Where There is a Will – There are Relatives

Named Beneficiary Must be Paid Death Benefit

Barry Zalma

Dec 22, 2023

Transcript

FACTUAL BACKGROUND

Following her husband’s death, Sherry elected to purchase a Policy from Prudential and continued to make the premium payments. To effectuate purchase of the Policy, Sherry completed and signed an Optional Group Universal Life Enrollment Form (the “Beneficiary Designation”) on 25 April 2007, naming her half-sister, Diana Imrie (“Diana”), as her sole beneficiary and Diana’s children as contingent beneficiaries.

After her husband’s death in 2007, Sherry moved in with Diana and her then-husband Paul Imrie (“Paul”) in North Carolina. Diana and Paul divorced in December 2014, and Sherry continued to live with Diana in North Carolina until March 2016.

Sherry believed Diana took the money because Diana was a joint signatory on the account and had access to the funds. Following this discovery, Sherry wanted to cancel the Policy with Prudential because she could no longer make the monthly payments, and “Diana was the sole beneficiary.”

The Prudential representative advised Della she would send a “Cancel Coverage Form” via email. Della did not complete and return this form. Without the return of this form, the cancellation of the Policy did not go into effect.

In 2016, Sherry attempted to commit suicide by overdosing on her heart medication. On 22 March 2016, Sherry died due to complications from her suicide attempt.

On 10 May 2016, Diana emailed Prudential with a copy of the Beneficiary Designation form Sherry had signed in April 2007. After Prudential received the Beneficiary Designation from Diana Prudential was asked to verify whether the Beneficiary Designation should be accepted by Prudential. Prudential paid Diana $54,000, the full amount of the Policy.

On 5 May 2017, after Paul and Della emailed Prudential alleging Diana was aware the Policy had been canceled and therefore fraudulently claimed she was the beneficiary of the purportedly canceled Policy. As a result of Paul and Della’s multiple emails and the transcription of the cancelation call, the matter was referred to Prudential’s Corporate Investigations Division (“CID”).

CID Investigator Peter Friscia (“Friscia”) was assigned to investigate any alleged fraud regarding the payment of the Policy to Diana and the cancelation call made by Della. Following interviews with Della, Paul, and Diana, Friscia concluded there was no evidence to substantiate any fraud by Diana, but Della’s impersonation of Sherry did constitute fraud.

Based on Friscia’s report, Prudential referred the case to the Georgia Department of Insurance (the “GDOI”) for further investigation. Prudential’s referral stated that Della was suspected of committing insurance fraud due to her impersonation of Sherry on the cancellation call. The referral further stated Paul “aided and abetted” Della in her attempt to cancel the Policy.

Plaintiffs filed a Complaint in Gaston County District Court requesting a declaratory judgment as to their rights under the Policy. In the Complaint, the Sibling-Plaintiffs alleged Prudential was required to pay out the Policy to the surviving siblings in equal shares, and the payout to Diana was wrongful because she was not the beneficiary on file.

On 21 December 2022, Judge Bell granted both of Prudential’s partial motions for summary judgment.

ANALYSIS

First, the Sibling-Plaintiffs argued that the trial court erred but there was no uncertainty as to the respective legal rights of the parties in the Policy. The evidence in the Record showed Diana submitted a Beneficiary Designation, signed by Sherry, noting Diana as the sole beneficiary of the Policy. Prudential confirmed the information in the Beneficiary Designation and concluded the claim by Diana was valid.

Moreover, the Sibling-Plaintiffs’ own evidence shows they likewise believed Diana was the beneficiary of the Policy.

The Sibling-Plaintiffs have failed because the evidence shows Diana was the beneficiary of the Policy and the judgment was affirmed.

ZALMA OPINION

Because the decedent had fallen out with her sister and wanted to cancel the policy to keep her from benefiting from the decedent’s death, she asked her other sister to cancel the policy. The sister failed to do so and the person the decedent did not want to receive the benefits of the policy got the money. The rest of the family tried to make the decedent’s wishes be honored but could not do so because of the incompetence of the attempt to cancel the policy. Relatives should never get involved in the life insurance held by others.