Present: All the Justices
JOSEPHINE A. ABBOTT, ET AL.
OPINION BY JUSTICE LEROY R. HASSELL, SR.
v. Record No. 960984 January 10, 1997
KATHLEEN E. WILLEY, ET AL.
FROM THE CIRCUIT COURT OF CHESTERFIELD COUNTY
Timothy J. Hauler, Judge
The primary issue that we consider in this appeal is
whether Code § 64.1-193 permits a person to disclaim an
interest in the proceeds of a life insurance policy to the
detriment of her creditors.
Anthony V. Lanasa and Josephine A. Abbott filed their
bill of complaint against Kathleen E. Willey, J. Patrick
Willey, and Shannon J. Willey. The plaintiffs alleged the
following. Patrick Willey and Shannon Willey are the
children of Kathleen Willey and her deceased husband, Edward
E. Willey, Jr. Plaintiffs recovered a judgment in the sum
of $274,495.22 plus interest and costs against Kathleen
Willey based upon a note she had executed with her husband.
Edward Willey, Jr. died shortly after the note was executed
*
in November 1993.
A life insurance company had issued a life insurance
policy on the life of Edward E. Willey, Jr., and Kathleen
Willey was entitled to receive $350,845.92 plus interest
from the date of his death. Patrick and Shannon Willey were
entitled to receive an equal sum from the life insurance
*
This judgment was the subject of a prior appeal to
this Court, Lanasa v. Willey, 251 Va. 231, 467 S.E.2d 786
(1996).
policy.
According to the plaintiffs' allegations, Kathleen
Willey, "without consideration, fraudulently and
voluntarily, with intent to hinder, delay, and defraud the
[p]laintiffs, disclaimed the benefits due to her under the
life insurance policy. Upon disclaiming her death benefit
proceeds, the [d]efendant Kathleen Willey became insolvent."
Kathleen Willey's children received the death benefits and
used those funds to support their mother.
The plaintiffs asserted that Kathleen Willey's
disclaimer constituted a fraudulent transfer or conveyance
under Code § 55-80 and a void voluntary conveyance under
Code § 55-81. The plaintiffs also contended that Patrick
and Shannon Willey, with fraudulent intent, received funds
in the amount of $274,495.22 as a result of Kathleen
Willey's disclaimer, and that they have been unjustly
enriched and, therefore, hold these funds constructively for
the benefit of the plaintiffs.
The defendants filed a demurrer, asserting, inter alia,
that Kathleen Willey had an absolute right to disclaim the
proceeds of the life insurance policy. The defendants also
asserted that the plaintiffs' unjust enrichment claim is
barred by Code § 38.2-3122. The trial court sustained the
defendants' demurrer and entered judgment in their favor.
We awarded the plaintiffs an appeal.
Code § 64.1-191 states in relevant part that a
"beneficiary under a nontestamentary instrument . . . may
disclaim in whole or in part the succession to any property,
real or personal, or interest therein." Code § 64.1-192
prescribes the method of delivering or filing a disclaimer
under a nontestamentary instrument. Code § 64.1-193, which
governs our resolution of this appeal, states:
"Unless otherwise provided in the
nontestamentary instrument, the property or part
thereof or interest therein disclaimed and any
future interest which is to take effect in
possession or enjoyment at or after the
termination of the interest disclaimed shall be
distributed as if the disclaimant had died before
the effective date of the nontestamentary
instrument. The disclaimer shall relate back for
all purposes to the effective date of the
instrument. A person who has a present and a
future interest in property and disclaims his
present interest in whole or in part, shall be
deemed to have disclaimed his future interest to
the same extent if such disclaimer of a present
interest would cause the future interest to become
a present interest."
The plaintiffs contend that Kathleen Willey had no
absolute right to disclaim the insurance policy proceeds and
that such disclaimer was void because she made a voluntary
or fraudulent conveyance. The defendants respond that Code
§ 64.1-193 confers upon Kathleen Willey an absolute right to
disclaim any interest she might have in a nontestamentary
instrument. The defendants also assert that Kathleen
Willey's disclaimer relates back to the effective date of
the insurance policy and, therefore, she had no vested
interest in the life insurance proceeds at the time she
exercised her right to disclaim them and, thus, she was
incapable of making a fraudulent or involuntary transfer of
property.
We have repeatedly articulated principles of statutory
construction that we must apply when a statute, such as Code
§ 64.1-193, is clear and unambiguous:
"While in the construction of statutes the
constant endeavor of the courts is to ascertain
and give effect to the intention of the
legislature, that intention must be gathered from
the words used, unless a literal construction
would involve a manifest absurdity. Where the
legislature has used words of a plain and definite
import, the courts cannot put upon them a
construction which amounts to holding the
legislature did not mean what it has actually
expressed."
Barr v. Town & Country Properties, 240 Va. 292, 295, 396
S.E.2d 672, 674 (1990) (quoting Watkins v. Hall, 161 Va.
924, 930, 172 S.E. 445, 447 (1934)). Accord Conner v. Rose,
252 Va. 57, 58, 471 S.E.2d 478, 479 (1996).
Applying the plain language contained in Code § 64.1-
193, we conclude that once Kathleen Willey disclaimed her
interest in the insurance proceeds, those proceeds were
required to be distributed to Patrick and Shannon Willey as
if Kathleen Willey had died before the effective date of the
insurance policy. Code § 64.1-193 makes it perfectly clear
that the disclaimer relates back "for all purposes" to the
effective date of the life insurance policy. The plaintiffs
and defendants agree that the effective date of the
insurance policy precedes the events that gave rise to the
plaintiffs' purported cause of action against the
defendants.
Code § 64.1-193 does not contain an exception which
permits creditors to contest a disclaimer on the basis of a
fraudulent or voluntary conveyance, and we decline the
plaintiffs' invitation to add such an exception to the
statute. Therefore, we hold that Kathleen Willey had an
absolute right under Code § 64.1-191 to disclaim any
interest she may have had in the insurance policy, and as a
result of such disclaimer, she acquired no interest in the
insurance proceeds because the disclaimer related back to
the effective date of the insurance policy.
We find no merit in the plaintiffs' contention that the
trial court erred by holding that their claim for unjust
enrichment against Patrick and Shannon Willey is barred.
Code § 38.2-3122 states in relevant part:
"The assignee or lawful beneficiary of an
insurance policy shall be entitled to its proceeds
against any claims of the creditors or
representatives of the insured or the person
effecting the policy, except in cases of transfer
with intent to defraud creditors. . . ."
Here, Kathleen Willey's disclaimer related back "for all
purposes" to the effective date of the insurance policy and,
thus, she acquired no property interest which could be
transferred.
In view of our holdings, we need not consider the
plaintiffs' remaining arguments. Accordingly, we will
affirm the judgment of the trial court.
Affirmed.