Prudential Insurance Co. Of America v. Athmer

178 F.3d 473 (7th Cir. 1999)

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Nature of the Case

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Facts

P brought this interpleader action to determine who should receive the proceeds of two life insurance policies owned by a man who was murdered by his wife. Those we are disputing the funds are the victim's natural daughter, and the murderess's natural son and sister. Kevin Spann, a soldier in the U.S. Army, was the insured. P had issued him a life insurance policy pursuant to the Servicemen's Group Life Insurance Act of 1965 (SGLI), 38 U.S.C. §§ 1965 et seq., for $200,000 in 1992 when he was stationed in Germany. The policy named Spann's wife, Gina Spann, as primary beneficiary and Gina's natural son, Steven Hill, as contingent or secondary beneficiary. Steven (D) was 13 and had been living with Kevin and Gina throughout the eleven years of their marriage. The other policy, which was for $100,000, had been issued in 1994, also in Germany, by Boston Mutual. This policy also named Gina as the primary beneficiary, but it named her sister, Betty Jo Pierce (D), rather than Steven, as the contingent beneficiary, and it was not issued under SGLI. Neither policy mentioned Chrystal Athmer (D), Kevin Spann's natural daughter. He had never lived with her or even acknowledged the relationship, which was established by DNA testing after his death. In his will Spann devised his estate to Steven (D), describing him as 'my son.' Gina had Spann murdered by her 18-year-old lover and three of his 16-year-old pals. She pleaded guilty and was sentenced to life in prison without parole plus five additional years. Her whole family is estranged from her. Betty Jo Pierce (D) didn't have anything to do with her. They've been trying to get Kevin (D) away from her for years. Pierce (D) is Steven's (D) legal guardian and has instituted a proceeding to adopt him. Pierce (D) was not complicit in the murder. Gina is disqualified from taking anything under the life insurance policies. The district judge held that Ds were not disqualified from taking under the policies. Athmer (D) appealed.