Appellate Division Rejects Surviving Spouse’s Claim To Life Insurance Proceeds

In this case, a surviving spouse’s claim to her deceased spouse’s life insurance proceeds was rejected by an appeals court in New Jersey because the deceased spouse named others as beneficiaries. Fromageot v. Fromageot, Docket No. A-1099-13T1 (App. Div.,  December 2, 2015)

The decedent, Paul Fromageot (“Paul”), had two life insurance policies. One was a $2 million policy naming his wife as the sole beneficiary. The other policy, which was the subject of the litigation, was a $452,000 Hartford Life Insurance policy obtained through payroll deductions with Paul’s employer, Alliance Capital Management (“Alliance”). Paul had named four people as beneficiaries of this policy: his wife, his two parents, and his eldest child. The Alliance life insurance enrollment card stated that, “If more than one beneficiary is named, the death benefit… will be paid in equal shares to the designated beneficiaries who survive the employee.”

Following Paul’s death, Hartford paid each of the four beneficiaries a one-fourth share of the death benefit. Paul’s widow filed a complaint against Paul’s parents, claiming that Paul had intended for her to receive the entire policy proceeds and that, “[d]ue to poor draftsmanship of the declaration form, misrepresentation of [Paul’s] intentions, or mistake of fact,” Paul’s parents improperly received one-half of the policy proceeds and had been unjustly enriched. The plaintiff/widow sought restitution of that portion of the policy proceeds, made claims of breach of fiduciary duty, and demanded an accounting.

The Chancery Court held a trial, in which the widow presented an Alliance personal benefits statement, which identified her and their eldest child as beneficiaries, as well as computer “screen shots” identifying Paul’s widow, parents, and four children as beneficiaries. She also had a Knights of Columbus field agent testify that Paul had told him he had “a $500,000 policy with his employer, and $250,000 ‘on’ plaintiff” (apparently understanding this to indicate that Paul intended the plaintiff/widow to be the sole beneficiary).

In contrast, Paul’s father (a defendant) testified as to Paul and the plaintiff’s troubled marriage and Paul’s close relationship with his parents.

The Chancery Court judge found that the insurance application had been plainly written. The judge rejected the plaintiff’s claim that Paul had intended to name the defendants as contingent beneficiaries but had misunderstood the terms of the Alliance application. Instead, the judge found that Paul’s intention to name his parents as primary beneficiaries was consistent with the circumstances that existed at the time of the application: the couple’s troubled marriage, the “ill will” between plaintiff and Paul’s parents, and Paul’s close relationship with his parents.

The Appellate Division affirmed the Chancery Division’s decision.

 A copy of Fromageot v. Fromageot can be found here –  Fromageot v. Fromageot

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