Primerica Life Ins. Co. v. James Massengill & Sons Constr. Co.

Decision Date19 April 2011
Docket NumberNo. COA10–996.,COA10–996.
Citation712 S.E.2d 670
CourtNorth Carolina Court of Appeals
PartiesPRIMERICA LIFE INSURANCE COMPANY, Plaintiff,v.JAMES MASSENGILL & SONS CONSTRUCTION COMPANY, Tony W. Massengill, and Jimmy N. Massengill, Sr., Defendants.


Appeal by defendants from judgment entered 19 November 2009 by Judge Henry V. Barnette, Jr., in Wake County Superior Court. Heard in the Court of Appeals 7 March 2011.

Parker Poe Adams & Bernstein LLP, by Cynthia L. Wittmer, Scott E. Bayzle, Raleigh, and James Lynn Werner, Columbia, SC, for plaintiff-appellee.

Michael W. Strickland & Associates, P.A., Raleigh, by Michael W. Strickland, for defendant-appellants.


Defendant James Massengill & Sons Construction Company (JMS) appeals from an order granting plaintiff Primerica Life Insurance Company's (Primerica) motion for judgment notwithstanding the verdict and entering partial judgment in favor of Primerica and against defendant JMS. After careful review, we affirm.

I. Background

JMS is a construction company owned and operated, at all relevant times, by three brothers: John David Massengill (John), Tony W. Massengill (Tony), and Jimmy N. Massengill, Sr. (Jimmy). Tony served as President of the company, John served as the company's Vice President, and Jimmy served as the company's Secretary.

On 1 January 1992, Primerica issued a “key man” life insurance policy to JMS, insuring the lives of John and Tony in the face amount of one million dollars ($1,000,000) each (“the Original Policy”). Under the Original Policy, Tony was the primary insured, while John was covered through an “Other Insured Rider.” JMS was designated as the owner of the Original Policy, paid the premiums for the coverage under the Original Policy, and was initially designated as the primary beneficiary of the coverage on both Tony and John.

During the months of October through December of 1995, JMS made a series of changes to the Original Policy, by which the beneficiaries of both Tony and John's coverage were changed from JMS to the respective spouses and children of Tony and John. Each change was made in writing by letter on the letterhead of JMS and signed by both Tony and John. On 5 June 2000, JMS made another change to the Original Policy, changing the beneficiary of John's coverage to his estate. This change was also made by letter on the letterhead of JMS and signed by both Tony and John on behalf of JMS.

In late 2001, the Original Policy was approaching the end of its initial ten-year level coverage term and came up for renewal. By its terms, the Original Policy was set to automatically renew at the end of its ten-year term, unless a change was made to the Original Policy by JMS, the policy owner. On 23 October 2001, Primerica notified JMS by letter of the approaching renewal date and informed JMS that higher premium payments would accompany the renewal unless JMS wanted to renew its coverage under newly available insurance products offering lower premiums. In addition, the local Primerica agent, Douglas A. Vinson (“Vinson”), went to the offices of JMS to discuss the renewal options and to obtain the necessary signatures on the renewal paperwork. John was not in the office at that time, but Vinson consulted with Tony regarding the renewal options and the new insurance products offering lower premiums. Tony informed Vinson that both he and John wanted to continue their coverage with no changes. After the meeting, Tony signed a policy change form, bearing the same policy number as the Original Policy, to renew the same life insurance coverage but using the new lower-cost product. John was not present during any part of the meeting, and Vinson never saw John or obtained John's signature.

Vinson forwarded the renewal documents to Douglas Harold Stumbo (“Stumbo”), a National Sales Director for Primerica, who in turn submitted the forms for processing. However, upon receipt of the policy change form, Primerica's underwriting department notified Stumbo that coverage for John could no longer be issued as a rider to Tony's coverage under the lower-cost option requested on the policy change form, and recommended that John's coverage be moved to a separate policy number. As a result, Stumbo altered the policy change form to request deletion of John's rider from the renewed policy and completed an application to convert the rider to coverage under a separate policy number for John. In doing so, Stumbo mistakenly made two changes to the coverage which were unknown to and unauthorized by JMS. Stumbo listed JMS, rather than John's estate, as the beneficiary on the application for conversion of John's rider. Because the prior changes in beneficiary designation were handled by Primerica's home office without the involvement of local agents, Stumbo was unaware that JMS had changed the beneficiary of John's coverage to John's estate. Stumbo also assumed, based on the Original Policy application and the fact that the Original Policy was set up as a “key man” policy, that JMS was the proper beneficiary. Also, Stumbo indicated that John, rather than JMS, was the owner of the converted coverage. Stumbo submitted the conversion application to Primerica in early 2002, without double-checking the beneficiary and ownership designations with JMS or John or Primerica's home office, and signing John's name himself in an attempt to expedite the renewal process.

On 19 February 2002, Primerica issued coverage on John's life under a separate policy number for one million dollars ($1,000,000) with JMS designated as the beneficiary of the coverage and John designated as the owner of the new policy (“the Rider Conversion Policy”). Following its issuance, the Rider Conversion Policy was sent to JMS by certified mail on 21 June 2002.

John died on 29 March 2005 after battling cancer since 2001. In a letter dated 10 May 2005, JMS notified Primerica of John's death and requested that Primerica cease drafting the monthly premiums from JMS's bank account. In response, Primerica sent a claimant's form to JMS, the beneficiary designated by Stumbo on the Rider Conversion Policy. JMS completed the claimant's form and sent the form to Primerica, asserting that JMS was the rightful beneficiary of John's coverage.

On 10 June 2005, Primerica sent a benefit check payable to JMS in the amount of $1,000,797.06, representing the face amount of John's coverage, plus a two-month premium refund. JMS immediately deposited the check into its bank account. The company had been struggling financially during the years leading up to John's death and had many outstanding debts at the time it deposited the insurance proceeds received from Primerica. On 5 July 2005, fifteen days after depositing the check in its bank account, JMS had spent nearly $900,000 out of the account. Within two months of receipt of the insurance proceeds, the entire amount had been spent. JMS used the entirety of the proceeds to pay outstanding company debts and employee salaries so that the business could continue.

Judy Massengill (Judy), John's widow and executrix of his estate (“the Estate”), was unaware of JMS's actions regarding the insurance proceeds for John's coverage. Accordingly, having been provided Primerica's contact information by JMS, on 16 June 2005 Judy sent a letter to Primerica requesting documentation to submit a claim for the insurance proceeds for John's coverage on behalf of the Estate. Primerica responded by letter on 27 June 2005, stating that the Estate was not the designated beneficiary under the Rider Conversion Policy and that a benefit check for the proceeds had been paid to the designated beneficiary. JMS did not inform Judy that it had received the insurance proceeds for John's coverage.

Thereafter, Judy obtained copies of the insurance documents from Primerica and, after inspecting the documents, suspected that the documents were incorrect and unauthorized. As a result, on 7 December 2006, Judy filed an action on behalf of the Estate against Primerica to recover the one million dollars ($1,000,000) of insurance coverage on John's life. The Estate claimed that Primerica had erroneously paid the one million dollars in proceeds to JMS. During the pendency of the action by the Estate, Primerica discovered the mistaken changes made by Stumbo during the renewal process and determined that the Estate was in fact the correct beneficiary. Subsequently, Primerica paid the one million dollars in proceeds, for the second time, to the Estate and settled all of the Estate's claims against Primerica. As a result, on 12 October 2007, the Estate dismissed its action against Primerica.

On 21 February 2007, before the original action by the Estate against Primerica was dismissed, Primerica filed a third-party complaint against JMS, Tony, and Jimmy, asserting a claim of unjust enrichment to recover the one million dollars in proceeds mistakenly paid to JMS for John's coverage. In response, JMS, Tony, and Jimmy filed an Answer and certain counterclaims, all of which formed the basis of the present action. However, Tony and Jimmy individually dismissed all of their counterclaims prior to proceeding to trial.

The trial of the present action commenced on 14 September 2009. At the close of Primerica's case-in-chief, JMS dismissed all of its remaining counterclaims. At the close of all the evidence, Primerica moved for a directed verdict, which was denied by the trial court. On 17 September 2009, seven issues were submitted to the jury on Primerica's claim for unjust enrichment. The first issue concerned Primerica's claim against JMS and was as follows:

Was the Defendant [JMS] unjustly enriched by receiving death benefits from a life insurance policy on the life of John D. Massengill, issued by the Plaintiff [Primerica] in the amount of $1,000,000.00?

The remaining six issues submitted to the jury, applicable only in the event the first issue was answered in the affirmative,...

To continue reading

Request your trial
44 cases
  • Mountain Land Props., Inc. v. Lovell
    • United States
    • U.S. District Court — Western District of North Carolina
    • September 11, 2014
    ...Bank, Nat'l Ass'n v. Browning, ––– N.C.App. ––––, 750 S.E.2d 555, 559 (N.C.Ct.App.2013) ; Primerica Life Ins. Co. v. James Massengill & Sons Constr. Co., 211 N.C.App. 252, 712 S.E.2d 670, 677 (2011). A benefit is conferred officiously where it is conferred by interference in the affairs of ......
  • Szulik v. Tagliaferri
    • United States
    • U.S. District Court — Southern District of New York
    • August 21, 2013
    ...v. RYF Enters., LLC, ––– N.C.App. ––––, 742 S.E.2d 555, 561 (N.C.Ct.App.2013) (quoting Primerica Life Ins. Co. v. James Massengill & Sons Constr. Co., 211 N.C.App. 252, 712 S.E.2d 670, 677 (2011) (citation omitted)). “The doctrine of unjust enrichment is based on ‘quasi-contract’ or contrac......
  • Olivares v. Univ. of Chi., 1:15-cv-713
    • United States
    • U.S. District Court — Middle District of North Carolina
    • September 30, 2016
    ...that benefit, and (3) the benefit was not conferred officiously or gratuitously." Primerica Life Ins. Co. v. James Massengill & Sons Constr. Co. , 211 N.C.App. 252, 712 S.E.2d 670, 677 (N.C. Ct. App. 2011). Similar to the claim of unjust enrichment under Texas law, a claim of unjust enrichm......
  • Chisum v. Campagna, 16 CVS 2419
    • United States
    • Superior Court of North Carolina
    • April 25, 2019
    ...the contrary verdict actually returned by the jury. Primerica Life Ins. Co. v. Massengill & Sons Constr. Co., 211 N.C.App. 252, 256-57, 712 S.E.2d 670, 675 (2011) (quotation marks omitted). A motion for judgment notwithstanding the verdict tests the sufficiency of the evidence, taken in the......
  • Request a trial to view additional results
2 books & journal articles
  • Chapter 26 MONEY HAD & RECEIVED
    • United States
    • North Carolina Bar Association Elements of Civil Causes of Action in North Carolina (NCBA)
    • Invalid date
    ...and money had and received as separate claims); Primerica Life Ins. Co. v. James Massengill & Sons Constr. Co., 211 N.C. App. 252, 712 S.E.2d 670 (2011) (action for money had and received allows plaintiff to maintain equitable action to recover payment mistakenly made to defendant on theory......
    • United States
    • North Carolina Bar Association North Carolina Fiduciary Litigation Manual (NCBA) Chapter XI Tortious Interference with Inheritance
    • Invalid date
    ...483, 490, 742 S.E.2d 555, 561 (2013) (quoting Primerica Life Ins. Co. v. James Massengill & Sons Constr. Co., 211 N.C. App. 252, 259-60, 712 S.E.2d 670, 677 (2011)). b. Time Considerations A three-year statute of limitations is imposed on claims for unjust enrichment. N.C.G.S. § 1-52. Howev......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT