Messier v. Metropolitan Life Insurance Co.

NOTICE:  This opinion is subject to motions for reargument under V.R.A.P.
40 as well as formal revision before publication in the Vermont Reports.
Readers are requested to notify the Reporter of Decisions, Vermont Supreme
Court, 111 State Street, Montpelier, Vermont 05602 of any errors in order
that corrections may be made before this opinion goes to press.
 
 
                                No. 87-392
 
 
James Messier and Sylvia Messier             Supreme Court
 
   v.                                        On Appeal from
                                             Franklin Superior Court
Metropolitan Life Insurance Co.
and Cheryl Coutts                            November Term, 1988
 
 
John P. Meaker, J.
 
Valsangiacomo, Detora, McQuesten, Rose and Grearson, Barre, for plaintiffs-
   appellees
 
A. Gregory Rainville of Northern Trial Associates and Michael Rose (On the
   Brief), St. Albans, for defendant-appellant, Cheryl Coutts
 
 
PRESENT:  Allen, C.J., Peck, Gibson, Dooley and Morse, JJ.
 
 
     DOOLEY, J.   Plaintiffs James and Sylvia Messier sued the Metropolitan
Life Insurance Company and Cheryl Coutts to establish their rights as
beneficiaries under a life insurance policy in the name of their deceased
son, Michael.  Cheryl Coutts (defendant), who had been engaged to be married
to the insured, claimed that he made her the beneficiary before his death.
The insurance company brought counter- and cross-claims in interpleader to
request that the court decide between the competing claimants to the policy
proceeds.  Relying on a stipulation of facts that was not signed by
defendant, the superior court granted plaintiffs' motion for summary
judgment.  Defendant appeals, and we reverse and remand for trial.
     Michael Messier (insured) died on November 19, 1985, from injuries
sustained while working for Wyeth Nutritionals, Inc. in Georgia, Vermont.
Wyeth supplied its employees group life insurance through Metropolitan Life
Insurance Company.  The policy provided that an employee could designate a
beneficiary by filing a written notice with the employer, who kept records
of beneficiary designations.  The employee could change his beneficiary at
any time, also by filing a written notice.  On March l, 1984, the insured
designated his parents, the plaintiffs, as his beneficiaries.
     In August, 1984, defendant and the insured began to live together and
planned to be married on November 30, 1985.  An affidavit from a Wyeth
personnel assistant indicates that, two weeks before his death on November
19, 1985, the insured requested information about naming defendant as his
beneficiary.  He was given the necessary cards to fill out, but there is no
direct evidence that he returned the cards to the personnel section.  A
search of his personnel records did not turn up the cards.
       The insured told at least two persons that he had changed the
beneficiary on his life insurance policy.  Other employees witnessed him
filling out the change of beneficiary forms.  The change of beneficiary
forms could not be found among the insured's possessions after his death.
     The court denied plaintiffs' first motion for summary judgment, which
was filed before discovery was completed.  When discovery was substantially
complete, plaintiffs again moved for summary judgment.  The court asked the
parties to submit a stipulation of facts on which the motion could be
decided.   Plaintiffs' counsel submitted a draft stipulation to defendant
and to the court, but defendant never signed it.
     The court subsequently granted summary judgment, stating that the
parties had stipulated to the facts and concluding that defendant had not
shown that the insured substantially complied with the insurer's require-
ments for changing the beneficiary.  The court also concluded that
defendant had failed to establish any equitable claim to the proceeds.  The
present appeal followed.
     The trial court stated that the summary judgment motion had been heard
and decided on the stipulation of the parties.  This statement was incorrect
since the defendant never agreed to the stipulation as drafted by
plaintiffs.  Although defendant argues that this error warrants reversal,
we do not agree.  The stipulation was derived from the discovery that had
been completed.  That discovery is in the record, and the parties fully
expected to obtain a ruling based on that discovery when the court suggested
making up a stipulation.  When we review the grant or denial of a summary
judgment motion, we apply the same standard as that applied in the trial
court.  See Thomas v. Farrell, No. 88-118, slip. op. at 3 (Vt. Oct. 20,
1989).  Thus, if we find  genuine issues of material fact, within the
meaning of V.R.C.P. 56(c), we must reverse the decision granting summary
judgment.  We can perform our review function based on the discovery in the
record and without considering the stipulation.
     Defendant next argues that the evidence offered in response to
plaintiffs' initial showing under V.R.C.P. 56 presented a genuine issue of
material fact.  Our rule on summary judgment is clear:  "summary judgment is
only appropriate when the materials before the court clearly show that there
is no genuine issue as to any material fact."  Morrisville Lumber Co. v.
Okcuoglu, 148 Vt. 180, 182-83, 531 A.2d 887, 888-89 (1987).  In deciding if
there is a genuine issue of material fact, all of the allegations presented
in opposition to summary judgment, if supported by affidavits or other
evidentiary material, are regarded as true.  Pierce v. Riggs, 149 Vt. 136,
139, 540 A.2d 655, 657 (1987).  Further, the party moving for summary
judgment has the burden of proof and the opposing party "must be given the
benefit of all reasonable doubts and inferences in determining whether a
genuine issue exists."  Weisburgh v. Mahady, 147 Vt. 70, 72, 511 A.2d 304,
305 (1986).
     This is essentially an interpleader action based on the request of the
insurance company that the court determine the proper beneficiary.  The
purpose of interpleader is to relieve the stakeholder of "vexatious and
multiple suits."   Walker Process Equip. Co. v. Cooley Building Corp., 129
Vt. 333, 338, 278 A.2d 714, 717 (1971).  Since the company has no interest
in which of the claimants prevail and interpleader is an equitable remedy,
the courts in change-of-beneficiary cases have not required literal
compliance with the terms of the policy to effectuate a change.  See, e.g.,
Capitol Life Ins. Co. v. Porter, 719 S.W.2d 908, 910 (Mo. App. 1986).
Substantial compliance has been deemed sufficient.  See, e.g., Bohannon v.
Manhattan Life Ins. Co., 555 F.2d 1205, 1210 (5th Cir. 1977).  The
philosophy behind this rule is that the right of the insured to change
beneficiaries should be given effect over procedural technicalities.  See
IDS Life Ins. Co. v. Estate of Groshong, 112 Idaho 847, 849, 736 P.2d 1301,
1303 (1987).
     The elements necessary to show substantial compliance have been stated
in various ways.  See Dooley v. James A. Dooley Assoc., 92 Ill. 2d 476, 484,
442 N.E.2d 222, 226 (1982).  The elements involve "a combination of intent
to make the change and positive action towards effecting that end."  Id. at
486, 442 N.E.2d  at 227.  We adopt the rule that a change of beneficiary must
be shown by intent, accompanied by a reasonable effort to change the
beneficiary.  Provident Indem. Life Ins. Co. v. Durbin, 541 F. Supp. 4, 7
(E.D. Pa. 198l); Matter of Schleis' Estate, 97 N.M. 56l, 563, 642 P.2d 164, 166 (1982).
     While this case is close, we conclude that it was not appropriate to
grant summary judgment.  The record clearly contains evidence of the
insured's intent to change the beneficiary to defendant.  We believe that
when we resolve all reasonable doubts and inferences in favor of defendant,
as we must in reviewing the grant of summary judgment, there was sufficient
evidence for the fact-finder to find that the insured made a reasonable
effort to change the beneficiary in this case.  The evidence offered by
defendant that the insured picked up the change-of-beneficiary form, that
employees witnessed him filling out the form and that he told others that he
changed the beneficiary on the policy create a circumstantial-evidence case
that the insured had taken all steps necessary to change the beneficiary or
at least had made a reasonable effort.  Cf. State v. Derouchie, 140 Vt.
437, 444, 440 A.2d 146, 149 (1981) (in evaluating evidence, focus must be on
"quality and strength of the evidence," not whether it is circumstantial or
direct).  In view of defendant's evidence, we cannot give conclusive effect
to plaintiffs' evidence that, after a search, the completed change of
beneficiary form could not be found in the employer's records. (FN1)  At best,
that evidence demonstrates that the insured did not file the form; it shows
nothing about whether he made a reasonable effort to file.
     Reversed and remanded.
 
                                   FOR THE COURT:
 
                                   ____________________________________
                                   Associate Justice
 
 
FN1    The affidavit of the personnel assistant also stated that "to the
best of my knowledge," the insured never returned the change-of-beneficiary
cards to the personnel section.  We do not believe that this statement meets
the requirement that affidavits be based on personal knowledge, rather than
on information and belief.  See V.R.C.P. 56(e); Johnson v. Fisher, 131 Vt.
382, 384, 306 A.2d 696, 697 (1973).