Dallas Fort Worth Insurance Lawyer Blog
Fort Worth life insurance attorneys will understand why people need an attorney’s help in these disputes after reading this case. The case is styled, Cheryl M. Patterson and Aundrell Patterson v. American General Life Insurance Company. The opinion was issued in May 2013, by the Houston Court of Appeals, 1st Dist.
Here is the relevant information.
The operative facts of this case are largely undisputed. On May 3, 2007, American General issued a life insurance policy for Lonnie J. Patterson, Jr. The policy initially named Lonnie, Jr.’s father, Lonnie J. Patterson, Sr., the primary beneficiary and his mother, Cheryl M. Patterson, the contingent beneficiary. American General subsequently received a change of beneficiary for the policy, naming Lonnie, Jr.’s mother, Cheryl, and, his sister, Aundrell Patterson, as primary co-beneficiaries. American General acknowledged and confirmed this change in a November 2007 letter to Lonnie, Jr.
Lonnie, Jr. passed away on October 8, 2009, and American General acknowledged that it was obligated to pay the insurance proceeds upon proof of Lonnie, Jr.’s death. Both Cheryl and Aundrell filed a proof of claim within the month, each requesting payment of fifty percent of the death benefits payable under the policy. After learning of the change in beneficiary, Lonnie, Sr. also sent three letters to American General challenging the validity of that change and alleging that he was the policy’s owner/ primary beneficiary. Lonnie, Sr. argued, inter alia, that Aundrell fraudulently changed the beneficiary designation and/or that Lonnie, Jr. lacked the mental capacity to make the change. Lonnie, Sr. also informed American General that he would seek legal counsel if this matter was not resolved in his favor.
In light of Lonnie, Sr.’s letters challenging the validity of that change, American General pleaded that it was unable to determine which party was entitled to the policy proceeds and on January 14, 2010, filed a petition in interpleader against Lonnie, Sr., Cheryl, and Aundrell, that claimed it to be an innocent stakeholder subject to rival claims to the policy proceeds. American General, confirmed Lonnie, Sr. as the policy’s originally named primary beneficiary, but acknowledged receipt of the November 2007 change the beneficiary request.
Lonnie, Sr., Cheryl, and Aundrell all subsequently filed answers, cross-claims against one another, and counter-claims against American General. In their jointly filed first amended counter-claim against American General, Cheryl and Aundrell asserted multiple causes of actions, including breach of contract, unfair insurance practices, as well as violations of chapter 542 of the Insurance Code (e.g., delay in payment, breach of duty of good faith and fair dealing, and misrepresentation of material facts). All of Cheryl’s and Aundrell’s counter-claims against American General were based upon American General’s decision to file the interpleader rather than distribute the policy proceeds to them.
After considering American General’s motion for deposit of funds into registry and approval of interpleader’s attorneys’ fees, the trial court granted American General interpleader relief on August 2, 2010. In its order, the trial court expressly found that American General was subject to bona fide competing and adverse claims to the policy proceeds, was unable to determine to whom the proceeds belonged, and that the interpleader action was proper because the company was subjected to double or multiple liabilities for the policy proceeds. The trial court granted American General’s interpleader and awarded its $2,500 in attorneys’ fees.
On March 7, 2011, the trial court granted American General’s motion for summary judgment seeking dismissal of Lonnie, Sr. and appellants’ counter- claims. The trial court ordered that Lonnie, Sr., Cheryl, and Aundrell each take nothing on their claims against American General, and dismissed all of the claims against American General with prejudice. The trial court also awarded American General an additional $25,000 in attorneys’ fees.
The following month, on April 4, 2011, the trial court granted Cheryl’s and Aundrell’s motion for summary judgment against Lonnie, Sr. and awarded Cheryl and Aundrell all of the policy proceeds, minus the attorneys’ fees that it had previously awarded to American General.
After Cheryl and Aundrell dismissed their remaining cross-claims against Lonnie, Sr. with prejudice, the trial court issued its “final judgment” on April 12, 2011, which incorporated all of its prior interlocutory orders.
Okay, those were the facts. The trial Court ultimately let American General out of the case after awarding them about $27,500 of the insurance proceeds and dismissed the Patterson’s. On appeal this Court upheld the trial Court stating, “We hold that this issue has been inadequately briefed on appeal, and we overrule it.”