Opinion ID: 1148283
Heading Depth: 1
Heading Rank: 3

Heading: Wesson's Death

Text: On March 14, 1980, Dr. Wesson, along with his wife, died as a result of a plane crash in Poland, while accompanying the United States Amateur boxing team en route to a match against the Polish team. At the time of his death, the premium, which was due February 1, 1980, had not been paid. After being informed of Wesson's death, Wimberly contacted Emmie Holt at MONY's Jackson office to inquire about the status of the policy since the February 1, 1980, premium was unpaid. She relayed the request to MONY's home office in New York, and on March 26, 1980, MONY's New York office sent a TELEX message to Holt stating, Since two premiums are due and unpaid and no APL provision was provided for, the policy will be lapsed to reduced paid up ($3,687.00). The grandmother of the Wesson children, beneficiaries of their father's policy, employed Attorney Clyde H. Gunn in the matter, and he contacted MONY on March 24, 1980, advising of Dr. Wesson's death and requesting a claims form. In May, 1980, Attorney Gunn sent in the claims form and copy of the policy to MONY and on June 2, 1980, MONY sent four form letters to its Jackson office informing them that the policy was lapsed to reduced paid-up value of $3,687.00. Attorney Gunn made demand for the full face amount on July 10, 1980, to which MONY replied on August 5, 1980, giving the same explanation as stated hereinabove. The Wessons filed suit against MONY on August 30, 1982. In denying the claim MONY relied only on the master message print (computer printout). This modus operandi of MONY in evaluating a claim was uncontradicted. Although the master message print indicated that an APL provision was not in Dr. Wesson's policy, the testimony showed that only the application of Dr. Wesson listed the beneficiaries, and claims personnel referred to it at the time the claim was filed to ascertain the beneficiaries. Question and answer # 9 indicating APL was on the application. [2] Between the time of Dr. Wesson's death and the filing of suit, in early 1981, MONY unilaterally altered its computer to reflect a O for APL in its master message print on all tax qualified whole life policies. After suit was filed and discovery had, this action was found out. MONY then attempted to rectify the situation by identifying the policies which had requested APL, changing its computer to reflect such, and notifying policyholders of the risk they run of having their plans lose their tax-exempt status. As a result of this investigation, MONY discovered fifty (50) death claims involving tax-sheltered policies, with eight (8) of those 50 being paid on a reduced paid-up basis. Of those eight, two, including Dr. Wesson, requested APL. The other policy was then paid in the full amount of its face value. Of the pension trust policies still in force, MONY discovered 1,614 policies which requested APL and were originally coded in its computer reflecting such, but were unilaterally changed to indicate no APL in 1981. MONY also discovered 182 policies wherein APL was requested but coded at issuance to indicate no APL. If Dr. Wesson had lived, his policy would have fallen into this latter category. MONY discovered the existence of the APL provision in Dr. Wesson's policy just prior to the due date of its answer to the complaint. MONY was served with the complaint December 2, 1982. MONY notified local counsel in Jackson, Mississippi, of the complaint, telling him it was a simple lapse case and that he should defend it vigorously. Marion Marable, the person making contact with local counsel, relied upon the information contained in the master message print, notwithstanding that, at that time, the file was in his possession containing the complete policy. MONY's local counsel, while reviewing the policy with MONY personnel at its Jackson office, discovered the inclusion of the APL provision in the policy and MONY was notified of this by local counsel on October 11, 1982. MONY filed an answer, denying liability, but, on December 15, 1982, amended its answer, admitted liability and paid the face value of the policy, with interest, into court. As a result of the suit, MONY took certain corrective measures. Also, it now requires its death claims personnel to review the application when evaluating a death claim.