November 28, 2012
State Court Holds Statute Supersedes Insurance Policy
A case in Colorado involves the insurance policy of Jeffrey M. Johnson. Johnson, now deceased, married Laurel M. Christensen in 2001. He soon purchased a life insurance policy and named Christensen as the primary beneficiary with his mother as the contingent beneficiary. From then, Johnson's mother passed away in 2006 and he and his wife divorced in 2008. At the time of his death, Johnson did not have any surviving heirs. The only family member that survived him was his sister, Dawn Wilson, the current personal administrator of his estate. Shortly after Johnson's death, his ex-wife filed a claim to receive the proceeds from the life insurance policy he purchased. The trial court in this case granted summary judgment against his ex-wife claiming that the divorce removed her rights to his policy. The same court also dismissed her claim to try to reform the beneficiary designation form. The court there held that the applicable statute that could have restored her rights, § 15-11-806, was inapplicable.
On appeal in Christensen v. Wilson, the Colorado Court of Appeals affirmed the holding of the trial court concluding that the applicable state statute, § 15-11-804(2), not only removed her rights as the beneficiary of the estate but also superseded her insurance policy that stated that only the owner could modify the rights of a beneficiary. The court further contended that the trial court was correct in holding that § 15-11-806 did not apply for three reasons. First, the statute was not applicable because the statute was enacted after Johnson had died. Second, the court concluded that this decision was correct because once § 15-11-804(2) removed her as a beneficiary, "there was no governing instrument for the court to reform." The last reason that the court offered was that § 15-11-804(2) was the only statute that provided remedies to former spouses. In this case, the court concluded that none of the remedies applied to Christensen.
See In re the Estate of Jeffrey M. Johnson, deceased, Colorado Court of Appeals No. 12CA0191, Nov. 21, 2012.
Special thanks to Patrick Thiessen (Poskus, Caton & Klein, PC) for bringing this article to my attention.
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