Hardy v. Wiggins (In re Wiggins)

Jordon Wiggins and Allison Hardy (plaintiff) were divorced and had two minor children, Elizabeth and Leah. The divorce decree required each parent to carry at least $250,000 in life insurance for the children’s benefit. When Jordon died, his estate was unaware of any life-insurance policy. On behalf of the children, Hardy filed a claim against Jordon’s estate for the $250,000 that should have been provided via insurance. Later, Jordon’s former employer notified the family that Jordon had two life-insurance policies totaling $360,000, but both named Jordon’s brother, Jason Wiggins (defendant), as the sole beneficiary. Jason and Hardy entered a settlement agreement that provided that (1) Jason would put $250,000 of the life-insurance proceeds he received into a trust for the children and (2) Hardy would release the children’s claim against Jordon’s estate. After the agreement was finalized, the parties learned that one policy actually named Jordon’s daughter Elizabeth as the beneficiary. That insurer paid $120,000 to Elizabeth. The second policy paid $240,000 to Jason. Jason placed $130,000 into the children’s trust and retained the remaining $110,000. Hardy contended the agreement required Jason to contribute the full $240,000 to the trust. The parties filed a joint petition in state court, seeking a declaration of their rights and obligations. The trial court found the agreement was based on a mutual mistake and reformed it to require Jason to pay only $130,000 into the trust. Hardy appealed.