Evidence of Oral Statements From Unavailable Witness to Determine Proper Beneficiary to Life Insurance Policy Exception to Hearsay Rule

Summary of Conseco Life Insurance Company V. Williams (8th Cir. ( Ark.) September 3, 2010) :

Conseco issued a life insurance policy to Niki Williams. Some time after the policy was issued, Ms. Williams became sick with cancer and subsequently died. Prior to her death, she had a falling out with her two sons and tried to remove them as the beneficiaries on her life insurance policy. Ms. Williams contacted Conseco to obtain the proper forms to submit the change from her sons to her sister Ellen Buckley. Apparently she was too sick to actually sign her name and Conseco would not accept an “X” as a signature. At Conseco’s suggestion, Ms. Williams gave Power of Attorney to her sister who then transferred ownership of the policy over to herself and later named herself the sole beneficiary.

After Ms. Williams’ death, Ms. Buckley and her 2 sons both submitted claims under the policy. The sons argued that Ms. Buckley used undue influence on their mother in order to get her to change the beneficiary on the policy. As a result of dispute, Conseco interpled the proceeds of the policy pending the resolution of the resulting litigation.

All parties moved for Summary Judgment. The lower court granted Summary Judgment as to Ms. Buckley and dismissed the son’s action. The sons appealed. Their main argument was that the evidence submitted by Ms. Buckley to prove decedent’s intent to have the policy changed was parole evidence and should not have been considered by the Court. Indeed, Ms. Buckley submitted affidavits from friends of decedent as well as her own. The Affidavits detailed conversations that the decedent had with the affirmants as to her desire to change the policy from her sons to Ms. Buckley.

In a lengthy decision, the 8th Circuit affirmed the lower court’s decision and held that Ms. Buckley was entitled to Summary Judgment as a matter of law. The Court held that the affidavits in question were not Parole Evidence and instead were allowed in as a valid exception to the Hearsay Rule under Arkansas Rule of Evidence 803(3). The Court noted that their holding was consisted with the Court’s decision in Primerica, which had a similar conclusion, and despite Appellee’s arguments to the contrary, was fully applicable in this case.

Impact: In the appropriate case, evidence of the insured’s intent may be demonstrated by parole evidence.