Appeal from the Circuit Court of Cook County; the Hon. Joseph
Wosik, Judge, presiding.
JUSTICE MCNAMARA DELIVERED THE OPINION OF THE COURT:
Rehearing denied August 29, 1984.
Plaintiffs, Matthew Schwass and Pamela Schwass, by and through their guardian and next friend, Vicki Postillion, brought this action seeking the imposition of a constructive trust upon life insurance proceeds paid on the life of Charles Schwass to defendant Nancy Schwass. On cross motions for summary judgments, the trial court entered judgment in favor of plaintiffs. Defendant appeals.
Charles Schwass and Vicki Schwass, now Vicki Postillion, were married in 1962 and divorced in 1971. Two children, the plaintiffs, were born of this marriage: Matthew, born May 18, 1964, and Pamela, born March 30, 1966.
At the time of their divorce, Charles and Vicki entered a marital settlement agreement which was incorporated into their judgment for divorce. Paragraph 6 of that agreement provides in pertinent part:
"That the said minor children be named as co-equal irrevocable beneficiaries on all existing policies in existence as of September 1, 1971 on the life of Defendant and shall remain in force as such during the minority of said children. * * *"
At the time of the divorce and until his death, Charles was employed by Commonwealth Edison Company and was covered under two group life insurance policies. At the time of the divorce, the amount of an insurance policy carried with Aetna Life Insurance Company was $24,000 and the amount of a policy carried with Travelers Insurance Company was $2,000. At the time of Charles' death, the Travelers coverage had increased to $5,000, while the Aetna policy had been replaced by a different Aetna group policy, the benefit of which had increased to $63,000.
Charles and defendant were married in 1978. In 1979, they purchased a home in joint tenancy. Charles died on June 9, 1982. At that time Pamela was under the age of 18. After Charles died, Vicki learned that defendant was the named beneficiary on the life insurance policies and had received the insurance proceeds.
The trial court found that pursuant to the marital settlement agreement, both Matthew and Pamela were entitled to a constructive trust on the total amount of proceeds from both policies received by defendant. On appeal, defendant contends that her equitable right to the insurance proceeds is superior to any equitable right plaintiffs have; that Matthew does not have an equitable interest in the proceeds upon which a constructive trust may be imposed; and that Pamela's equitable interest in the proceeds is limited to the policies and amounts in force at the time of the judgment of divorce.
Defendant initially contends that she has a superior equitable right to the insurance proceeds. She points to the facts that she had no knowledge of the terms of the divorce, that when she and Charles purchased a home securing a substantial mortgage she did not obtain additional insurance coverage because Charles told her she was the beneficiary on his life insurance policies, that her income is insufficient to make the mortgage payments, and that she had to pay various bills as a result of his death.
• 1, 2 When marital settlement agreements require an insured to maintain life insurance for the benefit of a particular beneficiary, that beneficiary has an enforceable equitable right to the proceeds of the insurance policies against any other named beneficiary except one with a superior equitable right. (Appelman v. Appelman (1980), 87 Ill. App.3d 749, 410 N.E.2d 199; Lincoln National Life Insurance Co. v. Watson (1979), 71 Ill. App.3d 900, 390 N.E.2d 506.) In Brunnenmeyer v. Massachusetts Mutual Life Insurance Co. (1978), 66 Ill. App.3d 315, 384 N.E.2d 446, the insured's second wife, the named beneficiary on the life insurance policies, claimed a superior equitable right to the proceeds because the insured had been ill for a long time, had required costly care, and was destitute at the time of his death. The second wife also showed that she had limited financial resources, that there were outstanding bills, and that the children had other resources available to them. The Brunnenmeyer court found that these equitable considerations were insufficient to state a right to the proceeds which was superior to the rights of the children as set forth in the marital agreement. Similarly in the present case, the reasons stated by defendant, which are not as compelling as those rejected in Brunnenmeyer, fail to state a superior equitable right to the insurance proceeds.
Defendant also contends that the trial court erred in finding that Matthew, who had attained his majority before Charles' death, has an equitable interest in the insurance proceeds.
Both parties agree that this issue turns on the interpretation of paragraph 6 of the marital settlement agreement which required decedent to designate his minor children as co-equal irrevocable beneficiaries of the policies. Defendant argues that the decedent was required to name Matthew as a beneficiary during his minority, while plaintiffs contend that decedent was obligated to designate both children as beneficiaries until Pamela reached her majority.
To determine the intent of the parties as expressed by the language of the contract, the contract should be considered as a whole, and none of the language should be rejected as surplusage. (White v. White (1978), 62 Ill. App.3d 375, 378 N.E.2d 1255.) Here, the words "minor children" are used in paragraph 6 and throughout the divorce judgment and incorporated agreement. Since both children were minors at the time of the agreement, the word "minor" was not necessary to modify "children" if it was being used simply to identify the children of the parties. Thus, we agree with defendant that the use of the words ...