McGee v. International Life Ins. Co.

Brief Fact Summary.

McGee, a California resident, obtained a state court judgment in California in an action she brought against International Life Ins. Co. to recover payment as the beneficiary of her son’s life insurance policy. A California statute  allowed lawsuits against non-California insurance companies who had contracts with California residents, even if the companies could not be personally served in California. International Life Ins. Co.’s principal place of business was Texas.  McGee sought to enforce the judgment in Texas, but the Texas courts refused to afford full faith and credit to the California judgment.

Synopsis of Rule of Law.

In order to enter a binding judgment on an out of state respondent, due process may be satisfied where the underlying lawsuit is based on a contract which had a substantial connection with that state.

Facts.

McGee’s son, a California resident, originally purchased a life insurance policy from Empire Mutual Insurance Co. After International Life Ins. Co. assumed Empire Mutual’s insurance obligations, International Life Ins. Co. mailed a reinsurance offer to McGee’s son in California, which he accepted. McGee’s son subsequently mailed all premium payments from California to International Life Ins. Co.’s in Texas, its principal place of business.  After her son died, International Life Ins. Co. denied coverage under the life insurance policy. McGee obtained a California state court judgment against International Life Ins. Co. A California statute allowed lawsuits against non-California insurance companies who had contracts with California residents, even if the companies could not be personally served in California. McGee sought to enforce the judgment in Texas, but the Texas courts refused to afford full faith and credit to the California judgment.

Issue.

Did due process preclude the California court form entering a binding judgment against International Life Ins. Co.?

Held.

No. The due process clause did not preclude the California court from entering a binding judgment against International Life Ins. Co.

Discussion.

International Life Ins. Co.’s contract with McGee’s son had a substantial connection with California; the contract was delivered in California, the premiums were mailed from California, and the son was a California resident when he died.