Minnesota Life Insurance v. Kagan
2013 U.S. App. LEXIS 15611
| 7th Cir. | 2013Background
- Allen Kagan died of a heart attack in 2009, leaving Arlene and three children (Tammy, Scott, Richard) as potential beneficiaries under a SuperValu life insurance policy with Minnesota Life; the policy by default would go to Arlene if no beneficiary was designated.
- A change-of-beneficiary form allegedly completed by Allen on August 15, 2008 designated the children as beneficiaries, but there is no evidence he timely submitted it to Minnesota Life; the form was found after his death and submitted by the children, then disputed by Arlene.
- The policy required written requests and Minnesota Life’s approval to change beneficiaries; the change would take effect on the date signed if approved, but nothing in policy stated that the form had to be mailed by Allen.
- Illinois law recognizes substantial compliance with policy terms to effectuate a beneficiary change, provided there is clear intent and a concrete, reasonably in-power effort to carry out that intent.
- The district court granted summary judgment to Arlene, concluding Allen did not exactly or substantially comply; the Seventh Circuit affirmed, holding Allen did not substantially comply.
- The appellate issue is whether Allen’s August 2008 action constitutes substantial compliance and thus changes the default beneficiary under Illinois law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Allen substantially complied with the policy’s beneficiary-change requirements | Children: intended to change beneficiaries via form | Arlene: no substantial compliance since form not sent to Minnesota Life | No; no substantial compliance found |
| Whether the policy change could take effect without mailing the form back to Minnesota Life | Children: signing sufficed as a written request | Arlene: mailing and approval required | No; mailing/approval required, so change not effective |
Key Cases Cited
- Hoopingarner v. Stenzel, 768 N.E.2d 772 (Ill. App. Ct. 2002) (substantial compliance requires more than mere preliminary steps)
- Aetna Life Ins. Co. v. Wise, 184 F.3d 660 (7th Cir. 1999) (substantial compliance allowed when intent exists and action reasonably carried out)
- Dooley v. James A. Dooley Assocs. Emps. Ret. Plan, 442 N.E.2d 222 (Ill. 1982) (work toward change may not be enough; must be completed to effectuate change)
- Travelers Ins. Co. v. Smith, 435 N.E.2d 1188 (Ill. App. Ct. 1982) (doctrine of substantial compliance recognized in Illinois insurance cases)
- India Breweries, Inc. v. Miller Brewing Co., 612 F.3d 651 (7th Cir. 2010) (finality of district court orders and appellate jurisdiction considerations)