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Metropolitan Life Insurance Co. v. Melin

United States Court of Appeals, Eighth Circuit

April 3, 2017

Metropolitan Life Insurance Company Plaintiff
v.
Kaye Melin Defendant-Appellant Ashley Sveen; Antone Sveen Defendants-Appellees

          Submitted: November 17, 2016

         Appeal from United States District Court for the District of Minnesota - Minneapolis

          Before BENTON and SHEPHERD, Circuit Judges, and EBINGER, [1] District Judge.

          BENTON, Circuit Judge.

         Mark A. Sveen designated his then-wife, Kaye L. Melin, as the primary beneficiary of his life insurance policy, and his children as contingent beneficiaries. Later, Minnesota extended its revocation-upon-divorce statute to life insurance policies. The district court awarded the proceeds to the children, rejecting Melin's argument that applying the statute retroactively is an impermissible impairment under the Contract Clause. Having jurisdiction under 28 U.S.C. § 1291, this court reverses and remands.

         I.

         Sveen purchased the life insurance policy in 1997 and married Melin later that year. The following year, he named her as the primary beneficiary and his two adult children as contingent beneficiaries. Sveen had additional life insurance with his children as primary beneficiaries. Melin and Sveen divorced in 2007. Sveen never changed the beneficiary designation on the policy.

         In 2002, Minnesota amended its probate code to apply the revocation-upon-divorce statute to life insurance beneficiary designations: "the dissolution or annulment of a marriage revokes any revocable . . . beneficiary designation . . . made by an individual to the individual's former spouse." Minn. Stat. Ann. § 524.2-804.

         When Sveen died in 2011, Melin was still the primary beneficiary on the policy. The insurance company filed an interpleader to determine whether the revocation-upon-divorce statute revoked this beneficiary designation. Sveen's children-the contingent beneficiaries-and Melin cross-claimed for the proceeds. The district court granted summary judgment to the Sveens. This court reviews constitutional claims de novo. Walker v. Hartford Life & Accident Ins. Co., 831 F.3d 968, 973 (8th Cir. 2016).

         II.

         A.

         The Sveens argue that Melin lacks standing to assert a constitutional challenge to the revocation-upon-divorce statute.

         A non-party may assert a claim under a contract if the individual is a third-party beneficiary. See Dayton Dev. Co. v. Gilman Fin. Servs., Inc., 419 F.3d 852, 855 (8th Cir. 2005). Third-party standing is appropriate where: (1) the litigant "suffered an 'injury in fact, ' [ ] giving him or her a 'sufficiently concrete interest' in the outcome of the issue in dispute"; (2) what the litigant seeks has a "close relation" to the rights of the absent party; and (3) there is "some hindrance to the [absent] party's ability to protect his or her own interests." Powers v. Ohio, 499 U.S. 400, 411 (1991), quoting Singleton v. Wulff, 428 U.S. 106, 112 (1976).

         A contested beneficiary like Melin has standing because: (1) she would suffer the loss of policy proceeds, a concrete injury, if the statute were applied; (2) she seeks to enforce the contract as written, vindicating Sveen's written intent; and (3) Sveen's death hinders his ability to protect his interest to enforce the contract. See, e.g., Mearns v. Scharbach, 12 P.3d 1048, 1055 (Wash.Ct.App. 2000) (holding former spouse had third-party standing to assert constitutional ...


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