Prudential Insurance Co. of America v. Tull

532 F. Supp. 341, 1981 U.S. Dist. LEXIS 17170

• Court: District Court, E.D. Virginia
• Decided: December 8, 1981
• Docket: Civ. A. No. 80-0683-R
• Status: Published

Opinions

MEMORANDUM AND ORDER

WARRINER, District Judge.

In Paragraph 12 of both the original and the Amended Complaint in this interpleader action, Prudential Insurance Company stated that it promised to pay benefits to the insured’s “heirs at law.” This allegation was undisputed by the other parties.¹ Prudential did not file with the Complaint a copy of the insurance policy or the beneficiary designation form. In its 31 August Memorandum and Order, which stayed the action pending the ruling of the Virginia Supreme Court on Lillian Tull’s Petition for Writ of Error, the Court, in reliance on Paragraph 12, assumed the beneficiaries were the persons who were decedent’s heirs at law and applied Virginia law to determine their identity. Under Virginia law, the Court found that Lillian Tull and the surviving children of Reuben Varn Tull, as his heirs at law, would share in the proceeds of the insurance policy.

The Court’s assumption was based on the belief that the Complaint was drafted with care by knowledgable lawyers who had used the term “heirs at law” advisedly and in accord with its legal significance. Prudential now indicates that its use of the phrase was possibly inadvertent. It has filed a motion to amend the 31 August order. A copy of the insurance policy and the designation of beneficiary form accompany the motion. The designation provides that the proceeds be distributed “by law.” Neither in the policy nor in the designation is there relevant mention of heirs at law. There being no named beneficiary mentioned in the designation, Art. I, § 3 of the policy directs that the proceeds be paid “to the widow.... ” To the same effect is 38 U.S.C. § 770(a).²

Be that as it may, the more serious question now presented is, in light of the Supreme Court’s ruling in Ridgway v. Ridgway, — U.S. —, 102 S.Ct. 49, 70 L.Ed.2d 39 (1981),³ do the provisions of Section 64.1-18 of the Virginia Code have any application in this case?⁴ The parties shall file appropriate briefs on this issue. Petitioner shall file a brief within 10 days of entry of this order. Respondent Committee for Lillian Tull shall file her brief within 10 days of the filing of petitioner’s brief. Respondent children shall file briefs within 10 days of the filing of the Committee’s brief. Petitioner and respondent Committee shall file rebuttal briefs within 3 days of the filing of respondent children’s briefs.

And it is so ORDERED.

1 . It is true that Paragraph 14 of both Complaints mentions the “by law” language but the Court deemed the legal phrase of art to be controlling.

2 . Prudential argues in its Motion to Amend that such disposition is required by the recent United States Supreme Court ruling in Ridgway v. Ridgway, — U.S. —, 102 S.Ct. 49, 70 L.Ed.2d 39 (1981), that federal law controls in a Servicemen’s Group Life Insurance Policy. Prudential could have made an equally effective argument as to disposition by simply and unambiguously alleging the plain provisions of the policy.

3 . Ridgway is a case almost as appealing for a variance from the named beneficiary as this one. Yet the Supreme Court quoted with approval the uncompromising language in Hisquierdo v. Hisquierdo, 439 U.S. 572, 584, 99 S.Ct. 802, 809, 59 L.Ed.2d 1 (1979) with respect to the federal policy that the designation prevail:

It pre-emts all state law that stands in its way. It protects the benefits from legal process ‘[n]otwithstanding any other law ... of any State’ .... It prevents the vagaries of state law from disrupting the national scheme....

4 . The fact that counsel for Committee, even after having her attention called to Ridgway, does not raise the issue herself, suggests the Court misapprehends.