Suit Sees Suicide Clause

There’s a lawsuit in Little Rock’s U.S. District Court seeking $500,000 in insurance benefits on the life of M. David Howell Jr., who died in a Beverly Hills hotel room just as his $80 million Ponzi scheme was starting to unravel. Howell was also a banker in Fayetteville and Springdale.

It seems Hot Springs banker Richard T. Smith, who cosigned several of Howell’s problematic promissory notes, had a policy on his business partner’s life that Traveler’s Life & Annuity Co. has refused to honor.

The two-page complaint was filed July 18 by Little Rock attorney Brent Baber on behalf of lawyer David J. Wood “as trustee of the Richard T. Smith Family Trust #2.” According to the suit, the Smith family trust was “beneficiary and owner” of a life insurance policy issued by Traveler’s on March 2, 2001.

The lawsuit doesn’t say so, but Baber confirmed that Traveler’s denied payment because the policy contained a standard two-year suicide clause — and the Los Angeles County Coroner ruled that Howell committed suicide by taking an overdose of the painkiller Hydrocodone 19 months after the policy was purchased.

“We don’t think he committed suicide,” Baber said. “That’s for a jury to decide. Traveler’s has the burden of proof.”

The lawsuit seeks $500,000 plus 12 percent for “additional damages, costs and attorney’s fees.”