STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT
07-1164
OCCIDENTAL LIFE INSURANCE COMPANY OF NORTH AMERICA
VERSUS
RUBY BENOIT AND DEAUNDRA L. FRANCIS
**********
APPEAL FROM THE FIFTEENTH JUDICIAL DISTRICT COURT, PARISH OF LAFAYETTE, 20043303, DIVISION I HONORABLE THOMAS R. DUPLANTIER, DISTRICT JUDGE
J. DAVID PAINTER JUDGE
Court composed of Billy Howard Ezell, J. David Painter, and James T. Genovese.
AFFIRMED.
Genovese, J., dissents in part, concurs in part, and assigns written reasons.
Lloyd Dangerfield Attorney at Law 703 E. University Avenue Lafayette, LA 70503 Counsel for Defendant-Appellant: Ruby Benoit
Stan Gauthier, II Kristi Husher Oubre Jonathan D. Mayeaux Stan Gauthier, II A Law Corporation 1405 West Pinhook Road, Suite 105 Lafayette, LA 70503 Counsel for Defendant-Appellant: Deaundra L. Francis Greg R. Mier Onebane Law Firm 1200 Camellia Boulevard, Suite 300 Lafayette, LA 70508 Counsel for Plaintiff-Appellee: Occidental Life Insurance Company of North America PAINTER, Judge.
Occidental Life Insurance Company of North America (Occidental) instituted
this concursus proceeding by depositing the proceeds of a certain life insurance
policy into the registry of the court and made Ruby Benoit (Benoit) and Deaundra L.
Francis (Francis), both of whom claim to be the sole beneficiary of the policy,
defendants. Francis filed a reconventional demand seeking to reform the policy to
name her beneficiary or, in the alternative, seeking damages for negligence on the
part of Occidental. The trial court reformed the policy to name Francis as beneficiary,
dismissed the reconventional demand, and ordered that the balance of the funds in the
registry of the court, plus accrued interest but less court costs, be paid to Francis and
her attorney after all appellate delays had run. Benoit and Francis now appeal. For
the reasons that follow, we affirm the judgment of trial court in all respects.
FACTUAL AND PROCEDURAL BACKGROUND
In 1985, Debra Francis purchased an insurance policy from Occidental to
insure the life of her daughter, Deaundra Francis. The policy was numbered
230568313M (the M policy) and designated Debra as beneficiary. In 1987, Debra
purchased another insurance policy from Occidental to insure her own life. This
policy was numbered 230627324H (the H policy) and is the policy now at issue. The
H policy designated Benoit, Debra’s mother, as beneficiary. On December 11, 2003,
Debra executed a written change of beneficiary form to change the designated
beneficiary to her daughter. She referenced the M policy but listed herself as the
insured. However, in fact, Debra was the insured under the H policy, and Francis was
the insured under the M policy.
Debra died from recurring metastatic breast cancer on April 9, 2004. Benoit
then submitted a “Proofs of Death-Claimant’s Statement” to Occidental seeking the
1 benefits from the H policy. Francis also submitted a “Proofs of Death-Claimant’s
Statement” claiming that she alone was entitled to the benefits from the H policy
because of a mistake made by her mother in changing the beneficiary on the M policy
rather than on the H policy. When attempts to resolve the dispute were unsuccessful,
Occidental deposited approximately $70,000.00, the benefits due under the H policy,
into the registry of the court pursuant to La.Code Civ.P. art. 4658 and filed a
concursus proceeding citing both Benoit and Francis as claimants. Benoit filed an
answer alleging that she alone was entitled to the proceeds of the H policy. Francis
filed a similar answer but also asserted, in the alternative, that if Benoit was entitled
to the proceeds, Occidental should pay the full amount to each concursus defendant
because of Occidental’s alleged mishandling of a change of beneficiary form.
The trial court found that Occidental was not negligent in its handling of the
change of beneficiary form but reformed the H policy to name Francis as the
beneficiary pursuant to the change of beneficiary form submitted by Debra.
Accordingly, the trial court ordered that the balance of the funds placed into the
registry of the court, plus accrued interest but minus court costs, be paid to Francis
and her attorney after the expiration of all appellate delays. Benoit now appeals.
Francis also appeals, arguing that the judgment should be affirmed; however, Francis
claims that if the judgment is reversed based on a finding that the trial court erred in
reforming the policy, then in that event, she claims that Occidental negligently
handled the change of beneficiary transaction such that she is entitled to judgment on
her reconventional demand against Occidental in the amount of the policy proceeds.
For the following reasons, we affirm the judgment of the trial court in its entirety.
2 DISCUSSION
We first consider whether the trial court was correct in reforming the policy.
We review the trial court’s findings of fact in that regard under the manifest error
standard of review.
The trial court found that the change of beneficiary form was ambiguous
because it shows the M policy number but lists Debra as the insured when clearly she
was not the insured under that policy. We agree.
In determining the beneficiary of a life insurance policy, it is necessary to ascertain the intention of the deceased. In this regard, the courts are bound to give legal effect to all contracts and their terms, including insurance policies, according to the true intent of the parties, and the intent is to be determined by the words of the contract when they are clear and explicit and lead to no absurd consequences. Joseph v. Joseph, 537 So.2d 863 (La.App. 5 Cir.1989); Baker v. Life General Security Insurance Company, 405 So.2d 1162 (La.App. 1 Cir.1981).
When the agreement is unclear, ambiguous, or will lead to absurd consequences, the court should go beyond the written agreement to gather the true intention. Dixie Campers, Inc. v. Vesely Company, 398 So.2d 1087 (La.1981); Joseph v. Joseph, supra; Baker v. Life General Security Insurance Company, supra; Bohm v. CIT Financial Services, Inc., 348 So.2d 132 (La.App. 1 Cir.1977), writ denied, 350 So.2d 673 (La.1977); Louisiana Sav. Ass’n, Inc. v. Bluebonnet Holding Partnership, 546 So.2d 869 (La.App. 1 Cir.1989).
Commercial Life Ins. Co. v. Robinson, 95-186, pp. 5-6 (La.App. 5 Cir. 7/25/95), 662
So.2d 486, 488-89.
The trial court heard testimony from both Benoit and Francis, examined
Debra’s last will and testament and numerous other insurance documents, and also
received the deposition of Debra’s friend, Lisa Holmes. From these documents, it is
clear that Debra made several conscientious decisions regarding both the H and M
policies as well as other policies she held after she received her diagnosis of terminal
cancer, including making cash withdrawals from both the H and M policies. It is also
clear that Debra, in the months before her death, was primarily interested in settling
3 her financial affairs and providing for the well-being of her daughter and
grandchildren. Her will, executed on November 25, 2003, left the entirety of her
estate to her daughter and grandchildren and set up a trust for the grandchildren.
Further, we note that it would be nonsensical to make Francis the beneficiary of a
policy on her own life and that there was no need to change the beneficiary on the M
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STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT
07-1164
OCCIDENTAL LIFE INSURANCE COMPANY OF NORTH AMERICA
VERSUS
RUBY BENOIT AND DEAUNDRA L. FRANCIS
**********
APPEAL FROM THE FIFTEENTH JUDICIAL DISTRICT COURT, PARISH OF LAFAYETTE, 20043303, DIVISION I HONORABLE THOMAS R. DUPLANTIER, DISTRICT JUDGE
J. DAVID PAINTER JUDGE
Court composed of Billy Howard Ezell, J. David Painter, and James T. Genovese.
AFFIRMED.
Genovese, J., dissents in part, concurs in part, and assigns written reasons.
Lloyd Dangerfield Attorney at Law 703 E. University Avenue Lafayette, LA 70503 Counsel for Defendant-Appellant: Ruby Benoit
Stan Gauthier, II Kristi Husher Oubre Jonathan D. Mayeaux Stan Gauthier, II A Law Corporation 1405 West Pinhook Road, Suite 105 Lafayette, LA 70503 Counsel for Defendant-Appellant: Deaundra L. Francis Greg R. Mier Onebane Law Firm 1200 Camellia Boulevard, Suite 300 Lafayette, LA 70508 Counsel for Plaintiff-Appellee: Occidental Life Insurance Company of North America PAINTER, Judge.
Occidental Life Insurance Company of North America (Occidental) instituted
this concursus proceeding by depositing the proceeds of a certain life insurance
policy into the registry of the court and made Ruby Benoit (Benoit) and Deaundra L.
Francis (Francis), both of whom claim to be the sole beneficiary of the policy,
defendants. Francis filed a reconventional demand seeking to reform the policy to
name her beneficiary or, in the alternative, seeking damages for negligence on the
part of Occidental. The trial court reformed the policy to name Francis as beneficiary,
dismissed the reconventional demand, and ordered that the balance of the funds in the
registry of the court, plus accrued interest but less court costs, be paid to Francis and
her attorney after all appellate delays had run. Benoit and Francis now appeal. For
the reasons that follow, we affirm the judgment of trial court in all respects.
FACTUAL AND PROCEDURAL BACKGROUND
In 1985, Debra Francis purchased an insurance policy from Occidental to
insure the life of her daughter, Deaundra Francis. The policy was numbered
230568313M (the M policy) and designated Debra as beneficiary. In 1987, Debra
purchased another insurance policy from Occidental to insure her own life. This
policy was numbered 230627324H (the H policy) and is the policy now at issue. The
H policy designated Benoit, Debra’s mother, as beneficiary. On December 11, 2003,
Debra executed a written change of beneficiary form to change the designated
beneficiary to her daughter. She referenced the M policy but listed herself as the
insured. However, in fact, Debra was the insured under the H policy, and Francis was
the insured under the M policy.
Debra died from recurring metastatic breast cancer on April 9, 2004. Benoit
then submitted a “Proofs of Death-Claimant’s Statement” to Occidental seeking the
1 benefits from the H policy. Francis also submitted a “Proofs of Death-Claimant’s
Statement” claiming that she alone was entitled to the benefits from the H policy
because of a mistake made by her mother in changing the beneficiary on the M policy
rather than on the H policy. When attempts to resolve the dispute were unsuccessful,
Occidental deposited approximately $70,000.00, the benefits due under the H policy,
into the registry of the court pursuant to La.Code Civ.P. art. 4658 and filed a
concursus proceeding citing both Benoit and Francis as claimants. Benoit filed an
answer alleging that she alone was entitled to the proceeds of the H policy. Francis
filed a similar answer but also asserted, in the alternative, that if Benoit was entitled
to the proceeds, Occidental should pay the full amount to each concursus defendant
because of Occidental’s alleged mishandling of a change of beneficiary form.
The trial court found that Occidental was not negligent in its handling of the
change of beneficiary form but reformed the H policy to name Francis as the
beneficiary pursuant to the change of beneficiary form submitted by Debra.
Accordingly, the trial court ordered that the balance of the funds placed into the
registry of the court, plus accrued interest but minus court costs, be paid to Francis
and her attorney after the expiration of all appellate delays. Benoit now appeals.
Francis also appeals, arguing that the judgment should be affirmed; however, Francis
claims that if the judgment is reversed based on a finding that the trial court erred in
reforming the policy, then in that event, she claims that Occidental negligently
handled the change of beneficiary transaction such that she is entitled to judgment on
her reconventional demand against Occidental in the amount of the policy proceeds.
For the following reasons, we affirm the judgment of the trial court in its entirety.
2 DISCUSSION
We first consider whether the trial court was correct in reforming the policy.
We review the trial court’s findings of fact in that regard under the manifest error
standard of review.
The trial court found that the change of beneficiary form was ambiguous
because it shows the M policy number but lists Debra as the insured when clearly she
was not the insured under that policy. We agree.
In determining the beneficiary of a life insurance policy, it is necessary to ascertain the intention of the deceased. In this regard, the courts are bound to give legal effect to all contracts and their terms, including insurance policies, according to the true intent of the parties, and the intent is to be determined by the words of the contract when they are clear and explicit and lead to no absurd consequences. Joseph v. Joseph, 537 So.2d 863 (La.App. 5 Cir.1989); Baker v. Life General Security Insurance Company, 405 So.2d 1162 (La.App. 1 Cir.1981).
When the agreement is unclear, ambiguous, or will lead to absurd consequences, the court should go beyond the written agreement to gather the true intention. Dixie Campers, Inc. v. Vesely Company, 398 So.2d 1087 (La.1981); Joseph v. Joseph, supra; Baker v. Life General Security Insurance Company, supra; Bohm v. CIT Financial Services, Inc., 348 So.2d 132 (La.App. 1 Cir.1977), writ denied, 350 So.2d 673 (La.1977); Louisiana Sav. Ass’n, Inc. v. Bluebonnet Holding Partnership, 546 So.2d 869 (La.App. 1 Cir.1989).
Commercial Life Ins. Co. v. Robinson, 95-186, pp. 5-6 (La.App. 5 Cir. 7/25/95), 662
So.2d 486, 488-89.
The trial court heard testimony from both Benoit and Francis, examined
Debra’s last will and testament and numerous other insurance documents, and also
received the deposition of Debra’s friend, Lisa Holmes. From these documents, it is
clear that Debra made several conscientious decisions regarding both the H and M
policies as well as other policies she held after she received her diagnosis of terminal
cancer, including making cash withdrawals from both the H and M policies. It is also
clear that Debra, in the months before her death, was primarily interested in settling
3 her financial affairs and providing for the well-being of her daughter and
grandchildren. Her will, executed on November 25, 2003, left the entirety of her
estate to her daughter and grandchildren and set up a trust for the grandchildren.
Further, we note that it would be nonsensical to make Francis the beneficiary of a
policy on her own life and that there was no need to change the beneficiary on the M
policy since Francis would have become the owner of that policy upon her mother’s
death and would have been able to change the beneficiary herself. Thus, we find no
manifest error in the trial court’s decision. Having so found, we need not reach
Francis’ alternative arguments concerning the dismissal of her reconventional
demand.
Finally, we find that Benoit’s argument that the trial court erred in assessing
the court costs against the funds on deposit to be without merit. Louisiana Code of
Civil Procedure Article 4659 provides, in pertinent part, as follows:
When money has been deposited into the registry of the court by the plaintiff, neither he nor any other party shall be required to pay any of the costs of the proceeding as they accrue, but these shall be deducted from the money on deposit.
As the provisions of this article mandate the deduction of the costs from the money
on deposit, we find no error in the trial court’s assessment of the costs against the
funds on deposit rather than against either Occidental or Francis.
DECREE
For the foregoing reasons, we affirm the judgment of the trial court in its
entirety. All costs of this appeal are assessed to Appellant, Ruby Benoit.
4 NUMBER 07-1164
COURT OF APPEAL, THIRD CIRCUIT
STATE OF LOUISIANA
GENOVESE, J., concurs in part, dissents in part, and assigns the following reasons:
I concur with the affirmation of the trial court’s assessment of costs; however,
I dissent from the majority in its affirmation of the trial court’s change of beneficiary
designation.
There was nothing in the record to support the trial court’s “reformation” of the
insurance contract. There was no ambiguity. The decedent was an educated, retired
military woman with twenty-four years of military service who had engaged in
several insurance transactions with Occidental Life just prior to her death and had
confected a last will and testament less than five months prior to her death. She had
terminal cancer and was aware of her impending death. She had strategically gotten
her affairs in order just prior to her death. On her own volition, she knowingly
executed a change of beneficiary on the appropriate insurance forms on one of her life
insurance policies which was designated by her as the “M” policy.
The trial court found ambiguity in the transaction, reformed the insurance
contract, and on its own changed the policy designation from the “M” policy to the
“H” policy, ignoring the signed declaration of the decedent. The end result is that the
trial court unilaterally changed the decedent’s designation of beneficiary. In effect, the trial court and the majority of this court have superimposed what
they think was the intent of the decedent in changing the beneficiary designation on
one of her life insurance policies. There was no rational basis of fact in the record to
support such action. This sets a bad precedent and opens Pandora’s box. In the
future, a trial court will be able to delve into the intent of a decedent in his or her
change of beneficiary designation. This invites litigation by the living over the intent
of the dead and invades the sanctity of the decedent’s beneficiary designation when
he or she will no longer be around to defend same. That leads to absurd
consequences. In my opinion, the trial court was manifestly erroneous and clearly
and legally wrong in changing the decedent’s beneficiary designation on her life
insurance policy against the written declaration of the decedent without legal grounds
therefor. I would reverse the trial court and uphold the decedent’s beneficiary
designation on her life insurance policy.