This interpleader action is presently before us on cross motions for summary judgment filed by an individual claimant, June Walton, and a group of adversary claimants, Patricia Camerlin, Cindy Dishong, Kathleen Hibbert, Terry Lemley and Pamela Kostrej. We have jurisdiction pursuant to 28 U.S.C. § 1335. The facts upon which our opinion rests are not in dispute.
Jack R. Walton worked for Bell Telephone Company of Pennsylvania ("Bell") from January 28, 1952 until his retirement on August 25, 1975. On March 22, 1951, Mr. Walton and the woman now known as Patricia Camerlin were married. They were divorced on June 8, 1959. In 1962, Mr. Walton married June Walton.
While working for Bell, Mr. Walton enrolled in Bell's Basic Group Life Insurance Program, underwritten by the plaintiff, Provident Mutual Life Insurance Company of Philadelphia ("Provident"), on April 1, 1957. At that time Mr. Walton designated his then wife, Patricia W. Walton (now Mrs. Camerlin), as the primary beneficiary of his insurance policy. On December 6, 1966, some four years after his marriage to June Walton, Mr. Walton enrolled in Bell's Supplementary Group Life Insurance Program and indicated that the beneficiary designation would be the same as that contained in his other policy.
On April 19, 1980, Mr. Walton died. At the time of his death, the beneficiary named in his life insurance policy remained his first wife, Patricia W. Walton (now Mrs. Camerlin).
On August 11, 1980, June Walton (the second wife) brought suit in the Court of Common Pleas of Allegheny County, Pennsylvania, Civil Division at No. G.D. 80-18823, against both Bell and Provident on theories sounding in contract (the insurance policy), tort (negligent misrepresentation by Bell that policy beneficiary designation had been changed), and equity (seeking reformation of the policy). On September 21, 1981, counsel for Provident received a letter from counsel for Mrs. Camerlin (the first wife) asserting a claim to the insurance proceeds as the beneficiary designated in the policy.
Faced with these conflicting claims, on November 10, 1981 Bell and Provident filed this complaint to interplead the insurance proceeds and interest totaling $28,262.50. On November 19, 1981, we signed the proposed order attached to the plaintiffs' complaint, enjoining the prosecution of other suits pertaining to the Walton insurance proceeds and discharging Bell and Provident from further liability on those proceeds.
On February 19, 1982, after consideration of the claimant Walton's Motion to Vacate Order, we filed a Memorandum Opinion and Order vacating the order of November 19, 1981 as being overly broad, dismissed Bell for lack of jurisdiction, and limited the interpleader action strictly to a determination of the proper recipient of the proceeds of Mr. Walton's contract of insurance with Provident. Provident Mutual Life Insurance Company of Philadelphia v. Camerlin, 534 F. Supp. 318 (W.D. Pa. 1982).
On November 17, 1982, Mrs. Camerlin moved for summary judgment, claiming a right to the proceeds as the named beneficiary of the insurance policy. In a bench opinion issued on December 21, 1982, we ruled that 20 Pa. Con. Stat. Ann. § 6111.1 (Purdon Supp. 1983) applied to life insurance beneficiary designations and, consequently, rendered ineffective the designation of Patricia Camerlin as a beneficiary of Jack Walton's insurance policy. 20 Pa. Con. Stat. Ann. § 6111.1 provides:
If the conveyor is divorced from the bonds of matrimony after making a conveyance, all provisions in the conveyance which were revocable by him at the time of his death and which were to take effect at or after his death in favor of or relating to his spouse so divorced shall thereby become ineffective for all purposes.
On March 15, 1983, Mrs. Walton filed a motion for summary judgment, claiming the insurance proceeds as the sole beneficiary of her late husband's estate.
On April 12, 1983, the children of Jack Walton's union with Mrs. Camerlin filed a motion seeking to intervene in the case. Three of the four children, Cindy Dishong, Kathleen Hibbert, and Terry Lemley were named in the insurance policy as contingent beneficiaries. The fourth child, Pamela Kostrej, was born subsequent to the Walton's separation and therefore after Jack Walton designated the beneficiaries to his insurance policy in 1957. Pamela asserts an interest in the proceeds on the strength of an agreement by her three siblings to share the proceeds equally with her and in reliance on language in the policy which appears to include unborn children in a designation of children as contingent beneficiaries. All four children allege standing to intervene on the basis of an irrevocable assignment by Mrs. Camerlin to them of all of her rights to the proceeds and the status of three of the children as named contingent beneficiaries. We permitted all four children to intervene as defendants in the action to insure that all potential claimants to the interpleaded fund are parties in the case.
On April 20, 1983, Mrs. Camerlin and the four children moved for summary judgment in favor of the children on the basis of the designation of three as contingent beneficiaries by Jack Walton and the status of Patricia under the language of the policy. This motion, along with the earlier summary judgment motion filed by Mrs. Walton, raises two issues:
1. When 20 Pa. Con. Stat. Ann. § 6111.1 prevents a designated beneficiary from receiving the proceeds of an insurance policy, do those proceeds belong to the contingent beneficiaries or to the insured's estate?