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Click here for the full text of this decision FACTS:Douglas Sims, a Wal-Mart sales associate for 16 years died in on Dec. 1, 1998. He was insured under a company-owned life insurance (COLI) policy, which named Wal-Mart as the beneficiary. Wal-Mart and other companies created these policies to take advantage of certain tax benefits, but by 2000, the program had been discontinued because of change to the tax code. As part of the program, in 1993, Wal-Mart set up a trust to be the legal holder of the policies. The trust chose selected Georgia law to apply and named a bank in Georgia as the trustee. After discovering the COLI policy on Sims’ life, his estate sued Wal-Mart on June 28, 2001, alleging a violation of the Texas insurance interest doctrine, which requires any person insuring the life of another to have an insurance interest in that person’s life. The estate sought a constructive trust and a disgorgement order. On Wal-Mart’s motion for reconsideration, the district court affirmed its own ruling denying Wal-Mart’s motion for summary judgment. The district court rejected Wal-Mart’s argument that Georgia law, not Texas law, applied; or, in the alternative, that Texas’ statute of limitations barred the action. Wal-Mart also argued unsuccessfully that changes in Texas law changed the public policy underlying the insurance interest doctrine. The district court granted partial summary judgment for the estate, but certified three questions for interlocutory appeal to this court: 1. which state’s substantive law applies to the estate’s claims; 2. whether Wal-Mart has an insurable interest in Sims’ life; and 3. whether the statute of limitations bars the estate’s claims. Wal-Mart renews its arguments, and also asks the court to certify the question of Texas’ continued support of the insurable interest doctrine to the Texas Supreme Court. HOLDING:Affirmed and remanded; motion to certify denied. Acknowledging that the Restatement (Second) of Conflict of Laws �6(2) does not provide a specific analytical scheme for determining insurable interest claims, it does provide one for analogous claims, such as torts, contracts, certain life insurance contracts, unjust enrichment and other claims employing a “most significant relationship” test. The court rejects Wal-Mart’s argument that this is purely a contractual dispute, finding instead that the case involves the application of Texas’ common law on insurable interests in the context of an insurance contract to which Sims was not a party. The court notes that the case could be akin to an unjust enrichment claim, which examines “the place where a relationship between the parties was centered, the place where the enrichment was received, the place where the act conferring the enrichment was done, the domicile of the parties, and the place where a physical thing related to the enrichment was situated during the time of the enrichment. It is also similar to an insurance contract case, the court rules. “In sum, every viable”most significant relationship’ analysis performed in following the forum state’s choice of law provisions points to the application of Texas law to this case”. The court confirms that under Texas law, insurance policies procured by those lacking a sufficient interest in the life of the insured � which generally include close relatives; creditors and those having an expectation of financial gain from the insured’s continued life � are unenforceable. The court rejects Wal-Mart’s arguments that it has a reasonable expectation of pecuniary benefit in the continued lives of its employees. The fact of employment alone does not create such an interest. And the cost to a company of an employee’s death � in lost production and in training costs for a replacement � is an ordinary cost of business for the loss of any employee. None of the legislative pronouncements Wal-Mart cites to contradict the state’s general public policy apply, the court rules. The 1951 statute protecting insurable interests in officers, stockholders and partners does not apply here to an ordinary employee such as Sims. Another statute that could apply � if adults agree in writing to a third-party’s application for life insurance on their lives � was not made retroactive, nor did Sims agree to it. Finally, the COLI policy in this case did not meet the requirements of a 1989 statute allowing employers to issue life insurance policies to offset fringe benefit costs in certain circumstances (Wal-Mart does not argue that policy does.) “While the statutory provisions analyzed supra demonstrate an ever-broadening approach to insurable interests, there is no indication that the Texas Supreme Court would create other exceptions without explicit statutory authorization. And, as the district court concisely put it, it is not the role of federal courts sitting in diversity to ignore longstanding and consistently applied Texas legal authorities”. The court rules that the estate’s claim, whether characterized as one for unjust enrichment or even conversion, the two-year statute of limitations period, which would have ended two years after Wal-Mart received proceeds under the policy. Wal-Mart did not provide evidence related to this, so the trial court’s denial of summary judgment on this basis was proper. OPINION:Jolly, J.; Jolly, Smith and Garza, JJ.

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