Diep v. Rivas

¹³⁵ JAMES S. GETTY, Judge (Ret’d, Specially Assigned). Who, if anyone, is entitled to the proceeds of a group life insurance policy stemming from the death of Maria Rivas? The question is easily understood; the answer is more complicated, due to the bizarre circumstances giving rise to the competing claims. Background Xuang Ky Tran was employed by IIT Research Institute at the time of his death on April 2, 1996.

As a full-time employee, Tran obtained an accidental death and dismemberment policy issued by Continental Casualty Company (CNA) to the holder, IIT. Tran opted for a plan that provided life insurance for a spouse of a full-time employee. Tran and Maria Rivas were married on September 6,1990; they had no children. The amount payable upon Tran’s death was $300,000, the amount payable on the death of his wife was $150,000.

On April 2,1996, an argument erupted between Tran and his wife. She called 911 for assistance and during the conversation Tran killed her and immediately thereafter committed suicide by shooting himself with the same gun he used to murder his wife. The claimants are An and Vanessa Diep, who are the brother and sister of Tran, 1 and Dr. and Mrs. Hector Rivas, the parents of Maria Rivas. CjMA filed a Complaint of Interpleader and paid the proceeds of $150,000 covering Maria Rivas into the Registry of the Court.

The Dieps and Dr. Rivas filed cross motions for summary judgment. The case was heard in the Circuit Court for Montgomery County on April 27, 1998. The court held that the policy was unambiguous and that the $150,000 was to be paid to Dr. Rivas. Additionally, the court ordered that inter ¹³⁶ est on the award was to be calculated from the date of the court order directing CNA to deposit the money with the court until the date of the judgment, April 27, 1998, 2 The Dieps have appealed from those decisions.

Discussion Briefly, the general rule of construction of insurance policies in Maryland is to apply the terms of the contract in deciding the scope and limitations of the coverage. Chantel Associates v. Mount Vernon Fire Ins. Co., 338 Md. 131 , 656 A.2d 779 (1995). The objective is to ascertain the intent of the parties to the agreement by viewing the policy as a whole, rather than by emphasizing one provision to the exclusion of another.

Each provision or clause, whenever possible, shall be given effect by construing the language in its usually accepted meaning. Empire Fire and Marine Company v. Liberty Mut. Ins. Co., 117 Md.App. 72, 95-96 , 699 A.2d 482 (1997).

The nature of the policy and the purpose it was intended to serve are important considerations in determining intent. Id. at 96 , 699 A.2d 482 . The Dieps claim they are entitled to the proceeds of the policy under the “Payment of Claim” section, which provides for payment to the employee’s designated beneficiary or relatives as set forth in the policy. They also contend that they are not disqualified by the Slayer’s Rule. 3 Dr. Rivas claims the proceeds on the theory that Maria Rivas, his daughter, was the “insured” for the purpose of the policy on her life.

He contends that several persons may be ¹³⁷ insured under the terms of the policy and each may have separate interests. The Policy Initially, the policy states the effective date and term, which is one year. CNA reserves the right to non-renew after the first insurance year on any premium due date. Other relevant policy provisions are as follows: DEFINITIONS “We,” “Our” and “Us” mean the Continental Casualty Company, Chicago, Illinois. “Insured” means the eligible person whose insurance is in force under the terms of this policy. “Insured person” means the insured and the insured family members of the insured. “Principal Sum” means the amount of insurance, as shown in Statement 3 of the Application, which applies to the Insured Person.

ELIGIBLE PERSONS All persons described in Statement 2 of the application are eligible for insurance under this policy. Eligible Family Members The eligible persons becoming insured under this policy may also insure their eligible family members. Eligible family members, if any, are described in Statement 2 of the application. A person may not be insured under this policy as both an eligible person and an eligible family member.

An eligible dependent child may not be insured as a dependent child of more than one insured. Exclusions This policy does not cover any loss caused or resulting from: ¹³⁸ 4. Suicide or a suicide attempt while sane or self-destruction or an attempt to self-destroy while insane;.... Individual Terminations The insurance of any insured will cease on the earliest of the following dates: 1.

On the date this policy is terminated; 2. At the end of the Grace Period if the Holder fails to pay the required premium; 3. On the premium due date that falls on or next follows: a. The date the Insured ceases to be associated with the Holder in a capacity that makes him eligible for this insurance; or b.

The date the insured attains the age at which he is no longer an eligible person as stated in Statement 2 of the Application. The insurance of any insured family member will cease on the earliest of the following dates: 1. On the date insurance for the Insured terminates; or 2. On the premium due date that falls on or next follows the date such person ceases to be an eligible family member as described in Statement 2 of the Application.

CERTIFICATES We will deliver certificates, to the Holder for issuance to each insured. The certificates will describe the benefits and to whom payable, the limits of this policy and where it may be inspected. UNIFORM PROVISIONS ENTIRE CONTRACT; CHANGES: This policy, the Application and any attached papers constitute the entire contract between the parties. * * * WRITTEN PROOF OF LOSS: Written proof of loss must be given to Us within 90 days after the date of such loss.... ¹³⁹ Unless the Insured Person is legally incapacitated, written proof must be given within 1 year of the time it is otherwise due. PAYMENT OF CLAIM: Benefits for loss of life of the Insured will be paid in accordance with the beneficiary designation in effect at the time of payment.

If no such designation is in effect at that time, the benefits shall be paid to the surviving person or persons in the first of the following classes of successive preference beneficiaries of which a member survives the Insured: The insured’s (a) spouse; (b) children, including legally adopted children; (c) parents; (d) brothers and sister[s]; or (e) estate____ Benefits for loss of life of any insured family members will [be] payable to the Insured, if living, otherwise in the same manner as above. Benefits for other than loss of life are payable to the Insured. All accrued benefits unpaid at the death of the Insured will be payable in the same manner as above. Analysis The trial court, at the conclusion of argument by counsel, rendered the following decision: The issue before the court is contract interpretation.

There are definitions within the policy. For example, the definition^] say “insured” means eligible person. Under “eligible person” the family members are included. The policy states under the caption of eligible persons, all persons described in Statement 2 [4] are eligible for insurance under this policy.

Included in Statement 2 are an insured employee, an insured spouse, an[d] insured dependent children. ¹⁴⁰ A claim form supplied by the insurance company asked for the name of the insured in full. It identifies Maria Reavis [sic]. Defendants filled in Ms. Reavis’ [sic] name above the heading, name of the Insured when they submitted their claim to CNA insurance. Benefits cannot be triggered unless the insured person, be it an employee, the spouse, or the dependent child[,] is injured or killed.

Ms. Reavis [sic] was insured for her life. Benefits were triggered on her death. A common sense reading of the policy dictates this result. Therefore, summary judgment is granted in favor of Dr. Reavis [sic] and summary judgment for the cross defendant ■ is denied.

Contrary to the court’s assertion that the definitions say “insured means eligible person,” the definition says “Insured means the eligible person whose insurance is in force under the terms of this policy.” That reference is to the employee whose status as a full-time employee triggers the issuance of the policy. Family members are identified in the policy under the definition of “Insured Person,” which provides that “Insured Person means the insured and the insured family members of the insured.” Of course, both the insured and his designated family members are eligible for insurance under the policy. In short, the policy distinguishes between who is the insured and who are the persons receiving insurance coverage. The trial court referred to Maria Rivas as being “insured for her life.” We construe that statement to mean that she had insurance on her life.

She was not necessarily insured for her entire life had the murder not occurred, because eligibility of a spouse, as set forth in Addendum 1 of the Application, is from “age 18 through 70.” In dicta, the court indicated that the Slayer’s Rule did not appear to be applicable in this case, but that issue was not decided in light of the court’s granting Dr. Rivas’s motion for summary judgment. We shall, therefore, address first the Dieps claim. ¹⁴¹ 1. The Dieps Claim The Dieps argue that they are entitled to the proceeds of the policy on the life of Maria Rivas because all of the benefits under the policy are payable to the employee, if living, and to the employee’s designated beneficiary or relatives when the employee is deceased. They allege that they are innocent of any involvement in the death of their sister-in-law; that they are not claiming on behalf of the estate of their brother; that their claim is based solely on the express terms of the policy; and that Maria Rivas had no right to designate a beneficiary, because the policy expressly provided that the proceeds of the policy were payable to Tran, the insured.

The hill the Dieps must climb is the Slayer’s Rule. We hold, for the following reasons, that the Dieps as a matter of law are ineligible to receive the proceeds of insurance on the life of Maria Rivas. The Maryland Legislature has not enacted a “Slayer’s” statute governing whether a murderer may be enriched by taking any portion of the estate of the victim. We have, however, judicially adopted the Slayer’s