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Oklahoma Supreme Court: Revocation Upon Divorce Statute Only Applies Upon Final Judgment Of Divorce

In Ghoussoub v. Yammine, a June 21, 2022 opinion from the Oklahoma Supreme Court, the Court addressed the question of whether Oklahoma’s revocation-upon-divorce statute, 15 O.S. 2011 §178(A), applies when one party dies after the granting of the divorce but prior to final judgment on all issues.  The answer:  No.

The Facts of Ghoussoub v. Yammine

Dr. Jean Bernard and Marie Yammine were married in 2003.  In 2007, ReliaStar issued Bernard a two million dollar term life insurance policy on his life.  Yammine was designated the sole primary beneficiary, and Bernard’s brother, Roland Ghoussoub, the contingent beneficiary.

Bernard and Yammine separated in 2010.  Bernard filed to dissolve their marriage in 2015.

Bernard learned he was terminally ill in March 2017.  He moved for an order to dissolve the marriage and to bifurcate and reserve final judgment.  Prior to the hearing, and without court approval, Bernard changed the primary beneficiary on the policy.  Bernard was found in a coma the next day.  At an emergency hearing the trial court granted the divorce order over Yammine’s objection, reserving final judgment on the property and debt issues.  Yammine timely appealed the Order Granting Divorce.

Yammine applied for injunctive relief, alleging Bernard violated the automatic temporary injunction (“ATI”) mandated by 43 O.S.2011 § 110(A)(1)(b)(4)2 when he removed her beneficiary designation from the policy. Yammine also requested to be reinstated as the Policy’s primary beneficiary to protect her equitable share of the marital property. Bernard’s counsel objected, arguing that the ATI dissolved when the divorce was pronounced and that the trial court lacked jurisdiction to issue orders during Yammine’s appeal from the Order Granting Divorce.

The trial court enjoined Bernard’s removal of Yammine as the Policy beneficiary.   Bernard died in December 2018.  At the time of his death, Yammine was the primary beneficiary and Ghoussoub was the contingent beneficiary of the Policy.

Six weeks later, Ghoussoub filed a declaratory judgment action against Yammine and ReliaStar.  The trial court declared Ghoussoub was entitled to the Policy proceeds finding the Order Granting Divorce was final before Bernard’s death and that Yammine was precluded by operation of 15 O.S.2011 § 178(A) from receiving the proceeds of the death benefit of the Policy. Yammine timely appealed the judgment.

Revocation of Beneficiary Designations Upon Divorce In Oklahoma

15 O.S. § 178.5 addresses several types of written contracts, e.g., life insurance and retirement benefits, for which contracted death benefits are paid directly to a designated beneficiary upon death of the insured. The statute provides for revocation of all contract provisions in favor of a former spouse, subject to six exceptions.

The Oklahoma Supreme Court walked through the legislative history of the statue:

In 1994, the Legislature amended § 178(A) to add “depository agreements” and “security registrations” to its list of written contracts with death benefits provisions subject to revocation. The same year, the statutes related to those contracts, e.g. “Payable on Death” (P.O.D.) accounts, were amended to make each expressly subject to 15 O.S. § 178.6 In 2001, the Legislature enacted 18 O.S. § 381.39a to address P.O.D. joint accounts in a savings and loan association and also made them subject to § 178. See 18 O.S.2011 § 381.39a(B)(5).

In 2012, the majority rule in the U.S. continued to support that divorce per se does not affect a designated ex-spouse’s right to receive life insurance proceeds; eight states, including Oklahoma, represented the minority position that a divorce automatically revokes an ex-spouse’s beneficiary status. By 2018, twenty-six states had adopted revocation-on-divorce laws.

Does Oklahoma’s Revocation Upon Divorce Statute Apply Before a Final Judgment of Divorce?

No, the Oklahoma revocation upon divorce statute does not apply before a final judgment of divorce is entered.

On appeal, Yammine urged that the Legislature contemplated one final divorce in which all issues are adjudicated, but did not make its intent clear when drafting § 178(A). Yammine posits interpreting § 178(A) to include a divorce order that reserves final judgment on all issues deprives the divorce court of its opportunity to sit in equity and divests its retained jurisdiction.

To support her position, Yammine contends § 178(A) does not address the hybrid Oklahoma circumstance of a bifurcated divorce proceeding, where a divorce is granted but jurisdiction is reserved to address other pending issues.   Yammine argued § 178(A) does not apply when a spouse dies after the divorce order is entered but prior to final judgment on all issues.

Ghoussoub argues § 178(A)’s plain verbiage makes no such distinction between a divorce decree on all issues and one that has been bifurcated from other issues, such as property division. Pointing out “property interests” and “divorce proceeding” are absent from § 178(A)’s terms, he argued that § 178(A) revokes Yammine’s primary beneficiary status by operation of law.

Section 178(a) – Revocation Upon Divorce Statute

Section 178(A) provides:

If, after entering into a written contract in which a beneficiary is designated or provision is made for the payment of any death benefit (including life insurance contracts, annuities, retirement arrangements, compensation agreements, depository agreements, security registrations, and other contracts designating a beneficiary of any right, property, or money in the form of a death benefit), the party to the contract with the power to designate the beneficiary or to make provision for payment of any death benefit dies after being divorced from the person designated as the beneficiary or named to receive such death benefit, all provisions in the contract in favor of the decedent’s former spouse are thereby revoked. Annulment of the marriage shall have the same effect as a divorce. In the event of either divorce or annulment, the decedent’s former spouse shall be treated for all purposes under the contract as having predeceased the decedent.10

Section 110(C) – Automatic Temporary Injunctions

The Oklahoma Supreme Court determined that the plain meaning of § 178(A)’s terms reveals an irreconcilable conflict when read in conjunction with 43 O.S.2011 § 110(C), which provides:

Any temporary orders and the automatic temporary injunction, or specific terms thereof, may be vacated or modified prior to or in conjunction with a final decree on a showing by either party of facts necessary for vacation or modification. Temporary orders and the automatic temporary injunction terminate when the final judgment on all issues, except attorney fees and costs, is rendered or when the action is dismissed. The court may reserve jurisdiction to rule on an application for a contempt citation for a violation of a temporary order or the automatic temporary injunction which is filed any time prior to the time the temporary order or injunction terminates. (Emphasis added).

Construing the statutes together, the Oklahoma Supreme Court determined that:

The ATI expressly restrains both parties from “changing or in any manner altering the beneficiary designation on any life insurance policies on the life of either party or any of their children.” 43 O.S.2011 § 110(A)(1)(b)(4). Other ATI provisions specifically restrain the spouses’ post-petition interactions with several contracts that are subject to revocation pursuant to § 178(A). Pertinent here, § 110(C) provides that “[t]emporary orders and the [ATI] terminate when the final judgment on all issues, except attorney fees and costs, is rendered or when the action is dismissed.”

The ATI mandated by § 110–and the temporary order entered by the trial court at Yammine’s request–govern the life insurance policy at issue here. While Ghoussoub claims the Policy’s beneficiary was revoked by § 178(A), his position fails to consider § 178(A)’s conflict with § 110(C), which was enacted fifteen years after § 178(A). Read alone, § 178(A)’s application to a divorce order with pending property division issues, including a life insurance policy, is unclear. In contrast, § 110(C) very clearly maintains the trial court’s control of beneficiary changes to a life insurance policy owned by the parties until final judgment on all issues is rendered. “[W]here a matter is addressed by two statutes–one specific and the other general–the specific statute, which clearly includes the matter in controversy and prescribes a different rule, governs over the general statute.” Rogers v. Quiktrip Corp., 2010 OK 3, ¶ 13, 230 P.3d 853, 860. In addition, “[m]ore recently-enacted legislation controls over earlier provisions.” Id. Accordingly, we find the specific language in § 110(C) controls over § 178(A) in this cause.

Reading the two statutes together, the Oklahoma Supreme Court concluded that the  later enactment of § 110(C) effectively limits § 178(A)’s “after being divorced” language to a divorce where final judgment on all issues is rendered. To find otherwise creates an absurd result wherein one’s designation as a life insurance beneficiary, while protected by § 110(C) in a bifurcated proceeding where final judgment has yet to be rendered, is concurrently revoked by § 178(A).

Therefore, a final divorce judgment is required on all issues to invoke the revocation-upon-divorce statute under Oklahoma law.  Here, the trial court erred by interpreting §178(A) to revoke Yammine’s beneficiary designation in Bernard’s life insurance policy based on an order granting divorce when the final judgment on all issues remained pending at husband’s death.

For more information on revocation upon divorce, read Does Divorce Revoke a Will In Oklahoma?

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