Life Insurance And Murder – ERISA

What happens when the named beneficiary on a life insurance policy intentionally causes the death of the insured?  That was the question in this case from the Western District of Texas, San Antonio Division, opinion styled, Garrett Bean and Aneila Bean v. Minerva Alcorta.

Plaintiff’s father,Garry, has a $130,000 life insurance policy under which Alcorta was named the primary beneficiary and Garrett and Aneila were secondary beneficiaries of 50% each of the policy.

Alcorta was charged with intentional first degree murder of Garry.

The insurance company interplead the policy proceeds into the court and this lawsuit resulted.

Later in the year, Alcorta was found guilty of the murder of Garry.

Alcorta continued to fight for the policy proceeds with Garrett and Aneila who filed a motion for summary judgment claiming rights to the policy proceeds.

In reviewing the case, the court pointed out the following facts are undisputed: 1) Garry was insured under a life insurance policy governed by ERISA; 2) Alcorta was the primary beneficiary; 3) Plaintiff’s were each 50% contingent beneficiaries; 4) Alcorda has been convicted for the first-degree intentional and knowing murder of Garry; 5) that murder conviction is final.

Plaintiff’s argue they are entitled to summary judgment, because under the Texas slayer statute and federal common law, a beneficiary who willfully causes the death of the insured forfeits any right to collect under any life insurance policy.  As a threshhold, the Court reiterates that it declines to resolve the question of whether state slayer statutes are preempted by ERISA because the outcome of the case is the same whether applying the Texas statute or federal common law.

The Texas statute calling for forfeiture is Texas Insurance Code, Section 1103.151.

The Fifth Circuit stated in 1992 that the fact of a criminal conviction triggers Texas’s forfeiture rule as a matter of law.

Because there is no provision of ERISA, or any other federal law, directly addressing this issue, federal common law applies.  Federal common law in this regard mirrors state slayer statutes because federal common law encompasses the equitable principle that a person should not benefit from his wrongs.  Further, in enacting ERISA, Congress could not have intended to ensure recovery of ERISA benefits when one spouse intentionally kills the other spouse because it has long been a principle of federal common law that such killers should not be rewarded with insurance benefits for taking a life.

Thus, the Court concludes that under the undisputed material facts of the case, both Texas and federal law are clear that in killing Garry, Alcorta forfeited her right to any benefits under the life insurance policy.