Gregory, et al. v. Central Sec. Life Ins. Co., et al.
| Docket Number: | 2005-CA-01825-SCT | |
| Supreme Court: | Opinion Link Opinion Date: 04-05-2007 Opinion Author: RANDOLPH, J. Holding: Affirmed |
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| Additional Case Information: |
Topic: Insurance - Successor liability - Product line theory Judge(s) Concurring: SMITH, C.J., WALLER AND COBB, P.JJ., CARLSON AND DICKINSON, JJ. Non Participating Judge(s): DIAZ, J. Dissenting Author : EASLEY AND GRAVES, JJ. Procedural History: Summary Judgment Nature of the Case: CIVIL - INSURANCE |
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| Trial Court: |
Date of Trial Judgment: 06-15-2005 Appealed from: Chickasaw County Circuit Court Judge: Andrew K. Howorth Disposition: Granted Appellee's Motion for Summary Judgment Case Number: 2002-18 |
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| Party Name: | Attorney Name: | |||
| Appellant: | WILLIAM H. GREGORY, DECEASED, BY AND THROUGH HIS CO-EXECUTORS, WILLIAM H.
GREGORY, JR., AND ROBERT HOOD GREGORY; AND BETTY SUE GREGORY |
WILLIAM R. COUCH,
RICHARD JOSEPH LAJAUNIE,
GRANT M. FOX |
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| Appellee: | CENTRAL SECURITY LIFE INSURANCE COMPANY, SUCCESSOR IN INTEREST TO ANDREW JACKSON LIFE INSURANCE COMPANY | THOMAS WICKER |
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Synopsis provided by:  If you are interested in subscribing to the weekly synopses of all Mississippi Supreme Court and Court of Appeals hand downs please contact Tammy Upton in the MLI Press office. |
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| Topic: | Insurance - Successor liability - Product line theory |
| Summary of the Facts: | William and Betty Gregory were sold two life insurance policies by an agent of Andrew Jackson Insurance Company, Earl Stevens. The policy listed Kathy Etheridge, the Gregorys’ daughter, as both the owner and beneficiary of the policies. The Gregorys claim Stevens represented to them that these policies were “vanishing premium” policies. Subsequently, Andrew Jackson became insolvent and was liquidated. Central Security entered into an Agreement for Assumption Reinsurance with the National Organization of Life and Health Insurance Guaranty Associations to perform certain contractual obligations of Andrew Jackson arising on or after January 1, 1993. In 2001, the Gregorys received a notice from Central Security that stated that in order to continue their policies, the Gregorys would be required to pay additional premiums as a result of declining interest rates. In 2002, the Gregorys filed a complaint against Central Security, as successor in interest to Andrew Jackson, and Stevens, alleging that Stevens individually made false and misleading representations to them in a deliberate attempt to induce the Gregorys to purchase the policies. Central Security filed a Motion to Dismiss or in the alternative, Motion for Summary Judgment. Stevens joined in the motion. The trial court issued an Order of Summary Judgment stating that the cause against Central Security was fully and finally dismissed. The order does not mention Stevens. The Gregorys appeal. |
| Summary of Opinion Analysis: | The Gregorys argue that Central Security assumed responsibility for the misrepresentations of Andrew Jackson when Central Security issued the Policy Amendment stating that the name Central Security was to be substituted for the name Andrew Jackson anywhere it appeared in the policy and that Central Security meets the requirement of successor liability through the product-line theory. The product line theory is a deviation from the traditional rule based largely on the idea that the successor corporation is, like the predecessor, in a position to assume the risk spreading role assigned to the manufacturer of a product by strict liability theory. Central Security does not meet any of the four criteria of the product line theory. Additionally, the Gregorys put forth no evidence which showed Central Security knew anything about the policy or the procurement of same other than the language of the contract. The policy, which William testified he did not read, unequivocally stated premiums would be due for life. Nowhere in the policy is there language which states premiums would vanish or that they would be due for only five to seven years. Central Security was not liable for the acts or omissions of Andrew Jackson or Stevens, as pursuant to statute, Central Security did not assume any obligations outside of the Covered Obligations. |
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