Mary K. Strauss, on behalf of her minor child, Finley Strauss, Appellant,

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2018).

STATE OF MINNESOTA
IN COURT OF APPEALS
A18-1016

Mary K. Strauss, on behalf of her minor child, Finley Strauss,
Appellant,

vs.

Michelle Kitsmiller, on behalf of her minor child, Elise Clifton,
Respondent.

Filed February 19, 2019
Affirmed
Larkin, Judge

Dakota County District Court
File No. 19HA-CV-17-2192

Beau D. McGraw, McGraw Law Firm, P.A., Lake Elmo, Minnesota (for appellant)

Brian S. Vidas, Richard J. Gabriel, Kyle R. Gabriel, Gabriel Law Office, PLLC, Mendota
Heights, Minnesota (for respondent)

Considered and decided by Schellhas, Presiding Judge; Larkin, Judge; and Slieter,
Judge.
U N P U B L I S H E D O P I N I O N
LARKIN, Judge
Appellant challenges the district court’s denial of her request to equitably distribute
one-half of decedent’s life-insurance proceeds to her minor child. She argues that her child

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was an intended beneficiary of decedent’s life -insurance policy and that the district court
misstated the relevant law and erroneously determined that decedent did not effectively
add the minor child as a beneficiary. We affirm.
FACTS
In 2014, Finley Strauss was born to appellant Mary Strauss and decedent Shane
Clifton. They were not married at the time. Decedent had another child, Elise Clifton,
who was born in 2007, to decedent and respondent Michelle Kitsmiller. Decedent did not
provide financial support for Finley during the first year of her life. In July 2015, appellant
initiated child-support proceedings regarding Finley.
At a child -support hearing on July 28, 2015, appellant and decedent agreed that
decedent would pay $300 p er month in child support, instead of the presumptive amount
of $629 per month under the Minnesota Child Support Guidelines, and that the issue of
past unpaid child support would be reserved for determination. During the hearing,
decedent’s counsel informed the presiding officer that the parties had a “private agreement”
and that if decedent “fail[ed] to fulfill that private agreement,” appellant could seek
payment for the past unpaid child support. The terms of that private agreement were not
stated on the record.
On August 13, 2015, a child support magistrate approved appellant and decedent’s
on-the-record agreement to set child support at $300 a month . The child -support
magistrate’s order did not refer to appellant and decedent’s private agreement or the terms
of that agreement. Also on August 13, decedent added Finley as a dependent on his health-
insurance policy. On August 31, decedent passed away unexpectedly after a heart attack.

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On November 9, 2015, decedent’s life -insurance company sent re spondent a
Certificate of Indebtedness regarding Elise’s status as beneficiary of that policy. The
Certificate of Indebtedness indicates that Elise will receive a lump sum , as well as any
accrued interest, when she turns 18 years old.
On January 12, 2017, appellant sued respondent on behalf of Finley, requesting that
the district court equitably distribute one -half of decedent’s life -insurance proceeds to
Finley. Respondent moved for summary judgment, arguing that appellant had not
presented evidence e stablishing a basis for equitable relief. The district court denied
summary judgment.
On January 22 and March 29, 2018, the case was tried to the district court.
Appellant, respondent, and a benefits manager for the City of St. Paul testified at trial. The
district court denied appellant’s request to designate Finley as a beneficiary of decedent’s
life-insurance policy. This appeal follows.
D E C I S I O N
Appellant contends that the district court erred by denying her request to equitably
designate Finley as a beneficiary of decedent’s life -insurance policy. Appellant did not
move for a new trial in the district court. This court’s review is therefore “li mited to
determining whether the evidence sustains the [district court’s] findings of fact, and
whether the findings sustain the conclusions of law and the judgment.” U.S. Bank N.A. v.
Cold Spring Granite Co. , 802 N.W.2d 363, 370 (Minn. 2011). Following a bench trial,
this court reviews the district court’s factual findings for clear error and its legal
conclusions de novo. Porch v. Gen. Motors Acceptance Corp. , 642 N.W.2d 473, 477

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(Minn. App. 2002), review denied (Minn. June 26, 2002). In reviewing the district court’s
factual findings, this court “view[s] the evidence in the light most favorable to the verdict.”
Rasmussen v. Two Harbors Fish Co., 832 N.W.2d 790, 797 (Minn. 2013).
“Where an insured has clearly and unambiguously demonstrated an intent to change
the beneficiary on a life insurance policy, this intent should be given effect, despite failure
to fully comply with policy requirements, unless prejudice to the insurer would result.”
Lemke v. Schwarz, 286 N.W.2d 693, 694 (Minn. 1979). A chang e of beneficiary may be
properly effected despite the insured’s failure to comply with policy requirements if
(1) “the insured intended to change the beneficiary” and (2) the insured “took affirmative
action or otherwise did substantially all that he could do to demonstrate that intention
without regard to whether he complied with the change -of-beneficiary provisions in the
policy.” Brown v. Agin, 109 N.W.2d 147, 151 (Minn. 1961). “If there exists any confusion
as to the insured’s intent or conflicting ex pressions of intent, then the named beneficiary
should be entitled to the proceeds.” Lemke, 286 N.W.2d at 696. A determination whether
a decedent effectively changed the beneficiar y of an insurance policy is governed by
equitable principles, Brown, 109 N .W.2d at 150 -51, and this court reviews the district
court’s ultimate decision whether to grant such equitable relief for an abuse of discretion,
Metro. Life Ins. Co. v. Belland, 583 N.W.2d 592, 593 (Minn. App. 1998).
The district court found that prior to the child-support hearing on July 28, appellant
and decedent discussed child support, child care, and medical support for Finley, as well
as decedent’s life-insurance policy. The district court found that decedent told appellant
that he wanted his two c hildren to be treated equally and to share the life -insurance

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proceeds. The district court also found that appellant and decedent agreed that decedent
would seek reimbursement from respondent regarding child -support payments, provide
more care for Finley, help appellant pay back money she had borrowed from her family,
make his health insurance available for Finley if necessary, and add Finley as a beneficiary
to his life-insurance policy.
The district court determined that the record “[was] sufficient to establish” the
private agreement and that “the Decedent intended to add Finley as a beneficiary.”
However, the district court also determined that “the record simply does not support a
finding . . . that [decedent] did substantially all that he could do to demonstrate his intention
to add Finley as a beneficiary” and that it was “unable to conclude that the Decedent made
affirmative efforts to effect this change.”
The district court relied on Lemke v. Schwarz. In Lemke, a decedent was insured
under the terms of two life -insurance policies which listed his spouse as the beneficiary.
286 N.W.2d at 694. Shortly before the decedent’s death, the decedent wrote a letter in his
own handwriting and mailed it to one of his daughte rs. Id. The letter stated t hat the
decedent bequeathed all of his assets to his two daughters, including a life-insurance policy.
Id. The supreme court stated, “The language of the [decedent’s] letter expresses the
[decedent’s] clear and unambiguous intent that his daughters rathe r than his wife receive
the entire proceeds of the policies. It is also apparent that the [decedent] expected and fully
intended the letter to have legal significance.” Id. at 695. The supreme court reasoned that
“[t]here seems to be . . . little, if an y, distinction between writing a letter to the insurer
[regarding] the change and making an unequivocal statement of such intent in a letter to

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another.” Id. at 696. Because the decedent’s letter expressed his intent that his daughters
receive the proceeds of his life-insurance policies and indicated that he “made affirmative
efforts to effect this change and under the circumstances substantially complied with the
relevant policy provisions,” the supreme court held that the decedent’s daughters were
entitled to the proceeds of the decedent’s life-insurance policies. Id.
Appellant argues that the district court erred in its application of Lemke. Appellant
notes that the district court’s order states, “In Lemke, the Minnesota Supreme Court
indicated that it ‘regretted’ the result but nevertheless felt obliged to hold that the insured
simply did not do enough to change the beneficiary.” Appellant points out that these
statements are inaccurate because the suprem e court did not use the word “regretted” in
Lemke and because that case actually “resulted in the insurance policy proceeds being
awarded to two (2) parties that were not the named beneficiaries on the polic ies.” The
district court’s inaccurate descriptio n of the outcome in Lemke is immaterial because the
district court nonetheless correctly described and applied the two-part test for determining
whether a decedent effectively changed the beneficiary of an insurance policy.
Appellant argues,
If a decedent writing a letter to his daughter, believing
that it would be enough to make her the beneficiary of his life
insurance policies, even though he did not send that same letter
to his insurer, is enough of a step toward changing the
beneficiary to result in the daughters taking the proceeds in
Lemke, the decedent in this case making an unconditional
promise that he would include Finley as a beneficiary on his
life insurance policy as part of a deal to pay less than half of
his actual child support obligati on, then standing in front of a
judge and having that promise become part of a legally
enforceable agreement is enough of a legally significant step

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toward compliance that Finley must be awarded her share of
the policy proceeds.

The facts in this case are readily distinguishable from those in Lemke, where the
insured clearly memorialized his intent to change his beneficiary in a letter and expected
that letter to have legal significance. Id. at 695. Here, decedent’s agreement to add Finley
as a beneficiary of his life-insurance policy was not made part of the record at the July 28
child-support hearing , and the ensuing order does not mention it. Decedent’s
acknowledgment that he could be required to pay past -due child support if he failed to
comply with an undisclosed term of a private agreement is not comparable to the clear and
unambiguous written communication of the decedent’s intent to change his beneficiary in
Lemke.
Appellant also argues that “[a]ll the evidence in this matter points to [decedent]
doing substantially all he could to demonstrate his intention to change the beneficiary
without actually having completed the change at the time of his untimely and entirely
unexpected passing.” Appellant notes that decedent followed through with other p arts of
the private agreement between appellant and decedent, including (1) seeking
reimbursement from respondent to allow him to make his child -support payments to
appellant, (2) adding Finley as a dependent on his health insurance, (3) spending more time
with Finley, and (4) attempting to get a loan to help appellant repay her debts to her family.
Appellant argues that “the fact that [decedent] was doing these things leads to the
inescapable conclusion that it was [his] intent to have both of his children treated equally”
and that had decedent “not passed away, there is every reason to believe that he would have

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continued to follow through with his promises and intent by having Finley added to his life
insurance policy as a beneficiary.” Appellant also argues that decedent’s failure to change
the beneficiary designation on his life-insurance policy, despite his addition of Finley as a
dependent on his health -insurance policy , is not determinative for several reasons,
including that different processes wer e necessary to make the changes and time did not
appear to be of the essence.
Appellant’s arguments are not persuasive because they are not based on evidence in
the record showing that decedent “took affirmative action or otherwise did substantially all
that he could do to demonstrate ” his intent to change his beneficiary . See Brown , 109
N.W.2d at 151. Instead, appellant’s argument seems to be that there is no evidence that
decedent would not have added Finley as a benef iciary in due time. But that is not the
standard used to determine whether a decedent effectively changed a beneficiary
designation.
In cases in which courts have determined that decedents effectively changed the
beneficiary of an insurance policy, the decedents took an affirmative step to effectuate the
change. For example, in Pabst v. Hesse, the decedent signed a change-of-beneficiary form
and mailed a copy to his spouse, the intended beneficiary. 173 N.W.2d 925, 926-27 (Minn.
1970). In Lemke, the decedent sent a handwritten letter to his daughter stating that his life-
insurance policy was bequeathed to his daughters. 286 N.W.2d at 694, 696. In Larsen v.
Nw. Nat’l Life Ins. Co. , the decedent entered into a stipulated dissolution settlement with
her spouse, the named beneficiary, awarding each party all right, title, and interest in their
respective life-insurance policies and the life -insurance company received a copy of the

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stipulation and dissolution decree. 463 N.W.2d 777 , 779, 781 (Minn. App. 1990), review
denied (Minn. Feb. 6, 1991). In Metro. Life Ins. Co. v. Belland, the decedent delivered an
executed change-of-beneficiary form to his insurance agent. 583 N.W.2d at 593-94. And
in In re Will of Kipke, the decedent completed and signed change-of-beneficiary forms and
sent them to his insurance agent’s office. 645 N.W.2d 727, 734 (Minn. App. 2002), review
denied (Minn. Aug. 20, 2002).
Unlike the cases above, there is no evidence that decedent attempted to document—
and thereby demonstrate —his intent to add Finley as a beneficiary of his life -insurance
policy. He did not memorialize his intent in any written form. And he did not state his
intent on the record at the July 28 child-support hearing, even though he acknowledged the
private agreement. When the facts here are compared to the caselaw examples above, we
cannot say that the district court erred in reasoning that “the record simply does not support
a finding . . . that [decedent] did substantia lly all that he could do to demonstrate his
intention to add Finley as a beneficiary.” We therefore hold that because the district court
correctly concluded that the standard for effectively changing a beneficiary was not met, it
did not abuse its discretion by denying equitable relief.
Affirmed.