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Schrempf v. New England Mut. Life Ins.

OPINION FILED JANUARY 5, 1982.

JAMES E. SCHREMPF, SPECIAL ADM'R OF THE ESTATE OF VICTOR G. NULL, DECEASED, FOR THE BENEFIT OF TANYA KAY NULL ET AL., MINORS, PLAINTIFF-APPELLEE,

v.

NEW ENGLAND MUTUAL LIFE INSURANCE COMPANY ET AL., DEFENDANTS-APPELLANTS.



APPEAL from the Circuit Court of Madison County; the Hon. WILLIAM E. JOHNSON, Judge, presiding.

JUSTICE WELCH DELIVERED THE OPINION OF THE COURT:

Rehearing denied February 24, 1982.

Shirley Ann Null, widow of Victor G. Null, brought this wrongful death action in 1980 in the Circuit Court of Madison County, on behalf of the two Null children, against New England Mutual Life Insurance Co. and its agent William S. Comfort. Subsequently, James E. Schrempf, special administrator of the estate of Victor G. Null, deceased, was substituted for Shirley Ann Null as plaintiff in these proceedings. The complaint alleged that the defendants negligently allowed Ronald and James Calvert to maintain large amounts of insurance on Victor Null's life, thereby contributing to a plan in which the Calverts had Victor Null murdered in the hope of receiving the insurance proceeds. Much litigation has occurred as the aftermath of this scheme, leading to several published opinions by the Federal courts in Missouri. We have adapted and expanded the account of relevant transactions as described in New England Mutual Life Insurance Co. v. Calvert (E.D. Mo. 1978), 459 F. Supp. 979, and United States v. Calvert (8th Cir. 1975), 523 F.2d 895.

Prior to July 19, 1972, Victor Null sought financial backing for the development of an invention, a rotary engine. Ronald and James Calvert agreed to provide the financial backing. Victor Null and the Calverts agreed to procure life insurance upon the life of Victor Null to protect the investment of the Calverts. Null and the Calverts made application to New England Mutual Life for $500,000 insurance; William S. Comfort and Harold L. Whitney were the agents of New England with whom Null and the Calverts dealt.

Frank W. French, Jr., assistant vice-president for New England, advised Whitney, by telegram-teletype, that New England would only issue $150,000 "corporate insurance" but would be willing to issue $100,000 personal insurance upon receipt of a new application by Null. William Comfort advised Null and Ronald Calvert of this decision, and further advised them that were Null to purchase a personal life insurance policy, he would be the owner of the same and would therefore have the right to assign the policy to the Calverts. Null agreed to purchase $100,000, with accidental death benefits. His estate was named as beneficiary thereof; however, Null contracted for this insurance solely for the reason that he wanted to assign the same to the Calverts, thus providing the security that the Calverts desired before they would invest in Null's invention.

On July 21, 1972, Null made application for the personal life insurance policy. On July 24, 1972, Null, accompanied by Ronald Calvert, went to the offices of the Whitney agency. Calvert delivered a check signed by his father, James Calvert, in the sum of $5,616. This sum represented the premium due on the $150,000 business insurance policy and the premium for the $100,000 personal life insurance policy. On this same date, Null executed an "Absolute Assignment and Change of Beneficiary Request," making the Calverts the owners and beneficiaries of the $100,000 personal insurance policy. New England's home office did not receive the assignment and change of beneficiary form until September 5, 1972.

In August of 1972, Ronald Calvert contacted Bowes and Company, an insurance broker, and asked if it would consider writing a $2,000,000 accident policy on the inventor, with a partnership, which included the Calverts, Null and several others, to be named as beneficiary. Calvert filled out the appropriate applications, and, after some communications with Lloyd's of London, Bowes and Company received a telex from London on September 13 indicating "bound coverage."

On November 9, 1972, Null's body was found in his East St. Louis workshop. He had been shot four times in the head with a .22-caliber firearm. There were no signs of forced entry, and nothing was reported missing, although the office had the appearance of being ransacked. The murderer has never been found.

Ronald Calvert was charged with and convicted of 12 counts of mail fraud in connection with the insurance applications. He was sentenced to 45 years' imprisonment. (United States v. Calvert (8th Cir. 1975), 523 F.2d 895). As the court noted in New England Mutual Life Insurance Co. v. Calvert (E.D. Mo. 1978), 459 F. Supp. 979, 980, "the Calverts were not interested in procuring the insurance to protect their investment, but instead procured the same as part of their scheme to obtain the proceeds thereof through the murder of Victor Null."

New England and Lloyd's filed separate complaints for declaratory judgment, seeking to declare the respective insurance policies void. In the New England action, brought in the Federal District Court for the Eastern District of Missouri, Shirley Null counterclaimed to recover the proceeds from the personal insurance on Victor Null. Relying on the evidence in Ronald Calvert's conviction, the district court granted summary judgment for New England on its complaint and on the counterclaim. (New England Mutual Life Insurance Co. v. Calvert (E.D. Mo. 1976), 410 F. Supp. 937.) Holding that summary judgment was inappropriate, the Eighth Circuit Court of Appeals reversed that order and remanded the case for a full trial. (New England Mutual Life Insurance Co. v. Null (8th Cir. 1977), 554 F.2d 896.) Following trial, the district court again entered judgment in favor of New England on its complaint and on the counterclaim. (New England Mutual Life Insurance Co. v. Calvert (E.D. Mo. 1978), 459 F. Supp. 979.) The Eighth Circuit affirmed. New England Mutual Life Insurance Co. v. Null (8th Cir. 1979), 605 F.2d 421.

The Lloyd's litigation was terminated much sooner than the New England case. On July 8, 1975, the following release was executed in favor of Lloyd's:

"* * * in consideration of the payment of the sum of One Hundred Thousand Dollars ($100,000) by said Releasee, and other good and valuable consideration, receipt whereof is hereby acknowledged, I, Shirley Ann Null, individually, as Administratrix of the Estate of Victor N. Null, Deceased, and as Guardian of the Estates of the two minor children Tanya Null and Tamara Null, do hereby remise, release and forever discharge, and by these presents do for my heirs, executors, administrators and assignors remise, release and forever discharge Releasees of and from any and all manner of action or actions, cause or causes of action, controversies, damages, claims and demands whatsoever, in law or in equity, which I now have against the said Releasees or any of them, or which I ever had or which I may have, or which my heirs, executors, administrators or assignees can, shall or may have upon or by reason of any matter, cause or thing whatever, from the beginning of the world to the date of these presents, and in particular, but without limiting the generality of the foregoing, of and from any action, cause of action, controversy, damages, claims or demands based upon or in any manner arising out of or in connection with or as a result of the acceptance by the Releasees of the insurance on the life of Victor G. Null, evidenced by the Certificate of Insurance No. 33393 and the said Companies' Cover Note EC-721288, it being understood and agreed that the acceptance of said sum is in full accord and satisfaction of a disputed claim and that the payment of said sum is not an admission of liability.

I acknowledge that I am represented by my own counsel and that in executing this Release I have relied on his advice, and I intend ...


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