West v. Founders Life Assur. Co. of Florida

• Court: Alabama Supreme Court
• Writing for the Court: HORNSBY
• Citation: West v. Founders Life Assur. Co. of Florida, 547 So.2d 870 (Ala. 1989)
• Decision Date: 23 June 1989
• Parties: Joe WEST, et al. v. FOUNDERS LIFE ASSURANCE CO. OF FLORIDA, et al. 88-275.

Page 870

547 So.2d 870

Joe WEST, et al. v. FOUNDERS LIFE ASSURANCE CO. OF FLORIDA, et al.

88-275.

Supreme Court of Alabama.

June 23, 1989.

Frank J. Tipler, Jr. of Tipler and Tipler, Andalusia, for appellants.

W.H. Albritton IV of Albrittons, Givhan & Clifton, Andalusia, for appellees.

HORNSBY, Chief Justice.

Plaintiffs Joe West and Elender Sanders, as administratrix of the estate of Susan P. West, ¹ appeal from a summary judgment entered in favor of the defendants, Founders Life Assurance Company of Florida ("Founders Life") and its agent, James H. Hudson. This case involves an alleged breach of a contract of insurance occurring when Founders Life tendered the proceeds of the policy to Mary Emma West. ²

In 1969, Founders Life, through its agent, Hudson, issued a policy of life insurance to Terriel West. Terriel's brother Joe was designated as primary beneficiary, and his sister Susan was designated as contingent beneficiary. (Susan died during the pendency of this lawsuit and her interests are now represented by her administratrix, Elender Sanders.) At some time thereafter, Terriel told Hudson that the original policy had been lost, but that he wished to change his primary beneficiary. The policy provides that such a change "shall take effect only when endorsed on the Policy by the Company." Nevertheless, Hudson provided Terriel with the proper forms to change the primary beneficiary.

In 1980, Terriel again wished to changed beneficiaries, and Hudson again furnished the proper forms. This time, Terriel designated his wife, Mary Emma, as the primary beneficiary and his estate as the contingent beneficiary. After Terriel died, Founders Life paid the proceeds of the policy to Mary Emma.

Joe and Susan filed suit against Founders Life and Hudson, claiming that Terriel had assigned the policy to them, that the changes in beneficiaries were invalid because they were not accomplished according to the terms of the contract, and that, therefore, they were entitled to the proceeds of the policy. In response to the defendants' motion for summary judgment, Joe testified by affidavit that Hudson knew that Terriel had delivered the original policy to him in exchange for valuable consideration. This, Joe argues, creates a factual issue as to whether an assignment was made; therefore, he contends, the trial court erroneously entered summary judgment. We disagree.

First, there is nothing in the record showing that Hudson ever entered into any contract with Joe or Susan. Accordingly, summary judgment as to Hudson was properly entered.

Second, the policy provides that any change in beneficiary "shall be subject to the rights of any assignee of record with the Company." Furthermore, the policy provides that "no assignment [of the policy] shall be binding upon...