North Carolina Lawyers Weekly
In arguing a husband had surrendered any right to his deceased wife’s insurance, plaintiff’s attorneys in Estate of Jenkins v. Jenkins distinguished a line of prior North Carolina rulings. Those cases held a separation agreement did not waive a named beneficiary’s right to take under an insurance or pension plan. A failure to change the named beneficiary, the rulings said, showed an intent to leave the policies intact.
Other cases were found to support the argument that implied intent could overcome an express agreement.
Following are the cases Durham attorneys Dan Johnson and Bill King said they cited in their trial court brief:
Distinguished Cases
Zachary v. Security Life and Trust, 4 N.C. App. 21, 166 S.E.2d 495 (1969). “The Zachary case contains a set of facts, and conflicting provisions in the separation agreement, from which the wife was properly held to retain her interests in the life insurance policy,’ Johnson said. He also said there seemed to be a clear intent to give the wife the insurance because the husband had actually handed the policy to her when they separated.
Imperial Tobacco Group Ltd. v. Peoples Bank, 7 N.C. App. 202, 171 S.E. 2d 807 (1970). The Imperial Tobacco court said a wife was entitled to her husband’s pension plan that named her as beneficiary despite a signed separation agreement. The court said, ‘[N]othing in the record indicates [the husband] desired to relieve petitioner of the obligation of paying his wife the widow’s pension provided for in his pension plan….”
Johnson noted that in Imperial, the husband and wife were separated seven years but never divorced prior to the husband’s death.
“In our case, the parties had been separated less than 30 days,’ he said.
DeVane v. Travelers Insurance, 8 N.C. App. 247, 174 S.E.2d 146 (1970). In Devane, a separation agreement did not expressly refer to a group life insurance policy. The husband remarried and named his second wife as beneficiary of profit sharing and medical insurance benefits, but left his first wife’s name on the group life plan.
Finding the husband’s actions indicated he did not desire to change the group life plan, the DeVane court said: ‘As the separation agreement furnishes no clear expression of the intention to the contrary, we are of the opinion that … ‘his failure to exercise it would indicate that he did not wish to effect such a change….”‘
Johnson argued Zachary, DeVane, and Imperial Tobacco did not hold that insurance policies must be listed in order to be waived by the separation agreement. Still, they represented a hurdle, he said.
“These decisions said that without a clear intent from the parties that a spouse was deprived of the rights, a separation agreement would not be read to bar the right to the life insurance. In our case, we had and were able to show that clear intent.”
Johnson also said those cases actually gave indirect support to his argument.
“Each of those cases said the failure to change a beneficiary ordinarily indicates that no change is desired,’ he said. ‘However, those decisions also said that each case must be decided on its own facts.
Supporting Position
Lane v. Scarborough, 284 N.C. 407, 200 S.E.2d 662 (1973). This was cited as the leading case in interpreting the intent of the parties and the doctrine of implication of unexpressed terms in separations agreements. In concluding that a surviving wife had released her distributive share in her husband’s estate, the Lane court said that a prior separation agreement encompassed “not only its express provisions but also all such implied provisions as are necessary to effect the intention of the parties….” The Lane court also said the surrounding circumstances had to be considered.
Sloop v. Sloop, 24 N.C. App. 295, 210 S.E.2d 262 (1974). Sloop followed Lane and held that a surviving widow had implicitly surrendered her right to dissent from her husband’s will in a separation agreement.
Hartman v. Hartman, 80 N.C. App. 452, 343 S.E. 2d 11 (1986). In Hartman, a husband who had executed a separation agreement similar to the one in Jenkins sued for an unequal division of the real estate under the state’s equitable distribution statute. The real estate was not specifically mentioned in the agreement, but the court found that the separation agreement was intended as a full and final settlement.
“These cases say rights or waivers not set out could be waived by implication,’ Johnson said. ‘We really had to push those cases, in both the summary judgment motion and when it came time to instruct the jury. The court was receptive to our arguments on them.”
