New York Life Insurance and Annuity Corporation v. Cannatella et al
Filing
45
ORDER and REASONS - IT IS ORDERED that the "Motion for Summary Judgment" 38 is GRANTED. The Policy proceeds currently in the Court's Registry are awarded to Cynthia Cannatella as stated within document. Signed by Judge Kurt D. Engelhardt on 6/7/2012. (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 Cynthia Dufour Cannatella’s (“Cynthia
Cannatella”) Motion for Summary Judgment (Rec. Doc. 38). This motion is opposed by
Defendant-in-Interpleader Diane Perez Cannatella (“Diane Cannatella”) (Rec. Doc. 39).
Considering all filings submitted by the parties, including Cynthia Cannatella’s Reply
Memorandum (Rec. Doc. 44), 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.
On September 29, 2011, Diane Cannatella filed a Motion for Summary Judgment
asserting her entitlement to the proceeds in the Court’s Registry. Rec. Doc. 20. The Court
denied Diane Cannatella’s motion in an Order and Reasons dated February 16, 2012. Rec. Doc.
37. The Court found that because the Injunction applied to the Policy and it was in effect at the
time of the Insured’s death, the Insured’s attempt to change the policy beneficiary was
ineffective. As such, Diane Cannatella’s Motion was denied.
II. ARGUMENTS OF THE PARTIES
Cynthia Cannatella argues that because the Insured failed to effectuate a valid change of
beneficiary, she remained the first beneficiry on the Policy at the time of insured’s death and is
entitled to received the policy proceeds deposited in the Court’s Registry.
On the other hand, Diane Cannatella argues that under Louisiana law, only the lifetime
benefits of the Policy are community property and that these benefits are to be divided at the
partition of the community, along with all other assets and liabilities. Diane Cannatella states
that death benefits from a life insurance policy are exempt from the claims of creditors under
Louisiana Revised Statute 22:912, La. Rev. Stat. Ann. § 22:912 (West 2012), and that Cynthia
Cannatella has been characterized as a creditor in the Insured’s succession proceeding.
Succession of Anthony W. Cannatella, Sr., No. 696-516 (24th Judicial District Court, Jefferson
Parish). Diane Cannatella claims that Cynthia Cannatella is entitled only to her share of the
community of acquets and gains, and that the death benefits from the Policy are not community.
Diane Cannatella further asserts that Cynthia Cannatella also violated the Injunction, and that she
should not be allowed to profit from the Injunction that she violated.
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, 94775, p. 6 (La. App. 5 Cir. 3/1/95); 652 So.2d 99, 103. A spouse may overcome this presumption
of community and prove the separate nature of property by a preponderance of the evidence.
Talbot v. Talbot, 2003-0814, p. 1-2 (La. 12/12/03); 864 So.2d 590, 593.
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).
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 argues that Cynthia Cannatella is merely a creditor of the Insured’s
estate, and that death benefits are exempt from creditors under Louisiana Revised Statute 22:912.
La. Rev. Stat. Ann. § 22:912 (West 2012).
However, the statute says that “[t]he lawful
beneficiary, assignee, or payee, including the insured’s estate, of a life insurance policy . . . shall
be entitled to the proceeds and avails of the policy against the creditors and representatives of the
insured.” Id. Cynthia Cannatella was the lawful beneficiary at the time of Insured’s death; she is
entitled to the Policy proceeds not because she is a creditor of the Insured’s estate with respect to
her share of the community, but because she was the contractually named beneficiary on the
Policy when the Insured died.
Diane Cannatella notes that a court may modify an injunction when circumstances
change, and asks that the Court stay this action while the state court resolves Cynthia
Cannatella’s community property claim.
The Court declines to stay this matter pending a state court decision on Cynthia
Cannatella’s community property claim because that claim is unrelated to this lawsuit. As the
Louisiana Fifth Circuit Court of Appeal has stated, “[i]t is well settled in Louisiana that life
insurance proceeds, if payable to a named beneficiary other than the estate of the insured, are not
considered to be a part of the estate of the insured. . . . Life insurance proceeds are not subject . .
. to community claims.” Kambur, 94-775, p. 6; 652 So.2d at 103 (citing American Health & Life
Ins. Co. V. Binford, 511 So.2d 1250, 1253 (La. App. 2 Cir. 1987)) (emphasis in original). The
Policy proceeds are not part of the insured’s estate and not subject to Cynthia Cannatella’s
community property claim. Therefore, the Insured’s succession does not involve the Policy
proceeds and there is no reason for this Court to delay decision of this matter.
Finally, Diane Cannatella states that Cynthia Cannatella should not be allowed to benefit
from the Injunction because she violated it in several respects. As the state court issued the
Injunction, it is the province of that court to determine what repercussions should result from its
violation, if such violation indeed occurred. Further, Cynthia Cannatella’s alleged violations of
the Injunction do not diminish its effect. As this Court has previously held, the Injunction
prevented the Insured from changing the beneficiary designation on the Policy, such that Cynthia
Cannatella was the first beneficiary when the Insured died. Rec. Doc. 37 at 8. Cynthia
Cannatella is thus entitled to judgment as a matter of law.
IV.
CONCLUSION
Considering the foregoing, IT IS ORDERED that the “Motion for Summary
Judgment” (Rec. Doc. 38) is GRANTED. The Policy proceeds currently in the Court’s
Registry are awarded to Cynthia Cannatella.
New Orleans, Louisiana, this 7th day of June, 2012.
_________________________________
KURT D. ENGELHARDT
United States District Judge
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