Facts

Plaintiff Eileen Green sued Coventry First and Valley Forge Life Insurance Co. for negligently and/or fraudulently removing her as the beneficiary of a life insurance policy insuring her deceased husband. Valley Forge paid the death benefit to the new beneficiary, an insurance trust with Green as a trustee.

PLAINTIFF'S CONTENTIONS:
Green claimed that Valley Forge was negligent for paying out the benefits to the wrong beneficiary.

DEFENDANT'S CONTENTIONS:
Valley Forge argued that it had no reason to believe there was anything improper with respect to the change of beneficiary on the subject line of the insurance policy. It claimed it had fully discharged its duties under Insurance Code Section 10172 when it paid the death benefit to the named beneficiary and received no competing claim until after two years. Valley Forge also contended that insurers cannot be held liable under a theory of negligence as a matter of law.

Result

The court granted summary judgment for Valley Forge, agreeing that an insurer could not be held liable under a negligence theory as a matter of law. It also agreed that Valley Forge had discharged its duties under Insurance Code Section 10172 when it paid out the death benefit to the named beneficiary.