Court enforces SGLI designation

In  Dohnalik v. Somner, 467 F.3d 488, 489 (5th Cir. 2006), the Fifth Circuit Court of Appeals addressed the question of whether an ex-spouse’s designation as a beneficiary under a Servicemembers' Group Life Insurance (SGLI) policy survives a state divorce decree purporting to divest the designee of any such interests.

 The Court of Appeals held that husband’s designation of wife as beneficiary of group life insurance policy survived the divorce decree that purported to divest her of any interest in his life insurance policies.

 Samuel King and Delores Dohnalik married in 1993. In 2002, King obtained a SGLI life insurance policy. The policy listed Dohnalik as the principal beneficiary and King’s mother, Mahamalea Somner, as the contingent beneficiary.

 Several months after the policy took effect the couple’s marriage ended in divorce. The final divorce decree provided, in relevant part, that Dohnalik was “divested of all right, title, interest and claim in ... [a]ll policies of insurance (including cash values) insuring [King’s] life.” The decree was signed as “consented to” by both parties and was entered on December 19, 2002.

 Just fifteen days after their divorce was finalized, King died on January 3, 2003. King never changed his SGLIA beneficiary designation prior to his death.

 After King’s death, both Dohnalik and Somner filed claims for the SGLIA policy proceeds. In response to the claims the SGLI office stated that, that it viewed Dohnalik as the rightful claimant. After failed negotiations, Dohnalik brought an action for a judgment declaring her the beneficiary. The Western District of Texas trial court found that Dohnalik was the rightful beneficiary of King’s SGLIA policy. Somner appealed the ruling.

 As the Fifth Circuit noted “this case presents a new twist on a long-resolved issue.” That being the question is whether Samuel P. King’s (“King”) designation of Delores Dohnalik (“Dohnalik”) as the beneficiary of his Serviceman’s Group Life Insurance policy survives the divorce decree that purports to divest her of any interest in his life insurance policies.

 The Fifth Circuit found the ERISA-related waiver cases were not applicable in light of the Supreme Court's "hardline stance" that the SGLIA preempts all contrary law including court orders, and that the beneficiary designated in accordance with the terms of the Servicemembers' Group Life Insurance policy must prevail.


Since King could have removed Dohnalik as the SGLIA policy beneficiary at any time, it is difficult to conceptualize what a waiver of Dohnalik's rights might entail. Query how one waives a right they do not have. Dohnalik had no right to remain a designee. That status was entirely contingent on King's discretion, so there was no future entitlement for her to waive. Perhaps such a waiver prohibits the policy holder from ever designating the waivee as a beneficiary, just nullifies any prior designation but allows for a subsequent one, or maybe Dohnalik remained the beneficiary but just waived her right to claim the proceeds. As curious as a waiver concept may be in this context, we have previously discussed it in similar terms. See Guardian Life Ins. Co. of America v. Finch, 395 F.3d 238, 240 (5th Cir.2004).

 The Fifth Circuit further noted:

If an SGLIA policy-holder wishes to change his designated beneficiary, he must communicate that decision to the proper office. King failed to do so, and the provisions of the SGLIA dictate that Dohnalik remains the designated beneficiary. Ridgway requires that we strictly construe the SGLIA provisions, and it is agreed that Dohnalik is the beneficiary under those terms. We therefore agree with the district court that Dohnalik is the rightful claimant and AFFIRM. 

Under Texas law there still may be some contractual remedies to recover the benefits.  Please contact a Texas lawyer who handles life insurance claims.


J. Michael YoungComment