United Investors Life Insurance Co. v. Severson

Mary Severson and Larry Severson (defendant) were a married couple who resided in Idaho. Mary used community property to pay for a term life-insurance policy on her life through United Investors Life Insurance Company (United Investors) (plaintiff). Mary named Larry as the primary beneficiary of the policy but later changed the policy to name her mother, Carolyn Diaz, as the primary beneficiary. Months later, Larry murdered Mary, and United Investors filed a complaint for interpleader. The Idaho slayer statute, I.C. § 15-2-803(b), prohibited a party who was convicted of slaying a victim from acquiring property or any other benefit as a result of the victim’s death. However, under Idaho law, if a deceased spouse paid for a term life-insurance policy with community property, one-half of the proceeds became vested in the surviving spouse upon the decedent’s death. For that reason, the trial court found as an initial matter that Diaz was entitled to at least $100,000 of the $200,000 in proceeds. Once Larry was convicted of Mary’s first-degree murder, the trial court held, among other things, that Idaho law barred Larry from receiving a share of Mary’s term life-insurance proceeds. The trial court based its ruling on I.C. § 15-2-803(e), which barred a victim’s slayer from receiving proceeds from the victim’s estate by devise, legacy, or intestate succession. However, Larry and Diaz agreed that I.C. § 15-2-803(e) was inapplicable because life-insurance proceeds did not pass by devise, legacy, or intestate succession. Larry appealed, arguing, among other things, that Idaho law did not bar him from receiving one-half of the term life-insurance proceeds.