Filed 5/3/18 Pioneer Mutual Life Insurance Co. v. Kumar CA5



NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIFTH APPELLATE DISTRICT

PIONEER MUTUAL LIFE INSURANCE COMPANY,

Plaintiff,

v.

PARMILA KUMAR,

Defendant and Appellant;

AVINESH SACHINE PRASAD SINGH,

Defendant and Respondent.

F074498

(Super. Ct. No. 2008977)


OPINION

APPEAL from a judgment of the Superior Court of Stanislaus County. Timothy W. Salter, Judge.
Stephen V. Imburg for Defendant and Appellant.
Edward W. Suman for Defendant and Respondent.
-ooOoo-
Nirupuma Singh (Niru) died in April 2014 while covered by a $100,000 life insurance policy. This lawsuit addresses whether her mother or her husband is entitled to receive the policy’s proceeds. The trial court determined (1) the $100,000 death benefit was a community asset, (2) the final change of beneficiary form that designated Niru’s mother was not effective because it was not signed by her husband, and (3) Niru’s husband inherited her one-half interest in the community property under the rules of intestate succession. As a result, the court awarded all of the proceeds to her husband. Her mother appealed.
We conclude the life insurance policy did not have the distinguishing characteristics of a term life policy and, therefore, the fact the last premium was paid with community funds did not cause the proceeds to be entirely community property. Instead, the characterization of the policy’s proceeds as separate or community property is based on the extent the policy was acquired with separate or community funds. Applying this rule to the trial court’s finding that eight of a possible 180 monthly premium payments were made with community funds results in approximately 4.44 percent of the policy’s proceeds being community property and approximately 95.56 percent being Niru’s separate property.
We further conclude that Niru’s final change of beneficiary form redesignating her mother was effective as to Niru’s 95.56 percent separate property interest and as to Niru’s one half of the 4.44 percent community property interest. Thus, her mother is entitled to $97,777.78 of the $100,000 in life insurance proceeds and her husband is entitled to $2,222.22 as his one half interest in the community property portion of the proceeds. The parties have not shown the judgment’s division of the policy account value contains error.
We therefore reverse the judgment in part and affirm it in part.
FACTS
In March 1999, Niru, age 24, completed an application to purchase a life insurance policy from Pioneer Mutual Life Insurance Company (Pioneer Mutual). The policy had a $100,000 death benefit. Niru designated her mother, Parmila Kumar (Mother), as the sole beneficiary, and designated her sister as the contingent beneficiary. During the first few years, Mother paid the premiums on the policy. Later, Niru paid the premiums.
A specimen of the policy included in the record is titled “Universal Life Insurance Policy.” The first page of the specimen describes certain features of the policy, including (1) a death benefit payable at death before maturity, (2) a surrender value, if any, payable at maturity, (3) an adjustable death benefit, (4) flexible premium payments, and (5) annual dividends and/or excess interest, although the payment of annual dividends is not likely while excess interest is payable.
In April 2010, Niru married Avinesh Sachine Prasad Singh (Husband). It was the second marriage for both of them. During the first year of the marriage, no premiums were paid on the policy. The annual statement of activity issued by Pioneer Mutual for the period ending March 22, 2011, stated the policy account value was $4,601.67 and the cash surrender value was $3,314.68. It also stated: “If planned premiums are not paid, your policy will continue until 08/23/2040.” Therefore, Niru, with the help of her mother, had paid enough premiums to provide life insurance coverage for the next 30 years. All of these premium payments were made before her marriage.
From the date of the marriage until August 2013, no premium payments were made under the policy. From August 2013 through March 2014, eight consecutive monthly premiums of $47 were paid with funds from the joint checking account of Niru and Husband, which was the account into which Husband deposited his earnings from work. The eight payments totaled $376.
To summarize the policy’s history, it was in place for eleven years and one month prior to the marriage. At most, 133 monthly premium payments could have been made before the marriage. The period from the marriage (April 2010) until the last premium payment (March 2014) covered 48 months. Only eight of the possible 48 monthly premium payments were made during the marriage.
In late 2013, Niru began feeling ill and was diagnosed with cancer. In March 2014, she was hospitalized for cancer treatment. On March 9, 2014, she suffered a right frontal stroke. The medical records described some impairment with left hemiparesis and mild depression, but did not record any cognitive deficit.
After Niru was hospitalized, she signed two change of beneficiary forms. The first was dated March 12, 2014, and designated Husband as the sole beneficiary under the policy. The trial court addressed the arguments about the effect of this form and analyzed the conflicting evidence. For example, the court discussed the testimony of Sydnee Lucas, the woman who witnessed Niru’s signature on the first change of beneficiary form, in which Lucas stated she had been deceived into believing the form related to a 401k retirement account that Niru wished to leave to Husband. The court explicitly stated the claims of Lucas about the change in beneficiary form were largely refuted by other evidence. Based on this and other findings, the court determined Niru validly designated Husband as her beneficiary on March 12, 2014.
By March 31, 2014, Niru had been discharged from the hospital and placed on hospice care at her parents’ home where they had set up a hospital bed in the living room. While there, Niru told Mother and her sister about signing a document that might have changed her life insurance beneficiary and stated she wanted to be sure her life insurance went to Mother. Niru asked them to obtain the necessary paperwork from her insurance agent.
On April 12, 2014, Niru signed her second and last change of beneficiary form. It renamed Mother as the sole beneficiary. Niru’s sister made a digital recording as Niru signed the document and this recording was played at trial. Niru stated she was making Mother the beneficiary because she did not feel comfortable with Husband receiving 100 percent of the insurance and stated she previously had signed a change of beneficiary form designating Husband as the beneficiary. The April 12, 2014, change of beneficiary form was given to the insurance agent, who duly forwarded it to Pioneer Mutual. On April 24, 2014, Niru died intestate.
PROCEEDINGS
In June 2014, about two months after Niru died, Pioneer Mutual filed a complaint-in-interpleader naming Husband and Mother as defendants and interpleading the $100,000 death benefit from Niru’s life insurance policy.
In September 2014, Husband filed a cross-complaint for declaratory relief and damages against Mother. Husband alleged causes of action for undue influence and fraud relating to the change of beneficiary form dated April 12, 2014. Husband requested declaratory relief stating he was the sole beneficiary under the policy, an award of funds to equal the amount of fees and costs awarded to Pioneer Mutual as interpleader, his attorney fees and punitive damages.
In December 2014, Mother filed an answer to the cross-complaint alleging she was the sole beneficiary under the policy. Mother claimed the change of beneficiary form dated April 12, 2014, was effective and Niru was not required by law to obtain Husband’s consent to the change.
In March 2016, the trial court issued a detailed, 13-page tentative decision, which proposed awarding Husband the policy proceeds and his costs of suit. Mother filed a request for statement of decision, which asked the court to identify the date on which the policy transmuted from separate property to community property. Husband filed a response, which objected to Mother’s request to modify and requested two modifications.
In May 2016, the trial court issued its statement of decision. The issues addressed in the statement of decision included (1) whether the insurance proceeds were community property because premiums were being paid with community income; (2) whether the policy was transmuted to Husband on March 12, 2014, when the first change of beneficiary form was signed by Niru; (3) whether Niru properly designated Husband as the beneficiary on that date; (4) whether Niru properly designated Mother as the beneficiary on April 12, 2014; and (5) whether Mother established undue influence or mistake. The court concluded the proceeds were community property because the last premium payment had been made with community funds and also concluded the April 12, 2014, change of beneficiary was ineffective because Husband had not signed the form. As a result, the court awarded the $100,000 policy proceeds to Husband.
The court also addressed what should be done with the policy account value of $4,946.06. The court determined that value was a distinct asset that was partially community (8/180 or approximately 4.44%) and partially separate property (172/180 or approximately 95.56%). The court stated the policy account value should be divided between Niru’s estate ($4,726.45) and Husband ($219.61).
In August 2016, the trial court entered a judgment implementing its statement of decision and awarding Husband his costs. Mother filed a timely notice of appeal.
DISCUSSION
I. LIFE INSURANCE PROCEEDS: SEPARATE OR COMMUNITY PROPERTY?
A. Background
1. Trial Court’s Decision
The trial court characterized the policy as neither “term” nor “whole-life,” but a hybrid. The court found “that it most closely resembles a term life policy.” The court recognized the general rule that the characterization of the proceeds of a term life insurance policy depend on the premium for the final term of the policy. Applying this general rule, the court stated, “because the final premium was paid with community funds, the Court finds that the policy benefits of $100,000 was a community asset.”
2. Mother’s Claims of Error
Mother contends the trial court committed two legal errors in reaching the conclusion that the proceeds of $100,000 were community property. First, Mother argues the policy should not have been characterized as a term life policy because the policy had an accumulated cash value, a characteristic that distinguishes it from term life insurance. Second, Mother argues the rule that the characterization of the proceeds depends on whether the last premium payment was made with separate or community funds does not apply because that premium payment did not cause the policy to remain in effect. In Mother’s view, the retained cash value of the policy would have caused the policy to stay in force until 2040, regardless of whether premiums were paid with community funds.
B. Legal Principles
1. General Rule for Life Insurance Proceeds
Ordinarily, both spouses have a community property interest in the proceeds of a life insurance policy to the extent the policy was acquired with community funds. (In re Marriage of O’Connell (1992) 8 Cal.App.4th 565, 577; Hogoboom and King, Cal. Practice Guide: Family Law (The Rutter Group 2017) ¶ 8:696, p. 8-259.) Conversely, to the extent the life insurance policy was acquired with separate funds, the proceeds ordinarily are separate property. Under these principles, when a life insurance policy is paid for with both community property funds and separate property funds, the proceeds are a combination of community and separate property.
2. Separate Rules for Term Life Insurance Proceeds
The general rule about the characterization of life insurance proceeds does not necessarily apply when the life insurance in question is a term life policy. (See Banner Life Ins. Co. v. Mark Wallace Dixson Irrevocable Trust (2009) 147 Idaho 117, 125 [206 P.3d 481] [unique nature of term life insurance policies has resulted in several community property states adopting the risk payment theory to guide classification of the policy proceeds].) Under California law, term life policies are subject to a distinct set of rules that govern how to characterize the proceeds from the policy. In In re Marriage of Burwell (2013) 221 Cal.App.4th 1 (Burwell), this court considered those rules and determined the proper “characterization of term life insurance depends on multiple factors, including whether the policy contains certain contractual provisions, and the insurability of the insured spouse.” (Id. at p. 7.) We adopted an “intricate methodology for allocating proceeds of term life insurance policies” as community or separate property and attached a flow-chart summarizing that methodology. (Id. at pp. 7, 26.) Among other conclusions, we determined the proceeds of a term life insurance policy are entirely community property when the final premium is paid solely with community property. (Id. at p. 24.)
In our view, the rationale for the last-premium-payment rule plays a dominant role in determining when it should be applied. The rule is based on the fact that under a term life policy, (1) a particular premium pays for insurance coverage for a specific period—that is, the insurance company’s “agreement to pay the policy proceeds if the insured dies between dates X and Y” and (2) a term life insurance policy expires without retaining a cash value. (Burwell, supra, 221 Cal.App.4th at pp. 16, 18.) These facts establish a strong causal link between the payment of the last premium and the entitlement to the death benefit. In other words, “but for” the payment of the last premium, the insurance company would not have been obligated to pay the death benefit when the insured died. Restated from another perspective, “the community owns the [term life insurance] policy during the term for which the policy was acquired with community funds.” (Minnesota Mut. Life Ins. Co. v. Ensley (9th Cir. 1999) 174 F.3d 977, 983.)
C. Last Premium Payment Does Not Determine Character of Proceeds
The reasons for applying the last-premium-payment rule to term life insurance policies guide our analysis of (1) whether Niru’s policy should have been treated like a term life policy and (2) whether characterizing the proceeds as separate property, community property or a combination depends on the source of funds used for the final premium payment. Specifically, we consider whether the last premium payment was the reason insurance coverage existed when Niru died and whether the policy would have expired without retaining a cash value.
Here, the policy’s annual statement of activity for the period ending on March 22, 2013, stated: “If planned premiums are paid, your policy will continue until 12/23/2070. [¶] If planned premiums are not paid, your policy will continue until 08/23/2040.” Prior to March 22, 2013, no community funds had been used to pay for the policy. Over the course of the next 12 months, eight monthly premium payments totaling $376 were made with community funds. The annual statement of activity for that period, which ended March 22, 2014, stated (1) the face amount of the policy was $100,000, (2) policy account value was $4,946.06, and (3) the cash value was $4,142.07. It also stated: “If planned premiums are paid, your policy will continue until 02/23/2073. [¶] If planned premiums are not paid, your policy will continue until 10/23/2044.”
The contents of the annual statements of activity demonstrate (1) the last premium payment was not the reason insurance coverage existed when Niru died in April 2014 and (2) the policy had a cash value. Consequently, the policy lacked the characteristics that provide the foundation for the rule that paying the last premium with community funds results in term life insurance proceeds being community property. Moreover, the annual statements of activity clearly show that if none of the eight monthly premiums paid with community funds had been made, the policy still would have paid a death benefit when Niru died in April 2014. Therefore, the use of community funds to pay insurance premiums was not the “but for” cause the coverage was in place when Niru died. It follows that the trial court committed legal errors in treating the policy as a term life insurance policy and concluding the proceeds were a community asset because the last premium was paid with community funds. Instead, the rule ordinarily applied to life insurance policies governs the policy and, as a result, the proceeds (1) constitute community property to the extent that community funds were used to pay the policy’s premiums and (2) constitute separate property to the extent that separate funds were used to pay the policy’s premiums.
D. Allocating the Life Insurance Proceeds
The next question is whether this court can allocate the proceeds between community and separate property or, alternatively, that allocations should be done by the trial court on remand. (See Code Civ. Proc., § 906 [powers of reviewing court].) Husband’s appellate brief did not reach this issue. Mother requested this court to resolve the question by awarding her the $100,000 death benefit plus the policy account value minus a $376 refund of premiums for Husband and minus the costs and attorney fees owed to the insurance company for filing the interpleader action pursuant to Code of Civil Procedure section 386.6.
Mother supports her request by arguing the policy was not acquired with community funds and the eight monthly premiums paid during the marriage were “supplemental.” She argues these supplemental payments “merely extended the policy in force period from 2040 to 2044.” Mother’s refund theory is not supported by a citation to a statute, rule of court, judicial decision or secondary authority. Therefore, we conclude the general rule ordinarily applied to life insurance proceeds applies. (See pt. I.B.1., ante [general rule].)
Under the general rule, the proceeds of a life insurance policy are characterized as separate property or community property to the extent the insurance policy was acquired with separate property funds and community property funds. Here, the trial court’s statement of decision explicitly addressed the extent to which the two types of funds were used to acquire the life insurance:
“The evidence indicated that 8 out of 180 [monthly] payments w[ere] made using community funds. The Community interest is therefore 8/180 or 4.44%. The separate interest is the remaining 95.56%.”
These explicit factual findings have not been challenged by Mother or Husband in this appeal. Therefore, we accept the ratios of 8/180 and 172/180 as the portions of the life insurance proceeds that are community property and separate property, respectively. Applying these ratios, $95,555.56 of the $100,000 life insurance proceeds is properly characterized as Niru’s separate property and the remaining $4,444.44 is community property. Next, we consider how Niru disposed of her property interests (both separate and community) in the death benefit of $100,000.
II. CHANGE OF BENEFICIARY FORMS
A. Trial Court’s Determinations
1. Form Naming Husband as Beneficiary
The first change of beneficiary form was dated March 12, 2014, and designated Husband as the sole beneficiary of the policy. The parties presented a number of arguments to the trial court about the March 12, 2014, change of beneficiary form. First, as to whether Niru actually signed the form, the trial court found Niru had changed her mind about who she wanted to be the beneficiary under the life insurance policy and had, in fact, signed the form on March 12, 2014. Second, the court considered whether Niru had transmuted the policy to Husband on March 12, 2014. The court explicitly found Niru did not transmute her insurance policy from separate property to community property. Third, the court considered whether Mother had established undue influence by Husband or mistake on the part of Niru with respect to the March 12, 2014, change of beneficiary form. The court concluded Mother had not pleaded mistake, failed to produce evidence sufficient to prove Niru signed the form as a result of a mistake, and produced “absolutely no evidence that [Husband] forced or coerced Niru into designating him as her beneficiary.” In accordance with these determinations, the court found “Niru validly designated [Husband] as her beneficiary on March 12, 2014.”
2. Form Renaming Mother as Beneficiary
The second change of beneficiary form was dated April 12, 2014, and renamed Mother as the sole beneficiary under the policy. At trial, the parties disputed whether Niru properly designated Mother as her beneficiary on April 12, 2014.
The court considered whether Niru was competent and truly wished to change the designated beneficiary on April 12, 2014. The court stated the notary personally observed Niru was competent and capable of signing her final designation naming Mother as the beneficiary. After reviewing the video, the court agreed that Niru did not appear coerced, threatened, confused or unable to comprehend her actions as she was signing the change of beneficiary form.
The court also considered how the rules of community property applied to the April 12, 2014, change in beneficiary form. Previously, the court had determined the proceeds from the insurance policy were community property because the last premium had been paid with community funds. Based on this determination and the failure to obtain Husband’s signature on the form, the court concluded “Niru did not effectively change the beneficiary back to her mother on April 12, 2014.” The court stated the change of beneficiary to Mother would have been a gift of community property and, pursuant to Family Code section 1100, subdivision (b), required the written consent of Husband.
B. Contentions of the Parties
Mother contends the proceeds are 100 percent separate property and the April 12, 2014, change of beneficiary form designating her as the sole beneficiary is valid without Husband’s signature. As a result, Mother contends she is entitled to the entire $100,000 in life insurance proceeds.
In contrast, Husband contends the proceeds are entirely community property and the April 12, 2014, change of beneficiary form could not change their character without his consent. Husband also contends the change of beneficiary form dated April 12, 2014, “was fraudulent and thus void.” This contention restates the allegation made in the second cause of action of Husband’s cross-complaint.
The arguments presented in the appellate briefs do not address the scenario presented by our determination that $95,555.56 of the $100,000 death benefit is separate property and the remaining $4,444.44 is community property. More specifically, the briefs do not address the effect the change of beneficiary forms had on this combination of separate and community property.
C. March 12, 2014, Change of Beneficiary Form
Mother has not challenged the trial court’s determination that the March 12, 2014, designating Husband as the beneficiary was valid or the underlying findings of fact that support the determination. Husband, naturally, agrees with the trial court’s determination that “Niru validly designated [him] as her beneficiary on March 12, 2014.” Accordingly, we accept the trial court’s determination that the March 12, 2014, change of beneficiary form was a valid way for Niru to convey her separate property interest in the policy.
D. April 12, 2014, Change of Beneficiary Form
As to the April 12, 2014, change of beneficiary form designating Mother as the beneficiary under the policy, Husband contends the attempted change “was fraudulent and thus void.” Husband also contends Mother’s claim is barred by California’s unclean hands doctrine because Mother and her surviving daughter arranged a ruse to deceive him. In addition, he contends Mother committed all of the elements of a tortious inducement of breach of contract based on the view that he had a valid, existing contract to receive the insurance proceeds. Thus, Husband has presented multiple arguments for why the April 12, 2014, change of beneficiary form is ineffective.
1. Contract Theory
We reject Husband’s argument that he had a contractual right to remain the beneficiary. The trial court explicitly found Niru did not transmute her separate property and determined the characterization of the policy changed by operation of law (i.e., the rule about the source of funds for the last premium payment), rather than by section 850 agreement. This finding is the equivalent of a finding that Niru and Husband had not entered into a contract or other enforceable agreement under which Niru promised to irrevocably designate Husband as the beneficiary. Husband has not addressed these explicit and implicit determinations by the trial court and has not established they are erroneous. (See In re Marriage of Arceneaux (1990) 51 Cal.3d 1130 [appellate court’s reliance on implied findings].) Therefore, we rely on these determinations to conclude the March 12, 2014, change of beneficiary form was not part of a broader agreement between Niru and Husband to transmute her separate property into community property or, alternatively, into the separate property of Husband. As a result, the April 12, 2014, change of beneficiary form that renamed Mother as beneficiary cannot be held invalid on the ground it violated Husband’s contractual rights.
2. Unclean Hands and Fraud
We reject Husband’s argument that Mother’s claim to the proceeds is barred by the unclean hands doctrine or fraud. First, Mother’s role in assisting Niru in renaming Mother as beneficiary cannot be regarded as unfair, unconscionable or inequitable on the ground that it was an attempt to cheat him out of his community property interest. (See generally, Bank of America, N.A. v. Roberts (2013) 217 Cal.App.4th 1386, 1400 [unclean hands doctrine].) Niru retained the right to determine who received her separate property and, to the extent the change of beneficiary form disposed of her separate property, it is effective. (§ 770, subd. (b) [married person may convey his or her separate property without spouse’s consent].) In contrast, to the extent the proceeds of the policy are community property, the change of beneficiary form cannot operate to deprive Husband of his share of that community property interest. (§ 1100, subd. (b).) Thus, Niru’s designation of who would receive her separate property was within her rights as recognized by statute and was not tainted by unfair or inequitable actions of Mother.
Second, the trial court considered whether Mother coerced Niru or took advantage of her confusion to obtain her signature on the change of beneficiary form. The court did not find any coercion or other misconduct. Instead, the court stated “Niru did not appear coerced or threatened, confused or unable to comprehend her actions as she was signing. She did appear calm, lucid and rational as testified to by the bank notary.” This discussion adequately demonstrates that the trial court did not find facts sufficient to apply the unclean hands doctrine to Mother and did not find Mother committed fraud. Furthermore, Husband did not bring to the attention of the trial court any ambiguities or omissions in its treatment of his claim of fraud in connection with the April 12, 2014, change of beneficiary form. (See Code Civ. Proc., §§ 632 [statement of decision], 634 [objections to statement of decision].)
In sum, we reject Husband’s arguments about unclean hands and fraud. These arguments are predicated on Husband’s view that the life insurance proceeds were entirely community property. As a separate property interest existed, Niru was entitled to convey that interest without Husband’s knowledge or consent. (§ 770.) Also, Husband’s arguments contradict the trial court’s express and implied findings regarding the details surrounding Niru’s signing of the form on April 12, 2014, and do not demonstrate the trial court was compelled as a matter of law to render factual findings that would support Husband’s theory of unclean hands or fraud. (See Dreyer's Grand Ice Cream, Inc. v. County of Kern (2013) 218 Cal.App.4th 828, 838.)
3. Effectiveness of the Change in Beneficiary Form
From our conclusion that Niru retained the right to convey or otherwise dispose of her separate property, it follows that the April 12, 2014, change of beneficiary form is valid to the extent it disposed of separate property. The separate property interest in the life insurance policy, including the $100,000 death benefit, is 172/180, or approximately 95.56 percent and the remainder is community property. Thus, Mother is entitled to receive the separate property interest (i.e., $95,555.56) pursuant to the April 12, 2014, change of beneficiary form.
The parties have not addressed how the community property interest in the life insurance policy (i.e., $4,444.44) should be divided. We conclude Husband is entitled to one half of the 8/180ths characterized as a community property interest, which totals $2,222.22. We further conclude that Niru’s half of the community property is transferred to Mother pursuant to Niru’s designation of beneficiary. (See Bassett, Cal. Community Property Law (2017 ed.) § 7.67 [if a life insurance policy names a third party as beneficiary, the surviving spouse is entitled to half of the community property interest with the other half going to the named beneficiary as if by testamentary disposition].) The parties have cited no authority that contradicts the principle set forth in this treatise.
To summarize, Husband is entitled to $2,222.22 as his community property share of the $100,000 death benefit. Mother is entitled to receive Niru’s separate property interest and Niru’s one half interest in the community property portion of the $100,000 death benefit – these interests total $97,777.78.
4. Policy Account Value
The judgment entered by the trial court stated: “The Policy Account Value of $4,946.06 shall be divided so that $4,726.45 goes to the estate of the decedent, Nirupama Kumar, and $219.61 to cross-complainant, [Husband].” Thus, the court determined Niru’s estate would receive all of her separate property interest in the policy account value and Husband would receive all of the community property. This determination implies that Niru’s designation of beneficiary form applied only to the $100,000 death benefit and had no operative effect as to the policy account value. This determination is supported by the wording of the change of beneficiary forms signed by Niru, which refer to “proceeds payable at the death of the Insured.” Furthermore, neither party has affirmatively demonstrated the trial court’s determination addressing the policy account value contains error. (Denham v. Superior Court (1970) 2 Cal.3d 557, 564 [trial court’s orders and judgments are presumed correct and thus, error must be affirmatively demonstrated].) Applying the presumption of correctness, we uphold the portion of the judgment addressing the policy account value.
DISPOSITION
The portion of the judgment stating “Avinesh Singh is awarded the Interpleader policy proceeds of $100,000” and awarding him costs is reversed. The portion of the judgment addressing the policy account value is affirmed.
The trial court is directed to file a modified judgment (1) awarding $2,222.22 of the policy proceeds to Avinesh Singh and the balance of $97,777.78 to Parmila Kumar and (2) awarding costs of suit to Parmila Kumar.
Appellant Parmila Kumar shall recover her costs on appeal.



HILL, P.J.
WE CONCUR:



POOCHIGIAN, J.



DETJEN, J.