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UNITED BEN. LIFE INS. CO. v. CODY

June 12, 1968

UNITED BENEFIT LIFE INSURANCE COMPANY, Plaintiff,
v.
Mrs. Clyde McLemore CODY; and Jeannette Pearson McDuffie, Defendants



The opinion of the court was delivered by: HODGE

 This action in the nature of interpleader *fn1" involves conflicting claims of the above named defendants, hereinafter referred to as Mrs. Cody and Mrs. McDuffie, to the proceeds of a life insurance policy issued by the plaintiff insurance company upon the life of one Raymond Randall McDuffie, deceased. The plaintiff insurer has paid the proceeds of the policy into the registry of the court and has been dismissed from the action.

 There are no issues of fact to be determined. The stipulated facts as set forth in the pre-trial order and briefs are as follows:

 Under date of February 1, 1963, plaintiff insurance company issued to Raymond Randall McDuffie a standard policy of life insurance in the face amount of $10,000.00. The policy was issued at Omaha, Nebraska which is the principal place of business of the insurer. McDuffie was at that time stationed in England as a member of the United States Air Force and listed Stockbridge, Georgia as his place of residence. Mrs. Cody was named as beneficiary in the policy. Later decedent married Mrs. McDuffie in England and notified the insurance company of the change of beneficiary to his wife, which was acknowledged by the insurance company by endorsement attached to the policy. Thereafter, decedent was transferred to a United States Air Force base at Minot, North Dakota, and divorced his wife, Jeannette, in North Dakota on March 14, 1966.

 The policy contains this provision:

 
"The insured may change the beneficiary designation by written notice to the Company. Such change will become effective when acknowledged by the Company."

 By will executed at Minot May 24, 1966, Raymond McDuffie stated, in part,

 
"I give, devise and bequeath absolutely and forever all my property, real, personal and mixed, and wherever situate to my mother, Mrs. Clyde Elizabeth Cody of Stockbridge, Henry County, Georgia. I have made other provisions through my Government Service Life Insurance for the other members of my family and I want my mother to have all property in my estate in fee simple absolute. It is my express directive that my former wife take no part of my estate nor any part of any other insurance that I may own, or to which I may be entitled."

 Raymond McDuffie died at an Air Force hospital in North Dakota five days thereafter, that is, on May 29, 1966, without changing the beneficiary by notice to the Company. The defendant Cody is the mother of the deceased and is the Executrix and sole beneficiary under said will which has been admitted to probate in Henry County, State of Georgia. The defendant Mrs. McDuffie is the last named beneficiary of the insurance policy and has since moved to the State of Washington.

 Jurisdiction of this court in this case is based upon diversity of citizenship and hence the law of the State of Washington with respect to interpretation of contracts must govern, under the rule of Erie Railroad Company v. Tompkins, 304 U.S. 64, 58 S. Ct. 817, 82 L. Ed. 1188. The Supreme Court of the State of Washington in a recent case, Baffin Land Corporation v. Monticello Motor Inn, Inc., decided March 24, 1967, 70 Wash. 2d 893, 425 P.2d 623, stated:

 
"We therefore adopt what we consider to be the better rule, viz., that the law of the state with which the contract has the most significant relationship, except perhaps in the unusual case of usury, will govern the validity and effect of a contract."

 The court then lays down the following factors in determining the state with which the contract has the most significant relationship:

 
"(a) the place of contracting,
 
(b) the place of negotiation of the ...

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