Terry v. LaGrois

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206 2 Terry, et al. v. LaGrois, et al. No. 02-1969
ELECTRONIC CITATION: 2004 FED App. 0004P (6th Cir.)
File Name: 04a0004p.06 Before: GUY and GILMAN, Circuit Judges; REEVES,
District Judge.*
UNITED STATES COURT OF APPEALS _________________
FOR THE SIXTH CIRCUIT COUNSEL
_________________
ARGUED: Randy J. Wallace, OLSMAN, MUELLER &
CORA JEAN TERRY , X JAMES, Berkley, Michigan, for Appellants. Paul M.
Stoychoff, RUSSELL & STOYCHOFF, Troy, Michigan, for
Plaintiff-Appellee, - Appellees. ON BRIEF: Jules B. Olsman, OLSMAN,
-
- No. 02-1969 MUELLER & JAMES, Berkley, Michigan, for Appellants.
METROPOLITAN LIFE - Paul M. Stoychoff, RUSSELL & STOYCHOFF, Troy,
INSURANCE COMPANY , > Michigan, for Appellees.
,
Defendant-Appellee, -
_________________
Third Party Plaintiff, -
- OPINION
v. - _________________
-
- RONALD LEE GILMAN, Circuit Judge. This case arises
DAVID M. LA GROIS ,
- out of a dispute over the proceeds of a group life insurance
CHRISTOPHER J. GAMBLE , and - policy. Earline Lynn Gamble, a United States Postal Service
DANIEL R. GAMBLE , - employee, was insured under the Federal Employees Group
Third Party - Life Insurance Act (FEGLIA). She presumably intended to
Defendants-Appellants. - designate her sister, Cora Terry, as the sole beneficiary of the
- policy, but Gamble signed the designation-of-beneficiary
N form with only her first name, failed to date the form, and
Appeal from the United States District Court neglected to check a box acknowledging that she had signed
for the Eastern District of Michigan at Detroit. in the presence of the two witnesses. When Gamble died,
No. 01-71780—Lawrence P. Zatkoff, Chief District Judge. Terry and Gamble’s three sons filed competing claims for the
life insurance proceeds. The sons argued that Gamble’s
Argued: December 3, 2003 designation of Terry as the sole beneficiary was defective,
resulting in the sons becoming the proper beneficiaries under
Decided and Filed: January 7, 2004 FEGLIA’s default provisions. On cross-motions for summary
judgment, the district court ruled in favor of Terry. For the

*
The Honorable Danny C. Reeves, United States District Judge for
the Eastern District of Kentucky, sitting by designation.

1
No. 02-1969 Terry, et al. v. LaGrois, et al. 3 4 Terry, et al. v. LaGrois, et al. No. 02-1969

reasons set forth below, we AFFIRM the judgment of the raised the possibility of multiple liability for MetLife, the
district court. company offered to interplead the insurance proceeds and
brought a cross-claim against Gamble’s three sons. MetLife
I. BACKGROUND argued that because Gamble had signed the designation-of-
beneficiary form with only her first name, rather than her full
The United States Postal Service made available to Gamble name, it was “unable to determine the proper beneficiary to
a group life insurance policy pursuant to FEGLIA, 5 U.S.C. receive the life insurance benefits.” The company thus asked
§§ 8701-8716. Gamble applied for the policy, issued by the court to take control of the $197,000 in life insurance
Metropolitan Life Insurance Company (MetLife), in May of proceeds and to release MetLife from the conflicting claims
1994. On a separate form titled “Designation of Beneficiary,” of Gamble’s three sons and her sister Terry. None of the rival
Gamble named her sister, Cora Terry, as the policy’s sole claimants objected to MetLife’s interpleader request.
beneficiary. But in making this election, Gamble signed only
her first name “Earline” in the space provided on the form for Terry moved for summary judgment against MetLife in
her signature. She also neglected to date the form and to December of 2001, arguing that she was entitled to the life
check a box confirming that she had signed the form in the insurance proceeds as a matter of law. Gamble’s sons
presence of the two witnesses. Two unrelated individuals, responded by filing their own motion for summary judgment,
however, did in fact sign as witnesses in the space provided. contending that they were entitled to the life insurance
The Postal Service acknowledged receipt of the form in June proceeds because Gamble’s signature was allegedly
of 1994. inadequate and because she had failed to date the designation
form. They again made no mention of Gamble’s failure to
When Gamble died in March of 2001, a controversy arose check the “witness” box.
between her three sons and her sister over who was entitled to
the $197,000 in proceeds of the life insurance policy. Each The district court granted Terry’s motion for summary
side filed claims for death benefits with the Office of Federal judgment in July of 2002, reasoning that
Employees’ Group Life Insurance. Gamble’s sons contended
that the designation of beneficiary was defective because [a]lthough Ms. Gamble failed to sign her full name, two
Gamble had signed only her first name and had not dated the witnesses were present to watch her authenticate the
form. They did not raise the issue of their mother’s failure to document. Under § 8705, individuals, other than the
check the “witness” box. beneficiary, are required to witness the insured party’s
signature on the Designation of Beneficiary form. This
The statute provides that if the insured does not properly requirement ensures that the insured party actually and
designate a beneficiary, then FEGLIA benefits will be willfully signed the document. The Court finds that Ms.
distributed according to an order of precedence specified in Gamble would not have summoned these witnesses nor
the statute. Gamble’s sons are the preferred individuals in the would the witnesses have freely signed the form had Ms.
event that Gamble failed to properly designate another Gamble not intended to authenticate the Designation of
beneficiary. Beneficiary form.
In May of 2001, Terry sued MetLife for the proceeds of No mention was made by the district court of the sons’
Gamble’s life insurance policy. Because the rival claims argument regarding the failure of Gamble to date the form.
No. 02-1969 Terry, et al. v. LaGrois, et al. 5 6 Terry, et al. v. LaGrois, et al. No. 02-1969

This appeal followed. First, to the beneficiary or beneficiaries designated by the
employee in a signed and witnessed writing received
II. ANALYSIS before death in the employing office or, if insured
because of receipt of annuity or of benefits under
A. Standard of review subchapter I of chapter 81 of this title as provided by
section 8706(b) of this title, in the Office of Personnel
We review a district court’s grant of summary judgment de Management. For this purpose, a designation, change, or
novo. Therma-Scan, Inc. v. Thermoscan, Inc., 295 F.3d 623, cancellation of beneficiary in a will or other document
629 (6th Cir. 2002). Summary judgment is proper where not so executed and filed has no force or effect.
there exists no genuine issue of material fact and the moving
party is entitled to judgment as a matter of law. Fed. R. Civ. Second, if there is no designated beneficiary, to the
P. 56(c). In considering a motion for summary judgment, the widow or widower of the employee.
district court must construe all reasonable inferences in favor
of the nonmoving party. Matsushita Elec. Indus. Co. v. Third, if none of the above, to the child or children of the
Zenith Radio Corp., 475 U.S. 574, 587 (1986). The central employee and descendants of deceased children by
issue is “whether the evidence presents a sufficient representation.
disagreement to require submission to a jury or whether it is
so one-sided that one party must prevail as a matter of law.” Fourth, if none of the above, to the parents of the
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 employee or the survivor of them.
(1986).
Fifth, if none of the above, to the duly appointed
B. FEGLIA executor or administrator of the estate of the employee.
“Congress enacted FEGLIA in 1954 to provide low-cost Sixth, if none of the above, to other next of kin of the
group life insurance to Federal Employees.” Metro. Life Ins. employee entitled under the laws of the domicile of the
Co. v. Christ, 979 F.2d 575, 576 (7th Cir. 1992) (quotation employee at the date of his death.
marks omitted). The provision of the Act relevant to the
present case is 5 U.S.C. § 8705(a), which governs the Congress amended FEGLIA in 1966 to tighten up the
designation of a beneficiary. If the insured does not designate requirements for designating a beneficiary. Prior to the
a beneficiary, the proceeds of the life insurance policy are to amendment, the statute simply required that the insured
be paid according to the order of precedence mandated by the designate a beneficiary in a “writing received in the
statute. Section 8705(a) provides in pertinent part as follows: employing office prior to death,” S. Rep. No. 89-1064,
reprinted in 1966 U.S.C.C.A.N. 2070, 2071, rather than a
Except as provided in subsection (e), the amount of “signed and witnessed writing received before death.”
group life insurance and group accidental death insurance 5 U.S.C. § 8705(a). (Emphasis added.) FEGLIA was
in force on an employee at the date of his death shall be amended as a reaction to cases that looked to a decedent’s
paid, on the establishment of a valid claim, to the person “manifest intent,” rather than to strict compliance with civil
or persons surviving at the date of his death, in the service regulations, in determining the proper beneficiary.
following order of precedence: See S. Rep. No. 89-1064 at 2071.
No. 02-1969 Terry, et al. v. LaGrois, et al. 7 8 Terry, et al. v. LaGrois, et al. No. 02-1969

One such case was the Ninth Circuit’s decision in Sears v. The equities in Sears may have prompted the court of
Austin, 292 F.2d 690 (9th Cir. 1961). Cecil Sears worked for appeals to disregard the civil service regulation and the
the Internal Revenue Service (IRS) and, as a federal general intent of the statute in order to comply with the
employee, received life insurance coverage through FEGLIA. insured’s wishes, but the precedent established in that
Id. at 690. At the time of his death, Sears had not complied case could, if generally followed, result in administrative
with the civil service regulations in designating a beneficiary difficulties for the Civil Service Commission and the
of his life insurance policy. The policy explained that Sears insurance companies and, more important, seriously
had the option of designating a beneficiary by securing “the delay paying insurance benefits to survivors of Federal
proper form . . . from the U.S. Civil Service Commission,” id. employees.
at 691, but, in the event that Sears did not designate a
beneficiary, the life insurance proceeds would be paid To clarify Congress’ intent, H.R. 432 rewrites section 4
according to a statutory order of preference. Although Sears to state clearly that the order of precedence set out in that
did not designate a beneficiary in writing using the U.S. Civil section shall prevail over any extraneous document
Service Commission’s form, he did designate a beneficiary in designating a beneficiary unless the designation has been
a handwritten will. The will, which was apparently neither properly received in the employing office or by the Civil
witnessed nor filed with the IRS prior to Sears’s death, Service Commission.
provided in pertinent part as follows:
S. Rep. 89-1064, reprinted in 1966 U.S.C.C.A.N. 2070, 2071.
In all due respect for my son and adopted daughter, This court has recognized that with the 1966 amendments to
Robert Cecil and LaVonne[,] I must remember the time FEGLIA, “Congress, on administrative efficiency grounds,
and care given to me by Karen when I was very ill and abolished the manifest intent test” that prevailed in Sears.
had no one to help me except her. For this I am Huff v. Metro. Life Ins. Co., 675 F.2d 119, 122 (6th Cir.
requesting that all my personal belongings in my 1982).
apartment . . . [including] my insurance policy with the
Federal Government . . . be given to Mrs. Karen Austin. C. Gamble’s designation of a beneficiary

Id. On appeal, Gamble’s sons argue that the following three
errors in their mother’s designation-of-beneficiary form
After Sears died, his two children and Austin filed render her designation invalid: (1) the signature of “Earline”
competing claims to Sears’s life insurance proceeds. The rather than her full name, (2) her failure to date the
Ninth Circuit held that Austin was entitled to the proceeds, designation form, and (3) her failure to check the box
reasoning that the fact that Sears “did not make his original acknowledging that she signed the form in the presence of the
designation in the exact manner set forth in the policy[] two witnesses. The sons therefore claim entitlement to the
should not prevent his definite intention, manifested by the life insurance proceeds because, in the absence of a
affirmative act of drawing up a will, from being given effect.” designated beneficiary, they are the preferred beneficiaries
Id. at 695. When Congress amended FEGLIA in 1966, it according to the order of precedence set forth in
discussed the Ninth Circuit’s holding in Sears as a primary 5 U.S.C. § 8705(a).
motivating factor for the change:
No. 02-1969 Terry, et al. v. LaGrois, et al. 9 10 Terry, et al. v. LaGrois, et al. No. 02-1969

Because the sons raise the issue of Gamble’s failure to Unlike in Hightower and Thomas, Gamble did not fail to
check the “witness” box for the first time on appeal, we sign her designation-of-beneficiary form, and, unlike in Ward,
decline to consider this point. See United States v. Ninety- her form was properly witnessed and timely filed. Her
Three (93) Firearms, 330 F.3d 414, 424 (6th Cir. 2003) signature is admittedly unusual, but, as the district court
(“This court has repeatedly held that it will not consider noted, FEGLIA “is silent regarding the sufficiency of an
arguments raised for the first time on appeal unless our failure insured’s signature on a Designation of Beneficiary form.”
to consider the issue will result in a plain miscarriage of Nothing in the statute requires an insured to sign her full
justice.”) (quotation marks omitted). Furthermore, even if the name; it simply requires a signed and witnessed writing. As
sons had not waived this argument, we would have concluded the district court recognized, a wide variety of “signatures” in
that it lacks merit for the same reason that their argument other contexts are considered to be legally valid:
concerning Gamble’s failure to date the form lacks merit, i.e.,
the statute does not impose either requirement as a condition Plaintiff also cites the Court to: MICH. COMP. LAWS
of making a valid designation. FEGLIA simply mandates a § 440.1201(39) (1979) (defining “signed” as “any
“signed and witnessed writing received before death in the symbol executed or adopted by a party with present
employing office.” 5 U.S.C. § 8705(a). Under the present intention to authenticate a writing, including a carbon
circumstances, where the sons have not challenged what copy of his or her signature.”) RESTATEMENT (SECOND)
appears on the form to be their mother’s properly witnessed OF CONTRACTS § 134 (“The signature to a memorandum
signature, we have no basis to believe that our failure to may be any signature made or adopted with an intention,
consider the effect of the unchecked box “will result in a plain actual or apparent, to authenticate the writing as that of
miscarriage of justice.” Id. at 424. the signor.”) and 2 Corbin, Contracts §§ 520-526 (1952)
(“A signature may consist of part or all of the signor’s
This leaves us with the sons’ remaining contention that name, even though misspelled or abbreviated to initials
Gamble’s incomplete signature invalidates her designation of only.”).
beneficiary. To support their position, the sons cite
Hightower v. Kirksey, 157 F.3d 528 (7th Cir. 1998), Thomas The sons argue, however, that the law governing the
v. Metropolitan Life Insurance Co., No. 99-1908, 1997 WL sufficiency of signatures for contract purposes is inapposite
159426 (D.C. Cir. Feb. 24, 1997) (unpublished decision), and in the context of FEGLIA. But they fail to explain their
Ward v. Stratton, 988 F.2d 65 (8th Cir. 1993), to demonstrate contention and do not cite any supporting authority. They
that other circuits have demanded strict compliance with further point out that “[i]t would stand to reason that any rule
FEGLIA’s requirements for designating a beneficiary. All articulated by a court to govern the provisions of FEGLIA
three cases, however, are easily distinguishable on their facts. should conform to, and ultimately serve, the end purpose for
In Hightower and Thomas, the insured employees totally which Congress drafted and enacted FEGLIA.” We fully
failed to sign the designation-of-beneficiary form. The agree. But unlike Gamble’s sons, we see no reason why the
Eighth Circuit in Ward, on the other hand, held that neither of understanding of what constitutes a signature under the UCC
two attempts to change the designated beneficiary had any and general contract law does not conform to or serve the end
force or effect because the first form attempting to do so was purposes for which Congress drafted FEGLIA.
not witnessed and the second was received after the insured
had died. As reflected in the Senate Report when FEGLIA was
amended in 1966, see S. Rep. No. 89-1064, reprinted in 1966
No. 02-1969 Terry, et al. v. LaGrois, et al. 11

U.S.C.C.A.N. 2070, 2071, the concern of Congress was to
avoid the “administrative difficulties” inherent in allowing
unspecified “extraneous document[s]” designating a
beneficiary to be considered. There was no concern
expressed about the completeness of the insured’s signature
in the space provided on the approved form.
Surely no court would declare any signature less than
“Earline Lynn Gamble” to be invalid. If “Earline L. Gamble”
would have been sufficient, or even “Earline Gamble,” then
why not simply “Earline”? Because Gamble’s abbreviated
signature appears in the proper space on the designation-of-
beneficiary form duly filed with the Postal Service, and no
one questions either the authenticity of her signature or the
fact that it was properly witnessed, we see no reason not to
give the designation its full effect. In sum, we find no
justification for distinguishing between what is a sufficient
signature under both the UCC and general contract law from
what is sufficient under FEGLIA.
D. The sons’ standing to bring this appeal
Terry argues, as an alternate basis to affirm the judgment of
the district court, that the sons lack standing to bring this
appeal for a variety of procedural reasons. A previous panel
of this court, however, denied Terry’s motion to dismiss the
appeal on this basis. Terry v. LaGrois, No. 02-1969 (6th Cir.
Nov. 5, 2002) (unpublished order). Because we have no
reason to disturb that ruling, and because we have concluded
that Terry should prevail on the merits, we have no need to
address her alternative basis for recovery.
III. CONCLUSION
For all of the reasons set forth above, we AFFIRM the
judgment of the district court.