Life Insurance – Who Gets Paid

Here is an interesting case form the U.S. Northern District, Dallas Division, regarding payment on a life insurance policy.  The case is styled, Metropolitan Life Insurance Company v. Michael Wayne Battle II.

Metlife offers life insurance to federal employees through a program referred to here as FEGLI.  The Office of Personnel Management (OPM) administers the program.  Metlife is required to pay FEGLI benefits when a beneficiary establishes a valid claim under FEGLI.  FEGLI payments are prioritized thus: first, to the employee’s designated beneficiary; second, if there is no designated beneficiary, to the employee’s surviving spouse; and, third, if neither is present, to the employee’s child or children.  This is pursuant to 5 U.S.C. Section 8705.

Battles’ father, Michael Battle (Michael), was covered under the plan and had coverage totaling $475,000 at the time of his death.  Michael had not designated a beneficiary.

Battle submitted a claim for benefits to Metlife and represented to Metlife that Michael was divorced and that Battle was an only child.  Metlife paid Battle the benefits.

Soon after, Metlife received another claim for benefits from Ashton Thompson (Thompson), another son of Michael.  Metlife confirmed that Thompson was a son and paid him half the benefits.

Metlife then informed Battle that Battle had been overpaid and requested that Battle reimburse Metlife half the money.  Battle refused and this lawsuit resulted.

Metlife filed a motion for summary judgment based on the equitable doctrine of money had and received and unjust enrichment.  To prove a claim for money had and received, Metlife must show that Battle holds money which in equity and good conscious belongs to Metlife.  A cause of action for money had and received is less restricted and fettered by fettered by technical rules and formalities than any other form of action.  It aims at the abstract justice of the case, and looks solely at the inquiry, whether the defendant holds money, which belongs to the plaintiff.  A cause of action for money had and received is not based on wrongdoing but instead, looks only to the justice of the case and inquires whether the defendant has received money which rightfully belongs to another.

MetLife moves for summary judgment on its claim for money had and received.  It contends that it mistakenly overpaid the FEGLI Benefits based on Battle’s representations; that the facts of this case mirror those in past cases where MetLife has recovered under an unjust enrichment theory; that Battle would receive an unentitled windfall were he allowed to keep the funds; and that Battle has continued to spend the FEGLI Benefits despite being notified by MetLife of the overpayment only 40 days after the original payment.
Battle was promptly notified of the overpayment based on Battle’s misrepresentations and this Court ruled that Battle cannot now maintain that he detrimentally relied on the overpayment.  Thus, Metlife wins the case.