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Click here for the full text of this decision FACTS:This appeal involves a $500,000 life insurance policy issued by appellant State Farm Life Insurance Co. (State Farm) on the life of Jose Eduardo Martinez (Ed), who owned the policy. After Ed’s death, his widow, appellee Toni Wasson Martinez (Toni), and his daughter, appellant Lisa Paul Martinez (Lisa), made claims for the life insurance proceeds. Upon Ed’s divorce from his first wife, Linda K. Martinez (Linda), they entered into an Agreement Incident to Divorce (AID). The AID provides that Ed would make monthly contractual alimony payments to Linda until Aug. 15, 2004, unless Linda died or remarried before that date. The AID also provides that, as long as alimony is payable, Ed will name Linda as irrevocable beneficiary to a portion of the proceeds on the State Farm policy in the amount of $175,000. Ed then changed the successor beneficiary to Lisa on May 16, 1996, by signing another State Farm Change of Beneficiary form, which continued to name as primary beneficiary “Linda Martinez, 41, ex-wife, in accordance with divorce decree dated 09-15-94.” This change also was recorded by State Farm. Also in May of 1996, with Linda’s written consent, Ed changed the beneficiary of the $175,000 State Farm policy to his estate. On June 30, 1996, Ed and Toni married. On Aug. 1, 2002, Ed signed a State Farm Change of Beneficiary form that named Toni as primary beneficiary and did not name a successor beneficiary. State Farm refused to process the request because it was in conflict with the divorce decree. On Aug. 25, 2002, Ed died. At the time of his death, Ed was obligated to pay contractual alimony to Linda for 24 more months ($5,000 per month), as long as she was living and had not remarried, a maximum of $120,000. The underlying dispute over the life insurance proceeds of $500,000 began with Lisa’s filing an application for the benefits on Sept. 2, 2002, and Linda’s filing on Sept. 5, 2002. Toni filed her application on Sept. 10, 2002, and State Farm acknowledged its receipt that day. Toni filed suit against State Farm, and two days later State Farm filed a separate interpleader suit against Toni, Lisa and Linda. The two suits were consolidated, and Toni and Lisa filed motions for partial summary judgment, each contending that she was the proper beneficiary. The trial court granted Toni’s motion and denied Lisa’s. Toni’s claim against State Farm for statutory penalties, attorney’s fees and interest proceeded to a bench trial, and the trial court entered a final judgment in Toni’s favor based on findings of fact and conclusions of law. HOLDING:The court reforms the trial court’s judgment to reflect the correct statutory penalty amount of $67,500, and affirms the judgment as reformed. Lisa and State Farm appeal the final judgment. Lisa says the trial court erred in its summary-judgment ruling; State Farm says the award to Toni of penalties, attorney’s fees and interest was error. Lisa complains that the trial court erred in granting the partial summary judgment and entering final judgment that Toni is the beneficiary. Lisa asserts that she is the beneficiary as a matter of law. Lisa argues that because Ed’s purported change of beneficiary to Toni did not comply with the AID and because State Farm rejected Ed’s request, she is the last correctly named beneficiary. The court holds that Toni’s assertion that State Farm improperly imposed its consent or approval to Ed’s request is correct. State Farm’s response was not “your request is not in a form acceptable to us;” it was “we think that you don’t have the right to do this under your divorce decree.” State Farm’s right to question the validity of Ed’s change in beneficiary is determined only by the policy’s provisions, and its duty was to comply with a request that complied with the policy. The court finds that the State Farm policy plainly provided that Ed could change the policy beneficiary and that the change was effective on the date that Ed signed the request. The court reasons that upon Ed’s death, his estate was bound to continue the alimony payments. If the estate did not or could not pay the monthly alimony, only then were the policy benefits payable to Linda to satisfy the monthly contractual alimony. The court therefore concludes that Ed’s designation of Toni as the beneficiary was effective on the date that Ed signed the request, subject to Linda’s interest in the policy proceeds to the extent that they serve as security for the monthly contractual alimony payments owed by Ed’s estate. The court states that any other result would defeat the policy’s language, Ed’s intent and the AID’s purpose. The court next addresses State Farm’s complaints about the trial court’s award of attorney’s fees, statutory penalties and their calculation, and prejudgment interest. State Farm argues that the trial court erred by assessing penalties and attorney’s fees, asserting that, as a matter of law, Toni was not a claimant under Texas Insurance Code Article 21.55, and that its filing of the interpleader action invoked a common-law exception to Article 21.55 liability for failing to pay Toni’s claim within the time allotted. The court disagrees and holds that Ed’s designation of Toni as the beneficiary was effective on the date that Ed signed the request, and Toni is a claimant for purposes of Article 21.55. State Farm next asserts that its filing of the interpleader action invoked a common-law exception to Article 21.55 liability. The court notes that an unreasonable delay in interpleading funds can thus result in the imposition of Article 21.55′s penalty. To adequately address State Farm’s first issue, the court therefore considers whether State Farm’s delay in filing the interpleader was unreasonable. The court holds that State Farm’s initial error in wrongfully rejecting Ed’s beneficiary change created the uncertainty, allowed the competing claims, and led to the interpleader, and finds that there is evidence that supports the trial court’s findings that State Farm’s actions were unreasonable and that it should have had no doubt that Toni was the beneficiary. Moreover, because State Farm created its own predicament, the court holds that the trial court, in the exercise of its equity jurisdiction, would not have abused its discretion in finding that State Farm was not an innocent stakeholder and was not entitled to the common-law interpleader exception to Article 21.55 liability. OPINION:Vance, J.; Vance, and Reyna, JJ. DISSENT:Gray, C.J. “On the facts of this case, the determination that the delay in filing the interpleader was unreasonable is against the great weight and preponderance of the evidence. Indeed, I find no evidence to suggest, or that would support the inference, that State Farm unreasonably delayed the filing of the interpleader.” “If I had to reach the issue, I would also hold that the penalty was improperly calculated. State Farm paid the policy proceeds and interest into the registry of the court shortly after the 60-day deadline and explained the reason for the delay.” “For the foregoing reasons, I respectfully dissent.”

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