Last week, Joseph A. Hallman received a glimmer of hope that he’ll eventually receive the proceeds of his former domestic partner’s life-insurance policies.
Hallman and Stephen T. Gallagher were domestic partners for about four years, before parting ways in 2009.
Gallagher, who was employed at the University of Pennsylvania as a computer specialist, died in May 2011 after a lengthy illness.
For the past four years, Hallman, 35, has pursued Gallagher’s life-insurance benefits, totaling about $354,000.
But Gallagher’s mother, Joann P. Gallagher, contends she’s entitled to the benefits.
Last year, Philadelphia Orphans’ Court Judge John W. Herron ruled that Hallman failed to prove he was the beneficiary for Gallagher’s life-insurance policies.
As a result, the proceeds should go to Joann Gallagher by default, according to Herron’s ruling.
But Hallman appealed in state Superior Court and in a 21-page opinion issued last week, the court remanded the case back to Herron for further consideration.
There is no paper copy of a form signed by Gallagher designating Hallman as the beneficiary of his life-insurance policies. At issue is the accuracy of electronic data indicating Gallagher made such a designation.
The Superior Court said Herron may have been too dismissive of the electronic data indicating Hallman’s status as Gallagher’s life-insurance beneficiary.
“[T]he absence of a paper form signed by [Gallagher], naming [Hallman] as primary beneficiary, is not automatically fatal to [Hallman’s] case,” the court noted.
The facts of the case should be fully developed and carefully scrutinized before a final determination is made, the court added.
Additionally, the court stated the insurer, Aetna Inc., acted properly by withholding the disputed funds from Hallman while the matter is adjudicated.
Barry F. Penn, an attorney for Hallman, said his client is entitled to the funds.
“My client was left the life-insurance benefits, in part, because he shared a mortgage with Stephen Gallagher and Mr. Gallagher wanted to ensure the mortgage could be paid with life-insurance proceeds, in the event of his death,” Penn told PGN. “That was the understanding and intent between Stephen Gallagher and my client. That’s what the official records have always indicated. If Stephen Gallagher’s actions taken on behalf of Mr. Hallman are not honored, that would be a miscarriage of justice. It’s not like somebody made this up about Mr. Hallman being designated the primary insurance beneficiary of Mr. Gallagher’s life-insurance policies.”
Penn expressed guarded optimism about the outcome.
“When a full hearing is held, where all the evidence is presented and the law is followed, the inescapable conclusion will be that my client was, indeed, designated as the primary life-insurance beneficiary — as the official records maintained at Penn have always indicated.”
Penn said Hallman is holding up as well as can be expected, but termed the ordeal a “nightmare.”
Cletus P. Lyman, an attorney for Gallagher’s family, issued the following statement:
“Two trends have come together. One is electronic record-keeping and the other is holding wealth in employee-benefit plans. Once, most wealth was transferred by will or trust prepared by a lawyer or by life insurance purchased through an insurance agent who visited the home. But many people now hold their wealth in group life insurance and 401(k)s, where the record-keeping is handled through the employer. I recommend clients keep their own detailed records in a safe place and not rely solely on their employers to maintain them, especially designation of beneficiaries.”
Lyman had no comment on whether an appeal will be filed in state Supreme Court.