Life Insurance Brings Out the Worst
Updated: Mar 12, 2020
Mr. Miller was a retiree from General Motors. He participated in the General Motors life insurance plan, which was through MetLife. He was able to keep that life insurance benefit in place in his retirement. Mr. Miller had two sons with his wife, who died in 2002. He remarried in 2003 and named his new wife as the sole beneficiary on his MetLife policy. Mr. Miller passed away in November, 2016. His sons planned and paid for his funeral, providing an assignment of part of the life insurance benefit to the funeral home.
A few months before Mr. Miller died his sons submitted a beneficiary designation form supposedly signed by him to MetLife dated August 5, 2016. However, Mrs. Miller also submitted a beneficiary designation dated September 2016. She signed the beneficiary designation as power of attorney for her husband. She failed to properly complete the designation, so MetLife refused to honor that designation. Thereafter, but before Mr. Miller died, she sent another beneficiary designation form, again using the power of attorney. MetLife rejected that one as well as incomplete. Clearly there was some sort of dispute brewing before Mr. Miller died.
After his death, that dispute erupted with Mrs. Miller and her stepsons fighting over who was the proper beneficiary for the $37,000 benefit. MetLife interpled the money. The power of attorney seemed to indicate that Mr. Miller was not competent, but the son’s beneficiary form was completed correctly. MetLife notified all parties and gave them a chance to resolve the matter and protect a dimunition of the benefit with litigation costs and fees. No compromise was reached.
MetLife filed an interpleader action in Miller v. Miller, No. 3:17-CV-2360-L, 2019 WL 7370433 (N.D. Tex. Dec. 31, 2019). The Miller brothers thought they would win the case given their beneficiary designation form was a month earlier and it was the only validly completed one. However, Mrs. Miller contested the Miller brothers’ claim, stating that her husband had suffered from dementia since 2014 and was unfit to sign the brothers’ beneficiary designation. She had a conflict of interest naming herself as a beneficiary on her form, but that did not really matter given her beneficiary designation was not complete.
Because the matter of dementia presented a question of fact the court conducted an ERISA bench trial. The court concluded that Mr. Miller had severe dementia at least as early as 2014. Therefore, he did not have the necessary mental capacity to sign any designation form thereafter. The court defaulted back to the plan document which provided how benefits would be paid if there was no valid beneficiary designation. Under that document, it all went to Mrs. Miller.
Such disputes are common these days, and in Alabama they can be even more complicated if there is a divorce and the surviving spouse! Contact an experienced life insurance lawyer at The Martin Law Group if you have a situation such as this one. Our practice focuses on ERISA, including ERISA life insurance claims!