Davis v. Tennessee Life Ins. Co.
| Decision Date | 26 January 1978 |
| Docket Number | No. 17020,17020 |
| Citation | 562 S.W.2d 868 |
| Parties | Nancy Kway DAVIS, Appellant, v. TENNESSEE LIFE INSURANCE COMPANY, Appellee. (1st Dist.) |
| Court | Texas Court of Appeals |
R. E. McDaniel, Winnie, for appellant.
Zbranek & Hight, J. C. Zbranek, Liberty, for appellee.
Nancy Kway Davis, the administratrix of the estate of Charles M. Davis, deceased, sued Tennessee Life Insurance Company to recover the proceeds of a policy of insurance on the life of Charles Davis. Nancy Kway Davis appeals from a take-nothing judgment. The judgment will be affirmed.
Prior to June, 1966, Charles Davis was employed by Reading and Bates Exploration Company, or an affiliated company, as an oilfield worker. Subsequent to his first employment, the company began the practice of requiring written contracts of employment. His last employment contract was executed in June, 1969.
Reading and Bates Offshore Drilling Company maintained employment and compensation records for all of its subsidiaries. There is evidence that it was the employer for all personnel except for certain individuals not citizens of the United States, and that it assigned the employees to various subsidiary companies. The 1969 employment contract, as did previous contracts, provided that as a condition of employment Davis agreed to sign up for the company's normal hospitalization, medical and life insurance group programs for himself and his family. Reading and Bates Offshore Drilling Company had in effect certain group life insurance policies with Tennessee Life Insurance Company. Charles Davis became an insured under the provisions of these group policies on becoming an employee. While policy No. 1264 was in effect, Charles Davis was killed in an accident. Tennessee Life Insurance Company paid the sum of $40,000.00 to Bessie Carr, the mother of Charles Davis, as the designated beneficiary of that policy although it was on notice of the fact that Nancy Kway Davis claimed an interest in the proceeds.
Mrs. Davis' claim is based on her contention that there was no valid designation of a beneficiary for the insurance policies in question. She contends that as administratrix of the estate of Charles Davis, she is entitled to the proceeds under the terms of policy No. 1264 issued in 1968.
Prior to the issuance of policy No. 1264, Davis' life was insured under Tennessee Life Insurance Company Group Policy No. 637. There was testimony that policy No. 1264 was issued to supersede No. 637 because there had been a number of endorsements to policy No. 637 and the company desired to increase the coverage under the policy. The insurance premiums were paid entirely by Reading and Bates. By agreement with Tennessee Life Insurance Company, some one of Reading and Bates' employees issued certificates of insurance in the appropriate amount to all of the employees on forms furnished by the insurance company. There was testimony that the amount of insurance an employee was entitled to receive depended on his salary. When it increased to the extent that he was entitled to additional insurance a new certificate would be issued to him which would replace previous certificates. There was evidence that at the time an employee first began work for Reading and Bates he was required to sign a card designating a beneficiary for the insurance to which he was entitled. On June 28, 1966, Charles M. Davis signed such a card thereby designating Bessie Carr as his beneficiary for group life and group accidental death insurance. No specific policies of insurance are referred to in this designation card. At that time policy No. 637 was effective.
Reading and Bates Offshore Drilling Company made an application in writing to Tennessee Life Insurance Company on March 1, 1968, for group life insurance. This application recites that the policy for which application is made would replace policy No. 637. Group policy No. 1264 was issued in response to this application. It provides that each employee shall have the right to designate a beneficiary upon becoming insured, and the right to revoke at any time any previous designation and make a new designation by giving through the owner written notice to the company at its home office. The policy defines the term "owner" as being Reading and Bates Offshore Drilling Company. The policy also provides that if there is no living designated beneficiary at the death of the insured, the amount then payable shall be paid to the executors, administrators or assigns of the employee.
The policy provides that the company will issue to the owner for delivery to each insured employee an individual certificate containing statements as to the insurance protection to which the employee is entitled and to whom it is payable, the effective date of the certificate, the beneficiary designation, and the conversion privilege.
Article 3.50 of the Insurance Code of the State of Texas places certain restrictions on insurance companies issuing group insurance policies. Paragraph 6 of Article 3.50, § 2 provides that the group life policy contain a provision that any sum becoming due by reason of the death of a person insured shall be payable to the beneficiary designated by the person insured, subject to the provisions of the policy in the event there is no designated beneficiary living at the death of the person insured. Paragraph 7 provides that the policy shall contain a provision to the effect that the insurer will issue to the policyholder for delivery to each person insured an individual certificate setting forth a statement as to the insurance protection to which he is entitled and to whom the insured's benefits are payable.
The insurance contract on which Nancy Kway Davis sues necessarily includes not only the master policy but also the certificate of insurance issued to Charles M. Davis. Board of Insurance Commissioners v. Great Southern Life Insurance Co., 150 Tex. 258, 239 S.W.2d 803 (Tex.1951); Wann v. Metropolitan Life Insurance Company, 41 S.W.2d 50 (Tex.Comm...
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