Life Insurance Company Of North America, Inc. v. Ortiz Et Al.

535 F.3d 990 (9th Cir. 2008)

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Nature of the Case

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Facts

On August 2, 1998, Luis (H) designated his wife, Gloria Ortiz (W), as the beneficiary of his life insurance policies. H and W separated in March 2002. They were divorced on December 15, 2004. The judgment also included a pre-printed notice indicating that '[i]t does not automatically cancel the rights of a spouse as beneficiary on the other spouse's life insurance policy.' In February of 2005, H's divorce attorney sent an exit letter advising him to 'reaffirm and/or change any beneficiaries on any . . . insurance policies.' The attorney also asked him to change the beneficiaries of his life insurance policies immediately. H did not attempt to change the written beneficiary designations. H married Graciela Ortiz (W2) on May 28, 2005. H did not work May 28-31 because of the marriage and the honeymoon. On June 24, 2005, H died as a result of a gunshot wound to the head while on duty. The term life insurance payment that funded H's coverage at the time of death was withdrawn from his May paycheck. The life insurance companies deposited life insurance and accidental death benefits totaling $518,483.13 with the clerk of the court. Ps instituted an interpleader action naming W and W2 as defendants. The court found that the life insurance policies became H's separate property and that H expressed an intent to name W2 as his beneficiary, but he died intestate before he could make that change. The judge awarded the proceeds of the policies to the estate to be split equally between W2 and H's two sons. This appeal resulted.