Ohio court on evidence of intent
Veach v. Chuchanis (2014 WL 2998982) is a decision by an intermediate court of appeals reviewing Ohio law regarding an insured's efforts to change a beneficiary designation. However, like in many life insurance beneficiary disputes, the efforts fell short of the insurance company's technical requirements.
Sentry Life Insurance company issued the policy to the insured in 1991. At the time, the insured designated Chuchanis as her primary beneficiary, with Veach as the contingent beneficiary. In 1998 she married Lytle. She sent a letter to Sentry stating she wanted to change her primary beneficiary to her husband. She asked that Sentry send her confirmation of the change.
Instead of a confirmation, Sentry sent a reply that stated, in pertinent part: “Enclosed is the form that is needed to change the beneficiary designations on your life insurance policy .” The insured did not return the form. Lytle died in 2000.
The insured died in 2013. Chuchanis claimed the benefits because he contended he was still the officially designated beneficiary and that the insured had told friends over the years that she still wanted him to receive the benefits. Veach countered that the insured's failure to complete and return Sentry’s change of beneficiary form was waived because she expressed her intent to remove Chuchanis as the primary beneficiary in the 1998 letter. Because Chuchanis was effectively removed, Veach claimed he should receive the money as the undisputed contingent beneficiary.
In response to the competing claims, Sentry filed an interpleader lawsuit. The lawsuit named Chuchanis, and Veach as parties and asked the court to determine the proper beneficiary.
The trial court found for Chuchanis as a matter of law, holding that under the doctrine of "substantial compliance" there was no evidence that the insured actually completed the change form removing Chuchanis and attempted to return it to Sentry. The trial court did not consider as evidence of intent the insured's 1998 letter.
The Ohio court of appeals disagreed with the trial court's reasoning. It held that, under Ohio precedent, a life insurance company waives technical requirements of a beneficiary change when it files an interpleader suit. Therefore, in that context, the test should not be "substantial compliance" with such requirements, but what was the insured's “clearly expressed intent” regarding the proper beneficiary. The court of appeals returned the case to the trial court so it could hold a trial on the issue of the policyholder's “clearly expressed intent” regarding her beneficiary.