571 N.E.2d 454 | Ohio Ct. App. | 1989
The estate1 of husband John Studley appeals from a judgment of the domestic relations court that found Studley had violated a separation agreement in which he was to provide continuing life insurance to his minor child. The child's mother/legal guardian cross-appeals from that same order contending that the court erred in its conclusion concerning which insurance policies were contemplated by the separation agreement.
Pursuant to a 1975 separation agreement later reduced to judgment, the husband agreed to keep two life insurance policies issued on his life in full force and effect with the parties' child as the primary, irrevocable beneficiary of those policies. Following the divorce, the husband failed to name the child as beneficiary on one of the policies; instead he named his parents as beneficiaries.2 That policy was a group life policy provided by Merrill-Lynch, his employer at the time of divorce. The policy would pay three times the husband's current salary at the time of death. At that time, husband was earning $14,400 per year.
In 1982, husband became employed *77 by Kidder, Peabody, Inc. He cancelled the Merrill-Lynch policy and obtained similar group insurance with the new employer. That insurance also named the parents, not the child, as beneficiaries. When the husband died in 1982, he was earning $68,926.12. In addition, there were three other life insurance policies on the husband's life at the time of his death — two group life policies and a business travel accident policy.
Following the husband's death, the wife filed a show cause motion after it became apparent that the husband had failed to name the child as beneficiary of the policies. The husband's parents and the executrix of the estate were named as party-defendants. The estate filed a motion for summary judgment, asserting that the separation agreement reduced to judgment was ambiguous when compared to the in-court agreement. A summary judgment rendered in favor of the estate was subsequently reversed by this court in Studley v. Studley (1986),
On remand to the domestic relations court, the issues were tried before a referee. The referee found that there were two identifiable life insurance policies in effect at the time of the divorce. The policy at issue had at least a $43,200 face value at the time.3 The husband also had accidental death and business travel accident insurance in effect on his life through Merrill-Lynch. The referee concluded that the child was only entitled to receive the proceeds of the group life insurance policy in effect at the time of the divorce, in an amount equal to three times the husband's salary at the time of his death. Therefore, the referee recommended that the child receive from the estate4 the sum of $206,778.36, with statutory interest of $80,558.76, for a total of $287,337.12. The referee also recommended that the child collect $23,277.99 in attorney fees. These findings were approved and judgment was rendered accordingly.
The estate assigns the following errors:
"I. The trial court erred in ordering that appellant pay to appellee-cross-appellant, as guardian for the minor child, the sum of $206,778.36, representing insurance proceeds allegedly owing to appellee-cross-appellant under the involved Merrill-Lynch contributory group life insurance policy, because such order is contrary to the law and evidence presented.
"II. The trial court erred in ordering appellant to pay to appellee-cross-appellant the sum of $80,558.76, representing statutory interest on the group life and supplemental group life insurance proceeds from the date of *78 their respective receipts, January 31, 1983 and March 9, 1983, through January 21, 1987, the date of the hearing on remand, because the debt to appellee-cross-appellant was not legally due and owing until November 20, 1987, the date on which the trial court entered final judgment.
"III. The trial court erred in finding the defendant in contempt for failure to comply with the prior court order, because the remedy of contempt against a deceased defendant is not available.
"IV. The trial court erred in failing to order that appellee-cross-appellant, as guardian of Holly Studley, be required to reimburse appellant for the proportionate amount of federal estate tax paid, as such proceeds bear to the sum of John Studley's taxable estate, where appellant paid the entire amount of such federal estate tax assessed against the estate of John R. Studley.
"V. The trial court erred in ordering appellant to pay to appellee-cross-appellant the sum of $23,277.99 toward appellee-cross-appellant's attorney fees and expenses."
The mother, on behalf of the child, asserts the following cross-assignments of error:
"I. The trial court erred to the prejudice of appellee/cross appellant in failing to award her proceeds of the several policies of insurance upon the life of John Studley in effect as of the date of divorce.
"II. The trial court erred to the prejudice of appellee/cross-appellant in failing to award her all of the proceeds of the substituted life insurance policy."
The mother contends that we should reject any argument on the subject of the insurance proceeds since those contentions were addressed in our prior decision in this case and are therefore barred by the doctrine of "law of the case." We reject this contention.
The doctrine provides that "* * * the decision of a reviewing court in a case remains the law of that case on the legal questions involved for all subsequent proceedings in the case at both the trial and reviewing levels. * * *" Nolan v. Nolan
(1984),
The first appeal involved an issue concerning what insurance the husband was required to maintain for the child. The court held that there were material facts at issue as to which insurance polices were in effect at the time of the separation agreement and the amount of potential proceeds from those policies, if any. Studley v. Studley, supra, at 4,
The relevant part of the separation agreement provided:
"IT IS FURTHER Ordered, Adjudged and Decreed that in accordance with the Agreement of the parties concerning several policies of insurance issued upon defendant's life which remain in full force and effect that the husband shall designate forthwith and thereafter maintain the child of the parties as primary, irrevocable beneficiary in said policies. The husband shall keep or cause to be kept said policies of insurance in full force and effect, free and clear of any additional encumbrances and he shall not transfer or assign said policies or any interest therein. With respect to a presently existing $500 loan against one of said insurance policies, the husband is ordered to pay said loan according to its terms and hold his wife and child harmless thereon."
Under the terms of the separation agreement, the child was granted a vested right to the "several policies" of insurance. The trial court concluded that the only policy in question under the separation agreement was the husband's group life policy provided by his then-employer, Merrill-Lynch.5 Having found a vested right, the trial court imposed a constructive trust on the proceeds of the group life policy paid to the estate. SeeFerguson v. Owens (1984),
Having found that the child maintained an equitable interest in the group life policy provided by the husband's second employer, the next question is what amount of proceeds the *80
child may receive. In deciding this question, we must necessarily look to the underlying separation agreement since it operated to vest the child with her irrevocable rights. Simonds v. Simonds,supra, at 237,
First, the separation agreement did not fix a cut-off for coverage under the policies. Under some circumstances, a court may order a spouse to provide life insurance as security for child support obligations. See, e.g., In re Estate of Monreal
(1985),
Second, the separation agreement failed to state that the policies should carry a definite face value. Considering that the policies were indexed to the husband's current salary, the parties most assuredly realized that a definite face value would be impractical. Reasonably assuming that the husband's salary would increase, the implication is that the parties most likely intended that the child receive all of the benefits of the policy. Schwass v. Schwass (1984),
Finally, equitable concerns compel the conclusion that the trial court did not err in granting the child a judgment commensurate to the husband's salary at the time of his death. Simply stated, this case arose from the husband's failure to do what he should have done. Presumably, had the husband fulfilled his obligations there would be no controversy. Our decision merely effectuates the equitable maxim, "equity regards as done that which ought to be done."
We are aware that several other jurisdictions have reached contrary results. See, e.g., Madsen v. Estate of Moffitt (Utah 1975),
Similarly, the estate's arguments that any insurance proceeds be offset by Social Security benefits previously received were concededly not raised before the trial court. In any event, our analysis in part IA, supra, makes clear that the life insurance was not expressly intended to secure child support obligations. In some instances, Social Security benefits received by a child may be credited against the obligor spouse's child support obligations. Yuhasz v. Yuhasz (Nov. 28, 1980), Cuyahoga App. No. 42193, unreported; Pride v. Nolan (1987),
The issues before the trial court involved interpretation of the settlement agreement in order to ascertain the equitable rights of the child pursuant to her position as a beneficiary under the life insurance policy. Reference to other recoveries or benefits is completely irrelevant to those issues. The child is simply recovering her equitable interest. Accordingly, we reject all of the estate's arguments. The first assigned error is overruled.
Where money is due under a contract that stipulates the amount to be paid, interest accrues from the time that the money due should have been paid. Shawhan v. Van Nest (1874),
In this case, neither the amount of the debt nor plaintiff's entitlement thereto was decided until the trial court's judgment. Under similar facts, this court in Hook v. Hook (1987),
We agree with the estate's initial proposition that attorney fees were not authorized by statute. The referee concluded that the estate's failure to pay immediately to the child the insurance proceeds constituted a child support *83
arrearage and that under R.C.
While the life insurance policy was not specifically intended to secure the support obligation, the failure to provide the required insurance was nonetheless a violation of a valid court order. Thus, the court has the power to award attorney fees since this is a post-decree enforcement action. Blum, supra; Rand v.Rand (1985),
A review of the evidence before the referee amply supports its conclusions concerning the amount of fees to be awarded to the child. The estate's obligation to turn over insurance proceeds accrued from the date of the husband's death, notwithstanding the estate's protestations to the contrary. Cf. Braverman v. Spriggs,supra, at 60, 22 Ohio Op. 3d at 48,
There is a significant difference between accidental death insurance and life insurance. Ferguson v. Owens, supra, at 227, 9 OBR at 569,
Following the hearing, the referee concluded that the vagueness of the separation agreement supported the conclusion that the parties did not intend that the accident policies be amended to name the child as beneficiary. We agree with this conclusion. The parties were well aware that four *84 separate insurance policies were in force at the time of divorce. Had they intended to extend the separation agreement to reach those policies, they could have stated that intention in clearer terms. Moreover, the mere reference to "life insurance" or words of similar effect is not sufficient to demonstrate the intent of the parties given that everyday parlance normally connotes any form of insurance benefits payable upon death as "life insurance." Id. at 58. Consideration of the significant difference between the life insurance and accidental death insurance policies, as well as the failure to provide clearly that the accidental death policies were included in the agreement, compels the conclusion that the trial court correctly approved the referee's recommendation.
The judgment is affirmed in part, reversed in part and the cause is remanded.
Judgment affirmed in part, reversed in part, and cause remanded.
DYKE and CORRIGAN, JJ., concur.
"* * * [I]n case of the termination of the employment for any reason * * * such person is entitled to have issued to him by the company, * * * a policy of life insurance in any one of the forms customarily issued by the company, except term insurance, in any amount not in excess of the amount of his protection under such group insurance policy at the time of such termination * * *."