Primerica Life Insurance v. James Massengill & Sons Construction Co.
712 S.E.2d 670
N.C. Ct. App.2011Background
- JMS owned a life-insurance policy on John and Tony Massengill, with JMS as policy owner and Tony as insured; John was an additional insured under an Other Insured Rider.
- Over 1995–2000 JMS changed beneficiaries of Tony and John’s coverage to family members; 2000 change designated John’s estate as beneficiary for John’s coverage.
- In 2001 JMS renewed the policy using a lower-cost product, with Primerica agent Vinson involved and Tony signing, but John did not sign; Primerica initially treated John as part of a rider under Tony’s policy.
- Primerica’s underwriter notified that John could not be renewed under the rider; Stumbo altered the renewal form and converted John’s rider to a separate policy, incorrectly listing JMS as beneficiary and owner John, unknowingly to JMS.
- In 2002 Primerica issued a separate Rider Conversion Policy for John’s life with JMS as beneficiary and John as owner; John died in 2005; JMS deposited a $1,000,797.06 proceeds check and spent nearly all of it by mid-2005.
- Judy Massengill, executrix of John’s estate, later discovered the Rider Conversion Policy was void and filed suit; Primerica later paid the proceeds to the Estate again and settled estate claims; Primerica then sued JMS for unjust enrichment to recover the mistaken payment, which JMS defended as authorized by contract and as instructed by John.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether JMS was unjustly enriched by receiving insurance proceeds | Primerica argues JMS lacked entitlement; Rider Conversion Policy void; ownership/beneficiary controls show JMS not entitled | JMS contends John’s intent and policy terms control; Primerica’s agents erred; evidence should go to jury | JNOV properly granted; JMS not entitled; recovery proper |
Key Cases Cited
- Fidelity Bankers Life Ins. Co. v. Dortch, 318 S.E.2d 794 (NC 1986) (owner controls beneficiary changes; contract governs rights)
- Adams v. Jefferson-Pilot Life Ins. Co., 558 S.E.2d 504 (NC App. 2002) (only policy owner may change beneficiary)
- Reagan v. U.S. Fid. & Guar. Co., 122 S.E.2d 774 (NC 1961) (recovery for mistaken payments when equity requires)
- Burnette v. N. Carolina Nat’l Bank, 256 S.E.2d 388 (NC 1979) (three scenarios where credibility is manifest as a matter of law for JNOV)
- McManus v. First Nat'l City Bank, 223 S.E.2d 554 (NC 1976) (recovery for mistaken payments when payee’s position can be reversed)