Alfa Life Insurance Corp. v. ReeseAnnotate this Case
In 2011, Wanchetta Reese, individually and as owner and beneficiary of the life-insurance policy issued on the life of her husband Lee Reese, filed a complaint in the Etowah Circuit Court against the defendants, Alfa Life Insurance Corporation, Josh Griffith and Judy Russell, two licensed Alfa insurance agents. Reese advised Defendants that she sought to obtain life insurance on her husband so that she would have funds available to bury him in the event of his death. Mr. Reese suffered from several chronic conditions, including kidney disease and diabetes. Reese contended that after being advised of Lee Reese's medical condition, Griffith stated to Reese that he needed to ask Russell for advice in completing the insurance application. In the presence of Reese, Griffith advised Russell Lee Reese's medical issues, and Russell advised Griffith, in the presence of Reese, to not put that information in the application. Lee Reese passed away unexpectedly on May 23, 2010. Mrs. Reese turned to defendants to make a claim for benefits, and Alfa denied it in a letter dated August 16, 2010. In her complaint, Mrs. Reese raised several claims including breach of contract, bad faith, fraud and the tort of outrage. Defendants moved to dismiss, and the trial court granted the motion with respect to the outrage claim, and denied as to Reese's other claims. The Supreme Court, after review, reversed the trial court's denial of defendants' motion as to the remaining claims: the undisputed evidence showed: (1) that Reese improperly relied on the agents' oral representations regarding the validity of the application without making any attempt to read the life-insurance policy application; (2) that Reese made no attempt to inquire into or to investigate any inconsistencies between the agents' oral representations and the language of the application; and (3) that no exception to the duty to read applied here.