                         No. 3--05--0771
_________________________________________________________________
Filed June 6, 2007.
                              IN THE

                       APPELLATE COURT OF ILLINOIS

                             THIRD DISTRICT

                               A.D., 2007

COLLEEN ALLTON,                 ) Appeal from the Circuit Court
                                ) of the 12th Judicial Circuit,
     Plaintiff-Appellee,        ) Will County, Illinois,
                                )
                                )
     v.                         ) No. 03--D--2023
                                )
LISA HINTZSCHE, as independent )
administrator of the Estate of )
GUY BLAKE ALLTON, deceased,     ) Honorable
                                ) Robert P. Brumund,
     Defendant-Appellant.       ) Judge, Presiding.
_________________________________________________________________

   PRESIDING JUSTICE LYTTON delivered the Opinion of the court:
_________________________________________________________________
     The defendant, Lisa Hintzsche, the independent administrator

of the estate of Guy Blake Allton, appeals from the circuit court's

order directing an insurance company to pay the proceeds of a life

insurance policy to the plaintiff, Colleen Allton.             Hintzsche

argues that Guy and Colleen’s children were entitled to the life

insurance   proceeds    because   the   marital   settlement   agreement

required Guy to change the policy’s beneficiary from Colleen to the

children.   We reverse and remand.

                                  FACTS

     Colleen and Guy married on August 8, 2000.           They had two

children together.       On August 10, 2000, Guy obtained a life

insurance policy for $100,000.      He named Colleen as the primary

beneficiary and his father as the successor beneficiary.
     Colleen filed for divorce on December 12, 2003.                     The circuit

court entered a judgment for dissolution of marriage on May 19,

2004.     In its order, the court adopted a Marital Settlement

Agreement    (Agreement)     into   which        the    parties    entered.         The

Agreement contained the following property settlement provision

regarding life insurance benefits:

     "Each party shall maintain a life insurance policy upon

     his or her life, such that upon the death of said party,

     each child of the parties shall be entitled to receive

     death benefits, in an amount of not less than $50,000.00

     per child.       Each party shall be obligated to maintain

     said policies so long as the parties have an obligation

     to     support    the   children       or    contribute        to    their

     post-secondary education.              Neither party shall cause
     liens to be secured against said benefits, which would

     diminish    the   aforesaid    proceeds           to   a   child    of   the

     parties.     Following the execution hereto, each party

     agrees to obtain and keep said policies in full force and

     effect and to designate the children of the parties as

     the sole irrevocable beneficiaries under said policies.

     Each party shall provide the other with proof of the

     existence, terms and provisions of said policies within

     30 days of the entry of a Judgment herein and thereafter

     annually provide proof that said policies have been

     maintained."



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The   Agreement   also    contained      the    following      provision     in    its

"Miscellaneous Provisions" section:

      "Each of the parties, his or her heirs, executors and

      administrators, in accordance with the terms hereof, upon

      the demand of the other party, will execute any and all

      instruments and documents as may be designated herein or

      as may be reasonably necessary to make effective the

      provisions of this agreement and release his or her

      respective interests in any property, real or personal

      belonging   to     or    awarded   to    the    other.     It     is   the

      intention   of     the   parties       that    this   Agreement    shall

      constitute a complete adjustment of the property rights

      of the parties hereto and that each party will perform

      all subsidiary acts to accomplish same."
The Agreement did not specifically mention Guy's existing life

insurance policy.

      On November 23, 2004, Guy died in a car accident.                  Hintzsche,

the administrator of Guy's estate, filed a Petition to Enforce

Divorce Decree and Reform Beneficiary Designation on June 30, 2005.

In the petition, Hintzsche stated that State Farm Insurance Company

requested a court order directing the payment of the proceeds of

Guy's life insurance policy because Colleen was claiming that the

proceeds should be paid to her despite the Agreement's provisions.

Hintzsche alleged that the life insurance proceeds should be paid

to the children, rather than to Colleen.

      At the hearing on the petition, the court found that:

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            "There is nothing in this judgment that required the

      specific policy that he had at the time of his death or

      at the time of the judgment to name the children.                 It

      specifically says, 'following the execution hereto, each

      party agrees to obtain and keep in full force.'             Well, it

      says that the parties agree to obtain.          That doesn't mean

      that the parties agree to change the beneficiaries on the

      policies    as   they   existed   prior   to   the    judgment   for

      dissolution of marriage."

The court denied Hintzsche's petition and ordered State Farm to pay

the policy's proceeds to Colleen.

                                    ANALYSIS

      On appeal, Hintzsche argues that the circuit court erred when

it ordered State Farm to pay the policy's proceeds to Colleen.
Specifically, Hintzsche argues that the fact that Guy did not

change beneficiaries on the life insurance policy does not affect

the rights of the children, who were the intended beneficiaries, as

evidenced by the Agreement's language.          Colleen contends that the

trial court correctly found that the Agreement did not require Guy

to   make   the   children    the   beneficiaries    of    his   existing    life

insurance policy because the Agreement did not specifically refer

to that policy.

      In Illinois, a divorce decree does not affect the rights of

the divorced wife as beneficiary of the husband's life insurance

policy.     O'Toole v. Central Laborers' Pension & Welfare Funds, 12

Ill. App. 3d 995, 299 N.E.2d 392 (1973).             However, the rights of

                                        4
the divorced wife could be affected if a property settlement

agreement specifically includes a termination of the beneficiary's

interest.    See O'Toole, 12 Ill. App. 3d 995, 299 N.E.2d 392.                 If,

pursuant    to   a   divorce     decree,      the   parties     agree   to   change

beneficiaries on a life insurance policy but do not do so, equity

requires that the proceeds be paid to the persons who should have

been named as beneficiaries.         Home Insurance Co. v. Hortega, 193

Ill. App. 3d 941, 550 N.E.2d 688 (1990); In re Estate of Comiskey,

125 Ill. App. 3d 30, 465 N.E.2d 653 (1984); Travelers Insurance

Company v. Daniels, 667 F.2d 572 (1981) (child entitled to father's

life insurance proceeds when a divorce decree required father to

change beneficiaries, but he failed to do so).

     When interpreting a marital settlement, courts seek to give

effect to the parties’ intent.           In re Marriage of Dundas, 355 Ill.
App. 3d 423, 425-26, 823 N.E.2d 239, 241 (2005).                The language used

in the marital agreement is generally the best indication of the

parties’ intent.          Dundas, 355 Ill. App. 3d at 426, 823 N.E.2d at

241. When the terms of the agreement are unambiguous, we determine

the parties’ intent solely from the language of the instrument. In

re Marriage of Michaelson, 359 Ill. App. 3d 706, 714, 834 N.E.2d

539, 546 (2005).          An ambiguity exists when an agreement contains

language    that     is    susceptible       to   more   than    one    reasonable

interpretation.      Ford v. Dovenmuehle Mortgage, Inc., 273 Ill. App.

3d 240, 244, 651 N.E.2d 751, 754 (1995). Where the language is

ambiguous, parol evidence may be used to decide what the parties

intended.    Michaelson, 359 Ill. App. 3d at 714, 834 N.E.2d at 546.

                                         5
We   review   de    novo      an   interpretation       of    a   marital   settlement

agreement and a determination of whether the agreement’s terms are

ambiguous.      Dundas, 355 Ill. App. 3d at 426, 823 N.E.2d at 242.

      The Agreement’s provision on life insurance benefits requires

the parties to "maintain" a life insurance policy for the benefit

of the children so long as the parties have an obligation to

support   the      children        or    contribute     to    their    post-secondary

education.         The   same      provision     also   requires      the   parties   to

“obtain and keep said policies in full force and effect and to

designate the children of the parties as the sole irrevocable

beneficiaries under said policies.”

      We find that the Agreement’s language is ambiguous because it

is   susceptible         to     two      different,     yet       equally   plausible,
interpretations.         On the one hand, the provision can be read to

require Guy to maintain the insurance policy he possessed at the

time of the divorce and name the children as the beneficiaries of

that policy. See Lincoln National Life Insurance Co., 71 Ill. App.

3d 900, 390 N.E.2d 506 (settlement agreement providing that the

deceased would “maintain” life insurance and name his child as

beneficiary required deceased to change the beneficiary of his

insurance policy).            Alternatively, the provision can be read to

require Guy to obtain an entirely new insurance policy for the

benefit of his children.                Because the terms of the Agreement are

susceptible to two different reasonable interpretations, parol

evidence should be introduced to determine the intent of the


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parties.    See Michaelson, 359 Ill. App. 3d at 714, 834 N.E.2d at

546.

       The judgment of the circuit court of Will County is reversed

and remanded.

       Reversed and remanded.

       CARTER, J., specially concurring:

       I agree with the majority opinion that the divorce settlement

agreement’s language is ambiguous and susceptible to different

interpretations regarding the entitlement to insurance proceeds.

Thus, the matter should be reversed and remanded to determine the

intent of the parties.      I specially concur because I          believe, on

remand, the     trial    court   should    consider   whether    to    impose   a

constructive trust.

       The appellant in this case had filed a petition to enforce the
judgment and reform the beneficiary designation of a certain life

insurance policy on the father. In the brief the appellant also

argues that the children had a right to the proceeds of the

insurance upon the death of the insured.           A vested equitable right

to the proceeds of insurance in Illinois can be enforced through

the imposition of a constructive trust, if appropriate.                See In re

Estate of Beckhart, 371 Ill.App.3d 1165, 864 N.E.2d 1002, 1006

(2007).

       When a settlement agreement requires a parent to name his

children as beneficiaries of a life insurance policy and the parent

fails to do so, a constructive trust may be imposed on the life

insurance     proceeds     to    protect     the    children’s        interests.

                                      7
See    Beckhart,     371   Ill.App.3d     1165,   864   N.E.2d     at   1007.   A

constructive trust is an equitable remedy that may be imposed to

redress unjust enrichment caused by one party’s conduct.                  Charles

Hester Enterprises Inc. v. Illinois Founders Insurance Co., 114

Ill.2d 278, 499 N.E.2d 1319 (1986).

       The purpose of a life insurance provision in a settlement

agreement is to ensure that the children are adequately supported

following the death of a parent.                See Beckhart, 371 Ill.App.3d

1165, 864 N.E.2d at 1005.           According to the Agreement, Guy and

Colleen were required to perform all necessary acts to accomplish

that purpose.        Guy was required to make his children beneficiaries

of an insurance policy, and Colleen had a responsibility to make

sure   that    Guy    fulfilled    his    obligations   to   the    children    by

enforcing the obligation to obtain insurance and providing proof of
that coverage.         It appears that both Guy and Colleen failed to

fulfill their duties under the Agreement to ensure that their

children      were    properly    named    as   beneficiaries      of   insurance

following the death of a parent.

       On remand, I would have the trial court consider whether

equity allows Colleen to benefit from her nonfeasance and to divest

her children of the interest she and Guy intended under the

Agreement. If the trial court finds that Colleen would be unjustly

enriched by retaining the insurance proceeds, the court should

impose a constructive trust to hold the proceeds solely for the

benefit of the children.          See Beckhart, 371 Ill.App.3d 1165, 864

N.E.2d at 1007.

                                          8
     HOLDRIDGE, J., dissenting:

     I respectfully dissent.              This case presents us with the sole

issue of whether the Agreement required Guy to change beneficiaries

on his life insurance policy.             When construing a contract, courts

give the contractual          terms their plain and ordinary meaning.

Reaver v. Rubloff-Sterling, L.P., 303 Ill. App. 3d 578, 708 N.E.2d

559 (1999). If the contract's language is unambiguous, courts must

determine    the    parties'      intent     solely     from    the   words    of    the

contract.    Reaver, 303 Ill. App. 3d 578, 708 N.E.2d 559.                   We review

the circuit court's determination of a contract de novo.                      Reaver,

303 Ill. App. 3d 578, 708 N.E.2d 559.

     Here,    the    Agreement      reveals      that   the     provision     on    life

insurance    benefits      does     not    specifically        mention     Guy's    life

insurance policy.          Furthermore, the provision's plain language
requires the parties to obtain life insurance policies, not change

an already-existing policy.           The two uses of the word "maintain"

are not dispositive and refer to the requirement that the parties

keep the policies in effect once they have obtained the policies.

In addition, I do not believe that the generic language of the

miscellaneous provision required Guy to change the beneficiary

designation    on    his   life     insurance     policy.        Nothing     in    these

provisions can reasonably be construed to indicate that the parties

intended the       children    to    be    the   beneficiaries        of   Guy's    life

insurance policy.

     Lincoln National Life Insurance Co. v. Watson, 71 Ill. App. 3d

900 (1979),cited by the majority, does not support the disposition.

In Lincoln National, the court ordered that the child receive the
proceeds of the father's life insurance policy, even though the

father did not change beneficiaries as was required by a previous

court order.     However, in Lincoln National, unlike the instant

matter, the divorce decree specifically required the father to name

his children as beneficiaries of his existing life insurance

policy.    The same cannot be said for this case.   I would hold that,

under the plain language of the Agreement, Guy was not required to

change the beneficiary designation on his life insurance policy,

and thus   the circuit court properly ordered State Farm to pay the

policy's proceeds to Colleen.    I dissent on that basis.




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