Life insurance and the promised benefits are property. They belong to the police owner and the recipient (s). They can only be changed with the permission of the owners and the insurer. When an owner dies before the life insured, others try to move into the position of owner and beneficiary. However, such a change is not automatic.
I D. Pulliam v Alfa Life Insurance Corporation, NO. 2018-CA-01735-COA, Court of Appeals of the State of Mississippi (October 6, 2020) an incompetent attempt to change ownership caused disputes from relatives and three appeals to the Court of Appeal.
Annie Patterson bought a $ 50,000.00 life insurance policy for her nephew and department, Christopher Nance, through Alfa Life Insurance Corporation. Annie was the owner and main beneficiary of the policy, and Christopher's biological mother, Angela Nance, was listed as the conditional beneficiary. Annie died and her father, C. D. Pulliam, tried to change the policy to replace Annie as owner and as the main recipient of the policy. But in the end, he failed because of filling in the wrong forms to implement the changes.
Christopher died and as a result of Christopher's death, a dispute arose as to whether Angela, as a conditional beneficiary, or CD, as a person claimed to be the replacement primary beneficiary, was entitled to life insurance income. Alfa, which was unable to resolve the dispute, lodged a complaint with the interpleader and a request for permission to deposit money and requested an injunction to pay the life insurance income. CD. submitted its response, affirmative defense and a counter-complaint against Alfa alleging multiple breaches of contract and negligence claims.
In the end, the Chancellor ruled that:
- Alfa was entitled to enforce the insurance income,
- Angela was entitled to the insurance income and
- D's counter-complaint should be "dismissed as customs."
I Pulliam v . Alfa Insurance Co . ( Pulliam I ), 238 So. 3d 620 (Miss Ct. App. 2018), the court partially upheld and reversed and partially revoked the Chancellor's judgment. The Court of Appeal considered that C.D .:'s counterclaim should not have been "rejected as customs", and therefore this decision was referred back to the Chancellery for further hearing. Following Pulliam I Alfa filed a second request for summary judgment in response to C.D.'s counterclaim. Eventually, the Chancellery entered into a decision to grant Alfa's summary judgment dismissing the legal claims asserted by C.D
C.D. claimed that his counter-complaint contained real questions of substantive facts in order to overcome Alfa's draft summary judgment. He claimed that if he had known that he could not and did not succeed in transferring ownership to the existing policy, he would not have continued to make the premium payments and would have sought further cover from another insurance provider.
I Pulliam I The Court of Appeal held that the CD lacked the power to change the original policy that Annie took. The only alleged authority for C.D. and Oti's actions are an explanation they provided to Alfa who identified themselves (and Willie Mae) as Annie's heirs. This was insufficient to give them the power to change ownership of a policy which, through its clear and unambiguous terms, belonged to Annie's property. Absence of a valid contract or obligation for an obligation from Alfa, all claims in the CD's counterclaim are without merit.
The Court of Appeal refused to respect and correct the CD's errors and concluded that the Chancellor's Court rightly considered that there was no real question of substantive facts to substantiate any of the CD's claims in his counterclaim against Alfa and granted Alfa's draft summary judgment in the correct manner.
When people die, whether they are insured or not, relatives and others gather like vultures to a dead GNU and try to get some of what was left. In this case, C.D., if he had been competent after Annie's death, could have changed the policy of naming him as the beneficiary, but did not do so and tried through disputes and appeals to have the court remedy his error. The court firmly refused. Insurance is not a right. It is a contract and the contract must be applied as written.
© 2020 – Barry Zalma. 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.
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