Ex-Wife Gets None of Ex’s Life Insurance, Court Rules

A deceased life insurance policyholder’s ex-wife has no right to any portion of the proceeds because the man’s death voids a family court order to split the cash surrender value of the policy, the Rhode Island Supreme Court has ruled.

Citing precedent, the court ruled in Loppi v. United Investors Life Inc. that any court action involving the distribution of property between Robert and Marilyn Loppi “terminates on the death of one of the parties.”

The facts in the case led the court to the “inescapable conclusion” that the family court’s order with respect to the division of property was voided upon Robert Loppi’s death, Associate Justice William P. Robinson III wrote in the Nov. 16 decision.

In the 1978 case Keidel v. Keidel, the Rhode Island Supreme Court held that “it is universally accepted that, divorce being a personal action, the death of one of the parties before the entry of the final decree thereon abates the action.”

Findings in Keidel were “clarified and reiterated” in Centazzo v. Centazzo in 1989, Justice Robinson wrote in the nine-page decision.

Loppi v. United Investors Life began in 2008 when Marilyn Loppi filed for divorce from Robert, who was served with divorce papers on July 19. Two days earlier, he switched the beneficiary of the life insurance policy from his wife to an uncle.

On March 27, 2009, the family court ordered that the Loppi’s life insurance and investment assets be cashed and divided equally, but the order was never completed because Robert Loppi died on May 28, according to court documents.

When the insurance carrier refused to pay the face amount of $375,000, David Loppi, who had been named the sole beneficiary, filed suit in October 2009 seeking 100 percent of the life insurance death benefit.

In April 2012, after a hearing, the court granted David’s Loppi’s request for 100 percent of the policy’s death benefit, a decision which Marilyn Loppi appealed.

Marilyn Loppi argued that that the policy was “marital property” and that the proceeds derived from it were subject to “equitable division.”

She also argued that her ex-husband’s beneficiary change two days before divorce papers were served would have been thrown out by the family court. The 50-50 split in the cash value of the policy was “akin to an alimony or support order,” she said, and valid even after her ex-husband’s death.

David Loppi argued that his nephew was under no court jurisdiction over marital assets at the time of the beneficiary transfer, which took place two days before Robert Loppi was served with the divorce papers.

The Rhode Island Supreme Court rejected Marilyn Loppi’s alimony argument.

“After a thorough review of the May 27, 2009, Family Court order addressing Marilyn and Robert’s life insurance policies, we are convinced that it is not, nor was it ever intended to be, an order of alimony or support,” the court ruled.

InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].

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Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at [email protected].