Life Insurance Dispute to Continue to Trial: Motion for Summary Judgment Inappropriate

hieroglyph-1226853-715x1024The death of a loved one is always an emotionally difficult time. But the loved one’s death also creates many obligations and legal requirements that the deceased successors must accomplish. Often, these processes can be complex and may lead to litigation, especially when money is involved. A recent court case out of the Third Circuit Court of Appeal for Louisiana illustrates these problems.

The case surrounds the life insurance policy of Triston Knoll. Mr. Knoll obtained a life insurance agreement and named his then-wife, Tina Knoll, and their minor child, Andree Knoll, as the primary beneficiaries (the individuals who would receive the payment made upon the death of Mr. Knoll pursuant to the life insurance agreement). The life insurance agreement was designed to pay Andree two-thirds and Ms. Knoll one-third of the total life insurance policy amount. Years after Mr. Knoll obtained the life insurance policy, Ms. Knoll and himself filed and were granted, a divorce. Mr. Knoll passed two years after the divorce.

Upon the death of Mr. Knoll, Ms. Knoll and Andree were supposed to receive the insurance policy payment because both were still both named primary beneficiaries. Andree’s biological mother, Andrienne Theriot, contested the insurance policy payment, arguing that prior to Mr. Knoll’s death he intended to name Ms. Theriot as a beneficiary and therefore Ms. Theriot was entitled to some of the life insurance proceeds. This controversy was brought before a federal district court where the court ruled that Ms. Knoll and Andree were entitled to all of the proceeds from the life insurance policy. While fighting the litigation in federal district court, Ms. Knoll and Andree entered into an agreement where Andree would receive the all of the life insurance proceeds and that those proceeds would be placed in a trust. However, after their success in the federal district court, Ms. Knoll argued that she did not intend to give up her right to some of the life insurance proceeds. Ms. Knoll then decided to file a claim in Louisiana district court.

At trial, Andree argued that Ms. Knoll gave away her right to the life insurance proceeds to the trust. Ms. Knoll countered, arguing that she had not met the requirements to give away her right to the life insurance proceeds. Both Andree and Ms. Knoll filed motions for summary judgment, and the trial court granted the Andree’s motion, ruling that Ms. Knoll did give up her right to some of the life insurance proceeds. A motion for summary judgment asks the trial court to decide a case prior to it going to trial if both parties agree to the material facts of the dispute.

Ms. Knoll, disagreeing with the trial court’s ruling, appealed the decision. She argued that under Louisiana law one must have an agreement and a fixed price before one legally transfers ownership and that she had not received any price, or benefit, from the transfer her right to the life insurance proceeds. See La. C.C. art. 2456 (2016). Andree disagreed, arguing that Ms. Knoll, while not receiving any cash payments, received many benefits from the assignment of the life insurance proceeds.

The Third Circuit reversed the trial court’s order granting summary judgment. The Third Circuit noted that summary judgment may only be granted when there is no genuine issue of material fact. La. C.C.P. art. 965 (2016). The Court held that there was a factual disagreement about whether Ms. Knoll intended to relinquish her right to the life insurance proceeds and that because this fact is material, summary judgment was inappropriate.

This case illustrates the need for clarity in communication between lawyers and clients as well as between parties. Because of a misunderstanding resulting from poor communication, both sides have had to spend significant time and money in order to resolve this misunderstanding. With the help of an excellent lawyer, hopefully, some of these misunderstandings from poor communication can be avoided, and thus will save all parties time and money.


Written by Berniard Law Firm Blog Writer: Smriti Krishnan

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