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Metropolitan Life Insurance Company v. Jemison

Background

Mr. Herbert B. Jemison was enrolled in a life insurance policy through his employer. Following his death, a dozen potential beneficiaries surfaced, all claiming the benefits should be paid to them. Unsure who to pay the life insurance benefits to, Metropolitan Life Insurance Company (“MetLife”) asked the court to intervene, known as an interpleader action. Thus, the court was tasked with determining who was the proper beneficiary.

The Life Insurance Policy

The life insurance policy states that if there is no beneficiary listed at the time of death, MetLife would pay the benefits to one or more of the following people, all who must have survived the decedent: spouse, child, and/or parent. In the alternative, the benefits may be paid to the estate.

The Competing Claims

Mr. Jemison had eleven children and two previous wives. Eliza, his second wife, died before him. The remaining twelve individuals all expressed claim to the benefits.

Mr. Jemison changed the beneficiary three times before his death. First, he listed his then wife, Eliza. Many years later, he changed the beneficiary to Ronald, one of his eleven children. A few years after that, he again changed the beneficiary to Lori, another child. At the time of his death, Lori was the listed beneficiary.

However, the benefits could not go to any of the previously named beneficiaries because

  1. Eliza predeceased him. The terms of the policy clearly stated the benefits would go to a surviving beneficiary.
  2. At the time Mr. Jemison changed the beneficiaries, first to Ronald and then to Lori, he was legally incapacitated. Because a mentally incompetent person cannot make a valid contract, the beneficiary changes were invalid.

Also laying claim to the benefits was Jessie, Mr. Jemison’s first wife. Jessie produced a marriage document and claimed they never legally divorced. A state probate court held a trial and determined Jessie and the four children she shared with Mr. Jemison were the surviving spouse and “heirs” (the present court noted it was unclear with the information before it why the probate court only named the four as “heirs” and not the other seven children).

The Court’s Ruling

Jessie urged the court to follow the probate court’s finding of her and her children as the legal spouse and heirs, implying the court should distribute the money to them.

However, the court noted the life insurance policy states the benefits are to go to the decedent’s “children,” not necessarily the “heirs.” Because it still remained unclear whether all the persons expressing claim to the benefits were Mr. Jemison’s children, it could not award the benefits to any one (or multiple) individual.

Thus, the court followed the alternative distribution allowed by the policy and ordered the money be paid to Mr. Jemison’s estate.

This case demonstrates the process of an interpleader complaint. When an insurance company is unable to determine who the rightful beneficiary is, it files an interpleader complaint to allow a court to determine the beneficiary.

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