## Facts

- In February 1971, Fidelity & Guaranty Life Insurance Company (Fidelity) issued a $9,000 life insurance policy on Richard Alvin Flood after receiving an application that purported to bear Richard’s signature; the policy named his wife, Ellen Flood, as beneficiary.
- In August 1971, Fidelity received a change-of-ownership form that purported to be signed by Richard Flood and that transferred ownership of the policy to Ellen.
- All dealings with the policy were handled by Ellen; Fidelity’s agent did not actually see Richard sign the application but signed as a “witness” because Ellen represented that the signature was Richard’s.
- In 1972, Richard Flood died after being poisoned with arsenic. Ellen Flood was prosecuted and later convicted of his murder.
- After the death, Ellen demanded payment of the policy. Fidelity denied payment because of the murder charges and returned all premiums to Ellen.
- In 1977, a demand was made for payment on behalf of Richard Flood’s estate (or, alternatively, for the benefit of the Floods’ minor child). Fidelity denied liability, asserting that Ellen had obtained the policy through forgery and fraud.
- At trial, the estate introduced the policy documents and argued that the policy should be treated as valid because Fidelity’s agent had signed the application as a witness to Richard’s purported signature.
- Fidelity presented handwriting testimony that the signatures on the application and change-of-ownership form did not match Richard Flood’s handwriting.
- Fidelity also introduced evidence described in the Louisiana Supreme Court’s opinion in Ellen Flood’s criminal case: before obtaining the policy, Ellen had asked an insurance agency whether she could buy a large policy on her husband without his knowledge and was told she could not.
- The trial court ruled for the estate, reasoning that there was no direct proof that Richard lacked knowledge of the policy or that Ellen intended, at the time of procurement, to murder him for the insurance money. Fidelity appealed.

## Issues

1. Whether the life insurance policy was void because it was procured through Ellen Flood’s fraud and forged signatures, without Richard Flood’s knowing consent.
2. Whether Fidelity was estopped from denying the policy’s validity because its agent signed the application as a witness to the insured’s purported signature despite not actually observing execution.
3. Whether Richard Flood’s estate (or his minor child) could recover policy proceeds when the named beneficiary was disqualified as the insured’s killer and the insurer asserted the contract was void.

## Decision

- The Court of Appeal of Louisiana, First Circuit reversed the trial court’s judgment and dismissed the estate’s suit.
- The court found the policy was fraudulently obtained through forgery and in connection with an illegal scheme, so no enforceable life insurance contract arose on Richard Flood’s life.
- The court rejected the estate’s estoppel argument based on the agent’s “witness” signature, given the agent did not see Richard sign and the evidence showed the signatures were not Richard’s.
- Because the policy was void, neither the estate nor the minor child could recover proceeds under it.

## Legal Principles

- A life insurance policy procured by forged signatures and without the insured’s knowing consent may be treated as void, leaving no contractual obligation to pay proceeds.
- Estoppel based on an insurer’s agent signing as a witness to a signature does not validate a policy when the agent did not observe execution and the insured’s assent is not proven.
- Louisiana public policy bars a beneficiary who feloniously kills the insured from taking policy proceeds; that policy also prevents enforcement of insurance arrangements connected to an unlawful plan to profit from the insured’s death.
- When a policy is void for fraud in procurement, recovery is barred even by innocent claimants (such as an estate or child) who would otherwise claim in place of a disqualified beneficiary.

## Conclusion

The Louisiana First Circuit held Fidelity owed no benefits because Ellen Flood procured the policy and later ownership change through forged signatures and fraud, in a transaction tied to her later murder of the insured; the insurer was not prevented from denying coverage by its agent’s improper “witness” signature, and the estate and minor child could not recover under a void policy.


Flood v. Fidelity & Guaranty Life Insurance Co., 394 So. 2d 1311 (1981)