Opinion ID: 174319
Heading Depth: 2
Heading Rank: 1

Heading: First National's Interest in the Policy

Text: On appeal, Minnesota Life argues that the district court erred in finding that First National, as administrator of Debra's estate, had an interest in the Policy. First, Minnesota Life contends that pursuant to the plain and unambiguous language of the Policy, it is relieved of all liability for payment of death benefits under the Policy to First National because no one other than Floyd possessed any interest in the Policy and the Policy named no contingent beneficiary to whom the funds are payable. Next, Minnesota Life contends that according to the Restatement (First) of Restitution § 189(1) comment (e) [4] when no one else has an interest in an insurance contract the insurer is relieved of all liability for payment of the proceeds. Next, Minnesota Life maintains that the Policy's unambiguous language does not authorize payment to the insured's estate upon disqualification or invalidation of the certificate holder. Finally, Minnesota Life contends that if we determine that it is necessary to look to state law for guidance, we will find, contrary to the district court's conclusion, that Restatement (First) of Restitution § 189(1) comment (e) is applicable under Arkansas law. Normal principles of contract interpretation apply to the construction of insurance policies.... Words and clauses are to be given their ordinary meaning and effect, and resort to extrinsic evidence is appropriate only to resolve ambiguities.... Enter. Tools, Inc. v. Export-Import Bank of United States, 799 F.2d 437, 439 (8th Cir.1986) (internal quotations and citations omitted). Whether an insurance contract is ambiguous is a question of law. Id. The parties agree that Floyd forfeited any entitlement to proceeds under the policy by causing his wife's death. Arkansas law plainly holds that one who wrongfully kills another is not permitted to share in the other's estate, to collect insurance on his life, or otherwise to profit by the crime. Middleton v. Lockhart, 344 Ark. 572, 583, 43 S.W.3d 113 (2001). For reversal, Minnesota Life relies on a rider contained in the Policy which states Except as provided under the section entitled `Additional Benefits,' an accidental death or dismemberment benefit under this rider will be paid to the certificate holder, if living, otherwise to his or her estate. Read in insolation, the rider's plain language appears to support Minnesota Life's position that only Floyd had an interest in the policy. However, after reviewing the record, we find that Floyd was not the sole possessor of a policy interest. The record indicates that Debra contributed directly to the Policy premium payments through her wages and indirectly through her assistance to Floyd as a wife and homemaker. Consequently, Debra acquired an interest in the Policy via her contributions as a breadwinner and homemaker. See Draper's Estate v. C.I.R., 536 F.2d 944, 947-48 (1st Cir.1976) (finding that insured wife's assistance as wife, mother, and homemaker, contributed in a very real sense to making payments on life insurance policies possible, and due in part to this, wife's estate had interest in the policies where husband-beneficiary murdered wife.). Accordingly, it appears that Debra had an interest in the Policy, and thus, Restatement § 189(1) comment e(3) is inapplicable. We find that because Debra had an interest in the Policy, payment to her estate is authorized due to Floyd's disqualification. Finally, because we find § 189(1) comment e(3) inapplicable to this case, we do not address Minnesota Life's state law arguments.