New York Life Insurance and Annuity Corporation v. Cannatella et al

Filing 37

ORDER and REASONS - IT IS ORDERED that the "Motion for Summary Judgment" 20 is DENIED as stated within document. Signed by Judge Kurt D. Engelhardt on 2/16/2012. (cab)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

NEW YORK LIFE INSURANCE
AND ANNUITY CORPORATION

CIVIL ACTION

VERSUS

NO. 11-1431

CYNTHIA DUFOUR CANNATELLA
AND DIANE PEREZ CANNATELLA

SECTION “N” (5)

ORDER AND REASONS

Before the Court is Defendant-in-Interpleader Diane Perez Cannatella’s (“Diane
Cannatella”) Motion for Summary Judgment (Rec. Doc. 20). This motion is opposed by
Defendant-in-Interpleader Cynthia Dufour Cannatella (“Cynthia Cannatella”) (Rec. Doc. 34).
Considering all filings submitted by the parties, the Court rules as set forth herein.

I. BACKGROUND
This matter involves a dispute between Cynthia Cannatella and Diane Cannatella over
entitlement to death benefits payable under a New York Life universal life insurance policy,
policy No. 62 791 089, insuring the life of Anthony W. Cannatella, Sr.
On or about May 24, 2000, New York Life received an application for universal life
insurance, naming Anthony W. Cannatella, Sr. as policy owner and also insured, electing
$250,000.00 in coverage, and naming Mr. Cannatella’s then-wife Cynthia Cannatella as first
beneficiary, and his son Andrew Cannatella as second beneficiary. Effective June 14, 2000, New

York Life issued a universal life insurance policy, policy no. 62 791 089 (the “Policy”), naming
Anthony W. Cannatella (“Insured”) as owner and insured. The Policy had a death benefit of
$250,000.00 and designated Cynthia Cannatella as first beneficiary and Andrew Cannatella as
second beneficiary, as requested. The Policy provides that New York Life will pay the Policy’s
death benefits to the named beneficiaries promptly when it has received proof that the insured
has died, provided the premiums have been paid as called for in the premiums section of the
Policy.
On or about May 12, 2010, Cynthia Cannatella filed a petition for divorce against the
Insured in the 24th Judicial District Court, Parish of Jefferson, State of Louisiana (“Divorce
Proceeding”). On or about September 27, 2010, New York Life received correspondence written
on behalf of Cynthia Cannatella forwarding a May 12, 2010 temporary restraining order and a
June 15, 2010 interim judgment from the Divorce Proceeding restraining and enjoining the
Insured from changing any beneficiary designations for any community-owned life insurance
policies (the “Injunction”). On or about November 10, 2010, a judgment of divorce was entered
between Cynthia Cannatella and the Insured in the Divorce Proceeding. Cynthia Cannatella
subsequently appealed the judgment of divorce on grounds that the judgment was improperly
granted under Louisiana Civil Code Article 103.1.
On or about November 29, 2010, New York Life received from the Insured a “Change of
Benficiary Request” that designated Diane Cannatella as first beneficiary, Anthony W.
Cannatella, Jr. and Andrew J. Cannatella as second beneficiaries, and the children of Anthony W.
Cannatella, Jr. and Andrew J. Cannatella as third beneficiaries. In response, on December 17,
2010, New York Life sent communications to the Insured, acknowledging receipt of his “Change
of Beneficiary Request,” but advising that it required additional information to process the

request. New York Life advised that it needed court documentation demonstrating that the
Injunction had been lifted, along with a copy of a final divorce decree, establishing that there
were no longer any restrictions on changing the Policy’s beneficiaries. New York Life further
communicated that once the foregoing documentation was received, it could process the “Change
in Beneficiary Request.” New York Life did not receive the requested documentation from the
Insured demonstrating that the Injunction had been vacated and/or that the court-ordered
restrictions regarding changing Policy beneficiaries had been removed.
The Insured died on or about December 31, 2010. On or about February 9, 2011, New
York Life received from Cynthia Cannatella a claim for death benefits under the Policy. On or
about February 16, 2011, New York Life received from Diane Cannatella a claim for death
benefits under the Policy. Thereafter, New York Life received conflicting information regarding
to whom the Policy’s death benefits should be paid. On or about March 4, 2011, New York Life
received communications on behalf of Cynthia Cannatella demanding payment under the Policy
and enclosing a February 25, 2011 order from the Divorce Proceeding recalling the Injunction
“solely as regards the release of life insurance proceeds being held by New York Life Insurance
Company [sic] on behalf of Mrs. Cynthia Dufour Cannatella.” Exhibit G to Rec. Doc. 13. On or
about March 7 and 9, 2011, New York Life received communications on behalf of Diane
Cannatella representing that the February 25, 2011 order had been improperly or fraudulently
obtained by Cynthia Cannatella and demanding that the Policy’s death benefits be paid to Diane
Cannatella.
New York Life filed its Complaint for Interpleader, Declaratory Judgment and Injunctive
Relief in this Court on June 17, 2011. On June 21, 2011, New York Life was granted leave to
deposit the Policy’s death benefit of $250,000.00 plus interest from the date of death into the

Registry of the Court. On July 5, 2011, New York Life deposited into the Court’s Registry $254,
458.90, representing the total death benefit payable under the Policy plus interest from the date of
the Insured’s death.

II. ARGUMENTS OF THE PARTIES
Diane Cannatella argues that she is entitled to the Policy proceeds because the proceeds
of life insurance policies are not community property. She argues that the Injunction never
prevented New York Life from paying the Policy proceeds to her as the first beneficiary, and that
even if it had, the Injunction was lifted on February 25, 2011 at the latest. Diane Cannatella
asserts that the Injunction prohibiting the Insured from changing any beneficiary designations on
any community-owned accounts did not prevent him from exercising his right as the owner of the
Policy to change the beneficiary because the proceeds of a life insurance policy are not
community property. Diane Cannatella also claims that the Injunction was improperly granted to
begin with.
Cynthia Cannatella asserts that while the proceeds of a life insurance policy are not
community, the policy itself is. The Policy was thus a community asset at the time of the
Insured’s death, as the community had not yet been partitioned. As a community-owned life
insurance policy, the Policy was covered by the specific terms of the Injunction.

III. DISCUSSION
A. Legal Standard
Pursuant to Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment “shall
be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on

file, together with the affidavits, if any, show that there is no genuine issue as to any material fact
and that the moving party is entitled to a judgment as a matter of law.” Fed. R. Civ. P. 56(c). The
materiality of facts is determined by the substantive law's identification of which facts are critical
and which facts are irrelevant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct.
2505, 2510, 91 L.Ed.2d 202 (1986). A fact is material if it “might affect the outcome of the suit
under the governing law.” Id.
If the dispositive issue is one on which the nonmoving party will bear the burden of proof
at trial, the moving party may satisfy its summary judgment burden by merely pointing out that
the evidence in the record contains insufficient proof concerning an essential element of the
nonmoving party's claim. See Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2554,
91 L.Ed.2d 265 (1986); see also Lavespere v. Liberty Mut. Ins. Co., 910 F.2d 167, 178 (5th Cir.
1990). Once the moving party carries its burden pursuant to Rule 56(c), the nonmoving party
must “go beyond the pleadings and by [his] own affidavits, or by the ‘depositions, answers to
interrogatories, and admissions on file,’ designate ‘specific facts showing that there is a genuine
issue for trial.’” Celotex, 477 U.S. at 324, 106 S.Ct. 2553; see also Matsushita Elec. Indus. Co.,
Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986);
Auguster v. Vermillion Parish School Bd., 249 F.3d 400, 402 (5th Cir. 2001).
When considering a motion for summary judgment, the Court views the evidence in the
light most favorable to the nonmoving party, Gillis v. Louisiana, 294 F.3d 755, 758 (5th Cir.
2002), and draws all reasonable inferences in favor of that party. Hunt v. Rapides Healthcare
System, L.L.C., 277 F.3d 757, 764 (2001). Factual controversies are to be resolved in favor of the
nonmoving party, “but only when there is an actual controversy, that is, when both parties have
submitted evidence of contradictory facts.” Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th

Cir. 1994) (citations omitted). The Court will not, “in the absence of any proof, assume that the
nonmoving party could or would prove the necessary facts.” See id. (emphasis omitted) (citing
Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 888, 110 S.Ct. 3177, 3188, 111 L.Ed.2d 695 (1990)).
Although the Court is to consider the full record in ruling on a motion for summary
judgment, Rule 56 does not obligate it to search for evidence to support a party's opposition to
summary judgment. Malacara v. Garber, 353 F.3d 393, 405 (5th Cir. 2003) (“When evidence
exists in the summary judgment record but the nonmovant fails even to refer to it in the response
to the motion for summary judgment, that evidence is not properly before the district court.”).
Thus, the nonmoving party should “identify specific evidence in the record, and articulate”
precisely how that evidence supports his claims. Forsyth v. Barr, 19 F.3d 1527, 1537 (5th Cir.),
cert. denied, 513 U.S. 871, 115 S.Ct. 195, 130 L.Ed.2d 127 (1994).
The nonmovant's burden of demonstrating a genuine issue is not satisfied merely by
creating “some metaphysical doubt as to the material facts,” “by conclusory allegations,” by
“unsubstantiated assertions,” or “by only a scintilla of evidence.” Little, 37 F.3d at 1075. Rather a
factual dispute precludes a grant of summary judgment only if the evidence is sufficient to permit
a reasonable trier of fact to find for the nonmoving party. Smith v. Amedisys, 298 F.3d 434, 440
(5th Cir. 2002).

B. Analysis
Under Louisiana law, “community property comprises: property acquired during the
existence of the legal regime through the effort, skill, or industry of either spouse.” La. Civ.
Code Ann. Art. 2338. Property in “possession of a spouse during the existence of a regime of
community of acquets and gains [is] presumed to be community.” La. Civ. Code Ann. art. 2340.

While life insurance proceeds are payable according to the policy terms and not subject to
community claims, the ownership of a life insurance policy itself is presumed to be community
property when obtained during the existence of the legal regime. See Kambur v. Kambur, 652
So.2d 99, 103 (La. Ct. App. 5 Cir. 1995). A spouse may overcome this presumption of
community and prove the separate nature of property by a preponderance of the evidence. Talbot
v. Talbot, 864 So.2d 590, 593 (La. 2003).
Here, Diane Cannatella has presented no evidence to support the argument that the Policy
was not community property. As such, she has not overcome the presumption of community,
and the Policy shall be classified as community property.
As a community-owned life insurance policy, the Policy was covered by the specific
terms of the Injunction which prevented the Insured from “changing any beneficiary designations
against any community owned policies.” Exhibit B to Rec. Doc. 13, p. 10; see Id. at 21 (making
the temporary restraining order a permanent injunction). The Injunction specifically stated that it
“appl[ied] to life insurance policies and beneficiaries thereto.” Id. at 21. The Injunction was still
in effect on November 29, 2010 when the Insured filed his “Change of Beneficiary Request”
form with New York Life. See Exhibit F to Rec. Doc. 13, p. 12 (section of the Divorce Judgment
continuing the “Objection to Hearing Officer’s Recommendations and Interim Order and/or
Order to Set Default Hearing before the District Judge” to February 10, 2011).
Diane Cannatella argues in her motion that Cynthia Cannatella “did not meet the burden
of showing the three requirements were met for issuing a preliminary injunction prohibiting
insured from changing the beneficiary to Diane Cannatella.” Rec. Doc. 20-1, p. 9. However, this
Court has found no authority (and Diane Cannatella cites none) allowing it to review the grant of
the Injunction in the state court Divorce Proceeding. The Injunction was part of a valid state

court interim judgment and must be respected by the parties and by this Court. As the Injunction
was in effect when the Insured submitted the change of beneficiary request form, this change
violated the Injunction and was thus invalid. See Exhibit C to Rec. Doc. 13. Cynthia Cannatella
therefore remained the first named beneficiary on the Policy at the time of the insured’s death;
Diane Cannatella’s motion is denied.

IV.

CONCLUSION
Considering the foregoing, IT IS ORDERED that the “Motion for Summary

Judgment” (Rec. Doc. 20) is DENIED.
New Orleans, Louisiana, this 16th day of February, 2012.

_________________________________
KURT D. ENGELHARDT
United States District Judge