BANNER LIFE INSURANCE COMPANY v. SONG et al

Filing 25

OPINION. Signed by Magistrate Judge Jessica S. Allen on 3/26/2024. (jd, )

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
BANNER LIFE INSURANCE
COMPANY,

Civil Action No. 23-3171 (CCC) (JSA)

Plaintiff,
v.
KE SONG and JENNIFER VOLKER as
Administrator of THE ESTATE OF RYAN
ANTHONY VOLKER, Deceased,
Defendants.

OPINION

JESSICA S. ALLEN, U.S.M.J.
This is an interpleader case to determine the beneficiary of a life insurance policy issued
by Plaintiff, Banner Life Insurance Company (“Banner Life”). Before the Court is the motion of
Defendant Jennifer Volker (“Volker”), as Administrator of the Estate of Ryan Anthony Volker
(“the Estate”), for judgment on the pleadings, pursuant to Federal Rule of Civil Procedure 12(c).
(ECF Nos. 19, 22). Defendant Ke Song (“Song”) opposes the motion. (ECF No. 20). The parties
have consented to the Undersigned’s jurisdiction to decide this dispositive motion. (ECF No. 24).
No oral argument was heard. See Fed. R. Civ. P. 78(b). For the reasons set forth below, and for
good cause shown, the Estate’s motion is DENIED.
I.

RELEVANT BACKGROUND AND PROCEDURAL HISTORY 1
On October 18, 2004, Banner Life issued Ryan Anthony Volker (“Ryan Volker” or

“Decedent”) life insurance policy number 17B797111 (“the Policy”) with a face amount of

This background is drawn from the Complaint, briefs, and the parties’ answers, crossclaims, and respective answers
to crossclaims. (ECF Nos. 1, 10, 13, 15-16, 19-20 & 22).
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$300,000. (Compl., ¶ 7; ECF No. 1). Song was married to Ryan Volker and was designated as
the sole beneficiary of the Policy. (Id., ¶ 8; see also Policy, attached to Complaint as Ex. 1). No
contingent beneficiary was identified. (Id., ¶ 9).
On or about July 22, 2008, Song filed a verified complaint in New Jersey Superior Court,
seeking a divorce from Ryan Volker. (Song’s Br., Ex. A, ECF No. 20-1; see also Song’s Answer
and Crossclaim 2 (“Song’s Crossclaim”) ¶ 2, ECF No. 13). An insurance disclosure attached to the
divorce complaint lists the Policy as an asset. (Id. at 20-1 pp. 11 of 21). On October 1, 2008, the
New Jersey Superior Court entered a final judgment of divorce. (See Compl., ¶ 10; see also Final
Judgment of Divorce, attached to the Complaint as Ex. 2). The Final Judgment states that “no
equitable distribution is sought.” (Id.) There is no mention of the Policy in the Final Judgment.
(Compl., Ex. 2).
Ryan Volker never remarried, and Song and Ryan Volker continued a friendly and cordial
relationship following their divorce. (Song Crossclaim, ¶ 6). On September 26, 2022, Ryan
Volker died intestate in Union County, New Jersey. (Song Crossclaim ¶ 1). He was living with
Song at the time of his death. (Song Crossclaim ¶ 8). Prior to his death, Ryan Volker did not
change the beneficiary designation under the Policy. (Volker Crossclaim, ¶ 6, ECF No. 10).
Ryan Volker was the biological father of Jennifer Volker and Amanda Steele. (Volker
Crossclaim ¶ 2; Song Answer Admitting Crossclaim ¶ 2, ECF No. 13). Volker is the duly
appointed administrator of the Estate. (Compl., ¶ 3). Following Decedent’s death, Song made a
claim for the Policy benefits. (Compl., ¶¶ 12-13). Shortly thereafter, Volker, on behalf of the
Estate, sought distribution of the Policy proceeds from Banner Life, contending that Song was

Because this is a motion for judgment on the pleadings, the allegations of the non-moving party (Song) are deemed
to be true for purposes of this motion. See Jablonski v. Pan Am. World Airways, Inc., 863 F.2d 289, 290–91 (3d
Cir.1988).
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automatically revoked as the beneficiary of the Policy following the divorce by operation of New
Jersey’s revocation on divorce statute, N.J.S.A. 3B:3-14 (at times, “the statute”). (Compl., ¶¶ 1317). In response, Banner Life informed Song of the Estate’s claim to which Song replied that she
entered into an oral contract with her “then-husband,” Ryan Volker, to remain as the beneficiary
of the Policy in exchange for continuing to pay the Policy premiums, triggering an exception to
the statute. (Song’s Br. at 1, 3, ECF No. 20; see also Song’s Crossclaim ¶ 7; Compl., ¶ 19).
Given the competing claims to the Policy proceeds, Banner Life filed the present
interpleader action on June 9, 2023, seeking to deposit the proceeds with the Court and be relieved
of any potential liability. (ECF No. 1). Banner Life has since deposited the funds with the Court,
(ECF No. 4), and “is indifferent to which of the claimants is entitled to the Policy’s proceeds.”
(Compl., ¶ 23).
On August 14, 2023, the Estate answered Banner Life’s complaint and filed a crossclaim
against Song, seeking a declaration that the Estate is the proper beneficiary. (ECF No. 10). On
August 15, 2023, Song answered Banner Life’s complaint and filed a crossclaim against the Estate,
seeking to declare Song the beneficiary of the Policy. (ECF No. 13). On September 5, 2023, both
the Estate and Song filed answers to their competing crossclaims. (ECF Nos. 15-16).
II.

THE PRESENT MOTION
On October 27, 2023, the Estate filed the present motion for judgment on the pleadings.

(ECF No. 19). In support of the motion, the Estate continues to argue that the statute automatically
revoked Song as beneficiary under the Policy following the divorce. (Estate’s Br. at 8; ECF No.
19-1). According to the Estate, Song was revoked as the beneficiary as a matter of law, and thus,
the Policy requires written notice to Banner Life to reinstate Song as the beneficiary. (Id.) The
Estate contends that no such writing occurred. As such, Song was removed as the beneficiary, and

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the Estate is entitled to the Policy proceeds. (Id. at 10). Finally, the Estate argues that Song’s
claim of an oral agreement with Decedent is insufficient as a matter of law to reinstate her as the
beneficiary. (Id.)
In opposition, Song contends that she was never removed as the beneficiary, and thus no
reinstatement is needed. (Song’s Br. at 1, 6-9). Rather, Song argues that she had an oral agreement
to remain as the beneficiary under the Policy. (Id. at 6). In other words, Song argues that the oral
agreement she had with Ryan Volker prevented her from ever being removed as the beneficiary,
and therefore, there was no need to have her reinstated. (Id. at 6, 9). According to Song, a writing
would be needed if Ryan Volker sought to change the Policy’s beneficiary designation. He did
not. And so, the oral contract to have her remain a beneficiary is sufficient to defeat automatic
revocation under the statute. (Id. at 9). Finally, Song contends, even if she was somehow revoked
as the beneficiary, she would be entitled to the Policy proceeds and/or to recover her premium
payments on various grounds, including unjust enrichment, contract reformation, and an equitable
lien. (Id. at 12-15).
On reply, the Estate contends that an alleged oral agreement should not be permitted to
defeat automatic revocation under the statute. (Estate’s Reply Br. at 1, ECF No. 22). The Estate
contends that Song’s pleading of an oral contract is conclusory, and that allowing an oral
agreement to trump the statute would create a situation “rife for abuse.” (Id. at 3). Finally, the
Estate contends that Song cannot seek relief based on theories such as contract reformation or
unjust enrichment because they are not pleaded as part of her crossclaim. (Id. at 10-11).
III.

LEGAL STANDARD
Federal Rule of Civil Procedure 12(c) provides “[a]fter the pleadings are closed—but early

enough not to delay trial—a party may move for judgment on the pleadings.” Fed. R. Civ. P.

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12(c). “The pleadings are ‘closed’ after the complaint and answer are filed, along with any reply
to additional claims asserted in the answer.” Horizon Healthcare Servs., Inc. v. Allied Nat. Inc.,
2007 WL 1101435, at *3 (D.N.J. Apr. 10, 2007).
Judgment on the pleadings under Rule 12(c) will not be granted “unless the movant clearly
establishes that no material issue of fact remains to be resolved and that he is entitled to judgment
as a matter of law.” Kruzits v. Okuma Mack Tool, Inc., 40 F.3d 52, 54 (3d Cir. 1994) (internal
citations and punctuation omitted). In reviewing a Rule 12(c) motion, the Court “must view the
facts in the pleadings and the inferences therefrom in the light most favorable to the nonmoving
party.” Jablonski, 863 F.2d at 290–91 (internal quotations and citation omitted); Hoff Supply Co.
v. Allen-Bradley Co., Inc., 750 F. Supp. 176, 178 (M.D. Pa. 1990) (“In considering a motion
brought under Fed. R. Civ. P. 12(c), all of the well-pleaded factual allegations in the adversary’s
pleadings are assumed to be true, while all contravening assertions in the movant’s pleadings are
taken to be false.”). A Rule 12(c) motion is reviewed under the same standard as a Rule 12(b)(6)
motion. Revell v. Port Auth. of N.Y. & N.J., 598 F.3d 128, 134 (3d Cir. 2010).
Specifically, where a plaintiff brings the motion for judgment on the pleadings, “the
question for determination is whether on the undenied facts alleged in the complaint and assuming
as true all the material allegations of fact in the answer, the plaintiff is entitled to judgment as a
matter of law.” United States v. Blumenthal, 315 F.2d 351, 352 (3d Cir. 1963). In other words,
“the question is whether the facts alleged in the answer are material in the sense that, if proved,
they will constitute a legal defense to the plaintiff's claim.” Id. at 352–53.
IV.

DISCUSSION
N.J.S.A. 3B:3-14 is referred to as New Jersey’s “revocation on divorce” statute. In re

Estate of Petronaci, 2024 WL 111281, at *2 (N.J. App. Div. Jan. 10, 2024). That law provides in

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relevant part:
a. Except as provided by the express terms of a governing
instrument, a court order, or a contract relating to the division of the
marital estate made between the divorced individuals before or after
the marriage, divorce or annulment, a divorce or annulment:
(1) revokes any revocable:
(a) dispositions or appointment of property made by a
divorced individual to his former spouse in a governing
instrument and any disposition or appointment created by
law or in a governing instrument to a relative of the divorced
individual’s former spouse; . . . .
Id. The statute applies to life insurance policies and operates to revoke the designation of a spouse
as a beneficiary following a divorce, unless the “express terms of a governing instrument, a court
order, or contract relating to the division of marital estate” provides otherwise. Hadfield v.
Prudential Ins. Co., 408 N.J. Super. 48, 52 (App. Div. 2009).
Here, the parties agree that the statute would operate to revoke Song as the beneficiary of
the Policy following her divorce from Ryan Volker, unless the terms of a “contract,” made before
or after the divorce, provide otherwise. (Song’s Br. at 1; Estate’s Reply Br. at 1). However, the
parties disagree on a question of law—i.e., does a contract contemplated by the statute need to be
reduced to writing? If Song is correct that an oral contract is sufficient, then the Estate is not
entitled to judgment as a matter of law because Song would still be the beneficiary if she can
convince the finder-of-fact that she had an oral contract with Ryan Volker. If, however, an oral
contract is not permissible, then Song would have been automatically revoked as the Policy’s
beneficiary by operation of the statute, and the Estate would be entitled to judgment as a matter of
law.
Song relies on Degelman v. Lincoln National Life Ins. Co., 2016 WL 3456920 (D.N.J. June
21, 2016), to support her argument that an oral contract is sufficient to preclude automatic
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revocation pursuant to the statute. In contrast, the Estate relies on Guardian Life Ins. Co. of Am.
v. Gonnella, 806 Fed. Appx. 79 (3d Cir. 2020), to argue that an oral agreement is insufficient to
avoid statutory revocation as a matter of law. As is explained below, the Court finds Degelman to
be on point and persuasive, while Gonnella is inapposite.
In Degelman, a husband was the owner of a life insurance policy and his then-wife was
named as the primary beneficiary. See id. at *1. Following a divorce, the wife continued to pay
the policy’s premiums pursuant to an alleged oral agreement with the husband to remain as the
beneficiary. Id. at *2. Following the husband’s death, the wife sought to collect the policy
proceeds, which the insurance company denied, contending that she had been revoked as the
primary beneficiary pursuant to N.J.S.A. 3B:3-14. Id. The wife filed suit, seeking, among other
things, reformation of the policy to name her as the primary beneficiary. Id. Relevant here, 3 the
Degelman court addressed whether an alleged oral contract to remain as the beneficiary was
sufficient to avoid automatic revocation under N.J.S.A. 3B:3-14. Id. at *5. After noting the
absence of relevant case law and legislative history, the court found that the allegation of an oral
contract in connection with N.J.S.A. 3B:3-14 was sufficient to withstand a motion to dismiss the
wife’s claim:
There is nothing to suggest that the alleged oral contract
between [the wife] and [the husband] is insufficient as a matter
of law to trigger the exception to N.J.S.A. 3B:3-14. First, the
limited case law interpreting N.J.S.A. 3B:3-14 does not provide
guidance on whether a ‘contract’ need be in writing for purposes of
the N.J.S.A. 3B:3-14 exception, nor could the Court locate any
relevant legislative history on the scope of “contract” within
N.J.S.A. 3B:3-14. However, it is clear that under New Jersey law,
contracts need not be in writing to be valid. Second, even though
[the wife] and [the husband] entered into a written Judgment of
The Degelman opinion also involves certain issues unrelated to this motion, including analysis of negligence claims
against insurance agents arising out of the decedent husband’s alleged efforts to change the beneficiary designation
prior to his death. Id. at *3-4, 7. This Court’s discussion of Degelman is limited to the analysis of whether an oral
contract is sufficient under N.J.S.A. 3B:3-14.
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Divorce, it is premature to determine whether it was meant to be the
exclusive document pertaining to the division of the marital estate.
Again, the case law and legislative history do not provide guidance
on this point. Thus, the Court concludes that when construing
the complaint in the light most favorable to [the non-moving
party], [the wife] has sufficiently demonstrated standing as the
primary beneficiary under the policy . . . .
Id. at *5 (citations omitted; emphases added).
The Court continued:
. . .[I]n short, if [the wife] is able to convince the fact-finder that
she and [the husband] entered into a ‘contract’ whereby she
would remain as primary beneficiary under the policy in
exchange for continued payment of the policy premiums, then
she can plausibly demonstrate that Lincoln erred in denying her
the policy proceeds on grounds that she had been revoked as
primary beneficiary under N.J.S.A. 3B:3-14. In other words,
under this theory, because [the wife] was never revoked under
N.J.S.A. 3B:3-14, Lincoln would reform the contract to name
her as the primary beneficiary and pay the proceeds to her.
Given the factual nature of such a claim, the Court finds that [the
wife] has sufficiently pleaded this claim to survive the motion to
dismiss.
Id. at *6 (emphasis added).
This Court agrees. Neither the plain language of the statute nor the legislative history
dictate that a “contract” must be in writing to satisfy the exception to the statute’s automatic
revocation. Indeed, relying on Degelman, the Eighth Circuit Court of Appeals, applying New
Jersey law, assumed that an oral contract may be sufficient to avoid revocation under N.J.S.A.
3B:3-14. See Rose v. Midland National Life Ins. Co., 954 F.3d 1117, 1119 n.3 (8th Cir. 2020).
This case fits under the rubric of Degelman. Here, Song has alleged that she entered into
an oral contract to continue to pay the Policy premiums in exchange for remaining the beneficiary
of the Policy. (See Song Crossclaim ¶ 7). If that allegation is accepted by the finder-of-fact, then
Song would not have been revoked as the beneficiary of the Policy by N.J.S.A. 3B:3-14. See

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Degelman, 2016 WL 3456920, at *6. While the Estate contends that Song has not sufficiently
pled the details of the alleged oral agreement, the Court disagrees. Federal Rules of Civil
Procedure 8 and 12 require only that a pleading provide the opposing party fair notice of a plausible
claim and the grounds upon which it rests. See, e.g., Bell Atlantic Corp. v. Twombly, 550 U.S.
544, 555 (2007). Song’s allegation of an agreement to continue to pay premiums in exchange for
remaining the beneficiary are assumed to be true and meet this minimal standard. See Degelman,
2016 WL 3456920, at *5 (similar allegations sufficient). Thus, because an oral contract is not
prohibited under N.J.S.A. 3B:3-14, and because Song has sufficiently pled the existence of an oral
contract, the Estate is not entitled to judgment as a matter of law. 4
The Estate’s reliance on the Third Circuit’s unpublished decision in Guardian Life Ins. Co.
of Am. v. Gonnella, 806 Fed. Appx. 79 (3d Cir. 2020) misses the mark. The Estate argues that
Gonnella supersedes Degelman by holding that an oral contract is insufficient as a matter of law.
However, this Court finds that a careful review of both the district court and Third Circuit decisions
in Gonnella demonstrate that the case is clearly distinguishable.
Turning first to the Gonnella district court opinion, there, a policy holder (Arleen)
designated her then-husband (Joseph, at times “claimant”) as the beneficiary under her life
insurance policy in 2010. Guardian Life Ins. Co. of Am. v. Gonnella, 2019 WL 13272509, at *1
(D.N.J. Apr. 24, 2019). Two years later, Arleen and Joseph divorced, and in connection with the
divorce, entered a written martial separation agreement (“MSA”). Id. The MSA specifically
addressed Arleen and Joseph’s life insurance policies, stating that the policies would remain the

Song’s opposition brief claims that, even if she was revoked as beneficiary, she would be entitled to recover policy
proceeds and/or her premium payments under various additional theories, including unjust enrichment and entitlement
to an equitable lien. (ECF No. 20 at 12-15). The Estate opposes these arguments, contending that the only claim
asserted by Song is a crossclaim for a declaration of entitlement to the policy proceeds. (ECF No. 22 at 10-12). The
Court agrees with the Estate. Song is cautioned that these purported claims and/or theories are not asserted in her
crossclaim and thus are not part of this case.

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separate property of the individual spouse. Id. Further, the MSA specifically stated that it could
only be amended in writing. Id. at *2. Thereafter, in 2017, Joseph alleged that he and Arleen
entered into an oral agreement to keep each other as the primary beneficiary on each’s respective
life insurance policy. Id. In May 2017, Arleen died, and the insurance company was faced with
competing claims from Joseph and Arleen’s daughter, who was named as the contingent
beneficiary on Arleen’s policy. Id. at *1. On a motion for summary judgment, the district court
denied Joseph’s claim to the policy proceeds. Id. at *3. In so doing, the court noted that Joseph
“acknowledges that his designation as beneficiary was revoked by statute upon divorce from the
decedent. However, he claims that he was re-designated as beneficiary as a result of the subsequent
oral contract with the Decedent.” Id. at *3 n.4 (citations omitted). The district court rejected the
argument, finding that any alleged oral agreement could not overcome the MSA’s requirement that
any changes to the agreement be made in writing. Id. at *3.
On appeal, the Third Circuit affirmed. See 806 Fed. Appx. 79 (3d Cir. 2020). The Third
Circuit concluded that there was insufficient evidence in the summary judgment record to establish
the existence of an oral agreement, but even if there was, an oral agreement could not modify the
MSA, which required any changes be made in writing. Id. at 82. In addition, the Third Circuit
further stated that, because Joseph had been severed as the beneficiary, any attempt to reinstate
him as the beneficiary had to be in writing under New Jersey’s relevant common law. Id. at 82
n.5 (citing DeCeglia v. Estate of Colletti, 265 N.J. Super. 128 (App. Div. 1993)).
Gonnella is distinguishable from this case for several reasons. First, the decision is a
summary judgment decision evaluating the existence of an oral contract on a summary judgment
record, not a Rule 12, pleading-based standard, which applies here. Id. at 82. Second, the claimant
in Gonnella contended that the oral contract to remain as a beneficiary was entered into five years

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after the divorce and after the execution of a written MSA. Id. Here, there is no MSA. Third, the
claimant in Gonnella acknowledged that he was removed as the beneficiary and argued that the
oral contract was sufficient to reinstate him as the primary beneficiary. See 2019 WL 13272509,
at *3 n.4. In contrast, here, Song contends she was never removed as beneficiary, and thus she has
not, and need not, seek reinstatement. Fourth, to the extent the Third Circuit rejected an oral
agreement, it was in the context of finding that New Jersey common law required beneficiary
designations to be made in writing. Id. at n.5 (citing DeCeglia, 265 N.J. Super. at 128). However,
the Third Circuit never held or commented in any way on whether an oral agreement could
constitute a “contract” under N.J.S.A. 3B:14-3. In short, Gonnella and Degelman are simply not
in conflict because they do not address the same issue. See Rose, 954 F.3d at 1119 & n.3 (citing
Gonnella and Degelman for different principles of law).
V.

CONCLUSION
For the reasons set forth above, the Estate’s motion for judgment on the pleadings, (ECF

No. 19), is DENIED. An appropriate order will be entered.
The parties are directed to meet-and-confer and submit, within ten (10) days, a proposed
pretrial scheduling order to govern discovery in this case.
The Clerk of the Court is requested to terminate the motion appearing at ECF No. 19.

Dated: March 26, 2024

s/Jessica S. Allen____________
Hon. Jessica S. Allen
United States Magistrate Judge

cc: Hon. Claire C. Cecchi, U.S.D.J.

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