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Mcwhite v. Equitable Life Assur. Society

OPINION FILED FEBRUARY 6, 1986.

MYRNA E. MCWHITE, GUARDIAN OF THE ESTATE OF SIDNEY MCWHITE, III, A MINOR, PLAINTIFF-APPELLANT,

v.

THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES ET AL., DEFENDANTS (HELEN MCWHITE, DEFENDANT-APPELLEE).



Appeal from the Circuit Court of Cook County; the Hon. David J. Shields, Judge, presiding.

PRESIDING JUSTICE LINN DELIVERED THE OPINION OF THE COURT:

Rehearing denied April 3, 1986.

Plaintiff brought this action on behalf of her minor son to have the proceeds of certain group life insurance policies on the life of her son's father, now deceased, paid to her for the benefit of the minor rather than to defendant, the father's second wife. Pursuant to a motion made by defendant, the trial court ordered distribution of the insurance proceeds and the interest earned thereon in accordance with a settlement agreement between the parties, providing plaintiff with $170,000 of the proceeds in question, and allocating $50,000 of the proceeds to the defendant.

On appeal, plaintiff contends that the minor son is entitled to all of the proceeds of the policies in question. Plaintiff asserts that the trial court erred when it granted defendant's motion for judgment in accordance with the settlement agreement because: (1) the settlement agreement was not legally enforceable since it was never encompassed and approved in an order signed by the trial court; (2) this court's decision in In re Schwass (1984), 126 Ill. App.3d 512, 467 N.E.2d 957, is grounds for repudiating the settlement agreement; (3) the terms of the divorce judgment establish that the minor son has a superior equitable right in the entire proceeds over the claimed rights of the second wife; and (4) the trial court failed in its duty to protect the rights and interests of the minor son.

We affirm the decision of the trial court.

BACKGROUND

Plaintiff, Myrna McWhite (Myrna), is the first wife of Sidney McWhite, Jr. (Sidney), now deceased. One child, Sidney McWhite III (Sidney III), presently a minor, was born to Myrna and Sidney. On June 9, 1978, Myrna and Sidney were divorced by a judgment of dissolution of marriage entered in the divorce division of the circuit court of Cook County. The portion of the judgment of dissolution relevant to this appeal decreed as follows:

"Insurance:

(b) The husband shall name the minor child of the parties as the irrevocable beneficiary in any and all life insurance policies maintained by his employer until said child reaches his majority or completes his college education, whichever event first occurs. * * *"

At the time of the dissolution of Myrna's and Sidney's marriage, Sidney's employer, Graver Industries (Graver), maintained for the benefit of Sidney $40,000 of group life insurance coverage. In addition, Sidney voluntarily purchased an additional $40,000 of group life insurance coverage the premium for which was paid for through Sidney's payroll deductions. In September 1978, some three months following the McWhite divorce, certain changes took place in the insurance plan offered to Graver employees. Consequently, Sidney purchased through Graver two additional life insurance policies, one for $20,000 of basic life coverage and another for $200,000 of accidental death coverage.

Two years later, in December 1980, Sidney married his second wife, defendant Helen McWhite (Helen). The following January, Sidney executed a change of beneficiary form to include Helen as cobeneficiary of his life insurance policies along with Sidney III. On July 16, 1982, Sidney died. His death was determined to be the result of an accident as defined within the meaning of the insurance policies which are the subject of this cause of action.

After Sidney's death, both Myrna, as guardian of the estate of Sidney III, and Helen claimed rights to the insurance proceeds. With leave of court, the insurance companies providing Sidney's coverage deposited the proceeds of the policies with the clerk of the court. On May 10, 1984, pursuant to a motion filed by Myrna's attorney, the trial court entered an order granting summary judgment for $80,000 in favor of Myrna, as guardian of the estate of Sidney III. The $80,000 summary judgment represented the amount of insurance in existence at the time that the judgment of dissolution of Myrna's and Sidney's marriage was entered by the circuit court. The proceeds remaining in dispute total $220,000, and represent the two after-acquired insurance policies not in existence at the time of the judgment of dissolution. The $80,000 summary judgment of May 10, 1984, is not before this court as part of this appeal.

A trial was set for September 12, 1984, in order to determine the respective rights of Sidney III and Helen in the proceeds of the two after-acquired policies. On that date, the parties, guided by the trial court, engaged in lengthy settlement negotiations. The parties agreed that Sidney III would receive $170,000 of the proceeds and that Helen would receive $50,000 of the proceeds. The agreement was orally approved by the trial court, who instructed the attorney representing Sidney III's interests (Myrna's attorney) to prepare an order embodying the terms of the settlement agreement. Because the hour was late, the matter was continued for the purpose of preparing such an order.

The written order was prepared by counsel for Myrna as directed by the trial court and on September 21, 1984, Helen's attorney confirmed the accuracy of the order when it was read to him over the telephone. Subsequently, Myrna's counsel brought the order to court to obtain the trial judge's signature. However, at that time the trial judge was tending to other matters on his docket and could not sign the order. Consequently, Myrna's attorney returned to her office with the unsigned order. Counsel for Myrna alleges that it was then that she discovered this court's decision in In re Schwass (1984), 126 Ill. App.3d 512, 467 N.E.2d 957, which she asserts is grounds for repudiating the September 12, 1984, settlement agreement entered into by the parties and orally approved by the trial court.

Myrna's counsel thereupon filed a motion urging the trial court to "re-examine" the settlement agreement in light of the Schwass decision and the trial court's duty to protect the rights and interests of Sidney III, a minor. Helen's counsel subsequently filed a motion for judgment in accordance with the settlement agreement arguing that the settlement agreement should not be set aside merely because of Myrna's misapprehension of the existing law.

The trial court conducted hearings on the parties' respective motions on October 12, 1984, and November 5, 1984. On the November 5 date, the trial court denied Myrna's motion for summary judgment and granted Helen's motion for judgment in accordance with the settlement agreement. On November 28, 1984, the trial court entered its written order distributing the $220,000 worth of insurance proceeds pursuant to the terms of the September 12, 1984, settlement agreement: $170,000 of the proceeds plus the interest earned thereon to Myrna, as guardian of the estate of Sidney III; and $50,000 of the proceeds plus the interest earned thereon to Helen, Sidney's second wife.

For the reasons noted, Myrna, as guardian of the estate of Sidney III, now appeals the trial court's order of November 28, 1984, contending that Sidney III is solely entitled to all of the ...


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