No. 20890-7-IIIThe Court of Appeals of Washington, Division Three. Panel Ten.
Filed: February 6, 2003 UNPUBLISHED OPINION
Appeal from Superior Court of Chelan County Docket No: 01-2-00032-7 Judgment or order under review Date filed: 02/14/2002
Counsel for Appellant(s), Charles R. Jr Cusack, Attorney at Law, 2005 Broadway St, P.O. Box 720, Vancouver, WA 98666-0720.
Counsel for Respondent(s), Patrick Paul Browne, Attorney at Law, 17544 Midvale Ave N Ste 307, Shoreline, WA 98133-4921.
BROWN, C.J.
Jack Winsor, in Washington, executed an Oregon general durable power of attorney form designating his sister, Margo Alava, as attorney-in-fact. Ms. Alava then changed the beneficiaries on Mr. Winsor’s two life insurance policies from Mr. Winsor’s estranged wife, Verna Winsor, to herself. When Ms. Alava and Ms. Winsor claimed the policy proceeds, Jackson National Life Insurance interpleaded the matter into the superior court. The trial court granted summary judgment to Ms. Winsor, concluding (1) she had standing to contest the beneficiary changes, (2) Washington law applied, and (3) because Washington law required specific authority to change beneficiaries, Ms. Alava lacked the power to change the beneficiaries. Ms. Alava appealed. We affirm.
FACTS
Jack and Verna Winsor were married in 1986 and resided for the relevant times in Washington. In 1995, Mr. Winsor converted two term life insurance policies with Jackson National Life Insurance Company to whole life policies, with death benefits of $100,000 each. In 1998, Mr. Winsor designated Ms. Winsor as beneficiary for both policies.
The parties separated in May 1999. Ms. Winsor filed for dissolution in July 1999. At the time of separation, Mr. Winsor was in poor health and was cared for by Mr. Winsor’s friend, Lorraine Sauerland and his sister, Margo Alava. In September 1999, Mr. Winsor executed a will providing his estate to be divided, 10 percent to each of his three children, 70 percent to Ms. Sauerland, and specifically disinheriting his wife, Ms. Winsor.
On June 29, 2000, from his home in Chelan County, Mr. Winsor executed an Oregon short form general durable power of attorney, designating his sister, Ms. Alava, as his attorney-in-fact. The Oregon form did not specifically grant authority to change beneficiaries on life insurance policies as is concededly required under Washington law. Nevertheless, in July, using this power of attorney, Ms. Alava requested that Jackson National change Mr. Winsor’s address to her address in Oregon. She asked for beneficiary change forms, which were mailed to Mr. Winsor at her address on July 24. In response to Ms. Alava’s August 7 return request under the power of attorney, on August 10, Jackson National changed the beneficiary designations from Ms. Winsor to Ms. Alava. On August 24, Mr. Winsor died in Wenatchee.
Ms. Alava and Ms. Winsor both filed claims with Jackson National, each claiming to be the sole beneficiary of the policies. Jackson National then interpleaded the proceeds into the Chelan County Superior Court. The trial court granted Ms. Winsor’s summary judgment, deciding the power of attorney did not grant Ms. Alava authority to change the beneficiary. Ms. Alava appealed.
ANALYSIS
Summary judgments are reviewed de novo, and properly granted solely when the evidence before the court establishes undisputed facts entitling a party to judgment as a matter of law. CR 56(e); Olivine Corp. v. United Capitol Ins. Co., 147 Wn.2d 148, 154-55, 52 P.3d 494 (2002).
A. Standing
The issue is whether the trial court erred on summary judgment when deciding Ms. Winsor had standing to object to the change in beneficiary as both a former beneficiary and as an existing spouse with a community interest in the funds used to purchase the policies.
The general rule of standing `requires that the plaintiff demonstrate an injury to a legally protected right.’ Sprague v. Sysco Corp., 97 Wn. App. 169, 176 n. 2, 982 P.2d 1202 (1999). `To have standing, a party must show a real interest in the subject matter of the lawsuit, that is, a present, substantial interest, as distinguished from a mere expectancy, or future, contingent interest, and the party must show that a benefit will accrue it by the relief granted.’ Primark, Inc. v. Burien Gardens Assocs., 63 Wn. App. 900, 907, 823 P.2d 1116 (1992). When a party lacks standing, the court lacks jurisdiction to decide the matter Postema v. Snohomish County, 83 Wn. App. 574, 579, 922 P.2d 176 (1996) Contra, DeWeese v. City of Port Townsend, 39 Wn. App. 369, 372, 693 P.2d 726 (1984) (although the question of standing is substantive, it should nevertheless be addressed as jurisdictional in the interests of an orderly proceeding).
When an insured reserves the right to change the beneficiary, the named beneficiary does not have a vested right to the policy proceeds during the life of the insured. See Mearns v. Scharbach, 103 Wn. App. 498, 511, 12 P.3d 1048 (2000). This tenet has been applied to preclude a contingent beneficiary from challenging the insurer’s waiver of contractual procedures for changing a beneficiary. Seattle Ass’n of Credit Men v. Bank of California, 177 Wn. 130, 138, 30 P.2d 972 (1934); In re Will of Kipke, 645 N.W.2d 727 (Minn.App. 2002); Fortis Benefits Ins. Co. v. Johnson, 966 F. Supp. 987, 991 (D.Nev. 1997); 4 Lee R. Russ Thomas E. Segalla, Couch on Insurance § 60:65 (3d ed. Supp. 2003).
Most jurisdictions allow a former beneficiary to bring a claim to invalidate a change in beneficiary based upon incompetence of the insured, fraud, undue influence, illegality, or breach of fiduciary duty. See Matter of Estate of Lint, 135 Wn.2d 518, 957 P.2d 755 (1998) (will procured by undue influence and fraud is void and ineffective) Praefke v. Am. Enter. Life Ins. Co., ___ N.W.2d ___, 2002 WL 1857384 review denied, 653 N.W.2d 891 (Wis.App. 2002) (claim for breach of fiduciary duty gives standing because the prohibition against self-dealing by an attorney-in-fact is not linked to any duty an agent may have to third parties, but is primarily addressed to the potential for fraud); 4 Couch on Insurance sec. 60:66 (3d ed. Supp. 2003).
Ms. Winsor argues this case is similar to Estate of Lennon v. Lennon, 108 Wn. App. 167, 29 P.3d 1258 (2001). In Lennon the court held the estate had standing to challenge the gifts. Id. at 183-84. This dissimilarity makes Lennon unpersuasive. Here, Ms. Winsor’s standing is derived from her own status. See City of Lakewood v. Pierce County, 144 Wn.2d 118, 129, 30 P.3d 446 (2001) (standing depends on the status of the person requesting adjudication, not whether the issue is justifiable).
Ms. Winsor has standing to challenge the beneficiary change because the policies were presumptively purchased with community funds. In Francis v. Francis, 89 Wn.2d 511, 515, 573 P.2d 369 (1978), the husband paid for two life insurance policies with community funds, naming his wife as the beneficiary on one, and his son from a former marriage, as the beneficiary on the other. Upon the husband’s death, the wife sued claiming both policies were community property and the husband could not give away community property without her consent. Essentially, the Francis court agreed. Id. at 515. Even so, one spouse may gift away his or her one-half. Id. When a spouse does gift away the entire community asset, such as when he designates a third-person as the beneficiary on a life insurance policy, the entire gift is not a nullity, but instead it is subject to the wife’s one-half interest in the proceeds. Id. at 515-16.
Here, Ms. Alava concedes Ms. Winsor has a community interest in the proceeds of the life insurance policies, but inconsistently argues Ms. Winsor’s community interest gives her standing to challenge just half the insurance distribution. In sum, the trial court did not err in finding Ms. Winsor had standing. See Dean v. Lehman, 143 Wn.2d 12, 19, 18 P.3d 523
(2001) (`a community property interest may be a sufficiently `real’ interest to confer standing.’).
B. Choice of Law
The issue is whether the trial court erred in applying Washington law rather than Oregon or Michigan law when interpreting the power of attorney. Initially, we note the law of the forum, in this case, Washington, will determine the conflict of law concepts to be applied. Complaint of Bankers Trust Co. v. Bethlehem Steel Corp., 752 F.2d 874, 881 (C.A. Pa. 1984) (citing Restatement (Second) of Conflict of Laws sec. 7(2) (Supp. 2002)). A power of attorney is an instrument used to create an agency between principal and agent. Bankers Trust, 752 at 881. Consequently, Washington’s conflict of law provisions relating generally to contracts and agency will be applied to determine the applicable law. Id.
Ms. Alava, out of context, cites a legal encyclopedia for the general proposition that a principal will be bound by the law where the agent acted. 3 Am. Jur.2d Agency § 8 (2002). Then, she points out her transactions with the insurance company in Michigan, originated in Oregon. Thus, without further citation, she argues Oregon law should apply. However, the same section provides ‘[g]enerally, the validity and scope of a power of attorney is governed by the law of the place where the power of attorney was executed.’ Id.
Further, the section quoted by Ms. Alava concerns a principal’s liability to third persons for the actions of an agent. Here, the third-person to the contract, Jackson National, is not making a claim to the proceeds. Instead, we are dealing with the extent of authority between principal and agent.
Even so, we need not engage in a conflict of law analysis unless Ms. Alava pleads and proves that an actual conflict of law exists. RCW 5.24.040; Fluke Corp. v. Hartford Accident Indem. Co., 102 Wn. App. 237, 245, 7 P.3d 825 (2000); Nissen v. Gatlin, 60 Wn.2d 259, 261, 373 P.2d 491 (1962). Her briefs to the trial court and this court do not contain any citation to the Oregon law. Thus, she has failed to plead or prove the existence of an Oregon law in conflict.
Nevertheless, when parties properly raise a conflict of law issue related to interpretation of contracts, Washington applies the law of the state with the most significant relationship to the transaction and the parties. West Am. Ins. Co. v. MacDonald, 68 Wn. App. 191, 196, 841 P.2d 1313
(1992). In this case-by-case analysis, the court generally considers the place of contract, negotiations, and performance, as well as the location of the subject matter and domicile or residence of the parties. Id. at 196 (citing Restatement (Second) Of Conflict Of Laws sec. 188 (1971)).
Our issue concerns the authority to change an insurance policy. Given the relationship between Mr. Winsor and Ms. Alava, we conclude Washington has the most significant contact. Mr. Winsor resided in Washington and executed the power of attorney in Washington. The insurance policies were issued on Mr. Winsor as a resident of Washington. Although Ms. Alava used the power of attorney from Oregon to transact with a third party, we conclude Washington law should apply to determine the scope of authority granted by the power of attorney.
C. Validity of Beneficiary Change The issue is whether the trial court erred in deciding no material facts remained regarding Ms. Alava’s agency and concluding Washington law precluded the effectiveness of her exercise of the power of attorney. Ms. Alava concedes Washington law would not permit the beneficiary change and Ms. Winsor’s right to one-half the insurance proceeds, but contends material facts remain regarding whether Mr. Winsor ratified her attempted change of beneficiary.
Ms. Alava correctly concedes she exceeded her powers under Washington law. Washington law does not permit Ms. Alava to change the beneficiary of Mr. Winsor’s life insurance policy without this authority. RCW 11.94.050(1). Since we must strictly construe the authority created by a power of attorney, no implied authority is implicated. See Bryant v. Bryant, 125 Wn.2d 113, 118, 882 P.2d 169 (1994) (powers of attorney are strictly construed).
Ms. Alava contends her unauthorized acts were merely voidable in the sense they could have been ratified by Mr. Winsor. While theoretically true, under well established agency principles the record does not support her assertion. She points to no action on Mr. Winsor’s part in the critical time frame bearing on ratification of her unauthorized acts. At least, she must point to some positive, independent acts on Mr. Winsor’s part between August 10, 2000 when the change in beneficiary status was mailed by Jackson National, and August 24, 2000 when Mr. Winsor died. The record is devoid of such facts.
Moreover, several jurisdictions answering this question have developed a bright line rule, holding that since a power of attorney must be in writing, ratification of unauthorized acts of the attorney-in-fact must also be in writing. See In re Estate of Romanowski, 329 Ill. App.3d 769, 771 N.E.2d 966 (2002) (citing Estate of Huston v. Greene, 51 Cal.App.4th 1721, 1727, 60 Cal.Rptr.2d 217, 221 (1997)).
Ms. Alava is unable to raise an issue of material fact on her theory of ratification. The agent has the burden of showing ratification. Testa v. Roberts, 44 Ohio App.3d 161, 165, 542 N.E.2d 654, 659 (1988).
The Deadman’s Statute, RCW 5.60.030, applies to exclude the testimony of a `party in interest’ when such testimony regards transactions or statements made by the deceased. RCW 5.60.030; Lennon, 108 Wn. App. at 174. The statute does not prevent testimony regarding an interested party’s own feelings or impressions. Id. Ms. Alava argues the trial court erred in excluding the declarations of her ex-husband, Mr. Alava and Lorraine Sauerland because they are not interested parties. An interested party is “[one] who stands to gain or lose in the action in question.” Id. (quoting Bentzen v. Demmons, 68 Wn. App. 339, 344, 842 P.2d 1015
(1993)).
Assuming for argument Ms. Alava is correct, the fatal defect in her reasoning remains the failure to point in this record to any act by Mr. Winsor, following the change in beneficiary mentioned by Ms. Sauerland or Mr. Alava, that might reasonably be interpreted as signifying ratification. At best, Ms. Sauerland’s declaration states her `impression’ Mr. Winsor would have approved of the beneficiary changes. CP at 33. Similarly, Mr. Alava’s declaration merely indicates his belief Mr. Winsor wanted the policy changes made without relating facts bearing on whether Mr. Winsor, after the fact, approved the changes.
CONCLUSION
The trial court did not err when granting summary judgment to Ms. Winsor. Affirmed.
A majority of the panel has determined this opinion will not be printed in the Washington Appellate Reports, but it will be filed for public record pursuant to RCW 2.06.040.
KATO, A.C.J., and KURTZ, JJ., concur.