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Life Insurance Company of North America Uses Interpleader Procedure to Resolve Life Insurance Dispute

A Utah court approved the use of the federal interpleader procedure for Life Insurance Company of North America in a dispute over life insurance benefits.  Life Insurance Co. of North American (LINA) is a Cigna company which issues group insurance benefits to employers.  Interpleader is a type of lawsuit used by a party who has money or property which more than one other person or company is competing to receive.  Life Insurance Company of North America was presented with a claim for life insurance benefits by Conrad Truman after his wife, Heidy Truman, died from a gunshot wound to her head.

However, two years after Ms. Truman’s death, Mr. Truman was found guilty of murdering her.  Janet Wagner, the deceased’s mother, also filed a claim for the life insurance benefits.  Because Life Insurance Company of North America did not know which beneficiary should receive benefits under its policy, it chose to interplead the funds into the court to let the court resolve the dispute and insulate itself from lawsuits.  Evaluating whether it would allow the Cigna insurance company to use interpleader, the District Judge wrote:

“Interpleader is a form of joinder open to one who does not know to which of several claimants it is liable.” Amoco Prod. Co. v. Aspen Group, 59 F. Supp 2d 1112, 1114 (D. Colo 1999)(citing General Atomic Co. v. Duke Power Co., 553 F.2d 53, 56 (10th Cir.1977). Interpleader actions typically involve two steps. First, the court must determine the right of the party invoking the interpleader remedy to require the competing claimants to litigate their dispute in one proceeding. Second, assuming the interpleader action is properly brought, the court will determine the respective rights of the claimants to the state.See e.g. United States v. High Tech Prods., Inc., 497 F.3d 637, 641 (6th Cir. 2007); Rhoades v. Casey, 196 F.3d 592, 600 (5th Cir. 1999), cert. denied, 531 U.S. 924 (2000).

The court found that because Life Insurance Company of North American was not able to determine who the proper beneficiary was under the terms of its policies, and because LINA could was threatened with double or multiple lawsuits or liability, that interpleader was an appropriate lawsuit for it to file.  This got all of the interested parties into court, and helped the Cigna company avoid being sued in the future over the same benefits.

Life Insurance Company of North America v. Wagner, No. 2:15-CV-00505-DS, 2016 WL 1465352 (D. Utah 4/14/2016).


To discuss your rights under a life insurance policy, call Life Insurance Attorney John V. Tucker at (866) 282-5260. 



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