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Media Alerts - Melin v. Sveen - Eighth Circuit
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April 28, 2017
  Melin v. Sveen - Eighth Circuit
Headline Eighth Circuit holds that Minnesota's revocation-upon-divorce statute is unconstitutional when applied retroactively to life insurance policies

Area of Law Insurance

Issue(s) Presented Whether the district court properly awarded life insurance proceeds to the decedent's children by retroactively applying Minnesota's revocation-upon-divorce statute to the decedent's policy naming his former spouse as the primary beneficiary.

Brief Summary In 1997, the decedent, Mark Sveen, married the appellant, Kaye Melin, and named her the primary beneficiary of his life insurance policy the following year. His two adult children, the appellees, were designated as contingent beneficiaries. Sveen and Melin divorced in 2007, and Sveen never changed the beneficiary designation on the policy. Sveen passed away in 2011, with Melin still listed as the primary beneficiary.

Upon Sveen's death, the insurance company filed an interpleader action to determine whether a 2002 amendment to Minnesota's probate code applied the revocation-upon-divorce statute to life insurance designations made prior to the statute's amendment. Melin and Sveen's two adult children cross-claimed for the proceeds. The district court granted summary judgment for Sveen's children.

On appeal, a panel of the Eighth Circuit reversed. The Court first held that Melin had standing to assert a constitutional challenge to the revocation-upon-divorce statute. The Court then relied on a prior Eighth Circuit panel decision holding that Oklahoma's revocation-upon-divorce statute violated the Contract Clause of the Constitution when applied retroactively to reach the same conclusion with respect to the Minnesota statute. The Court held that retroactive application of revocation-upon-divorce statutes is unconstitutional because policyholders have the right to rely on the law governing insurance contracts at the time the contract was made, and applying the statute would directly alter the rights and obligations of the contracting parties.

The full text of the opinion may be found at http://media.ca8.uscourts.gov/opndir/17/04/161172P.pdf

Panel Circuit Judges Benton and Shepherd, and District Judge Ebinger, sitting by designation

Date of Issued Opinion April 3, 2017

Decided Reversed and remanded

Docket Number 16-1172

Counsel Scott A. Wilson for Appellant and Daniel P. Doda for Appellees

Author Circuit Judge Benton

Case Alert Circuit Supervisor Joelle Larson, University of Minnesota Law School

    Posted By: Joelle Larson @ 04/28/2017 01:57 PM     8th Circuit  

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