All Content

Posted by: Tanja Trezise on Dec 19, 2013

Court: TN Supreme Court

Attorneys 1:

Michael S. Kelley (at trial and on appeal) and Briton S. Collins (at trial), Knoxville, Tennessee, for the appellant, The Old Line Life Insurance Company of America.

Attorneys 2:

Bruce T. Hill, Sevierville, Tennessee, for the appellee, Erik Hood.

Judge(s): WADE

The minor beneficiary of a $100,000 life insurance policy filed suit against his financial guardian and the insurance company after the guardian misappropriated the insurance proceeds. The trial court entered judgments in favor of the minor against both the guardian and the insurance company. On appeal by the insurance company, the Court of Appeals affirmed, holding that the insurance company breached its contractual duties by entrusting the proceeds to the guardian. The insurance company then applied for permission to appeal to this Court, contending that it could not be held liable for the loss to the minor because it had relied upon the validity of a juvenile court order of guardianship. Because the insurance company acted in good faith when it relied upon a facially valid court order establishing a financial guardianship in making payment of the life insurance proceeds, it is not liable for breach of contract. The judgment of the Court of Appeals is, therefore, reversed, and the claim against the insurance company is dismissed.