REVISED AUGUST 6, 2002
UNITED STATES COURT OF APPEALS For the Fifth Circuit
No. 01-30392
SUN LIFE ASSURANCE COMPANY OF CANADA,
Plaintiff,
VERSUS
SHEILA RICHARDSON;
Defendant-Appellee,
DIANA JAMES;
Defendant-Appellant.
Appeal from the United States District Court For the Eastern District of Louisiana July 22, 2002
Before DAVIS, DeMOSS, AND STEWART, Circuit Judges.
DeMOSS, Circuit Judge:
This case involves the application of Louisiana’s doctrine of
substantial compliance as to the change of beneficiary in a life insurance policy. The district court found that Melvin Richardson
substantially complied with the terms of his life insurance policy
to effect a change of beneficiary. For the reasons stated herein,
we conclude that the district court erred in such finding.
I. BACKGROUND
On June 29, 1989, Melvin Richardson (Melvin), who worked for
Highlines Construction Company (Highlines), executed a written form
changing the beneficiary of his life insurance policy to his
girlfriend, Diana James (Diana). Melvin and Diana stopped dating
in 1993, but remained friends. On June 6, 1998, Melvin married
Sheila Richardson (Sheila). Around that time, Melvin went to Linda
Lee (Linda) who was responsible for managing employee benefits at
Highlines. Melvin requested that “everything” be changed over to
his new wife Sheila. Linda testified that she gave Melvin numerous
forms to fill out. Melvin had limited reading and writing skills
and, as a result, Sheila filled out the forms then gave them back
to Melvin who signed them and then returned them to Linda.
Melvin was accidentally electrocuted on February 23, 2000,
while working for Highlines. After Melvin's death, Sheila learned
that she was the beneficiary of his workmen's compensation benefits
and his 401(k) plan, but not his life insurance policy. Rather,
Diana was still named as the beneficiary.
Sun Life Assurance Company of Canada (Sun Life), the company
2 that issued Melvin’s life insurance policy, filed in the district
court an interpleader pursuant to Rule 22 of the Federal Rules of
Civil Procedure to determine who was the legal beneficiary. Sun
Life deposited the proceeds of the policy into the registry of the
district court and named Sheila, Diana, and Melvin’s sister,
Shirley Ann Richardson (Shirley), as defendants. Diana filed an
answer to the complaint, and Sheila answered and filed a third-
party complaint naming Highlines as a third-party defendant.
Highlines answered the third-party complaint and Shirley abandoned
any claim to the insurance proceeds.
During a bench trial, the district court found four possible
explanations for Sheila being named beneficiary for everything
except Melvin's life insurance policy. First, Linda gave Melvin
the life insurance change of beneficiary form, which Melvin chose
not to return. Second, Linda gave Melvin the form, which he
accidentally lost and did not return. Third, Melvin completed and
returned the form, which Linda subsequently misplaced. Fourth,
Linda never gave Melvin the change of beneficiary form when she
gave him the paperwork concerning his other benefit plans.
The district court concluded that the fourth alternative was
the most likely to have occurred–-that Linda mistakenly failed to
give Melvin the form. In support of this conclusion, the district
court found that two witnesses corroborated Sheila's testimony that
Linda had told her that Melvin wanted to change “everything” to
Sheila's name, but that Linda had “overlooked” the life insurance
3 policy because it was in a separate place. The court also found
that the witnesses corroborated Sheila's testimony that Linda
stated she had not finished or completed the paperwork. In
addition, the court found that Linda was adamant that Melvin had
requested that “everything” be changed to his wife. Ultimately,
the court concluded that Linda did not make the change to the life
insurance because Linda did not realize that the form was missing.
The district court noted that Louisiana requires strict
compliance with the terms of an insurance contract to effect a
change of beneficiary. See American Gen. Life Ins. Co. v. Fine,
944 F.2d 232, 234 & n.5 (5th Cir. 1991). The district court,
nevertheless, applied the doctrine of substantial compliance. See
Bland v. Good Citizens Mut. Ben. Ass'n, 64 So. 2d 29, 33-34 (La.
Ct. App. 1st Cir. 1953). In doing so, the court held that Melvin
had complied with the requirements of changing his life insurance
policy's beneficiary to Sheila because he had intended to do so and
he took affirmative steps to do so. As a result, the court ordered
that judgment be entered in favor of Sheila, which entitled her to
the insurance proceeds of $104,000. The court also dismissed
Sheila's third-party claim against Highlines as moot.
On March 20, 2001, Diana filed a notice of appeal and Sheila
filed a protective appeal preserving her claim against Highlines.
On April 26, 2001, Highlines filed a notice of appeal. Thereafter,
attorneys J. Hunter Bienvenue (Bienvenue) and Charles Ferrara
4 (Ferrara) filed an original brief in intervention alleging that
they are entitled to reimbursement of costs and expenses and
attorney's fees in this matter in accordance with a contingency fee
contract entered into between Sheila and Bienvenue.
II. DISCUSSION
We are presented with two issues in this appeal. The first
issue is whether Melvin complied with the requirements of his life
insurance policy to effect a change of beneficiary. The second
issue is whether the intervenors, Bienvenue and Ferrara, are
entitled to recover reimbursement of costs and expenses and
attorneys’ fees in this matter in accordance with a contingency fee
contract entered into between Sheila and Bienvenue. This second
issue can be disposed of quickly because this Court does not have
appellate jurisdiction to consider it. This issue has not been
heard by the district court and, as a result, there has not been a
final judgment from which the intervenors may appeal. The
intervenors on appeal are dismissed without prejudice.
This Court reviews questions of law de novo and findings of
fact for clear error in appeals from judgments rendered after a
bench trial. Read v. United States ex rel. Dep’t of Treasury, 169
F.3d 243, 247 (5th Cir. 1999). Louisiana law requires strict
compliance with an insurance contract's terms to effect a change of
beneficiary. American Gen. Life Ins. Co., 944 F.2d at 234 & n.5.
5 Louisiana, however, recognizes the doctrine of substantial
compliance in limited circumstances. This doctrine holds that when
an insured does “substantially all that lay within his power to
effect a change of beneficiary,” the insured's strict compliance
with the policy's terms will be sufficient even though the
beneficiary is not altered before the insured's death. Bland, 64
So.2d at 33-34.
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REVISED AUGUST 6, 2002
UNITED STATES COURT OF APPEALS For the Fifth Circuit
No. 01-30392
SUN LIFE ASSURANCE COMPANY OF CANADA,
Plaintiff,
VERSUS
SHEILA RICHARDSON;
Defendant-Appellee,
DIANA JAMES;
Defendant-Appellant.
Appeal from the United States District Court For the Eastern District of Louisiana July 22, 2002
Before DAVIS, DeMOSS, AND STEWART, Circuit Judges.
DeMOSS, Circuit Judge:
This case involves the application of Louisiana’s doctrine of
substantial compliance as to the change of beneficiary in a life insurance policy. The district court found that Melvin Richardson
substantially complied with the terms of his life insurance policy
to effect a change of beneficiary. For the reasons stated herein,
we conclude that the district court erred in such finding.
I. BACKGROUND
On June 29, 1989, Melvin Richardson (Melvin), who worked for
Highlines Construction Company (Highlines), executed a written form
changing the beneficiary of his life insurance policy to his
girlfriend, Diana James (Diana). Melvin and Diana stopped dating
in 1993, but remained friends. On June 6, 1998, Melvin married
Sheila Richardson (Sheila). Around that time, Melvin went to Linda
Lee (Linda) who was responsible for managing employee benefits at
Highlines. Melvin requested that “everything” be changed over to
his new wife Sheila. Linda testified that she gave Melvin numerous
forms to fill out. Melvin had limited reading and writing skills
and, as a result, Sheila filled out the forms then gave them back
to Melvin who signed them and then returned them to Linda.
Melvin was accidentally electrocuted on February 23, 2000,
while working for Highlines. After Melvin's death, Sheila learned
that she was the beneficiary of his workmen's compensation benefits
and his 401(k) plan, but not his life insurance policy. Rather,
Diana was still named as the beneficiary.
Sun Life Assurance Company of Canada (Sun Life), the company
2 that issued Melvin’s life insurance policy, filed in the district
court an interpleader pursuant to Rule 22 of the Federal Rules of
Civil Procedure to determine who was the legal beneficiary. Sun
Life deposited the proceeds of the policy into the registry of the
district court and named Sheila, Diana, and Melvin’s sister,
Shirley Ann Richardson (Shirley), as defendants. Diana filed an
answer to the complaint, and Sheila answered and filed a third-
party complaint naming Highlines as a third-party defendant.
Highlines answered the third-party complaint and Shirley abandoned
any claim to the insurance proceeds.
During a bench trial, the district court found four possible
explanations for Sheila being named beneficiary for everything
except Melvin's life insurance policy. First, Linda gave Melvin
the life insurance change of beneficiary form, which Melvin chose
not to return. Second, Linda gave Melvin the form, which he
accidentally lost and did not return. Third, Melvin completed and
returned the form, which Linda subsequently misplaced. Fourth,
Linda never gave Melvin the change of beneficiary form when she
gave him the paperwork concerning his other benefit plans.
The district court concluded that the fourth alternative was
the most likely to have occurred–-that Linda mistakenly failed to
give Melvin the form. In support of this conclusion, the district
court found that two witnesses corroborated Sheila's testimony that
Linda had told her that Melvin wanted to change “everything” to
Sheila's name, but that Linda had “overlooked” the life insurance
3 policy because it was in a separate place. The court also found
that the witnesses corroborated Sheila's testimony that Linda
stated she had not finished or completed the paperwork. In
addition, the court found that Linda was adamant that Melvin had
requested that “everything” be changed to his wife. Ultimately,
the court concluded that Linda did not make the change to the life
insurance because Linda did not realize that the form was missing.
The district court noted that Louisiana requires strict
compliance with the terms of an insurance contract to effect a
change of beneficiary. See American Gen. Life Ins. Co. v. Fine,
944 F.2d 232, 234 & n.5 (5th Cir. 1991). The district court,
nevertheless, applied the doctrine of substantial compliance. See
Bland v. Good Citizens Mut. Ben. Ass'n, 64 So. 2d 29, 33-34 (La.
Ct. App. 1st Cir. 1953). In doing so, the court held that Melvin
had complied with the requirements of changing his life insurance
policy's beneficiary to Sheila because he had intended to do so and
he took affirmative steps to do so. As a result, the court ordered
that judgment be entered in favor of Sheila, which entitled her to
the insurance proceeds of $104,000. The court also dismissed
Sheila's third-party claim against Highlines as moot.
On March 20, 2001, Diana filed a notice of appeal and Sheila
filed a protective appeal preserving her claim against Highlines.
On April 26, 2001, Highlines filed a notice of appeal. Thereafter,
attorneys J. Hunter Bienvenue (Bienvenue) and Charles Ferrara
4 (Ferrara) filed an original brief in intervention alleging that
they are entitled to reimbursement of costs and expenses and
attorney's fees in this matter in accordance with a contingency fee
contract entered into between Sheila and Bienvenue.
II. DISCUSSION
We are presented with two issues in this appeal. The first
issue is whether Melvin complied with the requirements of his life
insurance policy to effect a change of beneficiary. The second
issue is whether the intervenors, Bienvenue and Ferrara, are
entitled to recover reimbursement of costs and expenses and
attorneys’ fees in this matter in accordance with a contingency fee
contract entered into between Sheila and Bienvenue. This second
issue can be disposed of quickly because this Court does not have
appellate jurisdiction to consider it. This issue has not been
heard by the district court and, as a result, there has not been a
final judgment from which the intervenors may appeal. The
intervenors on appeal are dismissed without prejudice.
This Court reviews questions of law de novo and findings of
fact for clear error in appeals from judgments rendered after a
bench trial. Read v. United States ex rel. Dep’t of Treasury, 169
F.3d 243, 247 (5th Cir. 1999). Louisiana law requires strict
compliance with an insurance contract's terms to effect a change of
beneficiary. American Gen. Life Ins. Co., 944 F.2d at 234 & n.5.
5 Louisiana, however, recognizes the doctrine of substantial
compliance in limited circumstances. This doctrine holds that when
an insured does “substantially all that lay within his power to
effect a change of beneficiary,” the insured's strict compliance
with the policy's terms will be sufficient even though the
beneficiary is not altered before the insured's death. Bland, 64
So.2d at 33-34.
Louisiana cases concerning the doctrine of substantial
compliance fall into two categories. The first category involves
cases in which the original beneficiary wrongfully interfered with
the insured's attempts to comply with the policy requirements. See
American Gen. Life Ins. Co., 944 F.2d at 234. The second category
involves cases in which the insured complied with the requirements
on the face of the policy, but some internal procedure of the
insurance company was not completed. Id.
The case at hand does not fit into either of these categories.
The district court, therefore, erred in applying the doctrine of
substantial compliance. There is no evidence whatsoever that
Diana, the named beneficiary of Melvin's life insurance policy,
interfered with Melvin's ability to change the beneficiary to
Sheila. Therefore, this case does not fit into the first category
of cases noted above. Likewise, there is no evidence that Melvin
ever received a change of beneficiary form which he filled out and
returned to his insurance company for processing. In this regard,
6 we note that Linda is an employee of Highlines and there is no
evidence that she was an agent or representative of the insurance
company. As a result, this case also does not fit into the second
category of cases.
III. CONCLUSION
For the foregoing reasons, we hold that the district court
erred in applying the doctrine of substantial compliance. We,
therefore, REVERSE the district court and hold that the named
beneficiary, Diana James, is entitled to the life insurance
proceeds. We vacate the district court’s order dismissing as moot
Sheila’s third-party claim against Highlines. We remand this
matter to the district court for further proceedings not
inconsistent with this opinion.