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Protective Life Insurance Co. v. LeClaire

United States District Court, D. South Carolina, Spartanburg Division

February 14, 2019

Protective Life Insurance Company, Plaintiff,
Deborah LeClaire, an individual, and Carrie Thomas, Administratrix on Behalf of the Estate of Robert Eugene Gilliland, Deceased, Defendants.


          Donald C. Coggins, Jr., United States District Judge

         This is an interpleader action involving competing claims to a $200, 000 life insurance policy issued to Robert Gilliland, who died on July 8, 2016. At the time of his death, Gilliland had in force the aforementioned life insurance policy underwritten by Plaintiff, an insurance company organized pursuant to the laws of Tennessee with its principal place of business in Birmingham, Alabama. ECF No. 1.

         Deborah LeClaire[1] was named as the beneficiary to the life insurance policy; however, Carrie Thomas, administratrix of Gilliland's estate, contests her right to the proceeds pursuant to S.C. Code Ann. § 62-2-507. Faced with competing claims to the policy, Plaintiff initiated this interpleader action, seeking permission to pay the policy proceeds into the Court's Registry and be discharged. The Court granted the Motion and dismissed Plaintiff from the case. ECF No. 20.

         A bench trial was held on January 7, 2019. ECF No. 65. Present at the hearing, were Thomas and LeClaire and no other witnesses. After receiving testimony, carefully considering the evidence, weighing the credibility of the witnesses, reviewing the exhibits and briefs, and studying the applicable law, this Court makes the following Findings of Fact and Conclusions of Law pursuant to Federal Rule of Civil Procedure 52. The Court notes that to the extent any of the following Findings of Fact constitute Conclusions of Law, they are adopted as such, and to the extent Conclusions of Law constitute Findings of Fact, they are so adopted.


         LeClaire and Gilliland were married on December 2, 2000. ECF No. 1-2 at 3. On September 8, 2001, Robert Gilliland applied for a $200, 000.00 life insurance policy from Plaintiff. ECF No. 35-2 at 4-7. The policy provides that if someone other than the insured person is to be an owner, she must be "named" as an owner in the policy schedule, an endorsement, or an amendment to application. Id. at 20. The application provides a space for a non-insured to be specifically named as an owner. Id. at 15. If someone other than the proposed insured in to be the owner, she is to be further identified by her social security number and her relationship to the insured. Id.

         Also on September 8, 2001, LeClaire signed a "Pre-Authorization Withdrawal Agreement," regarding "Policy No. DT-0084888" for "Name of Insured Robert Gilliland," allowing Plaintiff to automatically debit her Bank of America checking account each month for the policy premium. Id. at 9. Plaintiffs agent and LeClaire also signed a "Conditional Receipt Agreement" acknowledging that the agent had received the "Pre-Authorized Withdrawal Agreement" form for $139.50 per month on the policy. Id. at 8.

         On November 14, 2001, Gilliland and LeClaire signed an "Amendment to Application" form regarding "Name of Insured Robert Gilliland - Policy DT0084888." Id. at 14. Gilliland signed on the line designated for "Signature of The Insured(s)," and LeClaire signed on the line designated for "Signature of Adult Applicant/Owner(s) (if other than Insured)." Id. This amendment does not provide her social security number or identify her relationship to the insured. The amendment further provides that "the changes shown above shall be an amendment to and form a part of the application and the policy." Id. The only change above that line is an increase in the premiums. Id. LeClaire signed the amendment below the space indicated for changes. Id.

         Also on November 14, 2001, LeClaire executed a second "Pre-Authorization Withdrawal Agreement," authorizing Plaintiff to deduct $139.50 per month in premiums from her Sharonview Federal Credit Union checking account. Id. at 35. On November 26, 2001, Plaintiff issued the policy. Id. at 12. The policy identifies Robert Gilliland as owner on the declarations page. Id. The policy identifies LeClaire as the beneficiary. Id. at 15.

         On January 28, 2002, a decree of separate maintenance and support with respect to Gilliland and LeClaire was issued by the Cherokee County Family Court.[2] ECF No. 1 -2. The Family Court entered a divorce decree on August 20, 2003. ECF No. 1-3.

         On April 15, 2003, LeClaire telephoned Plaintiff and requested a Transfer of Ownership form. ECF No. 46-1 at 1-2. The form was addressed to Gilliland and mailed to LeClaire's address. Id. at 3. Gilliland's signature was required to complete the form, but the form was never returned to Plaintiff. Plaintiff made periodic annual reports that were addressed to Gilliland and included "important policyowner notice[s]". See, e.g., ECF No. 35-2 at 40. It was undisputed at trial that these notices were sent to LeClaire's address. It appears that LeClaire paid all premiums for the policy from November 2001 until Gilliland's death in July 2016.


         Section 62-2-507 of the South Carolina Code was amended in 2013 and now provides that:

(c) Except as provided by the express terms of a governing instrument, a court order, or a contract relating to the division of the marital estate made between the divorced individuals before or after the marriage, divorce ...

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