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Media Alerts - DeCoursey v. American General Life Insurance Company - Eighth Circuit
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June 14, 2016
  DeCoursey v. American General Life Insurance Company - Eighth Circuit
Headline Eighth Circuit panel interprets Missouri law concerning whether insurance proceeds paid in error must be returned to the insurance company

Area of Law Insurance

Issue(s) Presented Whether the district court properly determined that plaintiff failed to bring suit within the limitations period, but was still entitled to keep insurance proceeds paid to her in error.

Brief Summary DeCoursey's husband died in a car accident in 1986 and she submitted a claim on his $250,000 life insurance policy with American General Life Insurance Company's (the Company) predecessor in interest. The claim was denied, because the Company determined that the policy had lapsed. In June 2011 as part of the Company's own review of its life insurance policies, it notified DeCoursey that she was entitled to benefits under the policy because it had not, in fact, lapsed at the time of her husband's death. In 2013, the Company paid DeCoursey the policy's face value, $250,000. DeCoursey sued, claiming that she was owed 9% interest from the time her claim was denied in 1986. Upon further investigation, the Company confirmed that the policy had indeed lapsed prior to the accident, notified DeCoursey that it had wrongfully paid her, and counterclaimed for unjust enrichment.

The Company moved for summary judgment, arguing that DeCoursey failed to file suit within the 10 year limitations period. The district court agreed. DeCoursey also moved for summary judgment on the Company's unjust enrichment claim. The court granted DeCoursey's motion, holding that the company had voluntarily paid DeCoursey the $250,000 and was not entitled to its return because the Company had presented no evidence that it did not have an opportunity to diligently investigate the policy before it paid out.

On appeal, a panel of the Eighth Circuit agreed with the district court that DeCoursey's claims were brought outside the 10 year limitations period, which began to run in 1986 when her claim was denied, not in 2013 when she received the payment. The panel reversed the district court's decision with respect to whether DeCoursey was entitled to keep the $250,000 payment. The Missouri Supreme Court has never ruled on whether an insurance company may recover proceeds it pays out in error when it had an opportunity to investigate the facts. In such a case, the Eighth Circuit must predict how the state's highest court would decide the issue. The panel noted that the Missouri Supreme Court typically treats the Restatement on Restitution as authoritative. It then looked to the relevant portions of the Restatement, and determined that the Missouri Supreme Court would decide that a payor's lack of care will not diminish its right to recover, or somehow justify retention of the windfall wrongly paid. As such, the Eighth Circuit panel concluded that the Company had a straightforward restitution claim, and reversed the district court's grant of summary judgment against the Company.

The full text of the opinion may be found at

Panel Circuit Judges Arnold, Shepherd, and Wollman

Date of Issued Opinion May 17, 2016

Decided Affirmed in part and reversed in part

Docket Number 15-1927; 15-1929

Counsel Antwuan Smith for Susan DeCoursey and John Cowles Neiman, Jr. for American General Life Insurance Company

Author Circuit Judge Arnold

Case Alert Circuit Supervisor Joelle Larson, University of Minnesota Law School

    Posted By: Joelle Larson @ 06/14/2016 10:07 AM     8th Circuit  

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