Articles Posted in Life Insurance

Benbrook insurance lawyers at some point will have to deal with the Slayer Statute which is found in the Texas Insurance Code, Section 1103.151. In 1900, the Slayer Statute did not exist in Texas. A Texas opinion from that time illustrates how it works today. A person has to prove the beneficiary caused the death of the insured in order to be able to prevent the beneficiary from receiving policy benefits. The case is styled, Mutual Life Insurance Co. of Kentucky v. Mellott.

Mutual denied policy benefits based on the allegations that the beneficiary (Mrs. Mellott) caused the death of the insured (William Mellott) by administering to him strychnine poison for the purpose of causing his death.

Briefly stated, the facts proven on the trial are as follows: The policy on the life of William Mellott was issued on the 15th day of March, 1898, and said Mellott died on June 13, 1898. The evidence is conflicting as to whether Mr. or Mrs. Mellott procured the issuance of the policy, but the premium on the policy was paid by Mrs. Mellott. About the same time this policy was issued Mrs. Mellott procured the issuance of a policy for $10,000 by the same company on the life of Lucinda Jeffers, and had said policy assigned to her by Mrs. Jeffers. The evidence is conflicting as to whether or not Mrs. Jeffers knew that a policy had been issued on her life, and that she had transferred same to Mrs. Mellott; she testifying that Mrs. Mellott told her shortly after she had signed the paper, which she understood only gave Mrs. Mellott the right to use the policy, that she failed to pass a satisfactory examination, and that the policy had not been issued, in which statement she was corroborated by the testimony of two other witnesses. Mrs. Jeffers about this time made a will bequeathing all of her property, including the policy in question, to Mrs. Mellott. The deceased, William Mellott, for more than a year previous to his death, had been in bad health, suffering from trouble with his stomach and bowels, which trouble had at times caused him to have convulsions. About a month before his death he was seriously ill with entero coletis, the same character of disease which his attending physician testified was the cause of his death. On the 6th day of June, 1898, he was taken suddenly ill, and Dr. McKay was sent for; he being the nearest physician, and the emergency not allowing his regular physician to be sent for. He was first attacked with spasms or convulsions. Dr. McKay attended him regularly from the 6th to the 13th of June, making several visits each day. This physician testified that the deceased had convulsions from the first day that he was called to see him, and that such convulsions were among the usual symptoms, or rather results, of the disease from which the patient was suffering. His last visit to deceased before his death was about 8 o’clock on the evening before his death. At this time he thought the deceased was better, and did not anticipate a fatal termination of the disease. The deceased began to grow worse shortly after Dr. McKay left, on the evening of the 12th, and died about 4 or 5 o’clock the next morning. The doctor was sent for about 11 o’clock that night, but was not at home, and was again sent for about 3 o’clock. In answer to this last call he went to Mellott’s house, but arrived there just after his death. The preponderance of the evidence is to the effect that the convulsions from which deceased began to suffer shortly after Dr. McKay left him, on the evening of the 12th, were of the same general character as those which deceased had previously had, but were more severe, and continued to increase in frequency and severity until they produced death. One witness, however, a Mr. Sonnen, testified that he was with the deceased from about 8 until about 12 o’clock that night, and that the convulsions were of a different character from those which deceased had previously had. He described the kind of convulsions, and the position which the body of the deceased assumed during the convulsions, and Drs. Red and Knox testified as medical experts that convulsions of the character described by this witness were, in their opinion, produced by strychnine poison. The body of the deceased was exhumed about six months after his death, and a chemical analysis of the stomach failed to show any trace of strychnine.

A 1955, Beaumont Court of Appeals case discusses a life insurance issue that comes up every once in a while. The case is styled, Pritchett v. Henry.

Here is the relevant information from the case.

Howard Pritchett and his wife, Clyda Pritchett, the appellants, filed their suit against the appellee, Percy B. Henry, and certain life insurance companies; they alleged that they are the parents of Melba Henry, who had been the wife of appellee Percy B. Henry; that on or about January 8, 1955 Percy B. Henry shot and killed his wife, Melba Henry, unlawfully and illegally killing and murdering her. They further alleged that at the time of the alleged willful killing of Melba Henry by her husband, Percy B. Henry, there were in existence several policies of life insurance insuring the life of Melba Henry and the said Percy B. Henry was the beneficiary in said life insurance policies. They further alleged that they were the next of kin of the deceased, Melba Henry, after the appellee Percy B. Henry, and prayed the court to forfeit the interests of the appellee Henry in all policies of life insurance by virtue of Article 21.23 of the Insurance Code of Texas, V.A.T.S. This Article is now found in the Texas Insurance Code, Section 1103.151.

Weatherford life insurance attorneys need to know what an insurance company will do when they are unsure who is entitled to life insurance benefits. The answer is that they will file an “interpleader” and notify all people who might have a claim. This was the procedure followed in a 1957 case from the Fort Worth Court of Appeals. The style of the case is Murray v. American National Insurance Company.

American issued a policy on the life of Otis Carl Murray in which his wife, Sarah Lou Murray, was named beneficiary. Otis died on July 24, 1955. Sarah was indicted by the grand jury of Runnels County on August 24, 1955, for the death of her husband.

Sarah, on September 1, 1955, made demand on American for payment of the proceeds of the policy. Proof of death submitted did not reveal the cause of death of the insured. Less than thirty days after demand for payment, American advised Sarah’s attorney it was prepared to pay the amount due under the policy, subject to a valid and satisfactory release of liability, but called attention to the fact it had been put on notice that Sarah was under indictment for the death of her husband, and that if suit were filed American would pay the money into court and resist payment of costs, penalties and attorney’s fees on the ground it had not denied liability. Through the month of September American corresponded with Sarah’s attorney requesting completion of proofs of death.

Fort Worth life insurance lawyers will see situations where a life insurance company admits it owes money under a life insurance policy but is unable to determine who is owed the money. The proper action is for the life insurance company to interplead the money into a court. A 1957, Fort Worth Court of Appeals describes this situation. The style of the case is, Sarah Lou Murray v. American National Insurance Company.

Appellee American National Insurance Company issued a policy on the life of Otis Carl Murray in which his wife, appellant Sarah Lou Murray, was named beneficiary. The insured died on July 24, 1955. Appellant was indicted by the grand jury of Runnels County on August 24, 1955, for the death of her husband.

Appellant, on September 1, 1955, made demand on appellee for payment of the proceeds of the policy. Proof of death submitted did not reveal the cause of death of the insured. Less than thirty days after demand for payment, appellee advised appellant’s attorney it was prepared to pay the amount due under the policy, subject to a valid and satisfactory release of liability, but called attention to the fact it had been put on notice that appellant was under indictment for the death of her husband, and that if suit were filed appellee would pay the money into court and resist payment of costs, penalties and attorney’s fees on the ground it had not denied liability. Through the month of September the appellee corresponded with appellant’s attorney requesting completion of proofs of death.

Dallas life insurance lawyers know what an interpleader is and the circumstances under which, cause insurance companies to interplead life insurance proceeds into the court. An old 1931 case illustrates this. The case is styled, McCormick v. Southwestern Life Ins. Co. and is from the Waco Court of Appeals.

This is an interpleader filed by Southwestern in the District Court against Marjorie McCormick and Mike Lively and Ben Sleeper as guardian of the estate of Adelaide McCormick. Southwestern admitted they owed money under the insurance policy but unsure who to pay. Marjorie was the named beneficiary on a policy insuring the life of Andrew McCormick. Adelaide was the only surviving child. Ben was the assignee of the proceeds of the policy from Marjorie. The interpleader resulted from the allegation that Marjorie had intentionally caused the death of Andrew and thus, had forfeited her interest in the insurance proceeds.

The purpose of the remedy of interpleader is to protect an innocent stakeholder, (Southwestern) who is willing and ready to pay the funds int his hands to the party or parties entitled to receive the same. It is an efficacious and wholesome remedy. This is allowed to protect the stakeholder from conflicting claims.

Weatherford insurance attorneys see all kinds of gimmicks by insurance companies in their attempts to not pay claims. One of these is to try and cause a beneficiary under a life insurance policy to believe they are not a proper party to make the claim. The U.S. District Court, Tyler Division issued an opinion dealing with this issue. The style of the case is, Marcia Slack v. The Prudential Insurance Company of America.

Marcia sued Prudential for violations of the Texas Insurance Code, among other things, for their refusal to pay benefits on a life insurance policy her deceased husband had purchased wherein she was the named beneficiary. The fact pattern is a little complicated but one of the challenges to her lawsuit made by Prudential was that she did not have standing to under the Texas Insurance Code.

Prudential filed for Motion for Judgment on the Pleadings and argued that Marcia does not have standing to assert a claim under the Texas Insurance Code because she is merely a third party to the Policy. Prudential also contended that “claims under the Texas Insurance Code do not survive following the insured’s death.” Prudential attempted to bolster its argument by stating that (1) Plaintiff does not assert that any of Defendant’s representations reached Plaintiff (and instead were only made to Mr. Slack), (2) Plaintiff only asserts that Mr. Slack paid the Policy premiums, (3) Plaintiff was not designated as the beneficiary until after Mr. Slack took out the Policy, and (4) Plaintiff did not allege any reliance on Defendant’s representations.

Life Insurance lawyers need to know the relevant issues regarding the Texas Deceptive Trade Practices Act (DTPA) and how they interact with life insurance policy issues. This is discussed to a certain extent in a recent U.S. District Court, Tyler Division opinion. It is styled, Marcia Slack v. The Prudential Insurance Company of America.

Tom Slack, purchased a life insurance policy from Prudential in 2001. Mr. Slack named Marcia as the beneficiary of the Policy. After Mr. Slack died on December 2, 2012, Marcia filed a claim for death benefits under the Policy, and Prudential paid Mrcia $274,391.56.

Marcia contends that after purchase of the Policy, Pruential represented to the Slacks that Ronnie William Shaffer was the “representative with whom they should and could communicate regarding the Policy, including any questions concerning payment of premiums.” Marcia contends that the Slacks used community funds to pay the annual premium payment of $10,580.00 plus an additional payment of $6,720.00 from 2001 to 2010 because Prudential represented to them that if they made the additional payment, the premium due under the Policy would vanish after ten years.

Insurance Companies doing wrong again is a constant theme with Texas insurance lawyers. Day in and day out, claims get processed properly, but too many times they are not. The Texas Tribune published an article in September 2015, that illustrates one of the times an insurance company does wrong. The title of the article is, “Workers’ Comp Insurer Fined $250,000.00.”

The article tells us that for years, Crystal Davis battled an insurance company for workers’ compensation benefits after her husband, Wayne, was killed on the job in 2012.

As a result of her struggles, the Texas Department of Insurance has slapped that insurer with what is believed to be the largest fine ever issued for workers’ compensation violations in the state — $250,000. None of the money goes to Davis — a stay-at-home Tyler mom with two children — but the state is requiring that a large chunk of it be used to help children of injured or killed workers.