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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA THE MANUFACTURERS LIFE : CIVIL ACTION INSURANCE COMPANY, SUCCESSOR : BY MERGER TO NORTH AMERICAN : LIFE ASSURANCE COMPANY : NO. 96-4053 : Plaintiff, : : v. : : BETTY R. DOUGHERTY, and : PATRICIA BISCHOFF, AS : EXECUTRIX OF THE ESTATE : OF JAMES W. DOUGHERTY, : : Defendants. : M E M O R A N D U M EDUARDO C. ROBRENO, J. DECEMBER 11, 1997 This is an interpleader action brought by plaintiff, Manufacturers Life Insurance Company (“Manufacturers Life”), pursuant to the federal interpleader statute, 28 U.S.C. § 1335, against competing claimants to the proceeds of two life insurance policies issued by North American Life Assurance Company (“North American”) on the life of James W. Dougherty (“Mr. Dougherty”). 1 Manufacturers Life acknowledges that it is liable for the payment of the life insurance benefits owed under the policy and has deposited $45,453.79 in proceeds into the Registry of the Clerk 1 The Court has jurisdiction over this case in that claimants are citizens of diverse states and the amount in controversy exceeds $500. 28 U.S.C. § 2255(a)(6). Betty R. Dougherty is citizen of Pennsylvania while the estate of James W. Dougherty is a citizen of Connecticut, and the amount in controversy is $45,453.79. of Court. By agreement of the parties, Manufacturers Life was discharged from this litigation as a disinterested stakeholder. Therefore, the remaining issue to be resolved is which of the two claimants should receive the proceeds of the North American policies. The first claimant to the proceeds is Betty R. Dougherty (“Mrs. Dougherty”), the former wife of the decedent, who claims the proceeds as the named primary beneficiary on both policies. The second claimant is Patricia Bischoff, Mr. Dougherty’s wife at the time of his death and the executrix of his estate (“the estate”). The estate claims that while Mrs. Dougherty is indeed the named beneficiary on both policies, it is entitled to receive the proceeds because Mrs. Dougherty waived her rights to the proceeds under an oral agreement with Mr. Dougherty entered into after the two had divorced. Presently before the Court are cross-motions for summary judgment filed by the competing claimants. For the reasons that follow, the Court grants summary judgment in favor of Mrs. Dougherty and against the estate. I. BACKGROUND Mr. Dougherty and Mrs. Dougherty were divorced on January 25, 1991. In conjunction with the divorce, the parties entered into a property settlement agreement (“settlement agreement”) which provided in part that Mrs. Dougherty would become the owner of the North American polices at issue here and 2 another life insurance policy issued by Lutheran Brotherhood Insurance Company. In accordance with the settlement agreement, Mr. Dougherty transferred his ownership interest in the Lutheran Brotherhood policy to Mrs. Dougherty by executing an assignment of ownership form. However, Mr. Dougherty retained possession of the two North American policies and he continued to pay the premiums on those policies until the time of his death. The estate contends that the policies remained in Mr. Dougherty’s possession under a subsequent oral agreement between Mr. Dougherty and Mrs. Dougherty which modified the settlement agreement. Pursuant to the alleged oral modification, Mrs. Dougherty accepted the cash value of the policies in lieu of an actual transfer of the policies. The estate further contends that by accepting the cash value of the policies, Mrs. Dougherty relinquished any beneficial interest she had in the policies, including the right to receive proceeds as the named beneficiary. Mrs. Dougherty, on the other hand, contends that the monies paid to her were compensation by Mr. Dougherty for certain legal fees that she incurred during the divorce process. Mrs. Dougherty also claims that Mr. Dougherty remained in possession of the policies because he had orally agreed to continue paying the premiums on the policy in order to secure her cooperation in obtaining the annulment of their marriage. 2 2 These facts were attested to in an affidavit executed by Mrs. Dougherty. The estate filed a motion to strike Mrs. 3 Mr. Dougherty died on December 1, 1995. At the time of his death, the named beneficiary of both of the North American policies was Mrs. Dougherty. II. LEGAL STANDARD Summary judgment is appropriate if the moving party can "show that there is no genuine issue as to any material

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