Kunta Torrence participated in his employer's benefits plan that included a $15,000 life insurance policy issued by Humana Insurance. Torrence named his brother as beneficiary. The policy included a "facility-of-payment" clause. That clause covered the situation in which the named beneficiary is not alive at the time of the insured's death. It gave Humana the option to pay the proceeds of the policy to the insured's spouse, children, parents, siblings, or estate. Sadly, Torrence and his brother were both killed in the same car accident. Their mother, Nancy Kelly, borrowed $10,000 from Jackman Financial in order to pay for the funerals. She assigned a portion of the life insurance proceeds to Jackman to secure the loan. Two days later, she was appointed administrator of her son's estate. She completed a beneficiary form for Humana identifying herself as the beneficiary. At Humana's request, Kelley also completed an affidavit identifying Torrence's family members. Humana later advised Kelly that it had decided to turn over the proceeds to Torrence’s minor children. Jackman filed suit for denial of benefits under ERISA. Judge Norgle (N.D. Ill.) granted summary judgment to Humana. Jackman appeals.

In their opinion, Judges Rovner, Williams, and Hamilton affirmed. A facility-of-payment clause gives an insurer broad discretion in distributing the policy proceeds. Humana has an absolute right to choose from the list of possible recipients. Even though Humana knew that Kelly had already assigned much of the proceeds to Jackman, it was under no obligation to turn over the proceeds to Kelly or the estate. The Court then considered Humana's request for fees. Under ERISA, a prevailing party has a modest but rebuttable presumption in favor of fees. The Court applied the "substantially justified" test in denying fees to Humana. It considered that the case was filed in good faith, that neither Kelly nor Jackman new of the facility-of-payment clause at the time of the assignment, and that Jackman gave notice of its claim long before Humana paid out the proceeds. The Court did warn that it might decide differently if future litigants continue to challenge facility-of-payment clauses.