Hook v. Hook

519 N.E.2d 687, 35 Ohio App. 3d 51, 1987 Ohio App. LEXIS 10530

• Court: Ohio Court of Appeals
• Decided: April 13, 1987
• Docket: 51626
• Status: Published

Opinions

Pryatel, P.J.

This appeal arises from the judgment of the court of common pleas awarding plaintiff-appellee and cross-appellant Agnes Hook the proceeds of a life insurance policy.

Agnes (sixty) and Donal Hook (sixty-one) were married on December 23, 1970. Prior to their marriage, the parties entered into an antenuptial agreement. In Hook v. Hook (1982), 69 Ohio St. 2d 234, 23 O.O. 3d 239, 431 N.E. 2d 667, this agreement, which divested each party of any legal claim to the other’s property, was found to be valid.

In August 1974, Donal filed a divorce action in DuPage County, Illinois. In her answer to his complaint, Agnes admitted the existence of the antenuptial agreement. 1 Eventually, this action was dismissed.

On June 27, 1977, Donal filed an action for divorce in Cuyahoga County. On July 26, 1977, Agnes filed her answer and counterclaim seeking divorce, alimony, 2 property division and a request for an ex parte temporary restraining order. She did not mention the (court-upheld) antenuptial agreement entered into on the morning of the marriage (in 1970). Upon the filing of her answer and counterclaim, a temporary restraining order was issued ex parte barring Donal, inter alia, from changing beneficiaries, and/or cashing in or allowing noted insurance policies to lapse. Among the seven insurance policies which were the subject of the restraining order was the following:

“g. Unknown life insurance policies with unknown companies.”

On August 2, 1977, Donal filed an answer to the counterclaim in which he set forth the affirmative defense that on December 23, 1970, an antenuptial agreement was entered into whereby Agnes waived any interest to Donal’s assets. Donal attached a copy of the agreement.

At the time that the restraining order was issued, Donal was the owner and named insured on a life insurance policy (which reserved to him the right to change the beneficiary) issued by the United States government with Agnes the named beneficiary. In disregard of the temporary ex parte restraining order, on September 8, 1977, Donal changed the beneficiary from Agnes to his needy brother, Gerald Bliss Hook.

On September 12, 1977, Donal filed a motion for dissolution of the restraining order asserting that the antenuptial agreement entered into between the parties barred Agnes from any and all rights or interest in Donal’s property.

A month and one half later (October 28, 1977), and prior to any court ruling on the dissolution of the ex parte restraining order, Donal died. 3

On December 13, 1977, Gerald Bliss Hook, as the designated beneficiary under the decedent’s insurance policy provided by the United States government, collected the sum of $38,956.06. 4

On January 31, 1978, Agnes filed a claim against Donal’s estate pursuant to R.C. 2117.06 seeking payment of the insurance proceeds. When this claim was rejected, Agnes filed a declaratory action in the common pleas court, which found that Agnes was the only named beneficiary legally entitled to the proceeds. The court held that any change of beneficiary was null and void while a temporary restraining order was in effect.

The court entered judgment for Agnes against the estate of Gerald Bliss Hook for the sum of $38,956.06, together with interest from the date of judgment plus costs.

The executor for the estate of Gerald Bliss Hook timely appeals. Agnes cross-appeals.

Assignment of Error

“I. The trial court committed prejudicial error by awarding the plaintiff-appellee a judgment for $38,956.06 against the estate of Gerald Bliss Hook, appellant, whose decedent was the beneficiary of an insurance policy in like amount on the life of plaintiff-appellee’s late husband, Donal D. Hook, solely on the basis that said husband had changed the beneficiary of that insurance policy from his wife to his brother, Gerald, in violation of an ex parte restraining order during a pending divorce action.”

Appellant contends that an action for divorce is an in personam action and that the death of Donal abated the divorce action. We agree. As the Supreme Court of Ohio has stated in Porter v. Lerch (1934), 129 Ohio St. 47, 56, 1 O.O. 356, 360, 193 N.E. 766, 770: “* * * it stands to reason that where one or both parties to a divorce action die before a final decree of divorce the action abates and there can be no revival. * * * 9 Ruling Case Law, 414, 415, Section 214. * * *”

“Such rationale rests upon the premise that the object sought to be accomplished by the final decree, to wit, the dissolution of the marriage relation, is already accomplished by the prior death. See [Porter, supra]; Annotation (1936), 104 A.L.R. 654.” Miller v. Trapp (1984), 20 Ohio App. 3d 191, 192, 20 OBR 235, 237, 485 N.E. 2d 738, 739.

However, appellee maintains that an action for divorce and division of property does not require abatement upon the death of a party prior to the entry of the decree; rather, the court is vested with the discretion to either dismiss the action or to enter judgment nunc pro tune. See id. at the syllabus. An examination of Miller reveals that the trial court had heard the evidence before granting the wife a divorce. In Miller the decision entry memorandum had been filed prior to the death of the wife; all that remained was the entry of the final decree.

In the instant case, the court had not heard any evidence upon which it could adjudicate the matter; in fact, the divorce action had commenced just four months before Donal’s death. (The action was filed June 27, 1977 and Donal died October 28, 1977.) No evidence had been adduced, and since “the dissolution was already accomplished by death,” the domestic relations court properly dismissed the action on November 1, 1977.

Appellee next directs our attention to Candler v. Donaldson (C.A. 6, 1959), 272 F. 2d 374, which she characterizes as “most analogous to the instant case.” Drawing on her brief, we learn that Wheaton Candler, the deceased-insured, was a party to a divorce action and his wife, the beneficiary of a $10,000 insurance policy. In the divorce proceedings, the trial court issued a temporary restraining order which barred the insured-husband from “ ‘in any manner disposing of any of the properties and assets of either or both of the parties ***.’” Id. at 376. Notwithstanding such order, the insured-husband executed a change of beneficiary on his life insurance by removing his wife and substituting his mother as the beneficiary. After the change was recorded and prior to the resolution of the divorce action, the insured died. Claims for insurance proceeds, by interpleader, were submitted both by the decedent’s spouse and mother.

The United States District Court for the Eastern District of Michigan, relying on New York Life Ins. Co. v. Cook (1927), 237 Mich. 303, 211 N.W. 648, held that a wife has no interest in the insurance policy on the life of her husband merely by reason of the fact that she was the named beneficiary thereon and that, accordingly, the insured has the right to change the beneficiary while a divorce suit, brought by him, is pending and where his death intervenes before the entry of the decree.

Accordingly, the trial court found that the mother was entitled to the insurance proceeds since the wife had no vested interest in the insurance policy.

In reversing the lower court, the United States Court of Appeals for the Sixth Circuit found that although the husband has a right to change the beneficiary under the terms of the insurance policy, equities may arise in favor of the wife as named beneficiary, which would deny the husband the right to so change the beneficiary of such policy.

We find these facts recited by ap-pellee from Candler ignore additional evidence that formed the basis of the appellate reversal. A careful reading of the case reveals the following additional facts. A child (William Wallace Candler) was born September 20, 1955. On November 7, 1956, Wheaton filed a divorce action. On November 27, 1956, Margery filed a petition for temporary alimony. Following a hearing, the court ordered (1) that Whea-ton pay Margery $30 per week during pendency of the action for her and the child’s support and maintenance; (2) that Margery have continued use of the family home and furnishings; (3) that Wheaton pay all (a) utility bills and (b) other expenses for the use and enjoyment of the house; (4) that Wheaton continue in force (a) all life insurance policies, (b) auto insurance policies, and (c) policies pertaining to real estate and personal property, and lastly, (5) that Wheaton be restrained from disposing of property therein mentioned until final adjudication. Nevertheless, Wheaton changed the beneficiary from Margery to his mother (Louise Donaldson).

Wheaton died August 21,1957 and the obligations of maintenance and support of Margery and their son, the expenses of the family home and furnishings, utility bills, and maintenance of life and other insurance policies were thrust upon Margery.

By defying the restraining order (prohibiting him from changing the beneficiary) issued after a hearing, Wheaton deprived and defrauded his family of the obligations of sustenance, etc. that the court imposed upon him that would have been met by the proceeds of the life insurance policy. In short, equities had arisen on the life insurance contract in favor of Margery and their son.

Based on these additional facts, we accept as sound law the appellate court’s finding that equities had developed that prohibited the husband from changing the beneficiary.

In reviewing the Candler proceedings we find it more inapposite than analogous to the instant case where (1) no order of support or maintenance (or comparable order) was issued, and (2) an antenuptial agreement had been entered into which provided that “each party hereto may freely sell or otherwise dispose of any or all of his property, now owned or hereafter acquired, by gift, sale or deed, during life, or by Last Will and Testament.”

Hence, we find no equities here that arose in Agnes’ favor. As the antenuptial agreement provided:

“Each party is hereby barred from * * * all rights * * * or claims as widow * * *, heir, * * *, survivor, or next of kin, and all other rights or claims whatsoever, * * * which may, in any manner, arise * * * by virtue of said marriage.” (Emphasis added.)

Other cases cited by appellee are equally inapposite. In these cases the husband changed the name of the beneficiary in violation of a valid divorce decree which imposed equitable interests. The courts set aside the change, ruling that the court’s order in effect created a vested interest in the named beneficiary which could not be altered by the insured. See Campbell v. Prudential Ins. Co. of America (App. 1955), 73 Ohio Law Abs. 262, 137 N.E. 2d 515; Bank One Trust Co. v. Transamerica Life Ins. Corp. (1982), 5 Ohio App. 3d 236, 5 OBR 523, 451 N.E. 2d 542.

We conclude that the divorce action was abated by the death of Donal (Porter v. Lerch, supra) which also extinguished the ex parte restraining order against him. (Had Donal lived, he would have been subject to a citation for contempt at which hearing he could assert [in mitigation] the antenuptial agreement of which the court was unaware.)

In view of the lower court’s finding that plaintiff failed to establish that defendant conspired to defraud her, 5 and in the absence of a vested or equitable interest that arose or existed (in the appellee), we find for the appellant-executor and render him final judgment.

While our holding makes moot and dicta cross-appellant’s assignments of error, in compliance with App. R. 12 (A) we hold as follows:

Cross-Assignment of Error No. I

“I. Whether the trial court erred in awarding interest to run from [the] date of judgment as opposed to awarding interest to run from the date the proceeds of life insurance were wrongfully received.”

Generally, where money is due under a contract which stipulates the amount to be paid, interest accrues from the time that the money due should have been paid. Shawhan v. Van Nest (1874), 25 Ohio St. 490, 18 Am. Rep. 313. Where the amount of the debt is clear, but the only issue raised is whether the plaintiff is entitled thereto, interest runs on the debt from the time that it was due and payable, as found by the court. Braverman v. Spriggs (1980), 68 Ohio App. 2d 58, 60, 22 O.O. 3d 47, 48, 426 N.E. 2d 526, 527.

In the instant case, the debt was not due and payable until the court determined who owned the right to the proceeds. Therefore, the debt was not found due and owing until final judgment was rendered by the court.

Cross-appellant maintains that a life insurance policy is an “instrument of writing” within the meaning of R.C. 1343.03. 6 However, this insurance contract was between Donal, as the insured, and the insurance company (rather than between Agnes and Donal). Nor was it due or payable until the court issued its decree.

Lastly, cross-appellant argues that Gerald Bliss Hook wrongfully converted the insurance proceeds and, hence, she is entitled to interest from the date of conversion (i.e., December 13, 1977, the date Gerald Bliss Hook received the funds).

We find that a wrongful conversion did not take place. Gerald Bliss Hook’s name appeared as beneficiary on the insurance contract by no act of his own. The insurance company in accord with the contract paid the proceeds to the named beneficiary. It was only when the court incorrectly determined that Agnes, in effect, had a vested interest and awarded the proceeds to Agnes that she was entitled to the money. Accordingly, this first cross-assignment of error is without merit.

Cross-Assignment of Error No. II

“II. Whether the trial court erred in rendering judgment against the estate of Gerald Bliss Hook only as opposed to rendering judgment against both the estate of Gerald Bliss Hook and the estate of Donal D. Hook.”

Cross-appellant contends that since R.C. 1343.03 entitled her to prejudgment interest and that since the estate of Gerald Bliss Hook is not large enough for such an award that Donal’s estate should be held jointly liable so that she can collect the prejudgment interest. Agnes fails to cite any authority for her position.

In light of our disposition that Agnes is not entitled to any prejudgment interest, this cross-assignment of error is overruled.

Cross-Assignment of Error No. Ill

“HI. Whether the trial court erred in failing to award appel-lee/cross-appellant attorney fees in action to recover property wrongfully converted.”

Having already determined that this case does not involve a wrongful conversion, we find the trial court did not err in failing to award attorney fees. This cross-assignment of error is overruled.

This cause is reversed and final judgment is entered for appellant.

Judgment reversed.

Economus, J., concurs. David T. Matia, J., dissents. Peter C. Economus, J., of the Mahoning County Court of Common Pleas, sitting by assignment.

1 The Supreme Court in Hook noted that Agnes’ failure to raise the question of the antenuptial agreement’s validity in the Illinois case implied a willingness to abide by the agreement and a tacit admission that it was fair and reasonable.

2 There was no claim for temporary alimony either in the Illinois divorce action in 1974 or in the divorce action filed in 1977.

3 Under the terms of Donal’s will, Agnes did not receive any part of his estate. Donal's will reads in relevant part:

“Item I.

“I am married to Agnes Bates Hook, but having entered into an antenuptial agreement with my wife, Agnes Bates Hook, on the 23rd of December 1970,1 intentionally make no provision herein for her under this will since she has a substantial estate in her own right.”

4 On March 1,1984 (during the penden-cy of this suit), Gerald Bliss Hook died. The executor of his estate was substituted as a party defendant.

5 This finding was not cross-appealed.

6 R.C. 1343.03(A) provides in pertinent part:

“* * * when money becomes due and payable upon any bond, bill, note, or other instrument of writing, upon any book account, upon any settlement between parties, * * * and upon all judgments, decrees, and orders of any judicial tribunal for the payment of money arising out of tortious conduct or a contract or other transaction, the creditor is entitled to interest at the rate of ten per cent per annum, and no more * * *