COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 69106 : MIDLAND ALUMINUM CORPORATION : : : JOURNAL ENTRY Plaintiff-Appellant : : and -vs- : : OPINION UNIVERSAL GUARANTY INSURANCE : CO., ET AL. : : Defendants-Appellees : : : DATE OF ANNOUNCEMENT OF DECISION: FEBRUARY 22, 1996 CHARACTER OF PROCEEDING: Civil appeal from Common Pleas Court Case No. CV-270503 JUDGMENT: Affirmed. DATE OF JOURNALIZATION: __________________________ APPEARANCES: For Plaintiff-Appellant: For Defendants-Appellees: PATRICK J. GALLAGHER, ESQ. MELINDA HARDMAN, ESQ. McINTYRE, KAHN & KRUSE CO., LPA 120 East Avenue 1300 E. Ninth Street, Suite 1200 Elyria, Ohio 44035 Cleveland, Ohio 44114-1824 UNIVERSAL GUARANTY LIFE INS. CO. 5250 South Sixth Street P.O. Box 5147 Springfield, IL 62705-5147 - 2 - KARPINSKI, J.: Plaintiff, Midland Aluminum Corporation appeals from the judgment entered in favor of defendants, Universal Guaranty Insurance Co. and Richard Smith. Plaintiff's action was in the form of a creditor's bill, whereby plaintiff sought to attach the cash surrender value of defendant Smith's life insurance policy. For the reasons that follow, this judgment is affirmed. On November 9, 1992, plaintiff obtained a judgment against defendant, Richard Smith in the amount of $13,856.93 along with 1 interest at a rate of 18 percent from December 7, 1990 . On May 13, 1994, plaintiff filed a creditor's bill against Richard Smith and Universal Guaranty Insurance. This bill alleged that $14,590.44 remained due to plaintiff. The bill prayed for an order that Universal Guaranty Insurance pay plaintiff the cash surrender value of a life insurance policy owned by Richard Smith. This life insurance policy was purchased by Richard Smith as a result of his divorce decree from 1976. The decree specifically stated as follows: Husband shall maintain and keep in effect a life insurance policy in the minimum amount of FIFTY THOUSAND DOLLARS ($50,000.00) with the Wife irrevocably named as beneficiary and owner thereon. Husband shall deliver said policy or policies to wife and shall furnish Wife with proof of premium payment upon request. 1 Midland Aluminum Corporation v. Wellington Gear & Screw Products, Inc., et al. (Nov. 9, 1992), Cuyahoga C.P. No. 228096, unreported. - 3 - Richard Smith v. Agnes Smith (Aug. 20, 1976), Lorain C.P. Domestic Relations No. D20588-76, unreported. In compliance with this provision in the divorce decree, Richard Smith purchased a life insurance policy from Universal Guaranty with a face value of $100,000. Richard Smith was the named insured; Agnes Smith 2 (his former spouse) and Glen Smith are the named beneficiaries. It was Richard Smith's understanding that if he were to die, $50,000 would go to Agnes Smith and $50,000 would go to Glen Smith. The parties differ on the policy's cash surrender value. A letter from Universal Guaranty places the value at $10,990; however, Smith testified the value was $26,000 to $27,000. In 1993, Richard Smith made a withdrawal of $6,000 from the policy. The trial court granted summary judgment for defendants and plaintiff appealed raising one assignment of error, which states as follows: THE TRIAL COURT ERRED IN FINDING THAT THE CASH SURRENDER VALUE OF THE UNIVERSAL GUARANTY POLICY WAS EXEMPT AND/OR NOT SUBJECT TO EXECUTION IN SATISFACTION OF MIDLAND'S JUDGMENT AGAINST SMITH Plaintiff argues the trial erred in granting summary judgment for defendant because (1) the exemption found in R.C. 3911.10 does not apply to a life insurance policy that names a former wife as beneficiary and (2) defendant's 1976 divorce decree does not prevent execution of this judgment. Defendant responds (1) plaintiff's creditor's bill is defective because it 2 The record does not indicate what relationship Glen Smith has to the defendant Richard Smith. - 4 - fails to allege specifically that the judgment debtor does not have sufficient personal or real property subject to levy on execution to satisfy the judgment, (2) the creditor's bill cannot succeed because plaintiff has not exercised the option to take the cash surrender value of the life insurance policy, (3) R.C. 3911.10 exempts this policy from creditors, and (4) the divorce decree requires him to maintain life insurance for the benefit of his spouse. We need address only the argument concerning the statutory exemption because it is dispositive of this case. We agree with defendant, Richard Smith, and hold that R.C. 3911.10 does exempt this life insurance policy from the claims of plaintiff. This statute states in pertinent part as follows: All contracts of life or endowment insurance *** which have been taken out for the benefit of *** the spouse or children, or any persons dependent upon such person, *** or any creditor *** shall be held, together with the proceeds or avails of such contracts *** free from all claims of the creditors of such insured person or annuitant. The exemption specified in this statute covers this life insurance policy. Generally, the statute holds insurance policies purchased for the benefit of others such as spouse or children to be free from any claims on the insured. The prior divorce decree ordered Richard Smith to obtain 3 life insurance for his former wife and also to pay her support . 3 The support section of the separation agreement states as follows: Section 5. Husband shall pay to wife as alimony, the following amount under the following conditions: (continued...) - 5 - The insurance policy provided future security for the wife in the event Richard Smith died. Because she has not remarried, the wife is still dependent upon Richard Smith. Pursuant to R.C. 3911.10 a policy naming a beneficiary who is "dependent" is free from the creditor in this action. That Agnes Smith is a former spouse, moreover, does not render the statute inapplicable. The divorce decree ordering the insurance was based on her past spousal role. Insurance taken out for the benefit of a former spouse is exempt from attachment under this statute no matter when the divorce decree dissolving the marriage occurs. The same public policy reasons for holding the insurance exempt hold true: future security. Where continuing spousal support is ordered, insurance to guarantee that support is appropriate. Neither should be vulnerable to creditors. Plaintiff cites Hoffman v. Weiland (1940), 64 Ohio App. 467, for the proposition that the exemption does not apply to former spouses. We find Hoffman inapplicable for two reasons. First, in Hoffman, the wife/beneficiary was also the judgment/creditor who sought to obtain the cash surrender value of the policy. The court recognized, at 471, "It would be an anomaly if the 3 (...continued) (A) Six Hundred Dollars ($600.00) to be paid each and every month hereafter commencing September 1, 1976, and Five Thousand Dollars ($5,000.00) lump sum payable twelve (12) months from the date hereof. (B) All of such payments required by subsection (A) shall be made until the death of either party or until Wife's remarriage, at which time said payments shall be discontinued. - 6 - exemption that was originally intended for her protection is now transformed into a shield to protect the insured against the satisfaction of a judgment in her favor." In the case at bar, the wife is not a creditor, nor is she seeking to cash in the policy. Because she is still dependent, she needs the future security an insurance policy would provide. Therefore, the statutory exemption protecting her should apply. Judgment affirmed. - 7 - It is ordered that appellee(s) recover of appellant their costs herein taxed. The court finds there were reasonable grounds for this appeal. It is ordered that a special mandate issue out of this court directing the Common Pleas Court to carry this judgment into execution. A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure. NAHRA, P.J., and McMONAGLE, J., CONCUR. DIANE KARPINSKI JUDGE N.B. This entry is made pursuant to the third sentence of Rule 22(D), Ohio Rules of Appellate Procedure. This is an announcement of decision (see Rule 26). Ten (10) days from the date hereof this document will be stamped to indicate journalization, at which time it will become the judgment and .