Hearing scheduled in lawsuit against Neosho R-5 District, Heritage Life Insurance

The fate of a lawsuit filed by the husband of a teacher/counselor in the Neosho R-5 School District who died from complications of COVID-19 may be decided on Monday.

Matthew Osborne, the husband of former Goodman Elementary counselor Melissa Osborne (pictured), filed suit against the district, the company that handles district insurance, Insurance Benefits Consultants LLC, and American Heritage Life Insurance after the company denied a $150,000 life insurance claim.

In the petition, Osborne's attorney, Phillip Donald Greathouse of the Joplin firm of Warten Fisher Lee and Brown, claims the company accepted a premium payment on the insurance before denying it, that Insurance Benefits Consultants screwed up and that the Neosho School District was negligent because it only hired the company "based on the familial relationship between its initial principals and employees and Superintendent of Neosho SD."

Tana Wise, the IBC customer service advocate/office manager who was handling the district's account and who acknowledged Osborne's acquisition of the policy, is Superintendent Jim Cummins' sister. Her husband is former Neosho R-5 Board of Education member Phil Wise, who resigned his board position in 2017 due to a "conflict of interest" caused by his position with Insurance Benefits Consultants.

Motions to dismiss have been filed by Insurance Benefits Consultants and American Heritage.

In its motion, American Heritage says Osborne acknowledged that his wife "began the open enrollment process to obtain coverage under an AHL group term life insurance policy, she died prior to completing the required enrollment documentation."

The motion notes that Osborne said in his petition that as he reviewed his wife's insurance he saw that her application was "pending."

When an applicant begins the process of applying for life insurance—and even completes the required application forms—but dies prior to the policy being issued, Missouri courts hold no insurance policy exists to support a breach of contract claim. Even if a premium payment is remitted to the insurer—whether inadvertently or intentionally—that is nonetheless insufficient to create a contract for insurance.

In the response to American Heritage's motion, Osborne says the notice that his wife's application was "pending" doesn't make any difference since she had "been told that her application was complete" By Tana Wise, the premium was paid and she had taken all steps necessary for the application to go through.

The claims in Osborne's petition were spelled out in the January 5 Turner Report:

(Melissa) Osborne was diagnosed with a sinus infection July 2, 2021 and tested positive for COVID-19 the next day. Three days later, she was taken by ambulance to Freeman. On July 7, she was placed on a ventilator.

As her condition worsened, Matthew Osborne, who had concerns about her health insurance coverage, began reviewing her benefits and on July 18, noticed the word "pending" and was told "Tana Wise was going to follow up with Melissa because she had chosen two life insurance policies and wanted to make sure that was her intent."

Osborne was told "Evidence of Insurability (EOI) may be required, "but was never provided further instruction despite continued follow-up calls."

Melissa Osborne died August 4, 2021.

When her husband followed up with Cummins about the policy, he was told "there should be no problem with the life insurance," according to the lawsuit. Osborne went to the ICI offices and was told by Jay Boice at IBC that he saw no reason why the insurance shouldn't pay out.

On February 16, 2022, American Heritage Life Insurance refunded the $98.63 premium saying that it was from a policy that had been terminated in December 2019 due to a "non-payment of premiums."

After the company was told it was mistaken, it wrote back, once again denying benefits and saying that no paper application had ever been received. Osborne said he and his wife had never been told by IBC that any paperwork was required and had said "her open enrollment in the various benefits was complete on May 12, 2021."

Osborne is suing American Heritage Life Insurance for breach of contract and vexatious refusal to pay, IBC for two counts of negligence and the Neosho R-5 School District for two counts of negligence.

The hearing scheduled for 1:15 p.m. Monday in Newton County Circuit Court before Judge Gregory Stremel.