Utah Court of Appeals
Does divorce automatically revoke a former spouse's designation as life insurance beneficiary? Malloy v. Malloy Explained
Summary
Rhonda Malloy challenged the district court’s summary judgment ruling that allowed her deceased husband’s former spouse to retain proceeds from a FEGLI life insurance policy despite their divorce. The court held that the FEGLI handbook’s express provision preserving beneficiary designations after divorce was incorporated by reference into the election form, creating an exception to Utah’s automatic revocation statute.
Analysis
In Malloy v. Malloy, the Utah Court of Appeals addressed whether Utah’s automatic revocation statute applies to Federal Employees’ Group Life Insurance (FEGLI) policies when a divorced spouse remains named as beneficiary.
Background and Facts
Dan Malloy purchased a $50,000 FEGLI policy in 1989, naming his then-wife Mary Beth as beneficiary. After their 2004 divorce, Dan never changed the beneficiary designation. He remarried in 2006 but died in 2009 without updating his policy. His widow Rhonda sued Mary Beth for the insurance proceeds, arguing that Utah Code section 75-2-804 automatically revoked Mary Beth’s beneficiary status upon divorce.
Key Legal Issues
The central issue was whether the FEGLI handbook’s express provision that “divorce does not invalidate a designation that names your former spouse as beneficiary” constituted an exception to Utah’s automatic revocation statute under the “express terms of a governing instrument” exception in section 75-2-804(2).
Court’s Analysis and Holding
The Court of Appeals affirmed the district court’s summary judgment for Mary Beth. The court determined that the FEGLI handbook was properly incorporated by reference into Dan’s election form through language directing employees to consult the handbook for further information. Because Dan executed the election form before his divorce, and the handbook contained express terms preserving beneficiary designations after divorce, the automatic revocation statute did not apply.
Practice Implications
This decision highlights the importance of examining all documents incorporated by reference when analyzing beneficiary revocation issues. Practitioners should look beyond the primary insurance documents to identify manuals, handbooks, or other materials that may contain express terms overriding Utah’s automatic revocation provisions. The court also clarified that government publications are self-authenticating under Rule 902(5), eliminating foundation requirements for federal employee benefit manuals.
Case Details
Case Name
Malloy v. Malloy
Citation
2012 UT App 294
Court
Utah Court of Appeals
Case Number
No. 20110704-CA
Date Decided
October 18, 2012
Outcome
Affirmed
Holding
The express terms exception in Utah Code section 75-2-804 applies when a FEGLI handbook incorporated by reference into an election form expressly states that divorce does not invalidate a designation of a former spouse as beneficiary.
Standard of Review
Abuse of discretion for evidentiary rulings; correctness for questions of law regarding statutory interpretation
Practice Tip
When challenging or defending beneficiary designations after divorce, carefully examine all documents incorporated by reference into the original governing instrument for express terms that may override Utah’s automatic revocation provisions.
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