Many life insurance cases are fights between potential beneficiaries of the life insurance policy. That was the case in this 2023, opinion from the Southern District of Texas, Houston Division. The opinion is styled, Tommy Marion v. Principal Life Insurance Company and Nicky B. Thompson.
Marion sued Principal Life and Thompson alleging that Thompson fraudulently removed Marion as the beneficiary on a life insurance policy taken out by now-deceased John Thompson.
The facts of the case can be ciphered by reading the case. Thompson filed a motion to dismiss Marion’s claim. Here we will deal with the law regarding the alleged fraud.
Under Federal Rule of Civil Procedure 8(a), a “pleading that states a claim for relief must contain … a short and plain statement of the claim showing that the pleader is entitled to relief.” According to the United States Supreme Court opinion, Ashcroft v. Iqbal, “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'”
Rule 9(b) provides a heightened pleading standard for allegations of fraud or mistake: “a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person’s mind may be alleged generally.” This means that the who, what, when, and where be laid out before access to the discovery process is granted. This applies to allegations of forgery as well.
First, Thompson argues that Marion’s forgery allegations do not meet the heightened pleading standard of Rule 9(b). Second, he argues that Marion’s fraud claim improperly names “Thompson, or someone acting for his benefit” as the forger rather than Thompson. Third, he argues that a Texas fraud claim requires that Marion relied on the defendant’s fraudulent statement.
Rule 9(b) requires that a pleader set out the “who, what, when, and where” of fraudulent statements. Thompson cites no authority that the phrase “or someone acting for his benefit” renders a fraud allegation deficient under Rule 9(b). The “what” is also sufficiently alleged: a fraudulent document purporting to remove Marion as beneficiary of the policy and make Thompson the sole beneficiary. However, Marion fails to allege the “when” and “where.” Even though liability ultimately depends on whether the beneficiary changes were fraudulent rather than the time and place, the law is clear that Rule 9(b) requires Marion to plead these details.