standing principles)
- Powers v. Ohio, 499 U.S. 400 (1991) (third‑party standing test elements)
- Singleton v. Wulff, 428 U.S. 106 (1976) (third‑party standing framework)
- Energy Reserves Group, Inc. v. Kan. Power & Light Co., 459 U.S. 400 (1983) (Contract Clause substantial‑impairment test)
- Allied Structural Steel Co. v. Spannaus, 438 U.S. 234 (1978) (Contract Clause principles)
- U.S. Trust Co. of N.Y. v. New Jersey, 431 U.S. 1 (1977) (Contract Clause legitimate purpose and tailoring analysis)
- Stillman v. Teachers Ins. & Annuity Ass’n Coll. Ret. Equities Fund, 343 F.3d 1311 (10th Cir. 2003) (contrasting view on applying revocation-upon-divorce statutes to contracts)