Texas federal court interpleader win for clients

We routinely handle life insurance beneficiary interpleader cases for clients. A life insurance company files an interpleader lawsuit when there are competing claims to life insurance benefits.

Sometimes, the cases can be resolved by settlement during the court process. If the parties can not resolve the case by settlement, the court has to decide.

Several years ago we represented a group of people who had been designated beneficiaries of a life insurance policy. The owner of the policy was suffering from cancer and designated our clients as the beneficiaries over a week before she died. Her husband contested the beneficiary change. He alternatively claimed his wife did not sign the beneficiary designation form, she lacked capacity to make the designation, or was subjected to undue or fraud by our clients. He hired a handwriting expert to support his forgery claim and a doctor to review medical records and contend his wife lacked sufficient mental capacity to make a beneficiary designation.

Because the insured had purchased the life insurance policy through her employer, the dispute was covered by ERISA. Therefore, the case would be determined by a federal judge. In this case, Judge Pittman in Austin.

After several depositions, we decided to file a motion for summary judgment. A motion for summary judgment is a legal procedure that enables parties to seek a swift resolution to their case without going through a full trial. It is a request made by one party, asking the court to rule in their favor based on the undisputed facts and the applicable law. Summary judgment is generally appropriate when there are no genuine disputes of material fact, and one party is entitled to judgment as a matter of law.

The court ruled in our favor, agreeing that the husband had not established sufficient evidence to support his claims that his wife lacked capacity, was subject to undue influence, or that the designation for was a forgery.

The court proceeded with the analysis from the presumption that the Wife had the requisite mental capacity unless the Husband could prove otherwise. Under Texas law, a person is considered to have the mental capacity to contract if they appreciate the effect of their actions and understand the nature and consequences of their acts and the business they're transacting.

The court found that the doctor’s expert report failed to show that the Wife lacked the mental capacity to change the beneficiary for her life insurance policy. The evidence provided was considered speculative, nonspecific, and insufficient to rebut the presumption of capacity. Consequently, the court granted summary judgment in favor of our clients on the Husband's claim that Wife lacked the mental capacity to change the beneficiary on her life insurance policy..

The court was also not persuaded by the undue influence allegation. Husband alleged that the Wife's sisters and coworkers isolated her from him and pressured her into making financial decisions that benefited them but harmed him, leading to the change in the life insurance policy beneficiary.

Despite the animosity between the Husband and our clients, the court found that evidence presented failed to show that they exerted undue influence over the Wife. He provided no direct evidence of undue influence and his circumstantial evidence was not compelling, resulting in the failure of his undue influence claim as a matter of law.

In support of his forgery claim, Husband provided opinions by handwriting experts. But the court was not impressed. The Court noted that the experts did not sufficiently explain their methodology or how they reached their conclusion, so their opinion did not create a genuine issue of fact.

Reach out to our experienced team of attorneys who are ready to help you navigate the complexities of your case. We understand the emotional and financial challenges that come with competing claims, and we're committed to providing the guidance and support you need during this difficult time.

Contact us today for a consultation, and let us help you protect your rights and interests in your life insurance interpleader case. Don't leave the outcome of such an important matter to chance – enlist the expertise of our dedicated legal professionals to ensure you receive the best possible representation.