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Estate of Lane v. Courteaux

Court of Appeals of Tennessee, Nashville

February 28, 2017


          Session January 17, 2017

         Appeal from the Chancery Court for Rutherford County No. 14CV-27 Howard W. Wilson, Chancellor

         Decedent had a life insurance policy in which she named her husband and sister as beneficiaries. Upon her death, Decedent's husband filed suit to recover the proceeds Decedent left to her sister and place them in trust for the benefit of Decedent's son, who was a minor at the time. The trial court concluded the son was entitled to the proceeds based on the theory of promissory estoppel. The sister appealed, and we reverse the trial court's judgment. An insurance policy is a contract between the insured and the insurance company, and Decedent was entitled to designate whoever she desired as a beneficiary of her policy. Evidence of Decedent's intent with respect to the proceeds does not deprive the named beneficiary of her right to the funds.

         Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Reversed and Remanded

          Wm. Kennerly Burger, Murfreesboro, Tennessee, for the appellant, Amanda Davenport Courteaux.

          Jay B. Jackson, Murfreesboro, Tennessee, for the appellees, Estate of Charles Allen Lane, David Kevin Sharp, Charles Ezra Lane, and William Conner Lane.

          Andy D. Bennett, J., delivered the opinion of the court, in which Richard H. Dinkins and W. Neal McBrayer, JJ., joined.



         Teresa Davenport Lane ("Ms. Lane" or the "Decedent") and Charles Allen Lane were married and had a son, Conner, who was born in 1997. Ms. Lane had a $600, 000 life insurance policy in which she initially designated her husband as the sole beneficiary. When Conner was about twelve years old, Ms. Lane was diagnosed with a terminal cancer. A few weeks before her death, Ms. Lane added her sister, Amanda Davenport Courteaux, as a co-beneficiary of her life insurance policy.[1] Ms. Lane designated Mr. Lane and Ms. Courteaux to receive $300, 000 each upon her death.

         Ms. Lane's husband received a diagnosis of terminal cancer after his wife, and he was not expected to outlive Ms. Lane. Ms. Lane died unexpectedly, without warning, in November 2013. Mr. Lane was unaware that his wife had added Ms. Courteaux as a beneficiary until after Ms. Lane's death, when he sought to collect the entire $600, 000 from the insurance company. Mr. Lane believed that his wife left half of the proceeds to her sister for the purpose of taking care of Conner, who was then sixteen years old and on the verge of having no living parents to take care of him. When Mr. Lane became concerned that Ms. Courteaux was going to use the insurance proceeds for purposes other than Conner's welfare, he filed a complaint against Ms. Courteaux and Protective Life Insurance Company, the company that issued the life insurance policy at issue.[2]

         When he filed the complaint, Mr. Lane asked the trial court to issue a temporary restraining order enjoining Ms. Courteaux from spending or transferring any of the insurance proceeds until the resolution of the case. The court issued the temporary restraining order as requested. In the complaint, Mr. Lane sought to have $270, 000 of the insurance proceeds payable to Ms. Courteaux put into a trust for the benefit of Conner.[3]The legal theories Mr. Lane asserted to justify this relief included breach of contract/reformation, imposition of a constructive trust, promissory estoppel, and unjust enrichment.

         The trial took place on February 10, 2016. Mr. Lane died prior to the trial, in September 2014, and his executors and estate were duly substituted as parties in his place. The evidence at trial consisted of testimony by Ms. Courteaux, Conner, Conner's half-sister, Serita Lane, Conner's grandmother, Elaine Davenport, and family friends. The testimony was consistent that Conner was Ms. Lane's main priority and the center of her life, and she wanted to be sure he was taken care of after she and her husband died. Ms. Courteaux testified that she and her sister, Ms. Lane, were very close all their lives and that they both promised the other to take care of the other's children if anything ever happened to one of them. Before she died, Ms. Lane informed Ms. Courteaux that "there would be money available for [her] to take care of Conner with, " but Ms. Courteaux did not know that she was a beneficiary of her sister's life insurance policy until after Ms. Lane died. Ms. Courteaux testified that she did not have any discussions with her sister about insurance or any insurance proceeds.

         A document was introduced as "Exhibit 1" that was identified as a page from a spiral notebook belonging to the Decedent that contained handwriting by the Decedent. At the top of the page, the Decedent wrote, "My wishes are as follows, " and below that line she listed several names, including Ms. Courteaux's and Elaine Davenport's. The Decedent wrote dollar amounts next to most of these names. Underneath the list of names she wrote: "Chuck Lane is to oversee all my possessions and distribute them accordingly."[4] Ms. Courteaux testified that she did not see this document, or know anything about it, until after the Decedent died and Conner sent her a photograph of it.

         In response to the Estate's attorney's questions regarding how she intended to use the money if the court were to allow her to keep the proceeds, Ms. Courteaux testified as follows:

A: If it's my money, what does it matter what I use it on?
. . . .
Q: So if I understand you, . . . if it's not my business, it's not [Conner's] business either, right? So it's not his business as to how you use this money?
A: That's my nephew and if he ever needed anything, I would help him --
Q: If there's anything left - -
A: - - whether I get the money or ...

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