939 F.3d 618
5th Cir.2019Background
- In 1989 Larry Hickey became quadriplegic from a diving accident; he and Diane Weaver settled a suit and received a structured settlement composed of a lump-sum and periodic annuity payments.
- Four settlement documents govern the payouts: Release, Settlement Agreement, Assignment, and the MetLife Annuity. The Settlement Agreement provided that if Larry died before all payments, they would go to Diane if living, and stated “Claimant reserves the right to request to change the beneficiary of future periodic payments.”
- The Assignment identifies Larry as the “Claimant,” and the Annuity names Diane as beneficiary while listing Larry as the “Measuring Life” and Metropolitan Tower as Owner.
- Weaver and Larry divorced in 1999. In 2002 Larry (without Weaver’s knowledge) requested a beneficiary change to his brother James Perry; Larry died in 2014 and Perry began receiving payments.
- Weaver sued MetLife and an “Unknown Payee” in Texas state court; MetLife removed, interpleaded Perry, and the district court granted summary judgment for MetLife, Metropolitan Tower, and Perry. Weaver appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1. Was federal diversity jurisdiction proper after removal? | Weaver argued removal was improper because the later-identified payee (Perry) is a Texas citizen and destroys diversity. | MetLife argued the fictitious "Unknown Payee" is disregarded for removal and its diversity from Weaver supported removal. | Removal and diversity were proper: fictitious defendant disregarded and MetLife was diverse from Weaver. |
| 2. Did Interpleader counterclaim naming Perry destroy diversity? | Weaver contended naming Perry post-removal destroyed diversity and required remand. | MetLife argued Rule 22 interpleader is allowed and diversity is measured between stakeholder and claimants. | Interpleader counterclaim did not destroy diversity; diversity measured between MetLife parties and claimants (Weaver and Perry). |
| 3. Could Weaver join a money-had-and-received claim against Perry that would force remand? | Weaver sought to amend to add that claim, arguing joinder of a nondiverse defendant destroys jurisdiction. | MetLife argued the new claim was a transactionally related claim subject to supplemental jurisdiction under §1367. | The amendment was treated under supplemental jurisdiction; joinder did not require remand. |
| 4. Did Larry have contractual authority to unilaterally change the annuity beneficiary and did Weaver have a vested right? | Weaver argued the settlement should be read to prevent Larry from replacing her; she claimed vesting or third-party beneficiary rights that entitle her to payments. | MetLife, Tower, and Perry argued the documents (read together) gave Larry the right to request beneficiary changes and Weaver had no vested right before his death. | Court held the settlement documents, read as a whole, allowed Larry to change the beneficiary; Weaver had no vested right and thus no breach or recovery against MetLife/Tower or Perry. |
Key Cases Cited
- Miller v. Diamond Shamrock Co., 275 F.3d 414 (5th Cir. 2001) (standard for reviewing remand denial)
- Travelers Ins. Co. v. First Nat. Bank of Shreveport, 675 F.2d 633 (5th Cir. 1982) (Rule 22 interpleader diversity measured between stakeholder and claimants)
- Eikel v. States Marine Lines, Inc., 473 F.2d 959 (5th Cir. 1973) (realignment and interpleader discussed in multi-party disputes)
- City of Indianapolis v. Chase Nat’l Bank, 314 U.S. 63 (1941) (court may realign parties to reflect true sides of dispute)
- Coker v. Coker, 650 S.W.2d 391 (Tex. 1983) (Texas contract interpretation principles; ambiguity and construing the whole instrument)
- Fid. Union Life Ins. Co. v. Methven, 346 S.W.2d 797 (Tex. 1961) (revocable beneficiary rule: no vested beneficiary rights until insured’s death)
- Royal Indem. Co. v. Bates, [citation="314 F. App'x 732"] (5th Cir. 2009) (annuity payments vest only as they come due)