Christy Silver m/n/f Rome Joseph Poto v. Lenora Poto & a.

THE STATE OF NEW HAMPSHIRE

SUPREME COURT

In Case No. 2014-0358, Christy Silver m/n/f Rome Joseph
Poto v. Lenora Poto & a., the court on September 30, 2015,
issued the following order:

Having considered the briefs and oral arguments of the parties, the court
concludes that a formal written opinion is unnecessary in this case. The
petitioner, Christy Silver, as mother and next friend of her son, Rome Joseph
Poto (child), appeals a decision of the Superior Court (Garfunkel, J.)
determining that the respondents, Lenora and Mario Poto, Jr., are entitled to
the proceeds of a life insurance policy issued to the decedent, Mario Poto, III,
their son and the child’s father. We reverse.

The record supports the following facts. In 1994, the decedent obtained
a $240,000 term life insurance policy, from AIG Life Insurance Company,
through his employment with Mario’s Classic Mirror Co. The decedent named
the respondents, his parents, as the beneficiaries of the policy. The same
policy remained in effect from 1994 until the decedent’s death, and the
premium, fifteen dollars per week, never changed.

In 1999, shortly after the birth of the child, the decedent and the
petitioner were divorced. The divorce decree provided that the decedent “shall
maintain life insurance in the gross amount of $225,000 with the child as
named beneficiary.” The decree stated that the decedent “shall maintain said
insurance as long as it is available to him through his employment at
reasonable cost.” The decedent never changed the beneficiary of his life
insurance policy to the child, nor did he obtain any other life insurance
coverage naming the child as beneficiary.

In September 2005, AIG sent Mario’s Classic Mirror Co. a letter that
stated, in part, as follows:

Re: Deduction Method of Billing- Contract No. LB0643

Dear Sirs,

We are pleased that you elected to establish a payroll deduction life
insurance plan for your employees. However, by AIG’s procedural
requirements and for the reason that this type of product is no
longer being sold, companies not maintaining the minimum
participation of ten (10) employees, not including spouses or
 dependents, must be removed from the list bill method of payment.
Our records indicate that your company’s participation is less than
the minimum. At this time, we are requesting that you please
comply with the following procedures:

 Please discontinue payroll deductions of AIG Insurance
premiums for participating employees, and remit any premiums
collected to date within the next three (3) weeks.
 Policy owners will be informed of other methods of billing
offered by our company, such as direct billing to their home
address and the option of premium payment through their
checking or saving[]s account.

Shortly thereafter, the respondents began paying the premiums on the
decedent’s policy.

The decedent died in an automobile accident in 2008. AIG distributed
the proceeds of the policy to the respondents. The respondents were not aware
of the terms of the divorce decree until after the decedent died. The petitioner
filed this action seeking a declaratory judgment that the child was the intended
beneficiary of the life insurance policy and requesting that the court impose a
constructive trust over the proceeds of the policy.

Following a bench trial, the trial court found that prior to the September
2005 AIG letter, the decedent’s life insurance policy satisfied the condition in
the divorce decree that the decedent maintain life insurance “as long as it is
available to him through his employment.” The trial court determined that, in
the September 2005 letter, AIG “changed their internal policy” such that the
decedent’s employer “no longer qualified for their group insurance plan,” and
that, although the decedent “retain[ed] the policy, he did so thereafter on an
individual basis.” The trial court concluded that, because “the AIG policy
ceased to be offered through [the decedent’s] employment,” the condition in the
divorce decree was no longer satisfied, and the decedent “was no longer
obligated to maintain insurance for his son.” Accordingly, the trial court
denied the petitioner’s request for a declaratory judgment and declined to
impose a constructive trust. This appeal followed.

On appeal, the petitioner argues that the trial court erred by concluding
that the language in the decree stating “as long as it is available to him through
his employment” constituted a condition of the decedent’s obligation to
maintain life insurance for the benefit of the child. She further contends that,
even if that language was a condition of the decedent maintaining life
insurance, the trial court erred by finding that the condition was no longer met.
The respondents counter that the language in the divorce decree created a
condition and the trial court correctly determined that, after September 2005,

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the condition was no longer satisfied because the policy was no longer
“available to [the decedent] through his employment.”

We begin by addressing the petitioner’s argument that the disputed
language did not constitute a condition of the decedent’s obligation to maintain
life insurance. Resolving this argument requires us to interpret the divorce
decree. “The interpretation of the language of a divorce decree, like the
interpretation of other written documents, is a question of law, reviewed by this
court de novo.” Estate of Frederick v. Frederick, 141 N.H. 530, 531 (1996). “In
ascertaining the meaning of the divorce decree, we look to the plain meaning of
the language and at the meaning of the language in the context of the entire
decree.” In the Matter of Floros and Bell, 145 N.H. 401, 403 (2000) (quotation,
brackets, and ellipsis omitted). “The divorce decree . . . must be interpreted in
light of the facts and circumstances known to the parties and the court at the
time the court issued the decree . . . .” Laflamme v. Laflamme, 144 N.H. 524,
527 (1999).

To determine whether the language in the divorce decree created a
condition, we first look to its plain language. The language at issue provides
that the decedent “shall maintain life insurance in the gross amount of
$225,000 with the child as named beneficiary . . . . as long as it is available to
him through his employment at reasonable cost and as long as the child
remains a full-time student.” (Emphasis added.) The phrase “as long as”
means, in relevant part, “provided that.” Random House Webster’s Unabridged
Dictionary 1132 (2d ed. 2001). “[P]rovided,” in turn, means “on the condition
or understanding (that); providing.” Id. at 1556. Thus, under the plain
unambiguous meaning of the words used in the divorce decree, the decedent
was required to maintain life insurance with the child as the beneficiary on the
conditions that: (1) it was “available to him through his employment”; (2) “at
reasonable cost”; and (3) “the child remains a full-time student.”

We next turn to the petitioner’s argument that the trial court erred when
it concluded that this condition failed. Notably, the parties agree — and the
trial court found — that, prior to the September 2005 letter, the condition that
the policy was “available to him through his employment” was satisfied.
Therefore, there is no dispute that, if the decedent had died prior to the
September 2005 letter, the child would have a superior right to the proceeds
under our decision in Dubois v. Smith, 135 N.H. 50 (1991). Accordingly, the
narrow question before us is whether the change announced by AIG in the
September 2005 letter compels a different conclusion.

In Dubois, the decedent policyholder, upon divorcing his first wife, was
subject to a divorce decree that required him to designate his sons as the
beneficiaries of his then-existing insurance policies. Dubois, 135 N.H. at 52,
57. However, the decedent did not change his list of beneficiaries to comply
with the decree. Id. at 52-53. We observed that “children from a defunct

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marriage have an interest in life insurance proceeds superior to that of the
named beneficiary where a divorce decree or agreement required the insured to
maintain insurance for them and the insured . . . did not name them
beneficiaries.” Id. at 56 (quotation omitted). Accordingly, we held that, with
regard to the existing policy, the decedent’s “sons acquired a vested right to the
proceeds superior to anyone else named beneficiary.” Id. at 57.

Here, the trial court concluded that the condition in the divorce decree
was no longer satisfied because, after September 2005, the decedent’s
employer “no longer qualified for [the AIG] group insurance plan.” The trial
court reasoned that although the decedent “retain[ed] the policy, he did so
thereafter on an individual basis,” and it ruled that, because of this change, the
condition in the decree “ceased to be effective” and the child no longer had a
superior right to the proceeds under Dubois.

There is no dispute that the policy that the decedent first purchased in
1994 — which the parties agree satisfied the condition in the divorce decree
prior to 2005 — continued in effect until his death in 2008. In its September
2005 letter, AIG did not state that an existing group insurance policy had been
extinguished. Nor did it state that new individual policies would be issued.
Rather, it advised that policy owners would be informed of alternative methods
of billing. This, according to AIG, was necessary because the decedent’s
employer no longer had a minimum of ten employee-participants, and thus it
“must be removed from the list bill method of payment.” Finally, there is no
evidence in the record that the decedent was sent a notice terminating a group
policy, or that the decedent was issued a new individual policy after the
September 2005 letter.

The conclusion that the policy at issue was at all times an individual
policy issued through the decedent’s employer is further bolstered by the
undisputed testimony of respondent Lenora Poto, who acted as the office
administrator for the decedent’s employer. Poto testified that, prior to
September 2005, all employees “had a choice on whether [they] wanted [life
insurance] or not.” After electing coverage, each employee “privately”
determined with AIG the amount of coverage and the premium that each would
pay. She testified that the employer “had no control over” the employees’
policies, which were “private between the [insurance] agents and the employee,”
and acknowledged that the company’s role was “just . . . administrative[,] to
make sure that the premiums were deducted from [employees’] pay on a weekly
basis.”

On the basis of the undisputed facts, we conclude that the decedent’s
policy was never group life insurance. Rather, it was always an individual
policy. The “change” that was announced in the 2005 AIG letter was only an
administrative modification in the method of premium payment, and it did not
in any way alter the terms or nature of the policy itself: the decedent’s policy

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was at its inception — and at the time of his death — an individual policy.
Accordingly, we conclude that, at the time of the decedent’s death in 2008, the
policy continued to satisfy the condition in the divorce decree: that it be
“available to him through his employment.”

A divorce decree must be “interpreted in light of the facts and
circumstances known to the parties and the court at the time the court issued
the decree.” Laflamme, 144 N.H. at 527. We are not persuaded that it was the
intent of the family court that the change in payment method announced in the
AIG letter would relieve the decedent of his obligation under the divorce decree
to maintain life insurance for the benefit of his son, or that such an
administrative change would deprive the child of the financial security
envisioned by the court. See Dubois, 135 N.H. at 57-58 (rejecting an
interpretation of the divorce decree that would “obviously run counter to the
intention of the parties and against the meaning of the court order”).

The condition in the divorce decree that the decedent maintain life
insurance with the child as the beneficiary “as long as it is available to [the
decedent] through his employment” was satisfied for the 11-year period
between 1994 and September 2005, it remained satisfied after the employer’s
receipt of the AIG letter, and it remained satisfied in 2008 at the time of the
decedent’s death. Accordingly, we hold that, under Dubois, the child has a
right to the proceeds of his father’s life insurance policy superior to any rights
of the respondents.

Reversed.

DALIANIS, C.J., and HICKS, CONBOY, LYNN, and BASSETT, JJ.,
concurred.

Eileen Fox,
Clerk

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