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Court rules in fight over slain UD official’s life insurance

February 22, 2021 GMT

DOVER, Del. (AP) — The ex-husband of a woman who was slain in a murder-suicide in Pennsylvania stemming from a love triangle should be forced to relinquish proceeds he received from her individual life insurance policies, a Delaware court official has determined.

But a Chancery Court master also ruled Monday that Meredith Sullivan’s ex-husband, Luke Chapman, is entitled to keep the proceeds from her University of Delaware group life insurance policy.

The ruling involved conflicting state laws and came in a case of first impression, meaning it involved a novel issue that had never been addressed previously by a Delaware court. It was handed down exactly three years to the day that Chapman filed for divorce from Sullivan.

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Sullivan was killed at her Pennsylvania residence in April 2018, two weeks after Delaware’s Family Court entered the divorce decree. Law enforcement officials have said the wife of a man with whom Sullivan was having an affair broke into her home, waited for her to arrive, then fatally shot Sullivan before killing herself.

Sullivan, 33, was killed just days after taking a job as an assistant vice president at Villanova University. She had previously been a senior director for marketing at the University of Delaware.

Following her death, Chapman received the proceeds of two individual life insurance policies, for which he was the sole beneficiary. He also received insurance proceeds as the primary beneficiary on Sullivan’s group life insurance policy.

Sullivan’s mother and siblings argued that Chapman was not entitled to the insurance proceeds, even though the policies were issued in Delaware, because she had moved to Pennsylvania shortly before her death.

Unlike Delaware, Pennsylvania has a “revocation upon divorce” law, under which the former spouse of a life insurance policy holder is deemed to have “predeceased” the policy holder for beneficiary purposes and is not entitled to any proceeds.

Chapman argued in a court petition that because the divorce decree was issued in Delaware, and because the insurance policies were issued in Delaware, Delaware law governs the disposition of the insurance proceeds and he is the proper recipient.

Master in Chancery Patricia Griffin concluded, however, that because Sullivan was living in Pennsylvania at the time of her death, Pennsylvania has “a much stronger policy interest” in ensuring that the implied term of its public policy on automatic revocation of beneficiary designations is implemented.

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“Because decedent was a Pennsylvania domiciliary, I conclude Pennsylvania has demonstrated a stronger policy interest in ensuring that her estate benefits from (Pennsylvania’s law),” Griffin wrote in determining that Chapman must pay restitution of proceeds from the individual insurance polices to Sullivan’s estate.

Regarding the MetLife group insurance policy, however, Griffin said the key factor is not where the policy holder lived, but where the employer has its principal place of business. She noted that a group policy is issued to an employer, not an individual employee.

“Under Delaware law, petitioner is entitled to receive the MetLife proceeds,” she wrote.

Griffin also granted Chapman’s motion to dismiss a counterclaim in which Sullivan’s mother argued that a trust should be imposed over the insurance proceeds because Meredith Sullivan intended to change her beneficiary designation. Faye Sullivan also alleged that Chapman, as his wife’s insurance agent and financial adviser, had a duty to tell her about the possibility of changing her insurance beneficiary designations while their divorce was pending.

Griffin said Sullivan’s mother failed to provide a sufficient factual basis to infer that Chapman’s conduct was improper, or that he had a duty to tell his estranged wife about the possibility of changing her beneficiary designations.

Faye Sullivan also failed to allege facts to support the inference that her daughter intended to change her beneficiaries on the insurance policies or had taken any steps to do so, Griffin wrote.

Griffin’s report must be approved by a Chancery Court judge for a final decision in the case.