Protective Life Insurance Company v. Mehrkar

Background

Protective Life Insurance Company filed an interpleader action to resolve competing claims by Cheryl Mehrkar and Stacy N. Previte, as personal representative of the Estate of Anthony Louis Previte, to the death benefit from Anthony Previte’s life-insurance policy. An interpleader action allows a stakeholder holding disputed money to bring the competing claimants into one case so the court can decide who is entitled to the funds.

Aetna Life Insurance and Annuity Company issued the policy in 1993, initially insuring Anthony Previte for $54,902. Protective later became solely responsible for paying the death benefit. Mehrkar was the primary beneficiary when the policy was issued. She and Anthony Previte divorced in May 1996. Anthony later married Stacy Previte, and they remained married until his death on July 11, 2022.

Mehrkar submitted a claim for the death benefit in August 2022. Protective understood that New York’s law revoking certain beneficiary designations upon divorce had ended Mehrkar’s entitlement, but Mehrkar continued pursuing her claim. Protective deposited the policy proceeds with the court on April 24, 2023. Mehrkar did not answer, appear, or otherwise respond in the case, and a certificate of default was entered against her. She also did not oppose the Estate’s motion for summary judgment.

Interpleader Requirements

The court found that interpleader relief was proper because the death benefit exceeded $500, the Estate and Mehrkar asserted adverse claims, and the defendants were diverse from one another. Because Protective deposited the policy proceeds with the court, the court proceeded to decide which defendant was entitled to the funds.

Summary-Judgment Standard

Summary judgment is appropriate when the record shows no genuine dispute about a fact that could affect the result and the moving party is entitled to judgment under the law. The court independently reviewed the Estate’s factual submissions even though Mehrkar did not submit a response.

Analysis

The Estate argued that Mehrkar forfeited any claim to the proceeds by failing to participate in the action. The court agreed, stating that an interpleader defendant who does not answer or appear may be treated as having forfeited any claim to the disputed funds.

The court also decided the beneficiary issue on the merits. New York Estates, Powers and Trusts Law Section 5-1.4 generally revokes a revocable transfer or beneficiary designation benefiting a former spouse when the spouses divorce, unless the governing instrument expressly provides otherwise. The court found that the policy contained no provision preventing application of that law. It therefore held that Mehrkar’s primary-beneficiary status was revoked when she and Anthony Previte divorced in 1996.

The statute required the court to treat Mehrkar as though she had predeceased Anthony Previte when the revocation occurred. The policy provided that the rights of a beneficiary who dies before the insured belong to the policy owner, who was Anthony Previte. The court consequently held that the Estate was entitled to the policy’s death benefit as a matter of law.

Disposition

The court granted the Estate’s motion for summary judgment. The court permitted Protective, if it wished, to request reasonable attorneys’ fees and costs from the funds deposited with the court by November 14, 2023, but stated that it might or might not make such an award. The clerk was instructed to terminate the motion.