Saturday, June 18, 2011

Claim For Failure to Maintain Life Insurance

Jean Stewart and Earl Clark Stewart were divorced in Mississippi, on March 23, 1978. Mr. Stewart was required to pay child support for his son, Joseph Stewart. He made a few payments, then stopped, and moved to British Columbia. In 1992 the Mississippi Court held Earl Clark Stewart in contempt for failing to abide by its order to pay support, and ordered him to pay over $26,000 in arrears of support. The Mississippi Court also ordered Earl Clark Stewart to “maintain an insurance policy on his life in the amount of $100,000 and to name the minor child born of this marriage as sole beneficiary of the policy….”

Joseph Stewart is now a man of 34 years. Earl Clark Stewart never did pay the arrears of child support, nor continue to make the support payments. When he died, on December 18, 2008, he left his estate worth approximately $150,000 in his will to three children from a second marriage and to three step children. He did not make any provision for his son Joseph Stewart. Nor did he maintain a life insurance policy naming Joseph Stewart as his beneficiary.

Joseph Stewart sued his father’s estate for $100,000 for his father’s failure to have a life insurance policy in place.  

The first question that Mr. Justice Butler considered in Stewart v. Stewart, 2011 BCSC 774, was what law should apply to determine the extent of the obligation to maintain the life insurance? The case was heard by the Supreme Court of British Columbia, which usually applies British Columbia law, but the order to maintain the life insurance policy was made by a Mississippi court. Mr. Justice Butler held that Mississippi law governed. The law of the jurisdiction of the court that made the order should be applied to determine the obligations. Furthermore, child support obligations are governed by the law of the jurisdiction most closely connected to the child and custodial parent, which in this case was Mississippi.

When the court in British Columbia applies the law of a foreign jurisdiction, the court will generally consider expert evidence from a lawyer in that foreign jurisdiction.

In this case, the executor filed evidence from, James Farrior, a lawyer in Mississippi. According to Mr. Farrior, the order that Earl Clark Stewart maintain life insurance is a form of support, intended to provide security in case Earl Clark Stewart died while the child support obligation continued. Under Mississippi law, the obligation to pay child support ends when the child attains the age of majority, which is 21 in that State.

Mr. Justice Butler accepted Mr. Farrior’s opinion on Mississippi law, and held that the obligation to maintain the life insurance policy ended when Joseph Stewart turned 21. The Supreme Court of British Columbia dismissed Joseph Stewart’s claim against his father’s estate for $100,000.

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