After a breadwinner dies, families have to deal with more than just their grief. As a St. Louis car accident attorney, I know the loss of an important earner means the family loses a paycheck immediately. Because of the death, there are often large bills to pay as well—medical costs and the cost of a funeral. That’s the purpose of death benefits in an insurance policy. But when the insurer doesn’t pay right away, the family is left hanging and without resources. In Williamson v. Hartford Life & Accident, Linda Williamson alleged that Hartford should be obligated to pay her and a class of similarly situated people interest for the time they waited for the insurance company to pay death benefits. The trial court in western Missouri ultimately ruled that no interest is due until Hartford’s investigation, as provided in its policy, is complete. The Eighth Circuit upheld with different reasoning.
Williamson lost her spouse in a car accident in September of 2007. Hartford paid the death benefits due under their policy, but 14 months later. The policy does not provide for interest. It was issued as part of a group policy issued to a group in Tennessee. When Williamson filed her putative class-action suit, asserting that there are over 13,000 similarly situated people. she alleged that Tennessee law requires interest to be paid on claims. The parties filed cross-motions for summary judgment in district court, and the court found for Hartford. It reasoned that the policy gives Hartford the right to investigate claims, and no interest would be due until after the investigation was complete. Thus, the case was dismissed before class certification was considered. Williamson appealed.
The parties disagree on whether to apply Tennessee or Missouri law, but the Eighth U.S. Circuit Court of Appeals found that neither state’s law ultimately support Williamson’s claim. Missouri law provides for 9 percent interest, in the absence of another provision, for payments made after they were due and payable. The Eighth found this language dispositive, because it’s not disputed that Hartford paid the death benefits to Williamson when they were payable. Under Tennessee law, a similar provision says interest is due after a debt becomes payable, which Hartford contended ended the dispute. But a different section provides that accounts shall provide interest “from the time they become due,” and the court had to investigate what “due” means here. Relying on a 1977 Tennessee Supreme Court case, the Eighth concluded that the state court would construe “due” to mean the time of payment specified in the policy, not the date of loss. Because the policy specified payment as soon as possible after adjudicating the claim, the Eighth said, Williamson is not entitled to interest under any of these provisions.
This court decision defers to the insurance policy to determine whether the rules have been followed. But as a Missouri motor vehicle accident lawyer, I know insurance companies’ policies are written to serve the insurance company’s needs, so I prefer that courts not rely on them too heavily. Suppose, for example, that Williamson’s insurance company received all of the necessary documents within two months of the crash, but ignored them for three years. This would not be “as soon as possible,” but Williamson would have to rely on a court to make that ruling and protect her from the insurance company’s incompetence or foot-dragging. As a southern Illinois auto accident attorney, I can assure you that mistakes or wrongful claim denials do happen—and the consequences for a family left without a spouse or parent can be severe.
If you’ve suffered a wrongful death in your family and you’d like to talk to an experienced attorney about your legal options, call Carey, Danis & Lowe today for a free consultation. You can reach us through our website or call 1-877-678-3400 today.
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