Contingent Beneficiary Receiving Life Insurance Proceeds

Parker County life insurance lawyers need to read and understand this 1992, Houston Court of Appeals [14th Dist.] opinion. It is styled, Francis v. Marshall.
This is an appeal from a summary judgment granted in favor of appellee, Doris E. Marshall. She brought suit to recover as a beneficiary under a life insurance policy and the trial court held that she was the proper recipient of the proceeds. This Court affirmed.
Appellant, Douglas C. Francis, was found guilty of the murder of his wife, Karen E. Francis. Mrs. Francis had been insured under a $50,000 life insurance policy. Appellant was the primary beneficiary under this contract, and the deceased’s mother and appellee, Doris E. Marshall, was the contingent beneficiary. Upon appeal, appellant’s murder conviction was affirmed and he is now serving a life sentence.
Awaiting the outcome of appellant’s criminal trial, Great Southern Life Insurance Company (“GSL”) placed the proceeds of Mrs. Francis’ policy in the court registry. Appellee asked the court for the authority to withdraw the proceeds for her own benefit but her motion was denied because Mr. Francis’ appeal of his murder conviction was not final. This left the ownership of the funds unadjudicated so the trial court ordered the funds to be placed in an interest bearing account under the name of the estate of Karen E. Francis. Subsequently, appellee brought a declaratory judgment action seeking to have the proceeds paid to her in her individual capacity. After appellant answered, appellee moved for summary judgment and the trial court granted her motion.
Appellant asserts that the trial court erred in granting summary judgment in favor of appellee because there was a question of fact as to whether the insurance benefits should be paid to appellee in her individual capacity. Appellant argues in his second point of error that the trial court erred in granting summary judgment in favor of appellee because there was a question of fact as to who was entitled to the benefits. In arguing this second point, appellant contends that his conviction is some, but not conclusive evidence, of the right of someone other than appellant to the proceeds. He also argues that there was no summary judgment evidence proving that he brought about his wife’s death for the purpose and with the intent of accelerating collection of the proceeds.
In support of his argument, appellant refers to the probate court order which placed the funds in an account in the name of the estate of the deceased. Although appellant would argue that the order would raise a question of fact as to whether the estate was entitled to the proceeds, this is simply not the case. Rather, once appellee’s motion asking for the funds had been denied, the court’s order was merely a neutral way in which to categorize the account.
Even though the court did deny appellee’s motion, this was not a judicial resolution of who receives the proceeds. Again, it was only for the purpose of keeping track of the account. Indeed, the order stated that “said funds [were to] be placed in an interest-bearing account pending the outcome of the criminal appeal of Douglas C. Francis.” The parties agreed that the funds should be placed in this account pending the conclusion of the criminal case and determination of ownership. Since it is clear that the estate of Karen Francis had no interest in the proceeds, there was no question of fact as to this issue. Further, the estate is not a party to this lawsuit.
In his second point of error, appellant contends that the trial court erred in granting summary judgment because there was a question of fact as to who was entitled to the proceeds. Specifically, appellant argues that his conviction was both inconclusive as to (1) the right to proceeds and (2) to whether appellant willfully caused the decedent’s death. Appellant’s contentions are without merit because appellant’s conviction was conclusive as to both.
Appellant’s prior judgment of conviction was properly before the Probate and County court as a hearsay exception. As such, appellant’s judgment of conviction obligated the probate court to acknowledge that he “willfully [brought] about the death of the insured”. The probate code also required the court to bar appellant from recovering any proceeds.
Under the Probate Code, if a beneficiary of a life insurance policy is convicted for the insured’s death, he is prevented from financially benefitting from his wrong. The Probate Code states that in such a case, proceeds are to be paid as provided in the Insurance Code. The pertinent section of that code provides that a contingent beneficiary will receive the proceeds where the primary beneficiary has willfully caused the insured’s death. TEX.INS.CODE ANN. art. 21.23 (Now Texas Insurance Code, Section 1103.151.) Given the mandates of the Texas Insurance and Probate Codes, appellant’s conviction was conclusive as to appellee’s right to proceeds and thus, summary judgment for appellee was proper.
Appellant also claims that his conviction was inconclusive as to whether he willfully caused the decedent’s death. However, Mr. Francis is collaterally estopped from raising the issue. Collateral estoppel is frequently characterized as a preclusion of issues because it bars relitigation of any ultimate issue of fact which was litigated and essential to the judgment in a prior suit. The element of willfulness was litigated and essential to appellant’s conviction for murder, and thus the doctrine of collateral estoppel bars relitigation of that issue.
The repercussions of a prior conviction on a subsequent civil case has been considered by this court before. Because the issue of willfulness was litigated and critical to the prior criminal conviction, appellant is estopped from attacking the judgment or any issue necessarily decided by the guilty verdict. Thus, appellant is not entitled to relitigate the issue of whether he willfully caused his wife’s death.
By subpoint, appellant maintains that there is no summary judgment evidence that shows that appellant brought about the death of the deceased for the purpose and with the intent of accelerating the due date of the insurance policy and collecting the insurance proceeds. His contention is without merit because such is not required under either the Insurance, or the Probate Codes. Quite simply, appellee did not have the burden to prove that appellant killed his wife for this purpose or any purpose. All the statute required was that appellant willfully caused the death of the policy holder. In sum, as appellant’s prior criminal conviction was conclusive as to appellee’s right to recover the proceeds, and as appellant is collaterally estopped from raising the issue of whether he willfully caused the decedent’s death, this Court held that the trial court did not err in granting appellee’s motion for summary judgment.