TRANSAMERICA LIFE INSURANCE NO. 23-CA-138 COMPANY FIFTH CIRCUIT VERSUS COURT OF APPEAL BRUCE FUSELIER JR. AND TONYA I. GEGENHEIMER STATE OF LOUISIANA
ON APPEAL FROM THE TWENTY-FOURTH JUDICIAL DISTRICT COURT PARISH OF JEFFERSON, STATE OF LOUISIANA NO. 759-140, DIVISION "D" HONORABLE ROBERT J. BURNS, JUDGE PRO TEMPORE, JUDGE PRESIDING
November 29, 2023
SUSAN M. CHEHARDY CHIEF JUDGE
Panel composed of Judges Susan M. Chehardy, Fredericka Homberg Wicker, and Marc E. Johnson
AFFIRMED SMC FHW MEJ COUNSEL FOR PLAINTIFF/APPELLEE, TRANSAMERICA LIFE INSURANCE COMPANY Kelly Gayle Juneau Rookard Edward W. Trapolin Gretchen F. Richards
COUNSEL FOR DEFENDANT/APPELLANT, TONYA I. GEGENHEIMER John E. Sudderth Leo M. Prange, III Kate C. Casanova CHEHARDY, C.J.
In this dispute over death benefits owed under a life insurance policy issued
by Transamerica Life Insurance Company (“Transamerica”) insuring the life of
Jody Darlington Fuselier, Tonya Gegenheimer (“Tonya”), appeals the trial court’s
September 20, 2022 judgment that (1) granted summary judgment in favor of
Transamerica, dismissing Tonya’s claim against it for bad faith penalties pursuant
to La. R.S. 22:1973 at her costs, and (2) denied Tonya’s motion for partial
summary judgment, finding that Transamerica was not arbitrary, capricious, or
without probable cause at the time it invoked a concursus proceeding and placed
the proceeds of Jody Fuselier’s life insurance policy into the registry of the court.
On de novo review, applying the law to the facts of this case, we find that
Transamerica had a reasonable basis upon which to invoke a concursus
proceeding, and that the trial court did not err in ruling in favor of Transamerica
and against Tonya, dismissing her claim for bad faith penalties at her cost. For the
following reasons, we affirm the trial court’s judgment.
PROCEDURAL HISTORY
This case arises out of a dispute involving death benefits owed under two
separate life insurance policies issued by Transamerica to (1) Bruce Fuselier, Sr.
(Policy No. 41579883 – “Bruce, Sr.’s Policy”), and to (2) Jody Darlington Fuselier
(Policy No. 41579877 – “Jody’s Policy”). Bruce, Sr. and Jody were husband and
wife. Alleging there were rival claims to the death benefits due under both
policies, Transamerica invoked a concursus proceeding on March 23, 2016, and
placed the proceeds of the policies into the registry of the court. On September 30,
2016, Tonya, a rival claimant to the proceeds of both Bruce, Sr.’s and Jody’s
policies, answered Transamerica’s petition for concursus and asserted a
reconventional demand against Transamerica, alleging bad faith conduct associated
23-CA-138 1 with Transamerica’s handling of the purported rival claims to the proceeds of the
policies.1
On August 13, 2019, Transamerica filed its first motion for summary
judgment seeking dismissal of Tonya’s claims for bad faith damages and penalties
made pursuant to La. R.S. 22:1811 and La. R.S. 22:1973. Subsequently, on
October 9, 2019, Tonya moved for summary judgment against Transamerica,
suggesting to the court that there existed no genuine issue of material fact that
Transamerica violated La. R.S. 22:1973(A)(B)(5), because it arbitrarily,
capriciously, or without probable cause failed to pay the proceeds of Jody’s Policy
to her within sixty (60) days of its receipt of satisfactory proof of loss and,
therefore, she was entitled to judgment as a matter of law. Following a hearing on
the cross-motions for summary judgment held on November 13, 2019, the trial
court denied both party’s motions stating that it needed to “flush out the facts,” and
needed to know “what did [Transamerica] know and when did they know it.”
Additionally, the trial court emphasized that, prior to making a decision, it wanted
to hear “from the witnesses about when the claims were made on [Jody’s] policy
and by whom.” A written judgment denying the cross-motions for summary
judgment was signed on December 9, 2019, and this Court affirmed. See
Transamerica Life Insurance Company v. Fuselier, 20-15 (La. App. 5 Cir. 3/16/20)
(unpublished writ disposition), writ denied, 20-507 (La. 7/2/20), 287 So.3d 768.
Over the next several years, the parties engaged in additional discovery
regarding Tonya’s claim for bad faith damages, after which Transamerica filed a
second motion for summary judgment on February 25, 2021, seeking to have
Tonya’s claims dismissed. On February 14, 2022, Tonya filed a second cross-
1 Tonya subsequently withdrew her bad faith claim against Transamerica for its handling of Bruce, Sr.’s policy due to fraud allegations by both parties. Thus, according to Tonya, it is only Transamerica’s actions pertaining to Jody’s Policy that are relevant for the sole remaining bad faith claim, which is the basis for the instant appeal.
23-CA-138 2 motion for partial summary judgment on the issue of Transamerica’s bad faith
conduct for invoking the concursus proceeding and placing the proceeds of Jody’s
Policy into the registry of the court. A hearing on the cross-motions for summary
judgment was held on September 15, 2022. At the close of the hearing, the trial
court ruled from the bench and assigned oral reasons. The trial court granted
Transamerica’s motion for summary judgment, denied Tonya’s motion for partial
summary judgment, and assessed all costs to Tonya. A written judgment to this
effect was signed on September 20, 2022.
Tonya now appeals that judgment.
FACTUAL BACKGROUND
On March 29, 1999, sixteen years prior to her death, Jody applied to
Transamerica for a life insurance policy (Policy No. 41579877), as both owner and
insured. The application sought $1,000,000 of term life coverage and originally
named Bruce, Sr., spouse, as primary beneficiary, and Doris Skinner, friend, as
contingent beneficiary.2 From 2005 to 2011, Jody submitted five change of
beneficiary designations, the last of which was executed on October 1, 2011, which
named Bruce, Sr. as primary beneficiary and Susan Bunney, friend, as contingent
beneficiary.3
2 On March 26, 1999, Bruce Fuselier, Sr., husband to Jody, also applied to Transamerica for a life insurance policy (Policy No. 41579883) in the face amount of $1,000,000, as owner and insured. On April 2, 2004, Bruce, Sr. executed an assignment to transfer ownership of his life insurance policy to Jody. The transfer of ownership was confirmed by Transamerica on May 17, 2004. Bruce, Sr. died on September 16, 2015. Once Jody became owner of Bruce, Sr.’s Policy, Jody submitted numerous beneficiary change forms, always maintaining herself as the primary beneficiary. At the time of Bruce, Sr.’s death, Jody was the named primary beneficiary under his policy, and Susan Bunney was named the contingent beneficiary. 3 The record indicates that on September 29, 2005, Jody submitted a beneficiary change form changing her primary beneficiary to John W. Pearce, and named Bruce, Sr. as her contingent beneficiary. On March 7, 2007, Jody submitted a beneficiary change form restoring Bruce Sr. as the primary beneficiary to her policy, and naming Susan Bunney as the contingent beneficiary. On December 23, 2010, a beneficiary change form was submitted by Jody naming Tonya Gegenheimer (“friend/caretaker”) as the primary beneficiary and Todd Gegenheimer as the contingent beneficiary. On July 7, 2011, Jody submitted another change of beneficiary form naming Bruce, Sr. as the primary beneficiary and “Tony” Gegenheimer (“friend”) as contingent beneficiary. Three months later, on October 1, 2011, Jody submitted a change of beneficiary form naming Bruce, Sr. as the primary beneficiary and Susan Bunney as the contingent beneficiary. There were no further beneficiary change forms executed by Jody after October 11, 2011, until September 30, 2015.
23-CA-138 3 The affidavit of Dr. Gilbert G. Stock, which was admitted into evidence at
the summary judgment hearing, attests that between August 29, 2015, and
September 15, 2015, Jody presented to East Jefferson General Hospital (“EJGH”)
on several occasions for outpatient testing indicating a deep tissue infection, along
with metabolic acidosis. It was in the midst of addressing her own medical issues
that Jody’s husband, Bruce, Sr., died on September 16, 2015.4 On that same day,
Jody was admitted to EJGH for inpatient care due to a worsening of cellulitis and
the breaking down of her skin. On September 24, 2015, Jody was transferred to St.
Teresa’s, a long-term acute care facility located within EJGH, where she resided
until her death two months later.
On September 30, 2015—two weeks after her husband’s death, and only six
days after her admission to the long-term care facility—through her power of
attorney granted to Tonya,5 Jody executed the last beneficiary change form for her
policy, changing her primary beneficiary from Bruce, Sr. to Tonya, as
“Irrevocable” primary beneficiary, and naming Todd Gegenheimer, as contingent
beneficiary.
Jody died on November 25, 2015. Transamerica was notified of Jody’s
death on November 30, 2015, by Bruce Fuselier, Jr. (“Bruce, Jr.”), only son and
sole heir of Jody.6 There is a notation in Transamerica’s claim file indicating that
at the time Bruce, Jr. notified Transamerica of Jody’s death, he also advised that
Tonya was not to be “authorized on the policy,” and that he was contacting a
lawyer. In a letter to Transamerica from Bruce, Jr.’s counsel dated November 30,
2015, Transamerica was advised that Bruce, Jr., as the “lone-child” of Jody,
believed he was the beneficiary of Jody’s Policy and intended to “file suit to claim
4 Prior to her death, Jody made a claim on Bruce, Sr.’s Policy, so upon her death, Jody’s estate became the beneficiary of the proceeds of Bruce, Sr.’s Policy. 5 On October 18, 2011, Jody executed a durable power of attorney to Tonya. 6 The record shows that Bruce, Jr. was adopted by Bruce, Sr., and was his only child.
23-CA-138 4 all such life insurance proceeds …,” and made “formal demand that no payments
shall be issued to any such persons other than [Bruce, Jr.] until such time as the
issue of beneficiary, if any, is resolved to [[Bruce, Jr.’s] satisfaction.”
As previously noted, as of the date of Jody’s death, Tonya was listed as the
“irrevocable” primary beneficiary of Jody’s Policy. As such, in a December 8,
2015 letter, Transamerica notified Bruce, Jr.’s counsel that Tonya was making a
claim to the proceeds. Additionally, because Bruce, Jr. had never been named a
beneficiary on Jody’s Policy according to Transamerica’s records, the letter
requested that Bruce, Jr. provide a basis for his belief that he was the policy’s
Also on December 8, 2015, Transamerica sent a letter to Tonya advising that
Bruce Jr. was likewise making a claim against the proceeds of Jody’s Policy and
that Transamerica would “consider this matter a rival claimant issue.” Further,
Transamerica advised that it was a “neutral stakeholder,” and stated that if the rival
claimants could not reach an agreement as to the payment of the proceeds, it
reserved its rights to interplead the funds and allow the court to decide to whom the
proceeds should be paid.
In response to Transamerica’s request that Bruce, Jr. state why he believed
himself to be the beneficiary to the proceeds of Jody’s Policy, Bruce, Jr. submitted
a statement dated December 9, 2015, claiming that Jody, his mother, was
“medically incapable of executing documents for several years and was both
mentally and physically incapacitated well before her death.” In support, Bruce,
Jr. submitted a judgment of possession rendered in In re Succession of Jody
Darlington Fuselier, Twenty-Fourth Judicial District Court, Parish of Jefferson,
No. 755-847, division “B,” signed on December 9, 2015, recognizing him as the
sole heir of Jody’s estate, and advised that, as such, he was making a claim to the
23-CA-138 5 proceeds on behalf of her estate.7 Thereafter, on December 28, 2015, Bruce, Jr.
submitted an original copy of Jody’s death certificate to Transamerica.
On December 30, 2015, Transamerica sent Tonya a follow-up letter,
acknowledging that it had not yet heard back from Tonya since sending her the
December 8, 2015 correspondence notifying her of Bruce, Jr.’s rival claim against
the proceeds of Jody’s Policy. The letter advised Tonya that if Transamerica did
“not hear back from [her] by January 8, 2016, [it] may conclude that [she was] no
longer interested in pursuing [her] claim” for the proceeds of Jody’s Policy.
On January 6, 2016, through her counsel, Tonya responded to Transamerica
and advised that the paperwork that Bruce, Jr. submitted to Transamerica relative
to Jody’s estate was potentially fraudulent, because despite Bruce, Jr.’s
representation to the court, that neither Bruce, Sr. nor Jody died leaving a last will
and testament, both decedents, in fact, died testate “excluding Bruce, Jr. from any
inheritance.” Tonya’s counsel provided Transamerica with original copies of both
decedents’ wills, which were executed by Bruce, Sr. and Jody in December 2010,8
and advised, accordingly, that Tonya was contesting the distribution of the
proceeds under both Bruce, Sr.’s Policy and Jody’s Policy.9 In that same letter,
counsel for Tonya directed Transamerica, “DO NOT DISTRIBUTE PROCEEDS
FROM THESE POLICIES AT THIS TIME.”
7 It is important to note that, after Bruce, Sr.’s death, but prior to her own, Jody, as primary beneficiary, made a claim for the proceeds under Bruce, Sr.’s Policy. Consequently, upon her death, those proceeds flowed to Jody’s estate. Transamerica was provided with a certified copy of Bruce, Sr.’s death certificate by Bruce, Jr. Upon receipt of the December 9, 2015 judgment of possession placing Bruce, Jr., as Jody’s sole heir, into possession of Jody’s estate, which included the proceeds of Bruce, Sr.’s Policy, pursuant to a demand by Bruce, Jr’s counsel, Transamerica issued a check to Bruce, Jr. and his counsel’s law firm for the proceeds of Bruce, Sr.’s Policy (less the amount of an assignment covering the costs of Bruce, Sr.’s funeral expenses). It was later determined that these proceeds were paid by Transamerica in error, as Jody, in fact, died testate. 8 The information provided by Tonya’s counsel indicated that Jody died testate leaving a December 16, 2010 will naming Tonya Gegenheimer as her succession representative and sole legatee. 9 In response to the information provided by Tonya’s counsel, Transamerica issued a stop-payment on the check issued to Bruce, Jr. and his counsel for the proceeds of Bruce, Sr.’s Policy; however, Transamerica was advised that the check had already been cashed and placed into the law firm’s trust account.
23-CA-138 6 On February 19, 2016, in the parallel succession proceedings, Tonya filed a
petition to annul the December 9, 2015 judgment of possession declaring Bruce, Jr.
to be the sole heir of Jody’s estate. On March 16, 2016, Bruce, Jr. filed an answer
to Tonya’s petition to annul, alleging fraudulent misrepresentation and undue
influence by Tonya, and asserting Jody’s mental incapacity.10
On March 23, 2016, with Tonya and Bruce, Jr. continuing to litigate their
respective rights in Jody’s succession proceeding, and having reached no
agreement or resolution as to their rival claims to the proceeds of Jody’s Policy,
Transamerica instituted the instant concursus proceeding. Tonya filed an answer
to Transamerica’s petition for concursus on September 30, 2016, and asserted a
reconventional demand against Transamerica seeking damages, penalties, and
attorney’s fees for Transamerica’s alleged bad faith conduct in failing to timely
pay the proceeds of Jody’s Policy to her after having received satisfactory proof of
loss.
On November 3, 2016, Transamerica filed a first amended petition for
concursus wherein it added Susan Bunney as a potential beneficiary. Transamerica
alleged that, if Bruce, Jr.’s allegations of Jody’s mental incapacity prior to her
death were proven true, the September 30, 2015 beneficiary change form would be
unenforceable, making Susan Bunney the rightful beneficiary to the proceeds of
Jody’s Policy.
Bruce, Jr. answered Transamerica’s petition for concurcus on November 16,
2016, wherein he claimed that the rightful beneficiary to the proceeds of Jody’s
Policy was Jody’s estate. Specifically, Bruce, Jr. alleged that after 2011, Jody’s
10 In his answer, Bruce, Jr. specifically averred that Tonya committed fraud in following respects: (a) The exertion of undue influence on a mentally ill and incapacitated person in Bruce Fuselier Sr. and Jody Darlington Fuselier; (b) Misrepresentations of the insurable interest of Tonya Gegenheimer to the insurance proceeds and other assets of Bruce Fuselier Sr. and Jody Darlington Fuselier; (c) Misrepresentations of the mental capacity of Bruce Fuselier Sr. and Jody Darlington Fuselier; (d) Misrepresentations of the nature and extent of care that would be provided by Tonya Gegenheimer to the testators; and (e) Other acts as may be proven at the trial of this matter.
23-CA-138 7 mental condition had deteriorated to the extent that she lacked the physical and
mental capacity to legally contract. Consequently, Bruce, Jr. averred that, due to
her mental incapacity and inability to enter into a legally binding contract, Jody
died intestate, leaving her only child, Bruce, Jr., as the sole heir of her estate.
Further, Bruce, Jr. claimed that any and all changes of beneficiary forms and last
will and testaments of Jody Fuselier were, likewise, invalid since they were
executed without Jody’s proper legal consent.
Susan answered Transamerica’s amended petition on January 19, 2017. In
her answer, Susan, in essence, confirmed Bruce, Jr.’s allegations of Jody’s
incapacity by alleging that Jody was medically incapable of executing documents
for several years and was both mentally and physically incapacitated well before
her death.
On May 25, 2017, Transamerica issued a check for deposit into the registry
of the Jefferson Parish Court in the amount of $1,103,771.27, representing the
proceeds from Jody’s Policy (minus a funeral home assignment covering the cost
of Jody’s funeral expenses), statutory interest at 8% from December 28, 2015, to
May 30, 2017, and a premium refund.11 The record indicates that Bruce, Jr.
voluntarily dismissed his claims to his parents’ estates and renounced his claim to
the proceeds of both Bruce, Sr. and Jody’s life insurance policies on November 15,
2017.
On August 23, 2018, Tonya moved for summary judgment against Susan
Bunney seeking an order declaring Tonya to be the rightful beneficiary to the
proceeds of Jody’s Policy. Specifically, Tonya averred that Susan could not carry
her burden of proving that Jody was mentally or physically incapacitated “well
before her” death. Additionally, Tonya claimed for the first time in these
11 At that time, Transamerica requested that counsel for Bruce, Jr. also place into the registry of the court the checks previously issued under Bruce, Sr.’s Policy.
23-CA-138 8 proceedings that, pursuant to La. C.C. art. 1926, the named irrevocable beneficiary
designation could not be challenged. Susan opposed Tonya’s motion, attaching the
previously referenced affidavit of Dr. Stock in support her contention that at the
time Jody executed the final beneficiary change form on September 30, 2015, she
was medically incapable of doing so.
Tonya’s motion for summary judgment was granted on December 20, 2018,
wherein the trial court held that Tonya, not Susan Bunney, was the rightful
beneficiary of Jody’s Policy proceeds, and Susan was dismissed from the
concursus proceeding. After filing a suspensive appeal, on February 7, 2019,
Susan filed a voluntary motion to dismiss the appeal and all claims, interests, or
rights to any of the proceeds of Jody’s Policy. Accordingly, the trial court issued
judgment on February 14, 2019, ordering the Clerk of Court for the Parish of
Jefferson to disburse the proceeds of Jody’s Policy, plus all applicable interest, to
Tonya in the amount of $1,125,410.76. Although the proceeds of Jody’s Policy
had been disbursed to Tonya, she maintained and continued to pursue her claim for
bad faith damages and penalties against Transamerica.
On February 25, 2021, Transamerica filed a motion for summary judgment
seeking dismissal of Tonya’s bad faith claims. In support, Transamerica attached
the January 28, 2021 report of its expert in insurance claims handling, Dr. Louis G.
Fey, Jr., who opined that Transamerica did not violate any claims handling
standards at the time it initiated the concursus proceeding. Specifically, he
concluded that in light of the rival claims to the policy proceeds and the allegations
of fraud and incapacity, there was no other viable option for Transamerica to
protect itself from multiple claims than invoking a concursus proceeding.
Nearly a year later, Tonya filed a cross motion for summary judgment
against Transamerica. In her motion, Tonya sought a ruling by the trial court that
Transamerica had, in fact, violated La. R.S. 22:1973 and acted in bad faith by
23-CA-138 9 failing to pay Tonya, the rightful beneficiary, the proceeds to Jody’s Policy within
sixty days of December 28, 2015, when it received the certified copy of Jody’s
death certificate.
Transamerica and Tonya’s cross-motion came for hearing on September 15,
2022. In accordance with the oral reasons provided by the trial court at the close of
the hearing, a written judgment was issued on September 20, 2022, which granted
summary judgment in favor of Transamerica, dismissing Tonya’s bad faith claims
against it at her costs, and denied Tonya’s motion for partial summary judgment
against Transamerica. This appeal followed.
ISSUES PRESENTED ON APPEAL On appeal, Tonya contends the trial court erred in granting Transamerica’s
motion for summary judgment and assessing costs to her, and in denying her
motion for summary judgment. Tonya raises two issues for this Court’s de novo
review: (1) whether Transamerica acted in bad faith pursuant to La R.S. 22:1973 in
opening a concursus proceeding on the basis that Bruce, Jr. was a valid competing
claimant to Jody’s life insurance proceeds, rather than paying the proceeds of
Jody’s Policy to her, the actual named irrevocable beneficiary; and (2) whether
Transamerica violated La. R.S. 22:1973(B)(1) by misrepresenting facts or
insurance provisions to Tonya relating to the coverage at issue.
LAW AND ANALYSIS
Summary Judgment and Standard of Review
A motion for summary judgment is a procedural device used to avoid a full-
scale trial when there is no genuine issue as to material fact. Collins v. Home
Depot, U.S.A. Inc., 16-516 (La. App. 5 Cir. 3/15/17), 215 So.3d 918, 920. The
summary judgment procedure is favored and is designed to secure the just, speedy,
and inexpensive determination of every action. La. C.C.P. art. 966(A)(2). After an
opportunity for adequate discovery, a motion for summary judgment “shall be
23-CA-138 10 granted if the motion, memorandum, and supporting documents show that there is
no genuine issue as to material fact and that the mover is entitled to judgment as a
matter of law.” La. C.C.P. art. 966(A)(3); See also Chauvin v. Shell Oil Co., 16-
609 (La. App. 5 Cir. 10/25/17), 231 So.3d 903, 907, writ denied, 17-1985 (La.
1/29/18), 233 So.3d 607. The mover’s burden on the motion for summary
judgment, when he does not bear the burden of proof at trial, requires him “to point
out to the court the absence of factual support for one or more elements essential to
the adverse party’s claim, action, or defense.” La. C.C.P. art. 966(D)(1). The
opposing party’s burden is to “produce factual support sufficient to establish the
existence of a genuine issue of material fact or that the mover is not entitled to
judgment as a matter of law.” Id.
Appellate courts review a judgment granting or denying a motion for
summary judgment de novo. Thus, appellate courts ask the same questions the trial
court does in determining whether summary judgment is appropriate: whether
there is any genuine issue as to material fact, and whether the mover is entitled to
judgment as matter of law. Dorsey v. Purvis Contracting Grp., LLC, 17-369 (La.
App. 5 Cir. 12/27/17), 236 So.3d 737, 741, writ denied, 18-199 (La. 3/23/18), 239
So.3d 296.
Bad Faith Damages and Penalties under La. R.S. 22:1973
In her first assignment of error, Tonya alleges the trial court erred in failing
to find that Transamerica violated La. R.S. 22:1973 and acted in bad faith when it
failed to adjust the claim fairly and promptly and pay Tonya the proceeds of Jody’s
Policy within sixty days, rather than instituting the concursus procedure.12
12 La. R.S. 22:1973 provides, in pertinent part: A. An insurer ... owes to his insured a duty of good faith and fair dealing. The insurer has an affirmative duty to adjust claims fairly and promptly and to make a reasonable effort to settle claims with the insured or his client, or both. Any insurer who breaches these duties shall be liable for damages sustained as a result of the breach. B. Any one of the following acts, if knowingly committed or performed by an insurer, constitutes a breach of the insurer’s duties imposed in Subsection A of this Section:
23-CA-138 11 Further, Tonya argues the trial court erred in concluding that Transamerica had a
valid reason to name Bruce, Jr. as a competing claimant to the proceeds of Jody’s
Policy, thereby justifying Transamerica’s filing of a concursus proceeding, once it
was notified that she was the named irrevocable beneficiary on the policy at the
time of Jody’s death. According to Tonya, Transamerica could not “legally open a
concursus proceeding,” because Bruce, Jr., who had never been named a
beneficiary since the inception of Jody’s Policy, did not qualify as a “valid
competing claimant.” Tonya further avers that, based on insurance industry
standards, Transamerica had an affirmative duty to do a prompt and thorough
investigation into the validity of Bruce, Jr.’s purported competing claim, rather
than initiating a concursus proceeding and placing the onus on the court to be the
referee and determine the proper claimant.
In response, Transamerica argues that, once notified of competing claims for
the proceeds of Jody’s Policy, and faced with written demands from both counsel
for Tonya and counsel for Bruce, Jr. not to disburse the funds, it reasonably
concluded that instituting a concursus proceeding was proper under the
circumstances. In particular, Transamerica contends that Louisiana’s concursus
law only requires “persons having competing or conflicting claims,” and does not
require a prior determination as to whether a competing claim is “valid,” before a
concursus proceeding is available. We agree.
The Louisiana Code of Civil Procedure defines a concursus proceeding, in
part, as “one in which two or more persons having completing or conflicting
(1) Misrepresenting pertinent facts or insurance policy provisions relating to any coverages at issue. *** (5) Failing to pay the amount of any claim due any person insured by the contract within sixty days after receipt of satisfactory proof of loss from the claimant when such failure is arbitrary, capricious, or without probable cause.
23-CA-138 12 claims to money … are impleaded and required to assert their respective claims
contradictorily against all other parties to the proceeding.” La. C.C.P. art. 4651.
Pursuant to La. C.C.P. art. 4652, those claimants that can be impleaded include:
Persons having competing or conflicting claims may be impleaded in a concursus proceeding even though the person against whom the claims are asserted denies liability in whole or in part to any or all of the claimants, and whether or not their claims, or the titles on which the claims depend, have a common origin, or are identical or independent of each other.
The Louisiana Supreme Court has rejected the notion that there must be a
“valid,” competing claim in order for a concursus proceeding to properly be
invoked, as the plaintiff-in-concursus has no duty to definitively determine whether
a claimant has any chance of success in pursuing his claim. Cimarex Energy Co. v.
Mauboules, 09-1170 (La. 4/9/10), 40 So.3d 931, 942. In Cimarex, the Supreme
Court explained that the primary purpose of the concursus proceeding is to protect
a stakeholder, i.e., the plaintiff-in-concursus, “from multiple liability13 from
conflicting claims and from vexation attending involvement in multiple litigation
in which [the] stakeholder may have no direct interest.” Id. at 940 (citing Landry
& Passman Realty, Inc. v. Beadle, Swartwood, Wall & Associates, Inc., 303 So.2d
761, 763 (La. App. 1 Cir. 1974)). The Supreme Court also noted that concursus is
proper not only to prevent multiple liability, but also to prevent multiple litigation,
and therefore can be used by a party against whom multiple claims are asserted,
even though liability on some or even all of the claims is denied. Cimarex, 40
So.3d at 940; see also Comment, La. C.C.P. art. 4562. Moreover, the language of
La. C.C.P. art. 4652 provides that the use of the concursus proceeding is allowed
even if the stakeholder denies that liability is owed to one or all of the claimants.
13 In other words, one of the purposes of concursus is to protect the stakeholder from exposure to double liability. In this case, it was to protect Transamerica from having to pay the death benefit under Jody’s Policy twice—i.e., to both competing beneficiaries—when only one death benefit was actually owed.
23-CA-138 13 Cimarex, 40 So.3d at 940.14 The Supreme Court has further held that “[t]he use of
concursus is not dependent on the merits of the adverse claim. ...[as] in almost all
concursus proceedings, the claim of one of the parties will ultimately be found to
be invalid.” Id. at 942. It is not the obligation of the stakeholder to reach that legal
conclusion. Id.
In the instant case, it is undisputed that at the time Transamerica initiated the
concursus proceeding, Bruce, Jr. and Tonya were each asserting separate claims to
the death benefits owed under Jody’s Policy. To focus solely on the merits of
Bruce, Jr.’s claim to the life insurance proceeds, as Tonya would have this Court
do in order to defeat Transamerica’s motion for summary judgment, is tantamount
to focusing solely on the “multiple liability” purpose of concursus, and ignores
altogether the “vexatious litigation” purpose. See Cimarex, 40 So.3d at. 945. Even
assuming Bruce, Jr.’s claim was tenuous at best, requiring Transamerica to choose
which claimant to pay would still have exposed it to the costs and risks of
defending multiple suits. Id.
Upon de novo review of the facts and circumstances of this case, especially
in light of the correspondence sent separately to Transamerica by counsel for both
parties, each directing Transamerica not to disburse the funds, we find that
Transamerica was justified in its concern that if it paid the proceeds of Jody’s
Policy to Tonya, it would likely be faced with litigation by Bruce, Jr. Thus,
contrary to the assertions of Tonya that the concursus was unnecessary, we find
that Transamerica’s use of concursus to avoid such multiple litigation was proper.
See Principal Life Ins. Co. v. Chandler, 2008 WL 696173, at *1 (E.D. La. Mar. 13,
2008).
14 Like the concursus proceeding, federal interpleader was designed to protect the stakeholder. 7 Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice & Procedure, § 1702, at 533 (2001). This protection prevents a stakeholder from having to determine, at his peril, which claimant has the better claim. Id. at 534. And, even if the stakeholder denies liability to one or more of the claimants, he is still protected from having to defend multiple suits. Id.
23-CA-138 14 Under La. R.S. 22:1973, an insurer owes to its insured a duty of good faith
and fair dealing, and has an affirmative duty to adjust claims fairly and promptly.
Any insurer who breaches this duty shall be liable for any damages sustained as a
result of the breach. La. R.S. 22:1973(A). An insurer is considered to have
breached this duty when it fails to pay the amount of any claim due within sixty
days after receipt of adequate proof of loss when such failure is arbitrary,
capricious, or without probable cause. La. R.S. 22:1973(B)(5). In the instant case,
having determined that Transamerica’s initiation of the concursus proceeding was
proper under the circumstances, we likewise find that Transamerica was not
arbitrary, capricious, or without probable cause as it had a reasonable basis for not
paying the proceeds of Jody’s Policy to Tonya within the sixty-day period set forth
in La. R.S. 22:1973. We think the trial court expressed it best in its well-reasoned
oral reasons for judgment, when it stated:
[I]f the action of the company was reasonable in any way, then that certainly doesn’t amount to the company being in bad faith. Our Supreme Court has discussed the bad faith issue and has noted that vexatious refusal to pay means unjustified, without reasonable or probable cause or excuse. That’s I think what I just stated about our court talking about reasonable cause, and there was reasonable cause for this company to believe that these claimants would be litigating and would subject them to having to make a decision which claimant was legally correct and they’re not required to do that. In fact, that’s what it seems to me our concursus law is all about.
And as I think I mentioned before, whether the company’s refusal to pay is arbitrary, capricious, or without probable cause hinges on the facts known to the insurer at the time of its refusal and to pay the claim. State another way, I can’t sit here and use hindsight and judge Transamerica’s actions and view them from this point in the year 2022. I have to look at their actions, as I said, based on the information that they had when the concursus was invoked. And I believe they had a reason to do so and it was reasonable for them to invoke the concursus.
Our concursus laws give a company such as Transamerica the right to have this court decide which
23-CA-138 15 claimant is truly entitled to the money placed in the registry of the court.
Following de novo review, based on the undisputed facts and the existing
laws and jurisprudence as applied to those facts, we find that Tonya cannot carry
her burden of showing that, under La. R.S. 22:1973(B)(5), Transamerica was
acting in bad faith at the time it invoked the concursus proceeding in lieu of paying
the proceeds of Jody’s Policy directly to Tonya.
Tonya’s Claim for Bad Faith Penalties under La. R.S. 22:1973(B)(1)
In her second assignment of error, Tonya alleges the trial court erred in
failing to address whether Transamerica violated La. R.S. 22:1973(B)(1) by
misrepresenting pertinent facts or insurance policy provisions to her relating to
coverage under Jody’s Policy.15 Tonya argues that under La. R.S. 22:1973(B)(1),
an insurer can be held liable if it knowingly misrepresents or fails to disclose
pertinent facts that are not related to the insurance policy’s coverage. Kelly v. State
Farm Fire & Cas. Co., 14-1921 (La. 5/5/15), 169 So.3d 328, 344. A
misrepresentation can occur when an insurer either makes untrue statements to an
insured concerning pertinent policy provisions or fails to divulge pertinent facts to
the insured. Dufrene v. Gautreau Family, LLC, 07-467 (La. App. 5 Cir. 2/22/08),
980 So.2d 68, 85, writs denied, 08-629 (La. 5/9/08), 980 So.2d 694 and 08-628
(La. 5/9/08), 980 So.2d 698.
In support of her argument that Transamerica should be held liable under La.
R.S. 22:1973(B)(1), Tonya avers that Transamerica withheld pertinent facts from
her during the claims process and that it was “tantamount that [she] be made aware
of Transamerica’s position relating to Bruce, Jr.’s claim considering that she was
the named beneficiary” of the proceeds to Jody’s Policy. According to Tonya, the
information given to her was limited and provided in a single December 8, 2015
15 See Footnote 14, supra.
23-CA-138 16 letter advising that Transamerica was considering Bruce, Jr. as a rival claimant,
that Transamerica may interplead the funds, and that if Transamerica did so, it
would seek payment of its attorney fees out of the policy proceeds. Further, Tonya
contends that Transamerica failed to provide her with a copy of Jody’s Policy,
failed to inform her of its receipt of Jody’s death certificate and the legal
significance thereof, failed to communicate with her regarding Bruce, Jr.’s
allegations, and failed to inform her that it knew Bruce, Jr. was not entitled to the
proceeds of the Policy. Tonya contends that regardless of whether Transamerica
acted in bad faith when it invoked the concursus proceeding, it violated La. R.S.
22:1973(B)(1) and should be held liable to her for misrepresenting pertinent policy
provisions and pertinent facts.
In response, Transamerica contends that even though the trial court did not
provide oral reasons for rejecting Tonya’s alleged misrepresentation claim under
La. R.S. 22:1973(B)(1), the trial court properly dismissed the claim because
Transamerica made no misrepresentations to Tonya during the claims process
relating to any coverages at issue. As to Tonya’s contention that Transamerica
misstated Louisiana law in its December 8, 2015 letter, thereby triggering La. R.S.
22:1973(B)(1) and bad faith penalties, when it advised that Transamerica intended
to seek costs and legal fees if she and Bruce, Jr. were not able to reach an
agreement concerning their rival claim and it was forced to interplead the policy
proceeds, Transamerica denies this was a misstatement of the law. Specifically,
Transamerica avers the letter was sent prior to its decision to interplead the funds,
which action Transamerica contends it could have brought in either federal or state
court. Under federal interpleader law, a district court has the authority to award
costs, including reasonable attorney fees. See Corrigan Dispatch Co. v. Casa
Guzman, S.A., 696 F.2d 359, 364-365 (5th Cir. 1983); Perkins State Bank v.
Connolly, 632 F.2d 1306 (5th Cir. 1980). Thus, even though Transamerica opted
23-CA-138 17 to pursue the interpleader action in state court, Transamerica argues doing so did
not render the statement in its letter to Tonya false. Moreover, as the award of
attorney fees and costs is discretionary, the letter did not state that the court would
ultimately do so.
Regarding Tonya’s allegation that Transamerica failed to communicate with
her regarding the ongoing status of the claim, Transamerica avers that it was a
neutral stakeholder and maintained no position relating to Bruce, Jr.’s claim to the
proceeds of Jody’s Policy (or to Bruce, Sr.’s Policy). Moreover, Transamerica
argues that, despite Tonya’s statement to the contrary, it did attempt to make
contact with Tonya during the claims handling process, but did not hear back from
her until the January 6, 2016 letter it received from Tonya’s counsel.
After de novo review of the extensive record in this case, including the
depositions and affidavits, and considering the totality of the circumstances at
issue, we find the trial court did not err in granting Transamerica’s motion for
summary judgment, dismissing Tonya’s claim for bad faith penalties under La.
R.S. 22:1973(B)(1). We find no support for Tonya’s contention that Transamerica
failed to divulge pertinent policy provisions and/or pertinent facts about the claims
process.
CONCLUSION
For the foregoing reasons the trial court’s September 22, 2022 judgment is
affirmed.
AFFIRMED
23-CA-138 18 SUSAN M. CHEHARDY CURTIS B. PURSELL
CHIEF JUDGE CLERK OF COURT
SUSAN S. BUCHHOLZ FREDERICKA H. WICKER CHIEF DEPUTY CLERK JUDE G. GRAVOIS MARC E. JOHNSON ROBERT A. CHAISSON LINDA M. WISEMAN STEPHEN J. WINDHORST FIRST DEPUTY CLERK JOHN J. MOLAISON, JR. SCOTT U. SCHLEGEL FIFTH CIRCUIT MELISSA C. LEDET JUDGES 101 DERBIGNY STREET (70053) DIRECTOR OF CENTRAL STAFF POST OFFICE BOX 489 GRETNA, LOUISIANA 70054 (504) 376-1400
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