It has often been said that where there is a will, there are relatives and their lawyers. The same type of dispute arises when the recipient and owner of a life insurance policy changes shortly before the death of the life insured. In Emery v. Guarantee Trust Life Insurance Company A20A2082, Court of Appeals of Georgia (January 22, 2021) Georgia was faced with a claim by a former beneficiary for funds paid to a new beneficiary who required her signature the amendment request was forged.
Sarah Emery lost at the trial and appealed from the court granting a summary judgment in favor of the Guarantee Trust Life Insurance Company ("GTL").
At Emery's death grandfather, Donald Usher ("Donald"), GTL paid the death benefit of a life insurance policy that insured Donald's life to Gayle Usher ("Gayle"), Donald's wife. Emery claims to be the rightful owner and recipient of the policy, because before Donald's death, her signature was forged on a form of policy service that changed ownership and recipient of the policy from Emery to Gayle. The trial court concluded that since GTL paid the beneficiary mentioned in its document, it complied with the applicable law and is therefore isolated from liability.
The minutes revealed that GTL issued a life insurance policy to Donald on October 15, 2010. In 2015, Emery became the sole recipient and owner of the policy. In August 2016, about a month before Donald's death, Gayle called GTL and asked about the policy. Initially, GTL Gayle announced that it could not discuss the policy with her without the owner's permission.
When GTL got back the recipient form from Gayle, it was missing a page that required signatures from both Emery and Gayle. GTL informed both Gayle and Emery that they could not process the change to the policy form because it did not contain their signatures. Emery (without explanation) did not respond to GTL's communication. Gayle replied that she had kept a copy of the signature page and faxed it to GTL; the fax bore the alleged signatures of Gayle and Emery.
On August 31, 2016, GTL updated its records to reflect that Gayle was the new owner and recipient under the policy. Donald passed away on September 9, 2016 and on October 15, 2016, GTL paid the revenue from the policy to Gayle. In October 2017, Emery GTL announced for the first time that she was questioning Gayle's right to death benefits. Emery did not question that a change in policy form was actually implemented before Donald's death.
In the end, Emery brought an action against GTL for misconduct under insurance contracts, breach of contract and negligence. Following a hearing, the Court granted GTL's request for a summary judgment.
Emery claimed that the trial court erred in finding that GTL paid the benefits to Gayle in accordance with the terms of the policy.
Under Georgia's Charter OCGA § 33-24-41: “[w] when income from or payments during a lifetime. . . insurance or annuity contracts are paid in accordance with the terms of the insurance or agreement or the exercise of any right or privilege under the insurance or agreement and the insurer pays the income or payments in accordance with the terms of the insurance or agreement or in accordance with any written transfer of the policy or agreement; the person then specified in the policy or contract or through the assignment shall be entitled to the income or payments, if it is legally competent, shall have the right to receive the income or payments and give full acquittal of the income or payments and the payments shall completely release the insurer from all claims according to the policy or agreement unless the insurer, before payment is made, has received its home office a written notice from or on behalf of another person that the other person claims that he is entitled to payment or any interest in the insurance or agreement.
Georgia law does not oblige insurance companies to investigate and determine whether a person fraudulently completes and submits a policy change. Georgia law provides that when the insurer pays the person designated in the insurance as entitled to the income, the insurer is insured against all claims under the insurance. It releases the insurer from liability unless the insurer, before payment is made, receives a written notice from or on behalf of another complainant about the insurance income.
The Court of Appeal concluded, based on the clear meaning of the Charter, that the Court of Justice granted GTL a summary judgment. Emery did not inform GTL that she had a competing claim before payment in accordance with the charter. In addition, GTL – which has no legal obligation to investigate a fraudulent change of policy form – paid the "person" who appears before the change in policy form. The purpose of the charter is to " protect an insurance company" that pays benefits to someone who is then designated as a beneficiary against a subsequent claim by someone who actually has a superior right to the benefits.
Emery has no one to blame but herself. If her signature was forged, she would have replied to GTL when the forms were sent in rather than waiting a year after death and payment to the wife. Laches, who are not mentioned, check here because Emery waited a long time to assert his rights and the insurer, GTL, did everything necessary: it paid the beneficiary specified in its policy only to face a late filing claim that requires defending a lawsuit and an appeal.
© 2021 – Barry Zalma
Barry Zalma, Esq., CFE, now limits his practice to working as an insurance consultant specializing in insurance coverage, insurance management, insurance sentiment and insurance fraud almost equally for policyholders and policyholders. He also acts as an arbitrator or mediator for insurance-related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims lawyer and more than 52 years in the insurance industry. He is available at http://www.zalma.com and firstname.lastname@example.org.
Mr. Zalma is the first recipient of the first annual Claims Magazine / ACE Legend Award.
For the past 53 years, Barry Zalma has devoted his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to enable insurers and their claims staff to become professionals in insurance claims.
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