Facts

Kay Cole was the owner and insured under a Northwestern Mutual Life Insurance (Northwestern) policy. On Feb. 13, 2008, after meeting with her doctors on the day before her surgery, Kay Cole requested and received by email a beneficiary designation form from Northwestern representative Melissa Carrasco. Kay Cole changed the designation of her beneficiaries under the policy from Ryan Langdon to Amy Alcini, Christopher Cole, Katy Cole, and Jonathan Cole. Kay Cole instructed her assistant, Jacquelyn Damarjian, to return the completed form by fax and mail to Northwestern. The fax was received by Northwestern that day. Kay Cole died on Feb. 19.

On Feb. 20, Langdon contacted Northwestern about the policy. She was mistakenly informed that she remained the beneficiary. Subsequently, Northwestern sent confirmation of the change in beneficiary designation to Langdon. Langdon contested the validity of the change, and claimed that Kay Cole was not of sound mind when she executed the change, and also that the change was the product of fraud or lack of capacity.

The new beneficiaries spoke with Northwestern in an effort to repudiate Langdon's claims. Northwestern refused to review any information provided and refused to assess either parties' claims. Plaintiffs sued Northwestern claiming bad faith. Northwestern filed a counterclaim for interpleader.

PLAINTIFF'S CONTENTIONS:
Plaintiffs claimed that Northwestern acted in bad faith when it refused to pay the policy and failed to make any determination as to the validity of Langdon's claims.

Damages

Kay's beneficiaries claimed the policy benefits, plus interest, in the amount of $2,000,000.

Result

The jury found that Kay's new beneficiaries were the rightful beneficiaries of the policy and found in favor of plaintiffs on Langdon's conversion claim. The court ordered the designation of plaintiffs as the rightful beneficiaries of the policy.

Other Information

FILING DATE: May 2, 2008.