IN RE: ) ) ESTATE OF FRED MOORE, JR., ) ) JENNIFER ELLEN MOORE AKIN, ) ) Plaintiff/Appellant, ) Appeal No. ) 01-A-01-9603-CH-00139 v. ) ) MRS. FRED (LONDA) MOORE, JR., ) Williamson Chancery ) No. P-91-680 Defendant/Appellee. )
FILED COURT OF APPEALS OF TENNESSEE September 13, 1996
MIDDLE SECTION AT NASHVILLE Cecil W. Crowson Appellate Court Clerk
APPEAL FROM THE CHANCERY COURT FOR WILLIAMSON COUNTY
AT FRANKLIN, TENNESSEE
THE HONORABLE HENRY DENMARK BELL, CHANCELLOR
E.E. EDWARDS, III JAMES A. SIMMONS 1707 Division Street, Suite 100 Nashville, Tennessee 37203-2701 ATTORNEYS FOR PLAINTIFF/APPELLANT
JAMES V. DORAMUS GREGORY MITCHELL Doramus & Trauger The Southern Turf Building 222 Fourth Avenue North Nashville, Tennessee 37219-2102 ATTORNEYS FOR DEFENDANT/APPELLEE
AFFIRMED IN PART, REVERSED IN PART,
AND REMANDED SAMUEL L. LEWIS, JUDGE O P I N I O N
Plaintiff/appellant, Jennifer Ellen Moore Akin, appeals from
the chancery court's decision to deny her motion for summary
judgment and to grant the motion for summary judgment of
defendant/appellee, Mrs. Fred (Londa) Moore, Jr.
The facts out of which this matter arose are as follows.
Fred Moore, Jr. was divorced from Jeanette Garrison Moore on 6 June
1980. They entered into a property settlement agreement which the
court incorporated into the divorce decree. While married, the
parties had one child, Jennifer Ellen Moore. The agreement
provided that Fred Moore, Jr. was to obtain a life insurance policy
on his life "in the minimum amount of $50,000.00 payable to wife as
beneficiary for the use and benefit of Jennifer Ellen Moore." The
agreement also provided that Mr. Moore would pay the sum of $350.00
per month as child support. On 1 October 1981, the court entered
an amended order which decreased the amount of the child support to
$150.00 per month. The amended order did not refer to the life
insurance provision.
On 26 June 1981, Fred Moore married defendant. In obedience
to the property settlement agreement and the decree of the trial
court, Mr. Moore obtained and maintained a life insurance policy in
the amount of $250,000.00 through Lincoln Income Life Insurance
Company. He listed plaintiff as a beneficiary as required by the
property settlement agreement and the decree.
On or about 19 January 1989, Fred Moore deleted plaintiff
as a named beneficiary. As a result, defendant was the only
remaining named beneficiary of the policy. Mr. Moore died in
February 1990, and Lincoln Income Life Insurance Company paid the
2 entire face amount of the policy to defendant.
Defendant filed a petition to probate Mr. Moore's will in
July 1991. The record in that case reveals that Mr. Moore owned a
policy of insurance in the amount of $250,000.00 at the time of his
death. The court entered a final settlement of the estate on 11
February 1992 with all proceeds being paid to defendant.
Plaintiff filed suit on 12 July 1993 seeking $50,000.00 of
the proceeds from the life insurance policy. Both parties filed
motions for summary judgment in September 1995. Shortly
thereafter, the chancery court entered its final judgment. The
court denied plaintiff's motion, granted defendant's motion, and
dismissed plaintiff's complaint. Plaintiff filed her notice of
appeal on 14 Decemer 1995. On appeal, plaintiff simply asks that
this court determine whether the chancery court's decision was
correct.
Defendant makes two arguments in support of the court's
order. First, defendant contends that plaintiff's only claim
against defendant individually is one for a constructive trust.
Moreover, defendant argues that plaintiff can not prevail on such
a claim because she failed to allege any improper conduct on the
part of defendant. Second, defendant contends that plaintiff is
simply a creditor of her father's estate with a possible claim for
breach of contract because plaintiff did not have a vested right to
the insurance proceeds. We address these arguments individually.
Defendant argues that plaintiff can not prevail on her
constructive trust claim because plaintiff can not establish a
necessary element of a constructive trust, i.e., that defendant
comitted fraud or some other unconscionable conduct. "A
constructive trust may only be imposed against one who, by fraud,
3 actual or constructive, by duress or abuse of confidence, by
commission of wrong, or by any form of unconsciousable conduct,
artifice, concealment or questionable means, has obtained an
interest in property which he ought not in equity or in good
conscience retain." Intersparax Leddin KG v. Al-Haddad, 852 S.W.2d
245, 249 (Tenn. App. 1992). We agree that there is no proof in
this record that defendant was individually guilty of fraud or
other unconsciousable conduct; however, we are of the opinion that
Mr. Moore and defendant were privies.
In LeMay v. Dubenbostel, No. 03-A-01-9110-CH-00354, 1992 WL
74584 (Tenn. App. 15 April 1992), this court held:
[The second wife] was in privity with the deceased. Privies are not only those persons who are related by blood or law, but also those who are related through facts showing identity of interest. Privies are often said to have "derivative" interests. Examples of persons in privity each with the other, include heirs and ancestors, donees and donors, lessors and lessees. Where an insured changes the beneficiary on a life insurance policy and expires, the newly named beneficiary is in privity with the deceased insured.
Id. at *2 (citations omitted); accord Goodrich v. Massachusetts
Mut. Life Ins. Co., 34 Tenn. App. 516, 530, 240 S.W.2d 263, 270
(1951). In the past, courts have also held that a beneficiary is
liable for the acts of the insured without questioning the
relationship between the beneficiary and the insured. For example,
in a case decided by the western section of this court, the
decedent's ex-wife sued the decedent's sister to recover life
insurance proceeds guaranteed the ex-wife in a divorce decree.
Harrington v. Boatright, 633 S.W.2d 781, 782 (Tenn. App. 1982).
The chancery court found that the sister held the proceeds of two
life insurance policies in a constructive trust for the decedent's
ex-wife's benefit as a result of the decedent changing the
beneficiary in contravention of the divorce decree. Id. at 783.
The chancellor awarded the proceeds to the ex-wife and this court
4 affirmed the decision. Id.
Defendant also argues that plaintiff can not recover the
money because plaintiff never acquired a vested interest in it.
Most Tennessee cases which have addressed this issue have dealt
with the situation where at least one life insurance policy existed
at the time the trial court entered the divorce decree. In these
cases, the courts begin their discussions with the following
general rule: When the insured retains the right to change the
beneficiary, the beneficiary has only the mere expectancy of
receiving the benefits under the policy. See, e. g., Bell v. Bell,
896 S.W.2d 559, 562 (Tenn. App.
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IN RE: ) ) ESTATE OF FRED MOORE, JR., ) ) JENNIFER ELLEN MOORE AKIN, ) ) Plaintiff/Appellant, ) Appeal No. ) 01-A-01-9603-CH-00139 v. ) ) MRS. FRED (LONDA) MOORE, JR., ) Williamson Chancery ) No. P-91-680 Defendant/Appellee. )
FILED COURT OF APPEALS OF TENNESSEE September 13, 1996
MIDDLE SECTION AT NASHVILLE Cecil W. Crowson Appellate Court Clerk
APPEAL FROM THE CHANCERY COURT FOR WILLIAMSON COUNTY
AT FRANKLIN, TENNESSEE
THE HONORABLE HENRY DENMARK BELL, CHANCELLOR
E.E. EDWARDS, III JAMES A. SIMMONS 1707 Division Street, Suite 100 Nashville, Tennessee 37203-2701 ATTORNEYS FOR PLAINTIFF/APPELLANT
JAMES V. DORAMUS GREGORY MITCHELL Doramus & Trauger The Southern Turf Building 222 Fourth Avenue North Nashville, Tennessee 37219-2102 ATTORNEYS FOR DEFENDANT/APPELLEE
AFFIRMED IN PART, REVERSED IN PART,
AND REMANDED SAMUEL L. LEWIS, JUDGE O P I N I O N
Plaintiff/appellant, Jennifer Ellen Moore Akin, appeals from
the chancery court's decision to deny her motion for summary
judgment and to grant the motion for summary judgment of
defendant/appellee, Mrs. Fred (Londa) Moore, Jr.
The facts out of which this matter arose are as follows.
Fred Moore, Jr. was divorced from Jeanette Garrison Moore on 6 June
1980. They entered into a property settlement agreement which the
court incorporated into the divorce decree. While married, the
parties had one child, Jennifer Ellen Moore. The agreement
provided that Fred Moore, Jr. was to obtain a life insurance policy
on his life "in the minimum amount of $50,000.00 payable to wife as
beneficiary for the use and benefit of Jennifer Ellen Moore." The
agreement also provided that Mr. Moore would pay the sum of $350.00
per month as child support. On 1 October 1981, the court entered
an amended order which decreased the amount of the child support to
$150.00 per month. The amended order did not refer to the life
insurance provision.
On 26 June 1981, Fred Moore married defendant. In obedience
to the property settlement agreement and the decree of the trial
court, Mr. Moore obtained and maintained a life insurance policy in
the amount of $250,000.00 through Lincoln Income Life Insurance
Company. He listed plaintiff as a beneficiary as required by the
property settlement agreement and the decree.
On or about 19 January 1989, Fred Moore deleted plaintiff
as a named beneficiary. As a result, defendant was the only
remaining named beneficiary of the policy. Mr. Moore died in
February 1990, and Lincoln Income Life Insurance Company paid the
2 entire face amount of the policy to defendant.
Defendant filed a petition to probate Mr. Moore's will in
July 1991. The record in that case reveals that Mr. Moore owned a
policy of insurance in the amount of $250,000.00 at the time of his
death. The court entered a final settlement of the estate on 11
February 1992 with all proceeds being paid to defendant.
Plaintiff filed suit on 12 July 1993 seeking $50,000.00 of
the proceeds from the life insurance policy. Both parties filed
motions for summary judgment in September 1995. Shortly
thereafter, the chancery court entered its final judgment. The
court denied plaintiff's motion, granted defendant's motion, and
dismissed plaintiff's complaint. Plaintiff filed her notice of
appeal on 14 Decemer 1995. On appeal, plaintiff simply asks that
this court determine whether the chancery court's decision was
correct.
Defendant makes two arguments in support of the court's
order. First, defendant contends that plaintiff's only claim
against defendant individually is one for a constructive trust.
Moreover, defendant argues that plaintiff can not prevail on such
a claim because she failed to allege any improper conduct on the
part of defendant. Second, defendant contends that plaintiff is
simply a creditor of her father's estate with a possible claim for
breach of contract because plaintiff did not have a vested right to
the insurance proceeds. We address these arguments individually.
Defendant argues that plaintiff can not prevail on her
constructive trust claim because plaintiff can not establish a
necessary element of a constructive trust, i.e., that defendant
comitted fraud or some other unconscionable conduct. "A
constructive trust may only be imposed against one who, by fraud,
3 actual or constructive, by duress or abuse of confidence, by
commission of wrong, or by any form of unconsciousable conduct,
artifice, concealment or questionable means, has obtained an
interest in property which he ought not in equity or in good
conscience retain." Intersparax Leddin KG v. Al-Haddad, 852 S.W.2d
245, 249 (Tenn. App. 1992). We agree that there is no proof in
this record that defendant was individually guilty of fraud or
other unconsciousable conduct; however, we are of the opinion that
Mr. Moore and defendant were privies.
In LeMay v. Dubenbostel, No. 03-A-01-9110-CH-00354, 1992 WL
74584 (Tenn. App. 15 April 1992), this court held:
[The second wife] was in privity with the deceased. Privies are not only those persons who are related by blood or law, but also those who are related through facts showing identity of interest. Privies are often said to have "derivative" interests. Examples of persons in privity each with the other, include heirs and ancestors, donees and donors, lessors and lessees. Where an insured changes the beneficiary on a life insurance policy and expires, the newly named beneficiary is in privity with the deceased insured.
Id. at *2 (citations omitted); accord Goodrich v. Massachusetts
Mut. Life Ins. Co., 34 Tenn. App. 516, 530, 240 S.W.2d 263, 270
(1951). In the past, courts have also held that a beneficiary is
liable for the acts of the insured without questioning the
relationship between the beneficiary and the insured. For example,
in a case decided by the western section of this court, the
decedent's ex-wife sued the decedent's sister to recover life
insurance proceeds guaranteed the ex-wife in a divorce decree.
Harrington v. Boatright, 633 S.W.2d 781, 782 (Tenn. App. 1982).
The chancery court found that the sister held the proceeds of two
life insurance policies in a constructive trust for the decedent's
ex-wife's benefit as a result of the decedent changing the
beneficiary in contravention of the divorce decree. Id. at 783.
The chancellor awarded the proceeds to the ex-wife and this court
4 affirmed the decision. Id.
Defendant also argues that plaintiff can not recover the
money because plaintiff never acquired a vested interest in it.
Most Tennessee cases which have addressed this issue have dealt
with the situation where at least one life insurance policy existed
at the time the trial court entered the divorce decree. In these
cases, the courts begin their discussions with the following
general rule: When the insured retains the right to change the
beneficiary, the beneficiary has only the mere expectancy of
receiving the benefits under the policy. See, e. g., Bell v. Bell,
896 S.W.2d 559, 562 (Tenn. App. 3 March 1994). Courts then go on
to conclude that the beneficiary's interest vests when a court
enters a decree requiring the insured to maintain the policy and
prohibiting the insured from changing the beneficiary. Id.
In Brooks v. Brooks, No. 03-A-01-9309-CH-00323, 1994 WL
71528 (Tenn. App. 1994), the decedent's ex-wife brought a cause of
action against the decedent's second wife and his estate for the
deficiency in the ex-wife's life insurance proceeds. Id. at *1.
Pursuant to the ex-wife and the decedent's divorce decree, the
decedent was to acquire and maintain $175,000.00 in life insurance
and to name his ex-wife as the beneficiary. There were no life
insurance policies in effect at the time of the divorce. Id. At
the time of his death, the decedent had a $150,000.00 insurance
policy naming his ex-wife as the beneficiary and other policies
naming his second wife as the beneficiary. Because there were no
policies in effect at the time of the divorce, the court held that
the ex-wife's interest in the proceeds from the other policies did
not vest. Id. at *2. Thus, the court did not allow the ex-wife to
recover the $25,000.00 deficiency. Id. The eastern section
affirmed the trial court's decision on appeal. Id.
5 The decision in Brooks would seem to foreclose any recovery
on the part of plaintiff; however, the present case is
distinguishable. In the instant case, the father obtained the
appropriate insurance, albeit after the decree, and then changed
the beneficiary. We are of the opinion that plaintiff obtained a
vested interest in the insurance proceeds once Mr. Moore complied
with the court's order. In Brooks, the decedent never complied
with the court's order. The eastern section of this court has
stated that "in all doubtful cases the doubt should be resolved
against the one who has changed the beneficiary in defiance of a
court order." Holbert v. Holbert, 720 S.W.2d 465, 468 (Tenn. App.
1986). In a case which was factually similar to the instant case,
the court held as follows:
It is a general rule in this jurisdiction where a judgment requires a party to maintain a life insurance policy for the benefit of another, a Court of equity will not allow the Court's judgment to be defeated by changing the beneficiary or cancelling the policy, but will impose the judgment obligation on any policy owned by the defendant at his death.
LeMay, 1992 WL 74584 at *3.
We hold that the second wife, the defendant, was in privity
with the deceased and that plaintiff obtained a vested interest in
the insurance proceeds when Mr. Moore complied with the court's
order.
We have also considered plaintiff's issue of whether the
trial court erred in failing to grant her motion for summary
judgment. We are of the opinion after fully reviewing this record
that there are material factual issues which preclude the granting
of plaintiff's motion for summary judgment.
Therefore, it results that the judgment of the trial court
is affirmed in refusing to grant the plaintiff's motion for summary
6 judgment and reversed in granting the defendant's motion for
summary judgment. The cause is remanded to the trial court for
further necessary proceedings. Costs are taxed one-half to
plaintiff/appellant, Jennifer Ellen Moore Akin, and one-half to
__________________________________ SAMUEL L. LEWIS, JUDGE
CONCUR:
_________________________________ HENRY F. TODD, P.J., M.S.
_________________________________ BEN H. CANTRELL, J.