Zurich Life Insurance Co. of America v. Zoo Stage, Inc.

MEMORANDUM **

Zoo Stage, Inc., the policy owner and named beneficiary of an insurance policy on the life of Bias Mercado, appeals the District Court’s grant of summary judgment to Zurich Life Insurance Company, the issuer of the policy. The district court held that the insurance policy was void because Zoo Stage lacked an insurable interest in Mercado’s life. We have jurisdiction pursuant to 28 U.S.C. § 1291 , and we affirm.

A. Burden of Proving Insurable Interest

Contracts are generally entitled to a presumption of validity, and thus the party seeking to invalidate the contract bears the burden of proving invalidity as an affirmative defense. See 29 Am.Jur.2d Evidence § 159 (1994). However, under Arizona law, the insured or beneficiary bears the burden of proving coverage under an insurance policy. Keggi v. Northbrook Prop. & Cas. Ins. Co., 199 Ariz. 43 , 13 P.3d 785, 788 (2000). Furthermore, the statutory requirement that any person procuring *769 an insurance policy have “an insurable interest in the individual insured” at the time the contract was made, A.R.S. § 20-1104(A), and the common law public interest in requiring insurable interest in order to prevent wagering…