Tennessee

Warning: The following opinion is provided for purposes of discussion only. We have not Shepardized™ this opinion, and do not know the subsequent disposition of this case nor whether the effect of the opinion has been overruled or superceded by other law.

Beverly Fern Bagwell Brooks v. Mildred Beatrice Brooks,
1994.TN.18660 (Tenn.App. 03/03/1994)

COURT OF APPEALS OF TENNESSEE

No. 03A01-9309-CH-00323

1994.TN.18660

March 3, 1994

BEVERLY FERN BAGWELL BROOKS, PLAINTIFF-APPELLANT

v.

MILDRED BEATRICE BROOKS, DEFENDANT-APPELLEE

CHANCERY COURT. KNOX COUNTY. HON. SHARON BELL, CHANCELLOR

Petition for Rehearing Denied March 31, 1994,

Cecil D. Meek, Haynes, Meek, Summer & Ruble, Knoxville for appellant.

Bernard E. Bernstein and Celeste H. Herbert, Bernstein, Stair & McAdams, Knoxville, for appellee.

McMurray, Goddard, Franks

The opinion of the court was delivered by: Mcmurray

McMurray, J.

The appellant is the first wife of the late Dr. Robert T. Brooks. The appellee is the second wife and widow of the late Dr. Robert T. Brooks. When Dr. Brooks and the appellant were divorced, they entered into a property settlement agreement which the court in its final decree incorporated by reference. The agreement provided, among other things, that Dr. Brooks "as security for his periodic alimony obligations, shall be obligated to acquire and maintain, in full force and effect, a life insurance policy or a combination of life insurance policies . . . with a minimum limit of not less than $175,000.00 insuring his life with Wife [appellant here] as beneficiary thereof for and during such period of time as Husband shall have any obligation hereunder to pay periodic alimony to Wife." At the time of his death, Dr. Brooks had in force a policy of insurance under which the appellant was the beneficiary to the extent of $150,000.00. She was paid that amount. Subsequently she brought this action against the appellee individually and as executrix of the estate of Dr. Brooks and the estate of Dr. Brooks. At the Conclusion of a bench trial the trial court dismissed the appellee individually and as executrix of the estate of Dr. Brooks. The court found that the appellant was entitled to recover Twenty-Five Thousand Dollars ($25,000.00) from the estate of Dr. Brooks. *fn1 We affirm the judgment of the trial court.

We are called upon to determine if the appellee, who received substantial monies as a beneficiary under one or more life insurance policies on the life of Dr. Brooks, is individually liable for the $25,000.00 deficiency in the proceeds of insurance which the appellant should have received if Dr. Brooks had met his obligations under the divorce decree. The chancellor was of the opinion that since no policy was in force at the time the divorce decree was entered, the appellant had no vested right in any particular policy and, therefore, had no legitimate claim against the proceeds of policies where the appellee was the beneficiary.

The appellant relies upon the cases of Goodrich v. Massachusetts Mutual Life Insurance Co., 34 Tenn. App. 516, 240 S.W.2d 263 (1951), James v. Williams, 169 Tenn 41, 82 S.W.2d 541 (1935), and Herrington v. Boatright, 633 S.W.2d 781 (Tenn. App. 1981) as authority to the contrary. We are of the opinion that appellant's reliance on these cases is misplaced.

James, supra, is cited for the proposition that those in privity have no greater rights than the deceased while living; the privies stand in the "shoes" of the deceased. In James, the heirs at law of the deceased sought to set aside an adoption decree wherein James, the deceased, had adopted a child. James had no other children and was unmarried, therefore, his entire estate devolved upon the adopted child. The heirs at law sought to set aside the adoption proceedings. The court held that James would have been estopped to challenge the adoption proceedings and the complainants were in privity with him and possessed no greater right than he [James] had while living. While we have no quarrel with the proposition of law advanced in James, we find it to be inapplicable to this case. On the other hand, Goodrich and Herrington are asserted as authority that the appellant can maintain an action for the deficiency. In both cases, however, an insurance policy was in force and effect when a divorce decree was granted. In Goodrich, the husband was required "to pay premiums upon and keep in force a certain policy of insurance on his life . . . and to keep said insurance in force" in favor of his wife. Mr. Goodrich subsequently remarried. The beneficiary of the policy was changed by Mr. Goodrich to make his son the beneficiary. The former wife brought suit against the insurance company to recover the proceeds of the policy. She prevailed. The court's reasoning was that "we think the legal consequences of the decree was to give [the plaintiff] a vested interest in the proceeds of the policy, subject to be divested only by a rightful change of the beneficiary by the insured, and this could be done only in the event the wife should remarry."

In Herrington, a property settlement agreement was also approved by the court. The agreement provided among other things the following:

(5) Insurance: Husband shall keep his life insurance in effect and shall keep Wife as the beneficiary so long as they are married or if they should divorce, so long as she is not married.

At the time of the property settlement agreement, the husband had several insurance policies. Shortly before his death, however, the husband changed the beneficiaries of his policies. The court citing Goodrich, supra, resolved the issue in favor of the wife. The court stated that "where the right to change the beneficiary has been reserved to the insured, the beneficiary named in the policy has a mere expectancy and has no vested right or interest in the policy. However, where a divorce decree requires the husband to keep a life insurance policy in effect and denies him the right to change the beneficiary, then the wife as the named beneficiary has a vested interest in the policy." . . . . "The defendant argues that the property settlement agreement is vague and unenforceable because it does not refer to specific policies of insurance. This argument is totally defective because the normal meaning of the words 'shall keep his life insurance in effect' pertains to all his life insurance in effect at that time (emphasis added). . ."

We are of the opinion that where, as here, no policy of insurance was in effect at the time of the divorce decree, the wife acquired no vested interest. Thus this case does not fall within the rules laid down in Goodrich and Herrington.

It is clear that under the facts of this case, the appellant is simply a creditor of the estate of Dr. Brooks. He breached his contract with her and violated the court's decree when he failed to acquire and maintain the proper amount of life insurance to which the appellant would be entitled by virtue of the agreement and court decree.

The proceeds of life insurance are not subject to claims of creditors. See T.C.A. § 56-7-203. See Also Overman v. Overman, 570 S.W.2d 857 (Tenn. 1978).

We are of the opinion that in order to prevail, the appellant would be required to establish that the proceeds received by the appellee were received and are held in some form of constructive trust. The requirements of a constructive trust are as follows:

A constructive trust is one that arises contrary to intention and in invitum, against one who by fraud, actual or constructive, by duress or abuse of confidence, by commission of wrong, or by any form of unconscionable conduct, artifice, concealment, or questionable means, or who in any way against equity and good conscience, either has obtained or holds the legal title to property which he ought not, in equity and good conscience hold and enjoy. Sanders v. Forcum-Lannom, Inc., 225 Tenn. 637, 475 S.W.2d 172 (1972); Livesay v. Keaton. 611 S.W.2d 581 (Tenn. App. 1980).

There is nothing in the record which would justify the courts in finding a constructive trust, resulting trust or any other form of trust. We also note that the record does not support a finding of any fraudulent transfer as argued by the appellant. Further there is insufficient evidence to support a finding that the appellee procured any change of beneficiary.

Additionally, we note that before his death, Dr. Brooks was subject to an action for contempt of court for failure to procure and maintain the life insurance required by the property settlement agreement and court decree. Dr. Brooks and the appellant were back in court at least twice after the property settlement agreement was approved. No issues were made, as far as we can determine, over the lack of appropriate insurance policies being in force with the appellant as the beneficiary.

We concur with the Conclusions of the trial Judge that since no policy was in effect at the time of the property settlement agreement, no rights to the proceeds of any particular policy vested in the appellant.

We affirm the judgment of the trial court. Costs are assessed to the appellant and this case is remanded to the trial court.

Don T. McMurray, J.

CONCUR:

Houston M. Goddard, P.J. (E.S.)

Herschel P. Franks, J.

Opinion Footnotes

*fn1 An appropriate claim had been filed in the probate court.

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