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Ex-Wife Sues on Life Insurance Claim

A woman who alleges the executor of her husband’s estate breached a divorce agreement that required husband to maintain her as the beneficiary on mul­tiple life insurance policies has stated claims for breach of contract and con­structive trust, in the wake of the Nor­folk U.S. District Court’s denial of her motion to remand her suit to Virginia state court.

Jurisdiction

The executor of husband’s estate re­moved this case on the basis of diversity jurisdiction. Plaintiff seeks remand, ar­guing that the domestic relations excep­tion to jurisdiction applies in this matter and this court should decline to exercise jurisdiction. Alternatively, she contends the court should abstain from addressing the case pursuant to the Colorado River abstention doctrine. The court finds re­mand is not appropriate on either basis.

The domestic relations exception does not apply in the present matter. First, the complaint does not involve the issu­ance of a divorce, alimony or child custo­dy decree. Instead, plaintiff ’s claims are based upon decedent’s alleged breach of the marital settlement agreement. Sec­ond, the domestic relations exception does not apply because plaintiff ’s claims do not involve the elements of the domes­tic relationship. Even if there is a former domestic relationship between the par­ties, the claims at issue are contractual in nature and the contract duties at is­sue arise from the terms of the marital settlement agreement, not from Virginia domestic relations law.

Contract claim

Although Va. Code § 20-111.1 address­es the revocation of certain death bene­fits by divorce or annulment, the core of this case is an action for breach of con­tract, and the court need only address § 20-111.1 for purposes of resolving plain­tiff ’s breach of contract claim. Several federal courts have determined that, where the core dispute is a breach of contract claim, interpreting or applying § 20-111.1 does not trigger the domestic relations exception.

Further, the court rejects plaintiff’s contention that abstention is appropri­ate because there is a parallel proceed­ing currently pending in state court. Al­though plaintiff ’s petition filed against her former husband in Virginia state court addresses, in part, his failure to comply with the terms of the marital set­tlement agreement, such petition is not a parallel proceeding to the present action because each case names a different de­fendant and seeks different relief. Plain­tiff ’s state court petition is filed against the ex-husband personally and not his estate. Although plaintiff asserts she is attempting to substitute his estate as a defendant in such action, under Virginia law, contempt proceedings are generally not available against decedent defen­dants or their estates. The state court petition currently concerns a defendant who is not before the court and it ap­pears unlikely that plaintiff will be able to amend such petition to substitute the executor as a defendant.

Also, the relief sought in each action differs. If the state action were success­ful, it would require that the ex-husband be held in contempt for his failure to comply with the final divorce decree and marital settlement. In this action, plain­tiff seeks imposition of a constructive trust. A show cause motion is not a par­allel proceeding to an action for damages and declaratory judgment, even when filed against the same defendant.

Surviving claims

The court grants plaintiff ’s motion to file late response to defendant’s motion to dismiss. While the reason for delay – counsel’s failure to educate himself on the rules and procedures of this court – weighs against granting plaintiff ’s motion, the court finds that counsel’s neglect in this matter is excusable. The danger of prejudice, length of delay and its potential impact on judicial proceed­ings, are minimal in this matter.

Contrary to defendant’s argument, the language in paragraph 5 of the marital settlement agreement, providing that the ex-husband named plaintiff as the beneficiary to a life insurance policy he owns with Liberty National, is sufficient to identify a specific death benefit, even if it does not identify a particular life in­surance policy number.

Defendant concedes that, if proven successful, plaintiff ’s breach of contract claim may entitle plaintiff to imposition of a constructive trust.

However, the court agrees with defen­dant that the parties’ dispute does not present an ongoing conflict suitable for resolution by declaratory judgment. Any breach of contract by decedent, or other alleged harm, has already occurred.

The court denies dismissal of the con­tract and constructive trust claims.

Jones v. Jones (Davis) No. 2:16cv93, Sept. 13, 2016; USDC at Norfolk, Va.; Samuel R. Brown II for plaintiff; Jesse B. Gordon for defendant Jones; Robert B. Delano Jr. for defendant Liberty Nation­al. VLW 016-3-450, 33 pp.

VLW 016-3-450

Virginia Lawyers Weekly

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