The opinion of the court was delivered by: Garland E. Burrell, Jr. United States District Judge
The trial in this interpleader action was held December 16, 2008. AIG Life Insurance Company ("AIG") commenced this lawsuit following the unexpected demise of its insured Kenneth Lua ("Kenneth"), and after it received conflicting claims seeking the life insurance proceeds to be paid under Kenneth's AIG life insurance policy. AIG has placed the life insurance proceeds in the Court's custody, and has been dismissed as a party.
Both Kenneth's first wife, Virginia Joy Allen ("Allen"), (from whom he was divorced under the terms of a Marital Settlement Agreement), and his second wife, Ellen Lua ("Lua"),(to whom he was married at the time of his death), claim entitlement to the life insurance proceeds.
1. Allen was married to Kenneth from December 1990 until their marriage was dissolved by Judgment in May 1994.
2. On November 8, 1991, Kenneth named ALLEN as the beneficiary of the AIG life insurance policy no. SRG 0008064270 ("AIG policy") that is the subject of this lawsuit.
3. In 1994 Kenneth married LUA. 4. On September 1, 2006, Kenneth died from injuries sustained in a motorcycle accident.
5. Kenneth never changed the beneficiary to the AIG policy.
6. At the time of Kenneth's demise, he was married to LUA.
7. The Judgment of Dissolution between Kenneth and ALLEN gave Kenneth the full interest and title to the PG & E Savings Fund and the Pension Plan of PG & E. As part of the dissolution process, Kenneth was advised to make whatever changes to his life insurance policies that he wished. Kenneth made no changes to the subject policy.
8. On or about October 1, 2006, Lua submitted a claim to AIG in which she stated Allen had "released all her rights to any of Ken's PG &E benefits" and that she was sure "Ken just neglected to change this policy to list me as the beneficiary after we had gotten married."
9. AIG subsequently contacted Allen to inquire whether she wished to waive asserting a claim or waive any benefits. Allen informed AIG that she would assert a claim and did not waive any claim to benefits or proceeds. AIG received a letter from Allen in which she stated Kenneth "gave me a verbal contract to keep his life insurance in my name . . ."
Lua contends Allen waived her beneficiary expectancy interest under the AIG policy in a provision of a Marital Settlement Agreement Allen entered with Kenneth. Lua argues in that provision Allen waived her rights "under" Kenneth's "separate property pension plan." However, this general language did not extinguish Allen's expectancy interest in Kenneth's AIG policy. Life Insurance Company of North America v. Ortiz 535 F.3d 990, 993 (9th Cir. 2008)(stating under California law "general language in a marital settlement agreement will not be construed to include an assignment or renunciation of the expectancy interest conferred on the named beneficiary of ...