IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 10-31016

ANGELA LEE WARREN FOSTER, Individually and as Trustee of the

ELEANOR F. WARREN FAMILY TRUST, SHONDA FAYE WARREN

LABORDE, WINDY WARREN DARBY, and GEORGE W. WARREN, JR.

Plaintiffs-Appellees/CrossAppellants

v.

UNITED OF OMAHA LIFE INSURANCE COMPANY

Defendant-Appellant/CrossAppellee

Appeal from the United States District Court

for the Western District of Louisiana

USDC No. 6:08-CV-01170

Before WIENER, CLEMENT, and ELROD, Circuit Judges.

PER CURIAM:*

Before her death, Eleanor Warren, through a trust created in her name,

applied for a life insurance policy from United of Omaha Life Insurance

Company (“United”) but omitted mention of her lung condition, heart condition,

and recent visits to three physicians. After Warren’s death, United rescinded

United States Court of Appeals

Fifth Circuit

F I L E D

September 28, 2011

Lyle W. Cayce

Clerk

 Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not *

be published and is not precedent except under the limited circumstances set forth in 5TH CIR.

R. 47.5.4.

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No. 10-31016

the policy because of these omissions. Plaintiffs-Appellees, Warren’s children

(“Plaintiffs”), sued United under the policy. The district court held that

Plaintiffs were entitled to recover under the policy because, among other

reasons, Warren had no intent to deceive United. We affirm the district court’s

ruling that Plaintiffs are entitled to recover under the policy, its award of legal

interest, and its ruling that Plaintiffs are not entitled to statutory penalties.

I. FACTS & PROCEEDINGS

In 2001, Eleanor Warren, the Plaintiffs’ mother, created a trust (“the

Trust”) for the benefit of her children. Since 2003, one of Warren’s daughters,

Angela Lee Warren Foster, has served as Trustee. Until 2005, the Trust owned

a life insurance policy issued by Northwestern Mutual providing insurance

benefits in the amount of $1 million to be paid to the Trust following Warren’s

death.

In 2005, the Smith Insurance Agency (“Smith Agency”) suggested to

Warren that the Trust would be able to save money on insurance premiums by

seeking a different insurer. The Trust first submitted an application for a

replacement policy to Banner Life Insurance (“Banner”). On this application,

Warren indicated that she had two treating physicians, Drs. Crackower and

Steuben. She did not indicate on the application that she had received

treatment for heart disease, chest pain, or lung ailments. Banner offered to

issue a $1 million term policy, but for a higher than standard rate premium

because of Warren’s abnormal EKG and blood test results.

Through the Smith Agency, the Trust then submitted a life insurance

application to United. Brandon Smith and Jessica Breaux, employees of the

Smith Agency, reproduced the information from the Banner application onto the

United application. Warren was not interviewed or physically examined for this

application, but Smith asserts that he reviewed the application with Warren

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over the telephone. United requested a report on Warren from the MIB Group,

a non-profit organization of life insurance companies that collects information

on behalf of its members. The MIB report included a code indicating that

Warren suffered from chronic obstructive pulmonary disease (“COPD”) as

reported in 2001. United also requested the medical records of Dr. Crackower,

Warren’s family physician, for the period between June and October 2005. After

this investigation, the Smith Agency sent Warren and Foster the signature

pages, but not the medical history section, of the United application, and Warren

and Foster signed those pages.

Two weeks after she signed the application, Warren sought treatment

from a new physician, Dr. Malek, for shortness of breath and wheezing on

exertion. After ordering tests, Dr. Malek prescribed several drugs, an inhaler,

oxygen, and a vaccine. Warren then saw Dr. Malek’s partner, Dr. Fei, who

prescribed further treatment for the same condition. Meanwhile, at Smith’s

suggestion, Warren agreed to seek a $2 million rather than a $1 million policy. 

Some time after United had approved Warren for a $2 million policy, Dr. Malek

referred her to a third new doctor, Dr. Mounir, who concluded that Warren was

at a high risk for cardiovascular disease.

The day after her appointment with Dr. Mounir, Warren met Smith for

lunch to accept delivery of the United policy. Warren gave Smith a check for the

first premium and signed the delivery receipt, which states that it constitutes

an addendum to the policy. Foster never signed the addendum, although there

was a space for the signature of the trustee. The addendum states that Warren

had “no change in health” and had “not consulted a health care provider or been

hospitalized” since the date of application. The addendum also contains the

following statement: 

I/We understand that United of Omaha Life Insurance Company is

relying upon the information set forth in this Addendum and has

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made execution and delivery of this Addendum a condition of

delivery of this Policy. Incorrect or misleading information provided

herein may void this Policy from its effective date.

Warren died from lung cancer on June 1, 2007. When processing the

Trust’s claim on the policy, United opened an investigation and learned of

Warren’s visits to Drs. Malek, Fei, and Mounir. Based on this information,

United rescinded the policy and refunded the premiums paid.

The following June, Plaintiffs filed suit against United seeking full

payment of the $2 million life insurance policy as well as penalties based on the

allegation that United denied the claim without just cause. After a trial on the

briefs, the district court concluded that Plaintiffs were entitled to recover the

insurance proceeds but not statutory penalties. United filed a notice of appeal. 

Shortly thereafter, Plaintiffs cross-appealed the portion of the judgment

dismissing their claim for statutory penalties.

II. STANDARD OF REVIEW

When a judgment from a bench trial is appealed, we review questions of

law de novo. The findings of fact from a bench trial are reviewed for clear error, 1

regardless whether they are based on oral testimony or documentary evidence.2

Nevertheless:

When, as is the case here, the evidence relied upon by the district

court in making its findings consists solely of documents in the

record, the burden of establishing clear error is not so great as

where the court engaged in the judging of witness credibility or in

some other way was in a superior vantage point for finding facts.3

French v. Allstate Indem. Co., 637 F.3d 571, 577 (5th Cir. 2011).

1

FED. R. CIV. P. 52(a)(6); Hall v. Nat’l Gypsum Co., 105 F.3d 225, 228 (5th Cir. 1997).

2

Hall, 105 F.3d at 228; see also Volkswagen of Am., Inc. v. Jahre, 472 F.2d 557, 558-59 3

(5th Cir. 1973).

4

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This is because, as we have noted, “we view precisely the same evidence as did

the trial judge, from the same vantage point, neither tribunal being aided by

those advantages in assessing witness credibility that flow from observing

demeanor, reactions, and manner of testifying.”4

III. ANALYSIS

A. Insurance Proceeds

The district court held that United waived its right to rescind Warren’s life

insurance policy for misrepresentations in her original application by failing to

conduct an adequate investigation in light of that which it knew about Warren’s

health. The district court also concluded that those misrepresentations cannot

be charged to Warren in any event because the application was completed by

Smith. These conclusions are not presently at issue, as United conceded at oral

argument that it could not rescind the policy based on misrepresentations in

Warren’s original application.

Rather, United contends that the addendum to the insurance policy

contains misrepresentations that entitle it to rescind the policy. To deny

coverage for misrepresentations in a life insurance application, United must

establish that (1) Warren’s statements were false, (2) her misrepresentations

were made with an actual intent to deceive, and (3) her false statements

materially affected its acceptance of risk. In determining whether an applicant 5

intended to deceive the insurer, a court must examine whether “attending

Cooper v. Dep’t of Navy of U.S., 594 F.2d 484, 486 (5th Cir. 1979).

4

La. Rev. Stat. § 22:860; Johnson v. Occidental Life Ins. Co. of Ca., 368 So. 2d 1032, 5

1036 (La. 1979) (holding that each of these elements must be met in order to rescind policy,

notwithstanding the apparently disjunctive language of the statute); Swain ex rel. Estate of

Swain v. Life Ins. Co. of La., 537 So. 2d 1297, 1299 (La. Ct. App. 1989) (same).

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circumstances” indicate that the insured had knowledge of the falsity and

materiality of the misrepresentations.6

The district court found that, even if the statements in the addendum to

the effect that Warren had “no change in health” and had “not consulted a health

care provider or been hospitalized” since signing the original application were

inaccurate and material, United failed to establish that Warren made these

statements with intent to deceive. Whether an insured intended to deceive an

insurer is a factual finding that we review for clear error. The district court 7

based its conclusion that Warren did not intend to deceive United on the

following discrete facts. First, Warren had suffered from the same ailments for

at least five years, and Drs. Mounir and Malek testified that Warren underwent

no change in health between the submission of the application and the delivery

of the policy. Second, the court found Smith to be not entirely credible because

of multiple inaccuracies and equivocations in his deposition testimony. This,

reasoned the district court, gave it cause to question whether Smith thoroughly

reviewed the addendum with Warren during the delivery, which took place over

lunch in a public restaurant. Third, Warren previously had in place an

incontestable life insurance policy with Northwestern Mutual, and she switched

policies only at Smith’s suggestion. Fourth, when asked specific questions about

her medical history in a telephone interview, Warren answered truthfully. The

district court did not commit clear error in finding that, for these reasons, United

failed to show that Warren intended to deceive it when she signed the

addendum.8

Johnson, 368 So. 2d at 1036 (quoting Watson v. Life Ins. Co. of La., 335 So. 2d 518, 521 6

(La. Ct. App. 1976)) .

Wohlman v. Paul Revere Life Ins. Co., 980 F.2d 283, 285 (5th Cir. 1992).

7

See Swain, 537 So. 2d at 1300 (insufficient evidence that insured had intent to deceive 8

because, among other reasons, “he was not asked to nor did he read the application before

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United also asserts that the addendum made Warren’s truthful disclosure

of her medical history a condition precedent to coverage under the policy. Under

Louisiana law, a suspensive condition, or condition precedent, is “a fact upon

which the rights and duties of the parties depend.” Louisiana courts “do not 9

construe stipulations in a contract as suspensive conditions unless the express

contract language compels such construction.”10

Here, the addendum states that “execution and delivery ofthis Addendum”

is “a condition of delivery of this Policy.” The parties do not dispute that Warren

executed the addendum and that the addendum was delivered to United. The 11

addendum further states: “Incorrect or misleading information provided herein

may void this Policy from its effective date.” (emphasis added). This permissive

language does not expressly compel the construction that complete disclosure is

a condition precedent to coverage. Further, the circumstances under which a

misrepresentation enables an insurer to rescind a policy are set out in Louisiana

law, as discussed supra. Because the district court did not commit clear error 12

in finding that Warren had no intent to deceive United when she signed the

addendum, Plaintiffs are entitled to recover under the policy.13

signing it”); see also State Farm Mut. Auto. Ins. Co. v. Bridges, 36 So. 3d 1142, 1148 (La. Ct.

App. 2010) (insured did not intend to deceive insurer “when he was unaware of what was in

the form”).

LA. CIV. CODE. art. 1767 cmt. (f).

9

Tilley v. Lowery, 511 So. 2d 1245, 1247 (La. Ct. App. 1987).

10

 We need not address Plaintiffs’ argument that the addendum did not go into effect 11

because Angela Lee Warren Foster, the Trustee, never signed it. We also note that neither

party argues that the policy as a whole did not go into effect because Foster never signed the

addendum.

See La. Rev. Stat. § 22:860(A) (limiting the kinds of misrepresentations that “shall 12

be deemed material or defeat or void the contract or prevent it attaching”) (emphasis added).

United’s reliance upon Holmes v. Jefferson Pilot Financial Insurance Co., 907 So. 2d 13

185 (La. Ct. App. 2005), is misplaced. In Holmes, the potential insured completed an

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B. Interest

United seeks a reduction in the legal interest, totaling $60,000, that

accrued during the time this matter was under advisement by the district court. 

United appeals to “basic fundamental principles of fairness and equity,” but

there is no authority to support United’s position. Thus, we affirm the district 14

court’s award of legal interest in this matter.

C. Penalty

Plaintiffs have asserted an additional claim for penalties under former

Louisiana Revised Statute § 22:656. Under that statute: 15

All death claims arising under policies of insurance issued or

delivered within this state shall be settled by the insurer within

sixty days after the date of receipt of due proof of death, and if the

insurer fails to do so without just cause, the amount due shall bear

interest at the rate of eight percent per annum from date of receipt

of due proof of death by the insurer until paid.

Louisiana courts have held that “[a]n insurer’s refusal to pay can be found to be

not ‘without just cause’ even though its defense is not subsequently upheld in

application for a life insurance policy and signed a conditional receipt that required him to

undergo a medical examination, among other requirements, before the policy could go into

effect. Id. at 186-87. Holmes died before he could undergo the medical examination. The

court held that because Holmes had not fulfilled all of the conditions specified in the receipt

at the time of his death, the insurer had not accepted the application and there was no

coverage. Id. at 190. In the present case, by contrast, United accepted Warren’s application,

including the addendum. Whether United can nonetheless rescind the policy because of

misrepresentations in the addendum is determined by referring to Louisiana law, as discussed

supra.

See Trans-Global Alloy Ltd. v. First Nat’l Bank of Jefferson Parish, 583 So. 2d 443,

14

457-58 (La. 1991) (under the civil law, prejudgment interest is required in order to make a

plaintiff whole).

Now renumbered La. Rev. Stat. § 22:1811 by Acts 2008, No. 415 § 1, eff. Jan. 1, 2009. 15

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court” and that a penalty should not be imposed if the insurer was justified in 16

believing that it had found sufficient reasons to deny the claim.17

United’s investigation revealed substantial omissions by Warren as to the

state of her health and her visits to additional physicians. Even though its

defenses have not ultimately prevailed, United was not without just cause in

withholding payment under the policy, so we affirm the district court’s decision

not to impose penalties.

IV. CONCLUSION

The district court did not commit clear error in finding that Warren had

no intent to deceive United when she signed the addendum to the life insurance

policy. We therefore affirm the district court’s ruling that Plaintiffs are entitled

to recover from United under the policy. We also affirm the district court’s

award of legal interest. Additionally, we affirm the district court’s ruling that

Plaintiffs are not entitled to recover statutory penalties from United.

AFFIRMED.

Bertrand v. Protective Life Ins. Co., 419 So. 2d 1254, 1260 (La. Ct. App. 1982) (citing

16

Ducote v. Life Ins. Co. of La., 245 So. 2d 531 (La. Ct. App. 1971); see also Hendricks v. Conn.

Gen. Life Ins. Co., 244 So. 2d 249 (La. Ct. App. 1971)).

Bertrand, 419 So. 2d at 1259; cf. Swain, 537 So. 2d at 1304 (penalties were justified 17

when an investigation “would have revealed to the defendant thatits defenses were spurious”).

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