Life Insurance In A State Other Than Texas

Texas life insurance attorneys need to have a basic working knowledge of how other states handle life insurance claims. Often times a Texas attorney will have a situation where the law of another state may apply to a life insurance claim. Here is a case to read. It is styled, Minnesota LIfe Ins. Co. v. Jones. It is a 2014, case from the United States Court of Appeals, Seventh Circuit.
Jones, who left no will, owned a life insurance policy that his employer had obtained for him from Minnesota Life. He did not designate a beneficiary, but the policy provided that the proceeds, which at his death amounted to nearly $307,000, would go first to a surviving spouse (there was none), second to any surviving child or children, third to any surviving parents, and fourth to Lenord’s estate.
An Illinois resident named Quincy Jones, claiming to be Lenord Jones’s son submitted a claim to the insurance company-as did another Illinois resident, Annie Moore, claiming to be Lenord’s daughter. The insurance company, being a nonresident of Illinois, was able to and did file an interpleader action in the federal court in Chicago. Fed.R.Civ.P. 22.
Angela Ashford, Lenord’s biological sister, also claimed entitlement to the proceeds of the insurance policy, as she was Lenord’s only known blood relative if Quincy and Annie were not Lenord’s children. In that event, since Lenord had left no will, Angela would be the sole beneficiaries of his estate. And so she was allowed to intervene in the district court action, where she contended that Lenord had been homosexual, had never had children but had pretended to in order to conceal his homosexuality, and had actually told her that neither Quincy nor Annie was his biological child. Angela claimed that she therefore is entitled to the life insurance proceeds.
Angela submitted copies of Lenord’s income tax returns showing that he had claimed various children as his dependents, sometimes omitting Quincy. On appeal she added that Quincy had placed in evidence neither his birth certificate nor any affidavit or other evidence from his mother concerning his paternal parentage. Angela noted further that Lenord hadn’t designated Quincy as a beneficiary of the life insurance policy, though this is consistent with Lenord’s having known that Quincy was his only child and would therefore automatically receive the proceeds of the policy.
Annie voluntarily took a DNA test, flunked it, and therefore abandoned her claim to the insurance proceeds, leaving only Angela to contest Quincy’s claim. Before giving up, Annie had filed (and Angela had joined) a motion that Quincy be ordered to take a DNA test. The district judge denied the motion, mainly on the ground that Angela admitted that Lenord had held Quincy out as his biological son and had signed an order of parentage in 1996 acknowledging Quincy (who was then six and a half years old) as his son. The judge went on to award the insurance proceeds that the insurance company had deposited in the district court to Quincy.
Rule 35(a) of the Federal Rules of Civil Procedure authorizes a district court to order, upon a showing of good cause, a physical examination of a litigant whose physical condition is at issue in the litigation. A DNA test for paternity is quick, noninvasive, painless–and conclusive. Given the conflicting evidence of Lenord’s parentage of Quincy, ordering Quincy to submit to a DNA test would seem a no-brainer.
Not so fast. The Illinois Parentage Act creates a presumption that a man is the natural father of a child if, so far as bears on this case, he and the child’s biological mother have signed an acknowledgment of paternity or, equivalently, of parentage. Both Lenord and Quincy’s mother had signed the 1996 acknowledgment of Lenord’s paternity.
The presumption is applicable to any civil action. So it’s applicable to the present case, which in effect is an in rem suit over entitlement to insurance proceeds.
Yet the presumption could well be deemed conclusive in a case such as this. Lenord could have named anyone he pleased as the beneficiary of his insurance policy. Designating Quincy as the beneficiary would have been one way to do it; declaring Quincy his son in the parentage order was another, given that the policy gives children priority in the distribution of its proceeds. Since Angela, the sister, couldn’t have contested a beneficiary designation in the insurance policy itself, she shouldn’t be able to contest the parentage order.
It makes sense in other words to deem the presumption irrebuttable when the putative parent has full control over who inherits and relies on the presumption to direct assets to a particular person, in this case Quincy. Obviously Lenord wanted Quincy to inherit and he had every right to direct the proceeds of the insurance policy to him. Had he adopted Quincy there would be no doubt that Quincy was entitled to the proceeds. But armed with the order of parentage Lenord had no need to adopt, just as he had no need to make a will or designate a beneficiary of his insurance policy. What is beyond doubt is that he had evinced no intent to leave money to his sister.
Acknowledgement of a child constitutes “clear and convincing evidence” of paternity but is not conclusive and is therefore subject to rebuttal. The present case is not a probate matter-an action involving Lenord’s estate-but a suit to enforce an insurance contract. But it is a probate case in effect, just as Angela’s claim is a Parentage Act suit in effect; and so the relevant principles of the Probate Act should apply and make DNA evidence admissible to establish absence of paternity. But not when the suitor is excluded from questioning parentage, as in this case, and in any event not automatically admissible. Other cases hold that before the court can order a DNA test in a case such as this it must be “presented with persuasive and credible evidence that would lead the court to believe the DNA test would result in the disinheritance” of the presumptive heir.
This may seem an odd rule, given the simplicity and conclusiveness of a DNA test of paternity. But it reflects an understandable distaste for creating monetary incentives for family quarrels likely to generate painful accusations-here of homosexuality, for the parties agree that if Lenord was homosexual he didn’t want it known. In effect Angela is arguing that all you need in order to require a DNA test of a relative (or anyone else) who is ahead of you in line for an inheritance is an affidavit that the relative is not ahead of you, because he or she is a phony heir and you’re a genuine one. Notice the distasteful implication that had Quincy died after Lenord, Angela could have required Quincy’s corpse to be dug up in order for a DNA test to be conducted on it to determine whether Quincy had been Lenord’s biological son.
Rule 35 would have allowed the district judge to order a DNA test of Quincy, but not at the behest of Angela. And in any event, as we have emphasized, the rule would not have required the judge to do so, given Illinois’s aversion to ordering DNA tests in family squabbles. That aversion is grounded in substantive Illinois law and therefore binds the federal courts. Nor was Angela’s evidence against Lenord’s paternity conclusive. Homosexual men can of course father children and so far as appears our Lenord may have been bisexual–or indeed 100 percent heterosexual. Angela made no effort, so far as we can tell, to obtain evidence from Quincy’s mother–a suspicious omission. In these circumstances the district judge’s refusal to disinherit Quincy can’t be thought an abuse of discretion even if Angela had standing to seek his disinheritance. The judge’s refusal led directly to the award of the insurance proceeds to Quincy. The award was therefore confirmed.