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Reliance Standard Life Insurance Co. v. Magli-Grant

August 20, 2007

RELIANCE STANDARD LIFE INSURANCE COMPANY, PLAINTIFF,
v.
ANDREA MAGLI-GRANT AND DANIELLE TODD AND CHRISTOPHER TODD AND CELESTE TODD-WELLS, IN HER CAPACITY AS MOTHER, NATURAL GUARDIAN AND TRUSTEE OF THE ESTATE OF BRANDON TODD, A MINOR, DEFENDANTS.



The opinion of the court was delivered by: Elaine E. Bucklo United States District Judge

MEMORANDUM OPINION AND ORDER

Plaintiff Reliance Standard Life Insurance Company ("Reliance") brings this interpleader action to determine the proper beneficiary of a policy it issued covering the life of David Todd ("David"). Reliance has receiving competing claims regarding the benefits from Andrea Magli-Grant, David's fiancé at his time of death, Danielle and Christopher Todd, David's adult-age children, and Celeste Todd-Wells, the ex-wife of the deceased in her capacity as mother, natural guardian and Trustee of the Estate of Brandon Todd, David's minor son. The benefits dispute among the parties is based upon conflicting interpretations of a Marital Settlement Agreement ("Agreement") which governs certain aspects of David and Celeste's 2003 divorce. By agreement, the parties have moved for summary judgment. Magli-Grant has moved for summary judgment on the ground that she has a claim superior to David's children.

Brandon, through his guardian and Trustee of his estate, has also filed for summary judgment, arguing he has a claim superior to Magli-Grant. David's remaining children have adopted the arguments in Brandon's motion. For the following reasons, summary judgment is granted in favor of the children.

I.

The following facts are undisputed. On March 17, 2003, a Judgment for Dissolution of Marriage was entered in the Circuit Court of Cook County, Illinois terminating the marriage of David and Celeste. During their marriage, they had three children: Christopher (d.o.b. January 20, 1985), Danielle (d.o.b. March 26, 1987) and Brandon (d.o.b. October 31, 1991). The Judgment specifically incorporated the Agreement.

The provision of the Agreement at issue in this case is Paragraph 10.A, entitled "Life Insurance Coverage." It provides

The husband further covenants and agrees that he shall keep and maintain the term policy of life insurance with a face value of $300,000.00, current in full force and effect, and the term policy of insurance with a face value of $150,000.00 currently proffered to him through his place of employment, by paying the premiums thereon as the same shall fall due and by doing any and all other acts and things necessary or expedient to that end. The husband represents that within thirty (30) days from the entry of a Judgment for Dissolution of Marriage, he shall execute and deliver to the life insurance carriers, the usual and customary documents used by them to designate the children of the parties hereto as irrevocable beneficiaries, share and share alike, of the total death benefits of such life insurance and that the wife shall be designated as "Trustee" for the children of the parties. At such time as the youngest child attains the age of majority, is emancipated, or completes his college or university education, whichever shall be the last to occur, husband shall be entitled to alter the beneficiary designation under said policy or policies of life insurance to the person or persons of his choosing.

The husband further covenants and agrees that he shall provide, within thirty (30) days of the entry of as Judgment for Dissolution of Marriage, the wife with a duplicate copy of copies of the policy or policies of life insurance. Husband further represents and warrants that there are no existing liens or encumbrances upon said policy or policies of life insurance. Consistent therewith, the husband further convenience and agrees that he shall not in the future borrow against, pledge, hypothecate or convert the face value of said life insurance until his obligation to maintain such life insurance no longer exists. (Compl. Exh. D.) At the time the Judgment of Dissolution became final, David was employed by American Hotel Register through which he had group life insurance with a face value of $150,000. The group life policies (policy numbers GL 135439 and GL 135440) were provided by Reliance and allowed David to convert the coverage to an individual policy. Under the group life policies, [a]n Insured can use this privilege when his/her insurance is no longer in force. It has several parts. They are:

A. If the insurance ceases due to termination of employment or membership in any of this Policy's classes, an individual Life Insurance Policy may be issued. The Insured is entitled to a policy without disability or supplemental benefits. A written application for the policy must be made by the Insured within thirty-one (31) days after he/she terminates. The first premium must also be paid within that time. (Compl. at Exh. B and C.)

On March 31, 2006, David was terminated from his employment at American Hotel Register. Shortly thereafter, David submitted a "Group Life Conversion Application" ("the Conversion Application") to American Hotel Register. This provides

This form is to be used only when an eligible person desires to convert his Group Life Insurance to an individual policy. This form must be completed in full and submitted to the Company within 31 days following the effective date of termination of insurance. . . . You may wish to refer to your policy's Schedule of Benefits page to complete some of the questions on this application. (Compl. Exh. E.) The Conversion Application describes the insurance amount as "Basic $50K Supp $125" for a total of $175,000. (Id.) David named Magli-Grant as the primary beneficiary and Celeste as the contingent beneficiary. On April 26, 2006, Reliance acknowledged receipt of the application. (Compl. at Exh. F.) David passed away on May 22, 2006; Brandon was fourteen years-old. David and Magli-Grant were never married.

II.

Summary judgment is appropriate where the record shows that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Buie v. Quad/Graphics, Inc., 366 ...


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