Marriage of Spengler

Barbara Spengler (plaintiff) and Daniel Spengler were married in 1967. Daniel worked for Mid-Valley Dairy Company (Mid-Valley) in 1980. Through Daniel’s employment with Mid-Valley, he was provided with a group term-life insurance plan. Daniel did not have to submit to a physical examination or turn in proof of his insurability to be included in the group term-life insurance plan. Daniel’s insurance plan also afforded him the right to renew his life insurance without having to prove he was insurable. There was no evidence at trial that Daniel’s right to renew the policy was an enforceable right. In 1982, Daniel was diagnosed with prostate cancer. Testimony at trial indicated that Daniel’s prognosis would have made him unable to obtain life insurance. In 1986, Daniel and Barbara separated and subsequently divorced. Daniel maintained his life insurance through the plan provided by Mid-Valley. Daniel married Rose Spengler (defendant) in 1989. Daniel named Rose as his beneficiary in the life-insurance policy. A few months later, Daniel passed away. As the beneficiary of the life-insurance policy, Rose received $100,000. Barbara filed suit to obtain half of the $100,000, based on the claim that the life-insurance policy proceeds were community property from her marriage to Daniel. The trial court awarded Barbara half of the $100,000. Rose appealed the trial court’s judgment.