Claims Denial Attorney – Life Insurance – Divorce

Life Insurance claims and Divorce.  Shall the two never intertwine.

Here is a 2022, opinion from the Northern District of Texas, Dallas Division, that will drive a life insurance attorney crazy.  The opinion is styled, Amy Cannon v. Mae Katheryn Bryant.

This case is a life insurance case.  The insured had a life insurance policy with State Farm.  When the policy originated, the insured was married to Ms. Cannon and named her as the beneficiary.  A year before the insured died, he and Ms. Cannon divorced.  After the death of the insured, Ms. Bryant asserts that she is entitled to the Policy proceeds as the successor beneficiary under the Policy and as the mother and heir of her son because the Insured’s and Ms. Cannon’s January 22, 2016 divorce decree did not designate Ms. Cannon as a beneficiary under the Policy, and the Insured did not redesignate Ms. Cannon as his beneficiary under the Policy after their divorce as required by Texas law and section 9.301 of the Texas Family Code.

The above few lines is a short hand version of the Court’s 6 pages spent just explaining the procedural events leading up to the final decision.  Ultimately, the Court granted summary judgement in favor of Ms. Bryant.

The important information to take from the case is is how the Court interpreted Family Code section 9.301.  This section is a frequent issue in situations where a couple have life insurance during their marriage and then get divorced.  Section 9.301 explains how life insurance is dealt with in a situation involving divorce.  The opinion is 35 pages long and needs to be read and understood by attorneys handling life insurance claims involving a divorce.  Again, it needs to be read.

Here is a caveat to the opinion.  The opinion deals with Texas law.  Federal law handles these situations differently.  This Federal law is dealt with in other blogs by this author.  The most relevant Federal law is related to life insurance claims governed by the Employee Retirement Income Security Act of 1974 (ERISA) and life insurance governed by the Federal Employee Group Life Insurance (FEGLI).

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