Arkansas federal court applies the doctrine of substantial compliance

In Primerica v, Woodall, et al, Judge Susan Wright of the Eastern District of Arkansas considered a life insurance dispute involving the doctrine of substantial compliance.  This doctrine is fairly common raised in  life insurance beneficiary disputes. 

The court set out the background as:


On August 25, 1986, Primerica, then known as Massachusetts Indemnity and Life Insurance Company, issued a life insurance policy to Garvin (the “Policy”) insuring his life in the face amount of $100,000. The Policy included spousal term insurance or a spousal rider, which provided a $50,000 payment to Garvin, if alive, upon the death of the insured spouse. The Policy named “Betty Jo Reid” as both the principal beneficiary and the insured spouse, and Garvin and Betty Jo’s children (Kristy, Misty, Jodie, and Jerry) were the designated contingent beneficiaries. 

Garvin and Betty Jo divorced in 1992, and Betty Jo is now named Betty Jo Woodall. Garvin married Ila on July 10, 1993. In October 2001, Garvin contacted Primerica to confirm the identity of the Policy beneficiary, and by letter dated October 5, 2001, Primerica informed Garvin that “Betty Jo Reid” was still listed as the principal beneficiary. 

On April 10, 2002, at Garvin’s request, Primerica mailed him a form titled “MULTIPURPOSE CHANGE FORM.” Later that month, Primerica received a MULTIPURPOSE CHANGE FORM, dated April 21, 2002, signed by Garvin, Ila, and two witnesses. The form had three main sections, clearly separated by box borders. The first section was titled “NAME CHANGE;” the second, “TRANSFER OWNERSHIP;” and the third, “CHANGE BENEFICIARY.” The “CHANGE BENFICIARY” section had three subsections: “PRINCIPAL BENEFICIARY,” “CONTINGENT BENEFICIARY,” AND “SPOUSE RIDER BENEFICIARY.” 

Garvin completed the NAME CHANGE and CHANGE BENEFICIARY sections of the form that he submitted to Primerica. In the “NAME CHANGE” section, a handwritten checkmark appeared beside the selection “Insured Spouse;” “Betty Reid” is written on a line reserved for “Prior Name;” “Ila Elaine Reid” is written on a line reserved for “New Name;” and “marriage” is written on a line reserved for “Reason for Change.” Under the “CHANGE BENEFICIARY” section, which appears on page 2 of the form, the following language appears:

All designations of present beneficiaries and elections of settlement options pertaining to death benefits on the referenced Policy are hereby revoked and the proceeds payable under said Policy are to be paid to the following named person[s] as specified below pursuant to the payment provisions of said Policy, with the right to change the designation reserved.

Immediately following the foregoing language, the name “Ila Elaine Reid” is handwritten on a line reserved for the “Principal Beneficiary,” the number “100” appears on a line reserved for beneficiary percentage allocation, and the word “wife” is written on a line reserved for relationship to the insured. Garvin also supplied Ila’s social security number and birth date, as the form required.


Transamerica wrote a letter back to the insured on May 6, 2002, requesting information supporting that there was a legal name change. But he never responded.

However, he called the insurance company in late 2015 and in 2016 to allegedly confirm that Ila was the designated primary beneficiary.  After he died, Primerica was confused and apparently believed that Betty Jo and Ila were the same person.  However, after a review Primerica decided that Betty Jo was the correct beneficiary.  Ila of course objected and Primerica proceeded to the interpleader lawsuit

Judge Wright reviewed the April 2002 designation change form.  While the insured did not complete it correctly, she found that he clearly intended to make Ila the primary designated beneficiary of the policy. And he supplied Ila’s social security and birthdate, to distinguish her from Betty Jo.

Betty Jo argued that, while his intent may have been clear on the form, it was ultimately nothing more than “a mere announcement of a desire or preference to change his beneficiary.”  And Primerica did not process the change request.

But the court rejected this argument, noting that he had done everything he reasonably could to change the beneficiary from Betty Jo to Ila:


Arkansas follows the doctrine of substantial compliance, which dictates that where “the insured has done everything reasonably possible to effect a change in beneficiary, a court of equity will decree that to be done which ought to be done” . . . The undisputed evidence shows that Garvin intended to change the primary beneficiary of the Policy to his wife, Ila, and that he did everything reasonably possible to make that change. Because Garvin substantially complied with the Policy’s change-of-beneficiary provision, the Court finds that Ila Reid is entitled to judgment in her favor as to the insurance proceeds.


Many states apply the doctrine of substantial compliance to life insurance beneficiary designations.  Many federal courts also recognize the doctrine.  It is extremely important to consult an attorney experienced in handling beneficiary disputes.