Prudential Ins. Co. of America v. Bannister, Civ. A. No. 77-37 Erie.
| Decision Date | 15 April 1978 |
| Docket Number | Civ. A. No. 77-37 Erie. |
| Parties | PRUDENTIAL INSURANCE COMPANY OF AMERICA, Plaintiff, v. Judith A. BANNISTER and Mary Lou Ahlin, Defendants. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
Edward Orton, North East, Pa., for Bannister.
Frederick Fifner, Cleveland, Ohio, Theodore J. Padden, Erie, Pa., for Ahlin.
David E. Holland, Erie, Pa., for Prudential Ins. Co.
FINDINGS AND OPINION
This is an interpleader action brought by Prudential Insurance Company of America to determine contesting claims to the proceeds of a life insurance policy. The policy was issued in 1962 on the life of William E. Bannister. At the time of the insured's death, his sister Mary Lou Ahlin was the named beneficiary endorsed on the policy, and his wife Judith A. Bannister had been named beneficiary by the insured on a request for change of beneficiary form signed by the insured and presented to the company four months previously. They are the respondent-claimants in this interpleader action.
On November 9, 1974, William E. Bannister married the claimant Judith A. Bannister. On December 18, 1974, by filing a change of beneficiary form and by delivering the policy, the insured made Judith A. Bannister the beneficiary of his life insurance policy. On July 21, 1975, he again changed the beneficiary to Mary Lou Ahlin, his sister. The testimony revealed evidence of some marital discord at that time and a temporary separation, but the parties were reunited shortly thereafter and had a stable marital relationship until William's death.
On October 10, 1975, William A. Bannister was diagnosed as suffering from acute leukemia. In December 1975, he was unable to pay the insurance premiums and asked his mother, Ruth Charnicky, to pay the premium on the policy. Prior to or at that time, she received the policy document from William and retained possession until after William's death when she delivered it to Judith.
In June 1976, William, who was undergoing repeated treatments of radio and chemotherapy for his condition, again received a premium notice. At that time, the local agency office of Prudential received a call or calls regarding a loan on the policy, and the right of waiver of premium due to disability and the change of beneficiary. The testimony conflicts as to whether these inquiries were made in one or more calls, and by William or Judith or both of them. In any event, the loan request was processed immediately, and forms for requesting change of beneficiary and for waiver of premium on disability were mailed to the insured. The form for waiver of premium was signed by William Bannister on June 7, 1976. An accompanying medical form was signed by his treating physician on June 14, 1976. The form for requesting change of beneficiary to Judith A. Bannister was signed by the insured on June 13, 1976, received by the local office, and mailed to the home office on June 15, 1976.
The home office notified the local office on July 29, 1976 that they were returning the request for change of beneficiary form and closing the case. The local agent in charge of the customer account was not aware of this return. The local office reveals that the change of beneficiary form was again submitted to the home office on September 22, 1976. A form letter reply was received by the local office on September 27, 1978, requesting that the policy be submitted for endorsement and that a request form be re-submitted.
There is no evidence that William E. Bannister or his wife Judith A. Bannister were ever notified or informed that the request for change of beneficiary had not been executed by the Prudential Insurance Company at its home office.
Shortly after the death of William E. Bannister, his mother Ruth E. Charnicky delivered the insurance policy document to the widow Judith A. Bannister. It was tendered to the insurance company for endorsement of the change of beneficiary...
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