State Farm Life Ins. Co. v. Pearce – Case Brief Summary (California)

In State Farm Life Ins. Co. v. Pearce (1991) 234 Cal. App. 3d 1685, the insured named his wife as the primary beneficiary of three life insurance policies on his own life and named his wife's sister as the contingent beneficiary. (Id. at p. 1687.) The insured and his wife then separated. (Ibid.)

During the separation, a temporary restraining order issued that prevented the insured from changing the beneficiary designation on his life insurance policies. (Ibid.) While the insured and his wife were separated, the wife murdered the insured. (Ibid.)

After she was arrested and charged with the murder, the wife assigned her interest in the proceeds to her sister. The wife's sister and the estate of the insured each sought the proceeds of the policies. The trial court granted summary judgment in favor of the wife's sister, and the administrator of the insured's estate appealed. (Ibid.)

In reversing the trial court's grant of summary judgment, this court concluded that the insured's intent at the time of his death as to who should receive the policy proceeds was not necessarily reflected by the written terms of the insurance policies naming the sister of his killer as a beneficiary:

"Under these facts, we are unable to rule as a matter of law that insured's donative intent was clearly demonstrated by the terms of the policies purchased years before his death. Nor are we able to say that his wife's sister, by virtue of her relationship with the wife, is disqualified as a matter of fact or law from receiving the proceeds of the policies as a contingent beneficiary. The language of section 252 providing that policy proceeds become payable 'as though the killer had predeceased the decedent' is instructive only as to inheritance through the killer, as in the case of intestate or testamentary succession. This statute is not dispositive on the issue of a person independently designated by the insured as a contingent beneficiary. Thus, on a showing that even a person related to the killer had an independent relationship of some kind with the deceased, sufficient to support an inference that the deceased would have intended that policy proceeds should go to such a person, a judgment or order awarding such proceeds to such a contingent beneficiary might be proper. This record, however, is insufficient to support any such order, or to support any award of policy proceeds to the insured's estate. Factual issues remain to be resolved before the intent of the insured to distribute the proceeds of the insurance policies can be ascertained." (Pearce, supra, 234 Cal. App. 3d at pp. 1694-1695.)

In his concurring opinion in Pearce, Justice Froehlich concluded, "The case is controlled by the principle that the murderer can in no manner be benefited by her own crime." (Pearce, supra, 234 Cal. App. 3d at p. 1696 (conc. op. of Froehlich, J.).) He elaborated:

"The proper inquiry at trial of this matter will be whether and to what extent the implementation of the alternative beneficiary provision in the murdered decedent's insurance policy will benefit, or will represent the objectives of, the murderer. Evidence as to the original motivation for naming the wife's sister the alternative beneficiary would be instructive. If it can be shown, for instance, that the wife's sister designation was the result of the importuning of wife, the murderer, then the award of the insurance proceeds to the wife's sister might well be conceived by the court as violative of the prohibition against rewarding the objectives of the wrongdoer." (Pearce, supra, 234 Cal. App. 3d at p. 1696 (conc. op. of Froehlich, J.).)