Court Opinion

ID: 6325889
Source: CourtListenerOpinion
Date Created: 2022-03-23 00:00:22.597411+00
Date Added: 2024-06-11T09:22:06.856794
License: Public Domain

Case: 21-11037     Document: 00516249464         Page: 1     Date Filed: 03/22/2022

              United States Court of Appeals
                   for the Fifth Circuit                              United States Court of Appeals
                                                                               Fifth Circuit

                                                                             FILED
                                                                       March 22, 2022
                                  No. 21-11037
                                                                        Lyle W. Cayce
                                Summary Calendar                             Clerk

   New York Life Insurance and Annuity Corporation,

                                                             Plaintiff—Appellee,

                                       versus

   Bob Shelton, as Trustee of Barbara Jean Brown Living
   Trust DTD 5/29/2018,

                                                         Defendant—Appellant.

                  Appeal from the United States District Court
                      for the Northern District of Texas
                            USDC No. 4:21-CV-490

   Before Davis, Jones, and Elrod, Circuit Judges.
   Per Curiam:*
          In this concursive proceeding filed by New York Life Insurance and
   Annuity Corporation (“NYLIAC”), the court overruled the defendant, Bob
   Shelton’s objection to the concursive proceeding, and denied the

          *
            Pursuant to 5th Circuit Rule 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   opinion should not be published and is not precedent except under the limited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 Circuit Rule 47.5.4.
Case: 21-11037      Document: 00516249464           Page: 2   Date Filed: 03/22/2022

                                     No. 21-11037

   defendant’s motion to file a counterclaim for penalties and attorneys’ fees
   and awarded attorneys’ fees of $5,000 to plaintiff against Shelton. We affirm.
                                             I.
          Plaintiff, NYLIAC, filed this concursive proceeding to determine the
   party to whom it owed the proceeds of two annuity policies on the life of
   Barbara Jane Brown. The policies named two trustees as beneficiaries: the
   first named “Barbara Brown Family Trust” and was dated March 10, 2010;
   the second trust was dated September 30, 2010 and was styled, “The Barbara
   Jane Brown Living Trust.”
          The insured, Barbara Jane Brown, died in 2018. Defendant, Bob
   Shelton, as trustee of a third trust, “The Barbara Jean Living Trust” dated
   May 29, 2018 (“the 2018 trust”) asserted a claim to the death benefits. He
   represented that the 2018 trust under which he claimed was the only trust in
   existence and that it superseded all other trusts.
          NYLIAC made repeated efforts to obtain from Shelton a copy of the
   May 29, 2018 trust to verify that it did indeed supersede all other trusts and
   he was entitled to the proceeds of the NYLIAC policies. NYLIAC made
   numerous requests to furnish the 2018 trust documents. Shelton refused to
   respond to these requests and declined to provide the support demonstrating
   that the trust under which he claimed was the proper beneficiary of the
   policies. NYLIAC also offered to pay the proceeds of the 2018 trust to
   Shelton if he would sign a release and indemnity agreement to protect
   NYLIAC against any future claims that might be made for the proceeds.
   None of these efforts were fruitful, and after Shelton threatened suit,
   NYLIAC filed this concursive proceeding to determine the proper party
   entitled to the proceeds of the policy.
          After the proceeding was filed, Sharon and Ken Britton (“The
   Brittons”) appeared in the action alleging they were co-trustees of one of the

                                             2
Case: 21-11037      Document: 00516249464           Page: 3   Date Filed: 03/22/2022

                                     No. 21-11037

   trusts created by the insured. However, in May, 2021, the Brittons agreed
   for the proceeds to be distributed to the 2018 trust.
          In July, 2021, Shelton moved to file a counter-claim against NYLIAC
   for penalties under §542.058 of the Texas Insurance Code for delaying
   payment of the proceeds of the policies to him. The district court denied
   leave to file the counterclaim on grounds that it would be futile given the
   failure of Shelton to provide supporting documentation to NYLIAC
   demonstrating he was indeed the beneficiary of a trust that succeeded to the
   rights of all trusts named of record as beneficiaries of the policy proceeds.
          Relatedly, the district court overruled Shelton’s objection to the
   concursive proceeding based on the fact that he failed to provide the
   documentation or cooperate with NYLIAC to establish that the 2018 living
   trust was entitled to the proceeds.
          NYLIAC also moved for attorneys’ fees, and the district court, in its
   discretion, granted the request and awarded $5,000 in fees for the
   defendant’s failure to provide documentation necessary for NYLIAC to
   determine to whom the proceeds were owed.
          The district court then granted a joint motion of the parties to pay the
   proceeds (less the $5,000 attorneys fee assessed against defendant) to the
   2018 trust.
                                         II.
          Based on our review of the record, we agree with the district court’s
   conclusion that NYLIAC correctly utilized the concursive proceeding to
   have the court determine the party entitled to the proceeds of the NYLIAC
   policy. This proceeding was made necessary by the refusal of defendant to
   furnish documentation to NYLIAC demonstrating that the 2018 trust was
   entitled to the proceeds. For essentially the same reason, we also agree that

                                          3
Case: 21-11037      Document: 00516249464            Page: 4   Date Filed: 03/22/2022

                                     No. 21-11037

   the district court did not abuse its discretion in assessing attorneys’ fees
   against the defendant and denying him permission to file his counterclaim for
   penalties for failure to timely pay over the proceeds. We otherwise find no
   reversible error in the district court’s order.
          For these reasons and those stated by the district court in its careful
   order of September 14, 2021, we AFFIRM the district court’s judgment.

                                           4