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Provident Mutual Life Insurance Co. v. Ehrlich

January 27, 1975

PROVIDENT MUTUAL LIFE INSURANCE COMPANY OF PHILADELPHIA
v.
SELMA EHRLICH, APPELLANT IN NO. 74-1354, SHIRLEY EHRLICH A/K/A SHIRLEY JOAN EHRLICH AND SHIRLEY EHRLICH A/K/A SHIRLEY JOAN EHRLICH, AS EXECUTRIX OF THE ESTATE OF EDWARD W. EHRLICH, DECEASED PROVIDENT MUTUAL LIFE INSURANCE CO., ETC., APPELLANT IN NO. 74-1353 SELMA EHRLICH, APPELLANT IN NO. 74-1354



APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA. (C.A. No. 73-199).

Adams, Gibbons and Weis, Circuit Judges.

Author: Weis

Opinion OF THE COURT

WEIS, Circuit Judge.

The break up of a family is an unhappy affair whose consequences linger on long after the event and often involve strangers as well as those directly concerned. In this case a life insurance company finds itself in the unpleasant position of being beset by competing claims of two wives of a deceased insured. While both have sympathetic appeal, we conclude that only one can prevail here. The decision of the district court in making an award to both women, while somewhat solomonic in nature, we find to lack legal support.

Dr. Edward Ehrlich left his wife, Selma, and four children in the family home in Philadelphia in 1966 and moved to Nevada where he later secured a divorce and married Shirley. Some years before, he had taken out a life insurance policy with the Provident Insurance Company naming Selma, the first wife, as beneficiary. After the second marriage, he wrote to the insurance company requesting that Shirley be designated as beneficiary. The company declined to change the designation on its records because of pending litigation brought by Selma.

When Dr. Ehrlich died in 1972, both wives claimed the proceeds of the policy. Provident filed an interpleader in the United States District Court for the Eastern District of Pennsylvania and paid the proceeds into the court. After a trial, the district court held that Shirley had been legally designated beneficiary and was entitled to the proceeds. The court also decided that Selma was entitled to recover an equivalent amount from the insurance company because of equitable estoppel. 374 F. Supp. 1134. We affirm as to Shirley but reverse as to Selma.

The policy, which originally named Selma as the beneficiary, was in the face amount of $25,000 and was issued to Dr. Ehrlich on December 9, 1962. One of the policy provisions was that the insured reserved the right to revoke and change the beneficiary.

It was on or about October 6, 1966 that Dr. Ehrlich left Philadelphia permanently, and on October 25, 1966, Selma brought an action against him under the Act of 1907, P.L. 227, 48 P.S. ยง 132, in the Common Pleas Court of Philadelphia County. This statute provides that, in the event of failure for the support of his wife and children, proceedings may be instituted against any real or personal property of the husband and the court may direct a seizure and sale of sufficient assets to provide funds for the maintenance of wife and children.*fn1

On November 10, 1966, the state court appointed a receiver for the real estate of the husband which had been specifically described in the complaint and directed that the property be sold. The order further provided that "the Receiver is hereby authorized: (a) To seize and take possession of all the property, assets and effects of the defendant not limited to those above described or referred to wheresoever situate or found." Dr. Ehrlich received notice of this order although he was never personally served and did not subject himself to the jurisdiction of the Philadelphia court. On November 23, 1966, the attorney for Selma sent a copy of the court order to the Provident Insurance Company along with a letter requesting information on the amount of a quarterly premium which was soon due.

On December 28, 1966, Dr. Ehrlich divorced Selma in a Nevada proceeding and married Shirley on the same day. As part of the divorce decree, the doctor was ordered to make support payments of $100 per month per child until emancipation, with credit to be allowed for the assets attached in the Pennsylvania court proceeding. Ehrlich established a medical practice in Nevada and continued to live there until his death some six years later.

Dr. Ehrlich wrote to the Provident on February 20, 1967, saying:

"Please send me forms for change of beneficiary as well as the policy numbers which I have with you. My agent, C. E. Tobias, has not answered my request for this information in a letter ...


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