Wrong Age On Insurance Application

What can happen when the wrong age is on a life insurance application?  If you are a Mason County insurance lawyer, you should read this Northern District, Dallas Division, opinion.  It is styled, Jackson National Life Insurance Company v. Lance Robbins, et al.

On a prior opinion in this case, the court granted Jackson National’s motion to interplead funds into the court registry, minus attorney fees and court costs totaling $7,000.

Jackson National now moves the court to amend the motion because they have learned the aged of the insured was misstated in the policy application and as a result, the one million dollar policy is now $907,502.02.

The court denies Jackson National’s motion because the relief it seeks is not available to an interpleader plaintiff.  As the court has previously explained:

Generally stated, the purpose of an interpleader action is to protect a stakeholder from liability when faced with the threat of multiple inconsistent claims to a single fund.  It does this by allowing the stakeholder to tender the contested funds to the court in lieu of defending against multiple possible lawsuits.  An interpleader action allows the stakeholder to pay the money into the court, withdraw from the proceedings, and leave the claimants to litigate between themselves their entitlement to the funds.

The procedural device of interpleader, then, allows a stakeholder effectively to avoid a dispute with the claimants while the court determines the proper allocation of the disputed fund.

In its motion to amend order permitting interpleader, Jackson National is no longer in the position of a disinterested stakeholder, as it was when the court decided the original case.  At that time, Jackson National maintained that it was a disinterested stakeholder that asserted no interest in the policy proceeds, except for a request for attorney’s fees and court costs incurred in the interpleader action.  Jackson National acknowledged that it was obligated and willing to pay someone the proceeds of the $1 million policy that insured Dobbins’ life, minus its attorney’s fees and court costs.  It maintained that it was seeking interpleader relief as an innocent stakeholder faced with multiple claims.

Now, however, Jackson National and the competing claimants are involved in a dispute inter se over how much Jackson National owes under the policy.  Jackson National is no longer a disinterested stakeholder who is willing to pay the full $1 million stake (minus attorney’s fees and court costs) to which the claimants maintain they are entitled.  Jackson National is, in effect asking the court to decide by motion – not even a summary judgment – contested issues that may not be resolvable without a trial.

Accordingly, without suggesting Jackson is or is not entitled to pay a reduced amount of policy proceeds, the court concludes that Jackson cannot obtain relief through its current motion.