Erie Family Life Insurance Company v. Tiffany Dawn Sampson
M2016-00541-COA-R3-CV
| Tenn. Ct. App. | Jun 28, 2017Background
- Erie issued Tiffany Sampson a 20-year term life policy (insured: Sampson) and a Children’s Term Insurance Rider covering each child for $10,000; the Rider named the insured (Sampson) first beneficiary, then the estate of the insured child.
- Sampson listed her mother, Lynne Clark Meeks, as the primary beneficiary in the policy application, which superseded the Rider’s default beneficiary order.
- Sampson’s child Adrian died while in her care; Sampson was later criminally convicted in connection with Adrian’s death.
- Erie filed for declaratory judgment asking who should receive the Rider proceeds given Sampson’s disqualification under Tennessee’s Slayer Statute.
- The trial court concluded it would be inequitable to pay Meeks because doing so would allow Sampson to indirectly benefit in circumvention of the Slayer Statute and awarded proceeds to Adrian’s estate.
- The Court of Appeals reversed, holding the insured’s disqualification does not invalidate the beneficiary designation made by the insured in the application, so Meeks is entitled to the proceeds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the insured’s disqualification under the Slayer Statute prevents enforcement of the insured’s named beneficiary designation (so that proceeds instead pass to the insured child’s estate) | Erie: the Slayer Statute precludes Sampson from receiving proceeds and equitable considerations require denying Meeks to avoid circumvention | Meeks: Sampson’s disqualification does not void the clear beneficiary designation in the application; Meeks should receive proceeds | The insured’s disqualification does not invalidate the beneficiary designation made by the insured; proceeds payable to Meeks per the application designation |
Key Cases Cited
- Brooks v. Thompson, 521 S.W.2d 563 (Tenn. 1975) (when law excludes primary beneficiary from recovery, contingent/contractual beneficiary designation controls consistent with insured’s intent)
- Travelers Indem. Co. of Am. v. Moore & Associates, Inc., 216 S.W.3d 302 (Tenn. 2007) (insurance contracts interpreted fairly, giving language ordinary meaning)
- Naifeh v. Valley Forge Life Ins. Co., 204 S.W.3d 758 (Tenn. 2006) (contract construed as a whole in a reasonable and logical manner)
- Standard Fire Ins. Co. v. Chester–O’Donley & Assocs., Inc., 972 S.W.2d 1 (Tenn. Ct. App. 1998) (principles on policy interpretation and giving effect to parties’ intent)