Where a building damaged by fire was owned by a husband and wife as tenants by the entirety and the estate was acquired before the effective date of St. 1979, c. 727, amending G. L. c. 209, Section 1, upon the husband's death the wife, rather than the husband's estate, was entitled to the proceeds under a fire insurance policy naming both husband and wife as insureds. [720-721]
CIVIL ACTION commenced in the Essex Division of the Probate and Family Court Department on July 22, 1981.
The case was heard by Buczko, J.
Mark J. Favaloro for the plaintiff.
John J. Twomey for Mary Baldassare.
CUTTER, J. On June 19, 1979, Dante Baldassare and Mary Baldassare owned, as tenants by the entirety, premises in Peabody. They were then still married to each other, but divorce proceedings were pending. On that date, also, the house on the premises was damaged by fire.
The Merrimack Mutual Fire Insurance Company (the insurer) had issued to the Baldassares on July 31, 1978, an insurance policy (including fire coverage) under which the named insureds were "Dante Baldassare & Mary J. Baldassare." The policy contained what was apparently a "boiler-plate" printed provision reading in part, "DEATH OF NAMED INSURED: In the event of death of the Named
Insured, the definition of "Insured" is modified as follows: [and] the Named Insured shall mean: (1) the spouse, if a resident of the household at the time of such death; [Note 2] and (2) the legal representative but only with respect to the premises and property of the deceased covered under this policy at the time of such death . . . ." The policy was in force on the date of the fire.
Panakio (see n.1), a fire loss adjuster, negotiated with the insurer a settlement of $23,118.30 for the fire loss. This was acceptable to Dante Baldassare, but not to Mrs. Baldassare, who refused to sign a proof of loss for that amount.
On December 16, 1980, Dante Baldassare died testate. Mr. Regnante was appointed special administrator of Baldassare's estate with authority to settle the fire claim. On April 14, 1981, the insurer issued a draft for the settlement amount payable to the special administrator, Panakio, Mrs. Baldassare, and the Commonwealth. Mr. Regnante, as executor of the will of Dante Baldassare, sought declaratory relief in the Probate Court concerning the disposition of the proceeds of the draft.
It was stipulated (a) that, upon deposit of the settlement in court, the insurer should be declared free from further liability, (b) that $2,311.83 be paid to Panakio from the settlement proceeds for adjustment services, and (c) that a further sum of $2,407.67 be paid to the Commonwealth for medical services rendered to Mrs. Baldassare through the Department of Public Welfare. No dispute remains for decision about the issues and payments thus stipulated.
On March 2, 1982, a probate judge entered a judgment based upon the stipulation and a statement of agreed facts setting forth essentially the facts stated above. After the stipulated deductions for payments of Panakio, and the Commonwealth, and a court awarded fee of $840 to Mr. Regnante, [Note 3]
the remainder of the insurance proceeds was awarded to Mrs. Baldassare. The husband's executor contends that the award, in part at least, should have been made to the husband's estate which he argues would have been in accordance with the insurance policy provision quoted above.
It has not been shown that any part of the settlement was made with respect to separately owned tangible personal property of Dante Baldassare. The entire settlement appears to have been made with respect to the damaged house. Both spouses were named insureds. The real estate was held by them as tenants by the entirety under a 1953 deed to them from a corporate grantor (although the record concerning the deed is somewhat truncated). That both spouses were insureds is consistent with the circumstance that the insured house was held by them by the entirety.
The quoted printed provision of the policy (concerning the definition of "named insured" in the event of his or her death) seems wholly inapposite and ambiguous when the named insureds are husband and wife holding by the entirety and one insured spouse is survived by the other. No evidence suggests that either insured spouse or the insurer intended to do more (or less) than to insure the estate by the entirety, in accordance with its usual 1953 incidents. We regard the printed provision as having no clear relevance to the distribution of the insurance proceeds and deal with the proceeds as so closely related to the estate by the entirety as to be essentially a substitute for the damaged property. See 1 Pomeroy, Equity Jurisprudence Section 161 (5th ed. 1941).
As the estate by the entirety was acquired by the Baldassares well prior to the effective date (February 11, 1980) of St. 1979, c. 727, amending G. L. c. 209, Section 1, we (as did the probate judge) view the insured estate (and its insurance
proceeds) as having the usual incidents of an estate by the entirety existing in 1953 when the estate was accepted voluntarily by both spouses. See West v. First Agricultural Bank, 382 Mass. 534 , 543-552 (1981). See also Krokyn v. Krokyn, 378 Mass. 206 , 215-216 (1979).
In 1953, the incidents of an estate by the entirety in real estate were well established. See Bernatavicius v. Bernatavicius, 259 Mass. 486 , 487-489 (1927); Licker v. Gluskin, 265 Mass. 403 , 404-407 (1929); Pineo v. White, 320 Mass. 487 , 490-492 (1946); Park & Park, Real Estate Law Section 129 (1981 & 1982 Supp.). In general, see also Smith v. Smith, 361 Mass. 733 , 737 (1972). The husband was entitled to possession and control of the premises during marriage and to any rents and profits, [Note 4] but upon the death of either spouse, the survivor would take the whole estate. Other incidents need not be recited here.
In Massachusetts an estate by the entirety may exist in personal property. See Campagna v. Campagna, 337 Mass. 599 , 605-606 (1958). The proceeds of a taking by eminent domain of real estate owned by the entirety remain property of the entirety. See Ronan v. Ronan, 339 Mass. 460 , 464 (1959). See also Purple v. Purple, 354 Mass. 770 (1968). So do proceeds of a sale of the estate. Smith v. Tipping, 349 Mass. 590 , 592 (1965). We perceive no reason why insurance proceeds of the destruction of a building owned by the entirety should not remain an asset held by the entirety. See Annot., 64 A.L.R.2d 8, 47-62 (1959). The case of Hawthorne v. Hawthorne, 13 N.Y.2d 82, 85-86 (1963), relied on by Baldassare's executor, seems to us distinguishable on the basis, among others, that "an inseverable tenancy" in personalty is not recognized in New York. See 4A Powell, Real Property par. 624. (Rohan ed. 1981 & 1982 Supp.).
[Note 1] Merrimack Mutual Fire Insurance Company, Louis J. Panakio, and the Department of Public Welfare.
[Note 2] The record does not show that either spouse was a resident of the house on the date of Dante Baldassare's death, if that is in any way relevant. The probate judge found that the Baldassares were husband and wife until his death on December 16, 1980. His will was allowed on April 28, 1981.
[Note 3] It was originally contended by Mrs. Baldassare that Mr. Regnante had not been her attorney and was not entitled to be paid from the proceeds of the draft. That contention has not been argued and we treat it as waived. The reasons for the appointment of the special administrator are not apparent from the record. See note 2, supra.
[Note 4] The record does not show that there were any rents and profits between the date of the fire and Dante Baldassare's death. No argument is made for Baldassare's executor that the estate is entitled to any such rents and profits.