Newton v. Newton

RUIZ, Associate Judge,

concurring in part and dissenting in part:

I agree with the majority opinion that, under Penn Mutual Life Insurance Co. v. Abramson, 530 A.2d 1202 (D.C.1987), Ms. Young’s designation in 1985 and 1989 of her first (and then only) son, Carl, as sole primary beneficiary under her life insurance policies, is unambiguous and, thus, effectively excluded her later-born son, Daniel, from benefitting under those policies. I dissent from the majority’s conclusion with respect to appellant’s alternative argument that the designation of beneficiary form is equally unambiguous in that the “basic” portion of Ms. Young’s three-part FEGLI insurance was not included among the benefits provided to Carl, with the result that the basic coverage passes to both sons in accordance with the order of preference set out in the applicable federal statute.1 The majority remands the ease for consideration of extrinsic evidence of Ms. Young’s intent with respect to the basic coverage after concluding, without explanation, that “the added [handwritten] language creates an ambiguity with respect to the mother’s intention regarding the beneficiary for the Basic coverage.” See ante at 1025. That conclusion has no support within the four corners of the document we are interpreting. In her handwriting Ms. Young made as clear as possible on the form that she was designating Carl as the sole primary beneficiary of only the “standard option” and “family” portions of her life insurance; she did not designate Carl the beneficiary for the “basic” portion of her insurance. Just as there is no ambiguity on the face of the document with respect to the designation of Carl as the sole primary beneficiary, so is there no ambiguity on the face of the document with respect to the insurance coverage for which Carl was to be the *1026sole beneficiary. Because there is no ambiguity on the face of the form, there is no further fact-finding necessary. See Penn Mut., supra, 530 A.2d at 1210. Thus, there is no need to remand the case to the trial court to resolve a question of law that we review de novo.2

The difficulty with this case is not that the document is ambiguous—it is not—but that application of the rule in Penn Mutual, whether to exclude the later-born son, Daniel, as a beneficiary altogether, or to exclude the basic portion of the life insurance coverage from the benefits designated for the first-born, Carl, seems harsh where such exclusion appears to be the unintended conse-. quence of a parent’s inadvertence or failure to attend to updating legal documents upon the birth of a child. First, the instructions on the form itself lead the insured to designate a particular named individual, without providing guidance as to how such designation may affect children not yet bom. Second, even assuming that Ms. Young had understood the consequence of her designation of Carl as her sole primary beneficiary, it is all too easy to understand that; within eight months of giving birth to her second child, Ms. Young would not have had occasion or given thought to changing legal forms that would only take effect in the event of her death. In this ease, as in Penn Mutual, Ms. Young, a twenty-nine year-old mother of two young children, is not likely to have been thinking of death—particularly not the untimely violent murder that she suffered at the hand of her children’s father.

In Penn Mutual we applied contract principles and held to a strict interpretation of the written document, once the terms on the face of the document are determined to be unambiguous. See id. The appellant suggests that we should revisit the holding of Penn Mutual or narrow it to apply only to situations where there is evidence that the party making the designation understands or has received advice about the consequences of a beneficiary designation in the circumstances of a case such as this. There is no question that as with any contract case, the trial court is equipped to engage in the fact-finding that would be required if the status of the parties or other extrinsic evidence were a relevant consideration in the initial interpretation of the document. Considering that life insurance policies are used for estate planning purposes, another approach would be to raise a presumption when interpreting life insurance agreements against exclusion of later-born children, as is the case in the vast majority of jurisdictions with respect to pretermitted heirs in wills. See, e.g., Md. Code Ann., Est. & Trusts §§ 3-301,302 (1991 & Supp.1997); Va.Code Ann. §§ 64.1-70, 71 (Michie 1995). Surprisingly, the District of Columbia has no similar rule providing for pretermitted children. There is, therefore, the question whether any step in that direction should be adopted by the court or left to legislative action as the issue involves public policy that should be informed by input from the community and experts in the field. In sum, as this division is bound by Penn Mutual, appellant’s remedies are to initiate legislative action or seek review by the en banc court.

. 5 U.S.C. § 8705 establishes the order of preference where there is no designated beneficiary. In this case the proceeds of the life insurance policy would go to "the child or children of the employee ... .” 5 U.S.C. § 8705(a) (1994).

. At oral argument, appellee’s counsel agreed that the trial court’s order rejected appellant’s altemative argument and that a remand is not necessary.