Brenda Gail Langley is a resident of Tennessee, and on October 20, 1999, she took out a

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Brenda Gail Langley is a resident of Tennessee, and on October 20, 1999, she took out a $50,000 life insurance policy. In this policy, she named her three biological children—Kristin Taylor, Edward Langley, and Phillip Langley—as the three beneficiaries. The policy was taken out by Langley from Tennessee Farmers Life Reassurance Company. A clause in the policy stated that Langley reserved the right to change the beneficiaries at any time and that the beneficiaries would share the inheritance equally. In 2002, Langley created a power of attorney, naming her sister, Linda Rose, the POA. Within the document was a clause that stated: “I, Brenda Gail Langley, do hereby appoint and constitute Linda Sue Rose, my true and lawful attorney for me and in my name and on my behalf to transact all insurance business on my behalf, to apply for or continue policies, collect profits, file claims, make demands, enter into compromise and settlement agreements, file suits or actions and take any other action necessary or proper in this regard.” In October 2002, Rose contacted Tennessee Farmers and changed the beneficiaries stated in the policy. Rose claims the action to change the beneficiaries was the result of Langley’s frustration with her children. Then, in November of the same year, Langley executed a will, giving only $100 to her children and the rest of her assets to her sister, Rose. The following year, Langley passed away. Rose then proceeded to submit claims to collect the insurance money from the life insurance policy. Langley’s children then proceeded to file their own claims. Tennessee Farmers realized there was more than one claim being made and filed suit against Rose. The original beneficiaries of the policy—the deceased’s children—answered the complaint, arguing that Rose was not entitled to the proceeds because (1) the deceased’s execution of the power of attorney was brought about by duress, coercion, control, and undue influence exercised by Rose or, alternatively, (2) Rose violated her fiduciary duty, as attorney in fact, by changing the beneficiary designation on the deceased’s life insurance policy. Who do you think won the case and why?

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Dynamic Business Law

ISBN: 9781260247893

5th Edition

Authors: Nancy Kubasek, M. Neil Browne, Daniel Herron, Lucien Dhooge, Linda Barkacs

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