First Colony Life Ins. Co. v. Sanford

Citation555 F.3d 177
Decision Date07 January 2009
Docket NumberNo. 07-60482.,07-60482.
PartiesFIRST COLONY LIFE INSURANCE COMPANY, Plaintiff-Appellee, v. Bobby L. SANFORD, Defendant-Appellant.
CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)
555 F.3d 177
Bobby L. SANFORD, Defendant-Appellant.
No. 07-60482.
United States Court of Appeals, Fifth Circuit.
January 7, 2009.

[555 F.3d 178]

Kenna L. Mansfield, Jr. (argued), Joshua Payton Henry, Wells, Marble & Hurst, Ridgeland, MS, for Plaintiff-Appellee.

Michael Thomas Jaques (argued), Law Office of Michael T. Jaques, Ridgeland, MS, for Sanford.

Appeal from the United States District Court for the Southern District of Mississippi.

Before SMITH and PRADO, Circuit Judges, and YEAKEL, District Judge.*

YEAKEL, District Judge:

At issue in this diversity action is the validity of First Colony Life Insurance Company's ("First Colony") policy on the life of Emmanuel Morris.1 Bobby Sanford purchased the Policy and was the primary beneficiary under the Policy. For about a year before his death, Morris lived with Sanford and his family. Upon Morris's death, Sanford filed a claim seeking to collect the Policy's $100,000 death benefit. First Colony declined to pay Sanford and commenced the underlying declaratory-judgment action seeking, inter alia, a declaration from the district court that under Mississippi law, because Sanford lacked an insurable interest in Morris, the Policy is void. Sanford answered and asserted several counterclaims against First Colony, including breach-of-contract and tort claims. Both parties moved for summary judgment. The district court granted summary judgment in favor of First Colony and denied Sanford's motion. The district court found as a matter of law that Sanford lacked an insurable interest in Morris's life, the Policy was void, and Sanford was unable to establish a legal and factual basis for recovery on any of his counterclaims. The court ordered First Colony to refund to Sanford the premiums Sanford paid on the Policy. We reverse the summary judgment and remand for further proceedings.


In January 2004, Morris was seventeen years old and homeless; his father was dead, his mother was incarcerated serving a life sentence, and no family member was willing or able to care for him. Morris's grandmother asked Sanford, a released

555 F.3d 179

convicted felon who ministers to troubled teenagers, if Sanford would care for Morris. Sanford agreed, took Morris into his home, and cared for him along with Sanford's three children.

In February 2004, Sanford hired an attorney to commence legal proceedings for Sanford to become Morris's guardian. A Final Judgment Appointing Guardian was rendered in the Chancery Court of Rankin County, Mississippi, appointing Sanford as General Guardian over Morris, a minor, upon Sanford's taking the oath prescribed by Mississippi law. See Miss.Code Ann. § 93-13-17 (2008). Sanford, however, never took the oath. No Letters of Guardianship were issued to Sanford.

Sanford hired another attorney, who assisted Sanford in having Morris's federal social-security payments redirected from Morris's aunt to Sanford. Although Morris had use of the social-security funds while in Sanford's care, Sanford asserts that he provided additional financial support to Morris.

Before Morris came to live with Sanford, Sanford purchased First Colony life insurance policies insuring each of Sanford's three children that, like the Policy insuring Morris, each provided a $100,000 death benefit and named Sanford the primary beneficiary. In August 2004, upon Morris's consent, Sanford applied for, was approved, and purchased the Policy on Morris's life through the same insurance agent Sanford used when purchasing the First Colony life policies on his children. On the Policy application, Sanford represented that he was Morris's guardian.

In January 2005, Morris was reported missing. A few weeks later, Morris was found dead; the coroner determined Morris's death was caused by drowning. In March 2005, Sanford filed a claim for the $100,000 death benefit under the Policy, which First Colony denied. Initially, First Colony informed Sanford that payment was denied because Sanford was a suspect in Morris's death, although later First Colony told Sanford the denial was due to the fact that Sanford lacked an insurable interest in Morris's life. First Colony then commenced this action.

By affidavit, Sanford explained his relationship with Morris over the year that Morris lived with Sanford and his family. When Sanford met Morris during the first week of January 2004, Morris explained to Sanford that he was homeless and sleeping in abandoned houses in Batesville, Mississippi. Morris told Sanford that no one in his family could help him, but that Morris really wanted to work and to go to school. Sanford believed that he could help Morris, and asked Morris if he would like to come to Sanford's home in Florence, Mississippi. Morris said yes, and asked Sanford to take him in. Sanford offered him a room in his house, but Morris preferred to live in a small apartment on Sanford's property. Sanford agreed, and Morris lived in the apartment under Sanford's control and supervision.

Sanford states that he treated Morris the same as he treated his own children, in that he provided Morris a place to live, financially supported him over and above what Morris received in social-security benefits, provided Morris with a car and insurance, paid for trips for Morris, including flying him to Houston for an Astros baseball game, took Morris out to eat, provided Morris food at Sanford's home, bought Morris clothes and other things he needed or wanted, gave him money for entertainment, helped Morris find a job at the grocery store where Sanford shops, took him to church, and introduced him to people with the church that he thought could help Morris then and in the future. Accompanying Sanford's affidavit is a photograph of Sanford and Morris together

555 F.3d 180

with Morris wearing a suit Sanford purchased for him. Sanford assisted Morris with opening a checking account and co-signed for him on the account.

Sanford also took Morris to visit Mississippi College and Hinds County Community College, where they met with admissions staff. Additionally, Sanford assisted Morris in applying for a scholarship at Mississippi College, which Morris received. Morris instead chose to enroll in Hinds Community College, and Sanford paid Morris's tuition in cash and with funds from Sanford's ministry, the "Young People in Action Ministry." Included as summary-judgment proof are the scholarship award letter, a receipt for tuition to Hinds Community College, and copies of documents refunding to Sanford Morris's tuition due to the fact Morris was reported missing and never attended classes.

Sanford worked with Morris and assisted him in developing life goals and often discussed with him the importance of making good decisions and making something of himself and his life. In April 2004, Morris was in a car accident and needed medical treatment. At the hospital, Sanford signed as the party responsible for Morris and Sanford paid medical bills incurred by Morris related to the accident.

Sanford hoped that Morris would receive a college education and Morris would assist Sanford in the future with his youth ministry. Sanford stated that he treated Morris just like his own children when Sanford brought Morris into his home. As to Morris, Sanford stated that he intended to and did undertake all obligations and duties that a parent would owe to a child.

In rendering summary judgment in favor of First Colony, the district court found: (1) Sanford never became Morris's legal guardian; (2) Sanford's argument that Mississippi law allows his substantial relationship with Morris, which was engendered by love and affection, to establish an insurable interest in Morris's life was unavailing; and (3) Sanford failed to show that an...

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