Emery v. National Life & Acc. Ins. Co.

Citations: 614 F. Supp. 167; 1985 U.S. Dist. LEXIS 18354Docket: Civ. No. 84-3194

Court: District Court, S.D. Illinois; June 28, 1985; Federal District Court

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Jack Emery filed a Motion for Summary Judgment regarding a life insurance policy originally purchased by the deceased Charles Emery, which named Jack as the beneficiary. After marrying Diana Emery, Charles allegedly instructed insurance agent Don James to change the beneficiary to Diana, but this change was never executed. Following Charles' death, Diana filed a complaint for the insurance proceeds of $20,000 and $5,000 in punitive damages for delay in payment. The case was removed to the federal court, where the National Life and Accident Insurance Company counterclaimed for interpleader, as both Diana and Jack claimed the proceeds. Jack’s motion argues that Charles' attempts to change the beneficiary were ineffective because he did not take the necessary steps required by the policy. Diana opposes this, asserting that there is a material issue of fact regarding whether Charles’ statements to James constituted an overt act. The court noted that summary judgment is appropriate only if there are no genuine issues of material fact, emphasizing that the moving party bears the burden of proof. The court must view evidence favorably to the non-moving party and that mere allegations are insufficient to raise a factual issue. The disputed fact must be material and outcome-determinative under applicable law.

The case Egger v. Phillips involves an insurance policy that permitted the insured to change the beneficiary at any time, provided he filled out and signed a change of beneficiary request form, which he failed to do. Courts may recognize a beneficiary change if the insured intended to make the change and took positive steps toward it. Clear evidence of intent and concrete actions are necessary to avoid ambiguity. In this case, the insured had designated Jack Emery as the beneficiary at his death, and this designation was never formally altered. The insured attempted to obtain the necessary form from the agent multiple times over three months, but the agent's personal issues hindered this process. Jack Emery argues that the insured's actions were insufficient and did not constitute reasonable efforts to effectuate the change. The plaintiff counters that a material fact issue exists regarding compliance with the insurer's instructions and points to a statement in the premium receipt book urging contact with the agent. The court must determine whether the insured did all he reasonably could under the circumstances, taking into account the alleged intent and efforts to secure the form. The court notes that factual determinations are for the trier of fact, while the applicable legal standards are for the judge, with mixed questions of law and fact resolved by the jury after receiving instructions.

Jack Emery concedes, for the purpose of the motion, that the facts are as stated by the plaintiff in her deposition. The Court has established that the insured must do all that is reasonably possible under the circumstances to effectuate a change. The primary issue is whether the insured met this standard, which is a mixed question of law and fact for the trier of fact. In a jury trial, this determination would be left to the jury; however, since the Court is the trier of fact here, it will make this decision. Although there remains a material issue of fact, the Court believes it can resolve the mixed question of law and fact without awaiting trial, as it assumes the insured could have reasonably done more than claimed.

The Court emphasizes that in non-jury cases, summary judgment can be granted when the essential facts are undisputed, and only legal applications or mixed questions remain. The Court must ensure that the opposing party's entire version is considered, and that credibility issues do not impede its determination. The rationale for allowing summary judgment aligns with standards for directed verdicts and judgments notwithstanding the verdict. The Court affirms that it can adjudicate a mixed question of law and fact when the plaintiff's version is accepted as true and is viewed favorably.

In this case, the Court concludes that the insured did not do all reasonably possible to change the beneficiary. The Court notes that, beyond contacting the agent, the insured was advised to reach out to local or home offices, and the insured was aware of the necessary request form for changing the beneficiary. Additionally, the insured recognized that the agent's personal issues might have affected the agent's ability to assist with the form.

The plaintiff paid insurance premiums prior to marriage using her checking account, acknowledging that the insured had no checking account but contributed funds to hers. The couple was married for three months before the insured's death, during which he was capable of obtaining a form from the insurance provider, even instructing the plaintiff to secure the address to request the form shortly before his death. The Court surmised that if the insured had genuinely intended to change the beneficiary, he would have acted promptly. The insured had a belief he would die young, compounded by two prior shootings, and the Court concluded he did not take reasonable steps to effectuate the change, despite being aware of the necessary procedures and the agent's personal issues causing delays. Favorably interpreting the evidence for the plaintiff, the Court concluded that counterclaimant Jack Emery is entitled to judgment as a matter of law, granting his Motion for Summary Judgment. The plaintiff's Count I complaint for payment of proceeds and damages for vexatious delay is dismissed with prejudice. The Clerk is instructed to award the insurance proceeds to Jack Emery and transfer the deposited amount plus interest. Additionally, Jack Emery's claim against the insurer for vexatious delay is dismissed, with the Court indicating that the insurer acted appropriately in seeking interpleader amid claims from two parties. Jack Emery is allowed to demonstrate the merits of this claim within ten days, but his claim against the insurer is otherwise dismissed with prejudice. The remaining issue to be resolved is the plaintiff’s negligence claim against the agent Don James.