Facts

George Grant was murdered in his home in Green Valley on May 20, 2004. He had life insurance through plaintiff United Investors Life. On June 10, George's wife, defendant Donna Grant, filed a claim under the $500,000 life insurance policy. The plaintiff withheld payment on the policy claiming that George's death was a homicide that was still under investigation and defendant had not been yet cleared as a suspect. The plaintiff filed an interpleader complaint against defendant and other potential beneficiaries. The defendant hired a private investigator to investigate her husband's death. She submitted the investigation to plaintiff to no avail.

The defendant counterclaimed for declaratory relief, breach of contract, breach of implied covenant of good faith and fair dealing, intentional infliction of emotional distress, negligent infliction of emotional distress, Brandt fees, fraud and negligence.

PLAINTIFF'S CONTENTIONS:
The plaintiff claimed it was unable to identify the proper beneficiary under the policy because of conflicting claims to the proceeds. The court granted summary judgment in favor of plaintiff on the grounds that it properly interpleaded the proceeds, but that defendant could proceed on a claim that plaintiff unreasonably delayed filing interpleader proceeds.

DEFENDANT'S CONTENTIONS:
The defendant alleged that plaintiff was without good faith basis to deny benefits and was unreasonable in refusing to honor the terms of the policy. The defendant claimed that as a result of plaintiff's aggressive marketing strategy, her husband George had bought life insurance and listed her as the sole beneficiary. She had performed all conditions required under the policy to collect. She claimed that plaintiff had added new terms to the policy after it was issued and after George's death.

The court granted summary judgment against defendant on these claims, ruling that the provisions of the Probate Code prohibiting payment to persons involved in the homicide of an insured were implied as a matter of law, and that plaintiff therefore had a bona fide fear of multiple liability so long as defendant was not cleared as a suspect. Plaintiffs were permitted to proceed on the theory that plaintiff's delay in filing interpleader proceedings was unreasonable.

Injuries

The defendant claimed she incurred $75,000 in legal and investigative fees and costs. She also claimed she suffered anxiety, worry, embarrassment, and mental and emotional distress. The plaintiff additionally sought declaratory relief.

Result

The jury returned a verdict for defense awarding the interpleaded proceeds to defendant. On defendant's counter-claim the jury returned a verdict for $1,060,000 against plaintiff. This award included $265,000 in economic damages and $795,000 in noneconomic damages.