Petition for Writ of Certiorari — Kreppein v. Crane (No. 08-1049)
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Supreme Court, U.S.
\4 FILED
\ ~D oeiosorce 12 am
IN THE OFFICE OF THE CLERK
Supreme Court of the Wnited States
ALFRED J. KREPPEIN,JR., PETITIONER
Vv.
RYAN BRICE CRANE; LAUREL CRANE LUQUETTE AND
FIRST COLONY LIFE INSURANCE COMPANY
PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
PETITION FOR WRIT OF CERTIORARI
FRED E. SALLEY DENNIS P. DERRICK
Salley & Associates Counsel of Record
773878 Highway 1081 7 Winthrop Street
P.O. Box 3549 Essex, MA 01929-1208
Covington, LA 70434 (978) 768-6610
(985)867-9761
Attorneys for Petitioner
CURRY & TAYLOR @ (202) 393-4141
a
QUESTION PRESENTED
1. The court of appeals held that under Louisiana law a
temporary restraining order entered at the beginning ofa
divorce which prohibits both spouses from disposing of
marital property expires automatically when the
scheduled preliminary injunction hearing is not held,
regardless of the reasons why it was not held, thereby
permitting a spouse who engineers a postponement of the
show-cause hearing to dispose of marital property in the
interim without any order by the Louisiana courts
allowing her to do so, depriving petitioner of marital
property without due process of law. Does this result
overturn settled Louisiana divorce law, fail to give full
faith and credit to a valid Louisiana judgment and deny
petitioner fundamental fairness?
2. Do the federal courts undermine summary
judgment procedure by deciding for themselves----
instead of letting a judge or jury determine after trial----
the crucial fact question of whether the foot-dragging
conduct by petitioner’s wife was undertaken to engineer a
postponement of the preliminary injunction hearing so
that she could avoid the time-limited TRO prohibiting her
from disposing of marital property?
i
TABLE OF CONTENTS
QUESTION PRESENTED
"EBLE OF Frat anerenceccsecnscciccccccscovececes il
OPINIONS BELOW
JURISDICTION
REASONS FOR GRANTING THE PETITION.............0.se0seseeeeresees 14
CONCLUGIOON ......:ss:cesuseeeeee Deed indidsapcostsernccspovesssees 27
APPENDIX
Circuit Court Opinion
Reasons and Order of the District Court................ccceeees a
Judgment of the District Court
Reasons and Order of the District Court
Order Denying Rehearing
Petition for Divorce
ut
TABLE OF AUTHORITIES
CASES
ANDERSON V. LIBERTY LOBBY, 477 U.S. 242, 249-
255(1986)
BLAKELY V. WASHINGTON, 542 U.S. 296, 305-
306(2004)
BLONDER-TONGUE LABORATORIES, INC. V.
UNIVERSITY OF ILL. FOUND., 402 U.S. 318,
334(1971)
BUDD CONSTRUCTION Co., INC. V. CITY OF
ALEXANDRIA, 401 SO.2D 1070, 1073-1074(LA. APP.
COMMERCIALRES S.A. V. ROGERS, 357 U.S. 197,
209(1958)
DAUPHINE V. CARENCRO HIGH SCHOOL, 843 S0.2D
1096, 1102-1103( LA 2003)
FERENS V. JOHN DEERE Co., 494 U.S. 516, 524 (1990)
GRANNY GOOSE F JODS, INC. V. TEAMSTERS, 415 U.S.
423, 444-445(1974)
JOHNSON V. MUELBURGER, 340 U:S. 581, 587(1951)
KLAPPROTT V. UNITED STATES, 335 U.S. 601, 611
(1949)
KREMER V. CHEMICAL CONSTR. CorRP.. 456 U.S. 461,
482(1982)
LEWIS V. ADAMS, 679 S0.2D 498. 496(LA. APP. 1996)
MCNABB V. UNITED STATES, 318 U.S. 382, 341(1943)
MIGRA V. WARREN CITY SCH. DIST., 465 U.S. 75,
81(1984)
PARKLANE HOSIERY CoO., INC. V. SHORE, 439 U.S.
329, 331 (1979)
PEASE V. RATHBONE-JONES ENG. Co., 243 U.S. 273
SEU ee PUIAIIIE O Tics sahtsticaniensdansacetcarnndandasshianesautecs ek dinoumaseoeds coautamansatanees 24
POWELL V. COX, 83 SO.2D 908, 910(LA 1955)
REEVES V. SANDERSON PLUMBING PRODUCTS, INC.,
530 U.S. 138, 150-151(2000)
SALVE REGINA COLLEGE V. RUSSELL, 499 U.S. 225,
226(1991)
SEMTEK INT'L, INC. Vv. LOCKHEED MARTIN CORP.,
531 U.S. 497, 500-506(2001)
SUTTON V. LEIB, 342 U.S. 402, 406-410 (1952)
VANDERBILT V. VANDERBILT, 354 U.S. 416, 418-
419(1957)
STATUTES
28 U.S.C. § 1254(1)
28 U.S.C. § 1332(a)(1)
28 U.S.C. § 1738
28 U.S.C. § 2101(c)
RULES
Fed. R. Civ. P. 56
OTHER AUTHORITIES
Thomas, Suja A., Why Summary Judgment Is
Unconstitutional, 93 Va. L. Rev. 139, 143-144
Title VII and ADEA Cases, 34 B.C. L. Rev. 203, 229(1993). 25
]
OPINIONS BELOW
The unpublished opinion of the United States
Court of Appeals for the Fifth Circuit in First Colony
Life Insurance Company v. Alfred J. Kreppein, Jr. v.
Ryan Brice Crane and Laurel Crane Luquette, C.A.
No. 08-30409, decided October 16, 2008, and reported at
2008 U.S. App. LEXIS 21809, affirming the district
court’s order granting the respondents’ motion for
summary Judgment and denying the petitioner’s motion
for summary judgment, is set forth in the Appendix
hereto(App. 1-14).
The unpublished decision of the federal district
court for the Eastern District of Louisiana, in First
Colony Life Insurance Company v. Alfred J. Kreppein,
Jr.; Ryan Brice Crane and Laurel Crane Luquette,
C.A. No. 05-6849, filed August 24, 2007, granting the
respondents’ motion for summary judgment and
denying the petitioner’s motion for summary judgment,
is set forth in the Appendix hereto(App. 21-32).
The unpublished decision of the federal district
court for the Eastern District of Louisiana, in First
Colony Life Insurance Company v. Alfred J. Kreppein,
Jr.; Ryan Brice Crane and Laurel Crane Luquette,
C.A. No. 05-6849, filed March 20, 2008, dismissing First
Colony Life Insurance Company from this case, is set
forth in the Appendix hereto{App. 15-18).
The unpublished judgment of the federal! district
court for the Eastern District of Louisiana, in First
Colony Life Insurance Company v. Alfred J. Kreppein,
Jr.; Ryan Brice Crane and Laurel Crane Luquette,
C.A. No. 05-6849, dated and filed March 20, 2008, and
2
reported at 2008 U.S. Dist. Lexis 22296(E.D. La.
3/20/2008), declaring the respondents as the sole
beneficiaries to the death benefits of the life insurance
policy issued by First Colony Life Insurance Company
to Stephanie Boyter Kreppein, is set forth in the
Appendix hereto(App. 19-20).
The unpublished Petition for Divorce filed by the
petitioner against Stephanie Boyter Kreppein in the
Civil District Court for the Parish of Orleans together
with the Temporary Restraining Order entered by
Julien, J., both dated August 2, 2005, is set forth in the
Appendix hereto(App. 34-40).
The unpublished order of the United States
Court of Appeals for the Fifth Circuit in First Colony
Life Insurance Company v. Alfred J. Kreppein, Jr. v.
Ryan Brice Crane and Laurel Crane Luquette, C.A.
No. 08-30409, decided November 14, 2008, denying the
petitioner’s petition for rehearing en banc, is set forth
in the Appendix hereto(App. 33).
JURISDICTION
The decision of the United States Court of
Appeals for the Fifth Circuit affirming the district
court’s order granting the respondents’ motion for
summary judgment and denying the petitioner’s motion
for summary . 1dgment and declaring the respondents
the sole beneficiaries to the death benefits of the life
insurance policy issued by First Colony Life Insurance
Company to Stephanie Boyter Kreppein, was entered
on October 16, 2008; and i.s further order denying the
petitioner’s timely filed petition for rehearing en banc
was filed and decided on November 14, 2008(App. 1I-
14;33).
This petition for writ of certiorari is filed within
ninety (90) days of November 14, 2008. 28 U.S.C. §
2101(c).
The jurisdiction of this Court is’ invoked
pursuant to the provisions of 28 U.S.C. § 1254(1).
RELEVANT PROVISIONS INVOLVED
United States Constitution, Article IV, § 1:
Full Faith and Credit shall be given in each
State to the public Acts, Records, and judicial
Proceedings of every other State.
United States Constitution, Amendment V:
No person shall...be deprived of life, liberty, or
property, without due process of law....
United States Constitution, Amendment VIT;
In Suits at common law, where the value in
controversy shall exceed twenty dollars, the
tight of trial by jury shall be preserved, and no
fact tried by a jury, shall be otherwise
reexamined in any Court of the United States,
than according to the rules of the common law.
United States Constitution, Amendment X:
The powers not delegated to the United States
by the Constitution, nor prohibited by it to the
4
States, are reserved to the States respectively,
or to the people.
28 U.S.C. § 1332(a) (1):
(a) The district courts shall have original
jurisdiction of all civil actions where the matter
in controversy exceeds the sum or value of
$75,000,exclusive of interest and costs, and is
between—
(1) citizens of different States....
28 U.S.C. § 1738:
The Acts of the legislature of any State,
Territory, or Possession of the United States, or
copies thereof, shall be authenticated, by affixing
the seal of such State, Territory or Possession
thereto.
The records and judicial proceedings of any court
of any such State, Territory or Possession, or
copies thereof, shall be proved or admitted in
other courts within the United States and its
Territories and Possessions by the attestation of
the clerk and seal of the court annexed, if a seal
exists, together with a certificate of a judge of
the court that the said attestation is in proper
form.
Suea Acts, records, and judicial proceedings or
comes thereof, so authenticated, shall have the
same full faith and credit in every court within
the United States and its Territories and
Possessions as they have by law or usage in the
5
courts of such State, Territory
Possession from which they are taken.
Louisiana Code of Civil Procedure, Art. 8604(A) and
(B):
A. A temporary restraining order shall be
endorsed with the date and hour of issuance;
shall be filed in the clerk’s office and entered of
record; shall state why the order was granted
without notice and hearing; and shall expire by
its terms within such time after entry, not to
exceed ten days, as the court prescribes. A
retraining order, for good cause shown, and at
any time before its expiration, may be extended
by the court for one or more periods not
exceeding ten days each. The party against
whom the order is directed may consent that it
be extended for a longer period. The reasons for
such extension shall be entered of record.
B. Nevertheless, a temporary restraining order
issued in conjunction with a rule to show cause
for a preliminary injunction prohibiting a spouse
from:
(1) Disposing of or encumbering
community property;
(2) Harming the other spouse or child; or
(3) Removing a child from the jurisdiction
of the court, in a suit for divorce shall
remain in force until a hearing is held on
the rule for a preliminary injunction.
6
Louisiana Code of Civil Procedure, Art. 3606:
When a temporary restraining order is granted,
the application for a preliminary injunction shall
be assigned for hearing at the earliest possible
time, subject to Article 3602, and shall take
precedence over all matters except older matters
of the same character. The party who obtains a
temporary restraining order shall proceed with
the application for a preliminary injunction
comes on for hearing. Upon his failure to do so,
the court shall dissolve the temporary
restraining order.
STATEMENT
Petitioner and the decedent Stephanie B.
Kreppein (“the wife” or “Mrs. Kreppein”) were married
in November of 2000(App. 2;22). During their marriage,
the couple began accumulating debt on certain real
estate investments they had made in Florida(App. 2).
In order to protect each other from this debt in the
event that one of them died, they mutually agreed that
they would obtain life insurance policies, each naming
the other as a beneficiary (/d.). Through a friend who
was an insurance agent and broker, Terry Sullivan,
they purchased these separate life insurance policies
from First Colony Life Insurance Company (“First
Colony”) in February of 2003(/d.).
The term life insurance policy issued on the life
of petitioner’s wife was for $500,000 and it named
petitioner as primary beneficiary(/d.). The wife named
two children from another marriage-----the respondents
Ryan Brice Crane and Laurel Crane Luquette (“the
7
respondents”)----as contingent beneficiaries(/d.).
In May of 2005, petitioner’s wife was diagnosed
with terminal brain cancer and petitioner was caring
for her at their domicile in New Orleans. On July 28,
2005, petitioner’s wife was taken from her home by
members of her family and moved to Baton Rouge for
what petitioner believed was a short stay with her
relatives(/d.). The next day, a withdrawal of $140,000
was made at the Baton Rouge branch office from the
joint bank account maintained by petitioner and his
wife(App. 2). At the same time, Terry Sullivan advised
petitioner that an attorney purporting to represent
petitioner’s wife was asking Sullivan to change the
primary beneficiary for her life insurance policy (/d.).
Although petitioner believed that his wife lacked
the capacity to make these changes given her condition
and was probably acting at the coercion of other
members of her own family, in order to forestall further
attempts by the wife and/or her family to diminish their
joint marital assets unilaterally, petitioner on August 2,
2005, filed a petition for divorce in the Civil District
Court for the Parish of Orleans, State of Louisiana(App.
3;22;34-40). He alleged that he and his wife had ceased
living together in late July of 2005, but that during their
marriage they had “acquired community properties and
have incurred community obligations’’(App. 35).
In addition, because of recent events, petitioner
alleged that he
fears that before a hearing can be had or notice
given, the defendant, Stephanie Boyter
Kreppein, will or may dispose of, alienate, or
8
encumber some or all of the assets belonging to
the community of acquets and gains existing
between them, and will or may borrow against
the cash surrender values and/or change the
ownership and/or beneficiaries of the policies of
life insurance insuring the lives of the parties
hereto, causing [petitioner] immediate
irreparable injury and harm. [The petitioner]
seeks therefore and is entitled to the issuance
of a Temporary Restraining Ordeyr...restraining,
enjoining and prohibiting [petitioner’s wife], or
any other persons, entities, [etc.] ...claiming to
act in [her] behalf from in any way whatsoever
alienating, encumbering, or disposing of any or
all of the [marital] assets;...0or changing the
ownership and/or beneficiaries of any policies of
life insurance insuring the lives of either of the
parties hereto...
(App. 35-36)(emphasis supplied). Consistent therewith,
petitioner sought to have the wife show “on a date and
at a time to be set by this Court” why a preliminary
injunction should not issue with the same
provisions(App. 36;38). Petitioner further sought to
have returned forthwith the $142,000 taken by the wife
or the wife’s family from their joint bank account; to
have a decree terminating their community property
and partitioning same, and to have each of them
prepare a Sworn Descriptive List of marital
property(App. 36-37).
On August 2, 2005, the same day as petitioner
filed his petition for divorce, Judge Ethel Simms Julien
of the Civil District Court for the Parish of Orleans
issued a Temporary Restraining Order (“the TRO”)
9
which inter alia restrained, enjoined and prohibited the
wife or any other persons acting in her behalf from
encumbering the marital property or from “changing
the ownership and/or beneficiaries of any policies of life
insurance insuring the lives of’ either of the parties
hereto....” (App. 38-39). Furthermore, Judge Julien set
August 16, 2005, as the hearing date for the wife to
show cause why a preliminary injunction should not
issue with the same provisions as the TRO (App. 3;39-
40).
The TRO was personally served on the wife on
August 12, 2005 by the East Baton Rouge Parish
Sheriffs Office(App. 3). On August 13, 2005, the wife’s
counsel and petitioner’s attorney agreed to consolidate
petitioner’s divorce action with the wife’s own divorce
petition and to continue to a later date the scheduled
hearing of August 16, 2005, on the preliminary
injunction(App. 3-4). On August 17, 2005, the wife’s
attorney both faxed and mailed to petitioner’s attorney
his proposed motion for consolidation and for a
continuance of the show-cause hearing(App. 3-4).
By then, however, the time for the show-cause
hearing scheduled for August 16, 2005, had passed with
no hearing having taken place(App. 3).While the
attorneys for the Kreppeins were communicating with
each other about consolidating their clients’ respective
divorce actions and continuing the show-cause hearing,
the wife on August 22, 2005, with her attorney’s
assistance, executed a “Policy Change Form” which
revoked all prior beneficiary designations and named
her children, the respondents, as the primary
beneficiaries of her life insurance policy(App. 4;22). On
August 29, 2005, First Colony received notice of the
10
wife’s change of beneficiaries(/d.).
As events continued to unfold, petitioner’s
attorney did not receive a copy of the proposed motion
for consolidation and continuance mailed by the wife’s
counsel until Friday, August 27, 2005, the last normal
court day at the Civil District Court for the Parish of
Orleans for some time(App. 3-4). Hurricane Katrina
struck New Orleans and the surrounding area the
following Sunday, August 29, 2005, a storm which
forced both the state and federal courts in Louisiana to
suspend regular operations for months(/d.).
On October 11, 2005, in the aftermath of
Hurricane Katrina and while the state and federal
courts were still not functioning, the wife died with no
show-cause hearing having been held or scheduled by
either petitioner or the wife(App. 4;22). Following the
wife’s death, First Colony received notices of proof of
loss and claims for insurance proceeds from petitioner
as weil as from the respondents(App. 4). Because under
the insurance policy, First Colony was obligated to pay
the sum of $500,000, plus applicable interest, to the
person rightfully entitled to these death benefits, it
brought an interpleader action naming petitioner and
the respondents in federal district court for the Eastern
District of Louisiana on December 27, 2005, to
determine the rightful beneficiaries of the insurance
proceeds(App. 4;22).
After depositing the funds in the court’s
registry, First Colony obtained a partial summary
judgment dismissing it from the suit except for the
issue of its right to attorney’s fees(App. 4-5;22-23).
Petitioner and respondents eventually brought cross
eS
motions for summary judgment addressing the issues of
(1) the effect of the TRO on the wife’s change of
beneficiary of her life insurance policy; (2) the mental
capacity of the wife at the time she made this change in
beneficiaries; and (3) whether the change breached any
contract between the wife and petitioner(App. 5-6;21).
On August 24, 2007, the federal district court,
Porteous, J., granted summary to the respondents and
denied petitioner’s cross motion for summary
judgment(App. 21-32). It determined that the wife was
mentally competent when she changed the beneficiary
designation on August 22, 2005; that the TRO was not
in effect at the time she did so; and that she did not
breach any contract with petitioner by doing so(App.
6;23-32). Reading La. Code Civ. Pro., Art. 3604(A), the
motion judge ruled that a TRO, even in this divorce
action, by its own terms would operate for at most ten
(10) days and that it therefore expired ten days after
Judge Julien signed it on August 2. 2005, or by August
12, 2005 (App. 29-30).
In addition, Judge Porteous referred to La. Code
Civ. Pro., Art. 3606, and implied that petitioner in order
to preserve his right to enforcement of the TRO was
obligated to proceed with the application for the
preliminary injunction when it came on for hearing and
that upon his failure to do so, the court shall dissolve
the TRO(App. 30-31). He blamed petitioner for not
pursuing successfully either a consolidation of the two
divorce actions or a continuance of the show-cause
hearing(App. 31). As the district judge saw it on this
disputed record,
12
this Motion to Consolidate and Motion for
Continuance was never signed by [petitioner’s
counse]l]..., never signed by the Judge, and never
filed with the Court. See Rec. Doc. No. 85-6, p.
20-21. Therefore, the nearing date was never
effectively continued.
(/d.)(emphasis supplied).
Furthermore, the motion judge reasoned that
even if an agreement to continue the show-cause
hearing were effective, it would not have reinstated
the TRO which had expired by its own terms on August
12, 2005(/d.). In reaching this result, Judge Porteous
rejected petitioner’s argument that the TRO stayed in
force from its issuance on August 2, 2005, until the wife
died on October 11, 2005, because this result would
conflict with “well established law that a temporary
restraining order should not be kept in effect for many
months without making it a temporary injunction’’(/d.).
The court of appeals affirmed the district judge
on different grounds(App. 1-14). It ruled that a TRO,
entered in a Louisiana divorce proceeding under La.
Code Civ. Pro., Art. 3604(B), is not necessarily limited
to just ten (10) days but rather continues in effect until
the scheduled show-cause hearing on the preliminary
injunction; and if the party who obtains the TRO does
not proceed with the application for a preliminary
injunction when it comes on for hearing, then a court is
required to dissolve the TRO(App. 8-9). It found in the
face of the parties’ contradictory summary judgment
materials that regardless of the fact that the wife
wanted to consolidate their respective divorce actions
and to continue the August 16" show-cause hearing, the
13
petitioner was to blame for the show-cause hearing not
having taken place as “the...hearing...passed without
any attempt by [petitioner] to prosecute his
application’’(App. 9).
As the court of appeals concluded, regardless of
the wife’s conduct----as well as the conduct of her own
attorney--- in seeking an extension of this hearing, the
petitioner
never filed a motion for continuance seeking a
new hearing date. And the state court never
entered an order before (or even after) the
August 16 hearing continuing the hearing to a
later date. Accordingly, the temporary
restraining order was not in effect when
[petitioner’s wife] later changed her beneficiary
designation.
(App. 9). Because it decided that the TRO had expired,
it concluded that the TRO was not entitled to res
qudicata effect(App. 14).
On November 14, 2008, the court of appeals
denied the petitioner’s timely filed petition rehearing
en banc(App. 33).The petitioner now respectfully
brings this petition to the Court seeking a writ of
certiorari to the Court of Appeals for the Fifth Circuit.
14
REASONS FOR GRANTING THE PETITION
1. The Court of Appeals’ Refusal To Give Louisiana’s
Temporary Restraining Order The Adjudicatory Force
It Deserves Under Louisiana Divorce Law Violates The
Full Faith And Credit Clause, Undermines the
Principles of Erie R. Co. v. Tompkins, 304 U.S. 64
(1938) And Permits A Spouse To Dispose Of Marital
Property Before Trial Absent Judicial Order Thereby
Depriving Petitioner Of Property Without Due Process
of Law.
The TRO entered on August 2, 2005, by Judge
Julien incident to petitioner’s divorce action in the Civil
District Court for the Parish of Orleans prohibiting
petitioner’s wife from changing the beneficiary on her
life insurance policy was never terminated by any order
of any State court, by any hearing in any State court on
a preliminary injunction or by any other formal entry
by any State court in the divorce proceeding prior to
October 11, 2005, when petitioner’s wife died. While
under the plain language of La. CCP, Article 3604(A),
an ordinary TRO entered in any civil action “shall
expire by its terms within such time after entry, not to
exceed ten days, as the court prescribes...,” the terms of
Ia. CCP, Art. 3604(B), as revised in 1980, carve out an
important exception to this rule in divorce actions by
providing: :
Nevertheless, a temporary restraining order
issued in conjunction with a rule to show cause
for a preliminary injunction prohibiting a spouse
from:
(1) Disposing of or encumbering
community property;
2) Harming the other spouse or child; or
15
(3) Removing a child from the jurisdiction
of the court, in a suit for divorce shall
remain in force until a hearing is held on
the rule for a preliminary injunction.
(emphasis supplied).
La. CCP, Art. 3604(B), when read together with
La. CCP, Art. 3604(A), and La. CCP, Art. 3606, makes
clear that under Louisiana law, a TRO entered in a
divorce proceeding does not expire by its own terms
after ten (10) days—as TROs entered in other civil
actions do—but rather continues “until a hearing is
held on the rule for a preliminary injunction (emphasis
supplied);’and under La. CCP, Art. 3606, petitioner’s
application for a _ preliminary injunction shall be
assigned by the court “at the earliest possible time”
with petitioner obligated under La. CCP, Art. 3606 to
proceed with the application “when it comes on for
hearing.”
The record shows that Judge Julien herself
apprehended correctly thet nol0-day rule applied to
this TRO as on August 2, 2005, she scheduled the show-
cause hearing on the preliminary injunction for August
16, 2005, two weeks’ hence(App. 39). When
communication between counsel for the Kreppeins
ensued with the wife wishing to consolidate her own
divorce action with petitioner’s action and to continue
this show-cause hearing to another date, the wife on
August 22, 2005, with her attorney’s assistance, took
advantage of her own foot-dragging conduct and
executed a “Policy Change Form” which revoked all
prior beneficiary designations and named respondents
the beneficiaries of her life insurance policy(App.
3;4;22).
While the scheduled show-cause hearing date of
August 16" passed without the hearing having been
held, the wife never opposed the Civil District Court’s
jurisdiction to hear the divorce or to issue the TRO
against her. Instead, her attorney collaborated with
petitioner’s counsel and with court personnel to obtain
further time to prepare for the hearing and to file
pleadings in the matter. There is no evidence that the
wife moved for the dissolution of the TRO as was her
right under Art. 3606 and Art. 3607; and there is
absolutely no suggestion on this record that petitioner
failed to proceed with the application for a preliminary
injunction “when it comes on for hearing” as required
within Art. 3606.
The court of appeals’ reading of Art. 3604
together with Art. 3606 to mean that a TRO in a
Louisiana divorce action to remain operative must be
followed up within ten (10) days or soon thereafter with
a hearing on a preliminary injunction—and if no
hearing is held within that time, regardless of the
reason, it automatically expires----misreads settled
Louisiana law and nonsensically gives a spouse who
postpones the show-cause hearing with her own foot-
dragging conduct carte blanche to dispose of marital
property before trial, dispossessiny the other spouse of
marital property without due process of law and absent
any order by the State court allowing her to do so.
This ruling rewrites settled Louisiana law about
the adjudicatory force of TROs in Louisiana divorce
proceedings to the detriment of all divorce litigants. It
is established law in Louisiana that a TRO in ordinary
17
civil actions expires within the time fixed by the court,
not to exceed ten (10) days, unless extended within the
time fixed for good cause shown; and a TRO ceases to
exist as of the date of the hearing on the preliminary
injunction. Dauphine v. Carencro High School, 848
So.2d 1096, 1102-1103(La. 2003). Powell v. Cox,.83 So.2d
908, 910(La. 1955). Lewis v. Adams, 679 So.2d 493,
496(La. App. 1996). Budd Construction Co., Inc. v. City
of Alexandria, 401 So.2d 1070, 1073-1074(La. App.
1981). La. CCP, Art. 3604(A).
However, TROs issued in Louisiana divorce
proceedings stand on much different ground. When
issued in conjunction with a rule to show cause for a
preliminary injunction prohibiting a spouse’ from
disposing of marital property, as here, they remain in
force not for just ten (10) days, not just until the show-
cause hearing date itself, but rather wntil a hearing is
actually held on the rule for a preliminary injunction
and no sooner. La. CCP, Art. 3604(B). Stated another
way, a TRO issued in a divorce action in Louisiana
remains in full force and effect wnt the State court
orders otherwise after a hearing on the preliminary
injunction. Jd.
The TRO here is no different. With no show
cause hearing on the preliminary injunction having
been held by August 22, 2005, it was still in effect when
the wife changed beneficiaries on that day. Because she
violated its terms in doing so, her attempted change of
beneficiaries is null and void and should be rescinded
together with the entry of a declaratory judgment
reinstating petitioner as the primary beneficiary.
18
Were the rule otherwise, spouses seeking to
avoid a prohibition against disposing of marital
property could simply wait out anyl0-day period or let
the show-cause hearing date itself pass without a
hearing by feigning cooperation with the opposing
spouse to reach some kind of compromise or
continuance, all the while engineering a result which
postpones the hearing and leaves them free to dispose
of marital property in the interim without any need for
a court order allowing them to do so.
This is precisely what occurred here and what
the decision below encourages, all contrary to settled
Louisiana divorce law. The wife and her counsel! foot-
dragged their way to a postponement of the show-cause
hearing while she changed beneficiaries on her life
insurance policy to petitioner’s detriment, in violation
of the still-operative TRO and without any court order
allowing her to do so. The federal courts’ ratification of
this illegal behavior, conduct unmistakably
contumacious under Louisiana divorce law and in
derogation of the property rights of the opposing
spouse under Louisiana law, violates the Full Faith
and Credit Clause, undermines the principles of Erie FP.
Co. v. Tompkins, 304 U.S. 64(1938), and permits a
spouse to dispose of marital property absent court
order and in violation of petitioner’s due process rights.
Because no show-cause hearing was ever held
within the meaning of La. CCP, Art. 3604(B), the
adjudicatory power of the TRO remained in full force
throughout petitioner’s divorce proceeding up to and
including October 11, 2005, when the wife passed away.
Art. 3604(B). Her death during the pendency of
petitioner’s divorce action left intact the unchallenged
19
and still-operative TRO prohibiting either of them from
disposing of marital property. Succession of Bonnecaze,
149 So.2d 668, 666(La. App. 1968). Without any appeal
of its terms by the wife and without any opposition to
its entry---in fact, the wife acceded to its terms----the
TRO became part of the transactions between these
parties which have “a force equal to the authority of
things adjudged.” Jd. at 667. La. Rev. St.
13.4231(1)(““Except as otherwise provided by law, a
valid and final judgment is conclusive between the
same parties, except on appeal or other direct review,
to the following extent: (1) If the judgment is in favor of
the plaintiff, all causes of action existing at the time of
final judgment arising out of the transaction or
occurrence that is the subject matter of the litigation
are extinguished and merged in the judgment.”). See
and compare Granny Goose Foods, Inc. v. Teamsters,
415 U.S. 428, 444-445(1974).
As part of the transactions in petitioner’s divorce
action which have “a force equal to the authority of
things adjudged,” Succession of Bonnecaze, 149 So.2d
at 667, the unchallenged and _ still-operative TRO
prohibiting the wife from alienating marital property is
res judicata and deserved to be enforced in its entirety.
The court of appeals’ decision to the contrary
undermines this Court’s decisions on the Full Faith and
Credit Clause as well as its expressed notions about
when preclusion should operate to bar relitigation of
claims or issues.
In the first place, under the [Full Faith and
Credit Act, 28 U.S.C. § 1738, the “judicial proceedings
of any court of any such State shall have the same full
faith and credit in every court in the United States...as
20
they have by law or usage in the court of such
State...from which they are taken.” Under the statute, a
federal court which is asked to recognize a state court
judgment is obligated to give the same preclusive effect
to that judyment as would the courts of the rendering
state. Migra v. Warren City Sch. Dist., 465 U.S. 75,
81(1984). Kremer v. Chemical Constr. Corp., 456 U.S.
461, 482(1982). Underwriters Nat’l Assurance Co. v.
North Carolina Life & Accident Health Ins. Guar
Ass'n, 455 U.S. 691, 704 & n. 9(1982).
Thus given the jurisdiction of the Louisiana state
courts to render this TRO, if the State courts would not
entertain a collateral attack on its terms, neither should
a federal district court hearing the same controversy in
diversity, pendent or supplemental jurisdiction. See
Johnson v. Muelburger, 340 U.S. 581, 587(1951). After
all, the ultimate touchstone for applying preclusion
principles is fairness and equity, Parklane Hosiery Co.,
Inc. v. Shore, 489 U.S. 329, 331 (1979); Blonder-Tongue
Laboratories, Inc. v. University of Ill. Found., 402 U.S.
313, 334(1971); and if there is no reason to doubt the
quality, extensiveness or fairness of the procedures
followed in tne prior State court litigation, then
collateral estoppel/preclusion should apply to bar
relitigation. Wright, Miller & Cooper, 18 Federal
Practice and Procedure, Jurisdiction § 4423 at 58(2d ed.
1999).
Conversely, just as a federal district court may
not enforce a State court judgment entered in violation
of a party’s due process rights, its refusal to apply
appropriate preclusion principles which results in
dispossessing a party of his legitimate ownership of
merital property operates to deny that party his due
2]
process rights in federal court. See Kremer, 456 U.S. at
482-483. This Court has the responsibility in its
superintendency role over the federal courts and the
federal system to formulate the controlling rules for
hearings and proof which precede the entry of final
judgments and dismissals in order that those rules of
procedure provide all of the parties with due process in
their reach and result. Klapprott v. United States, 335
U.S. 601, 611 (1949) (Black, J.) citing McNabb v. United
States, 318 U.S. 382, 341(1943).
Similarly, Hrie mandates that a federal court
sitting in diversity jurisdiction in this suit apply the
substantive law of Louisiana, the forum State, in order
to decide the rights of the parties absent a federal
statutory or constitutional directive to the contrary.
Salve Regina College v. Russell, 499 U.S. 225,
226(1991). “The nub of the policy that underlies Hrie...is
that for the same transaction the accident of a suit by a
non-resident litigant in a federal court instead of in a
State court a block away should not lead to a
substantially different result.” Ferens v. John Deere
Co., 494 U.S. 516, 524 (1990).
Yet the court of appeals failed in_ this
fundamental duty. Creating judge-made common law at
odds with the substantive law of Louisiana in order to
reach a particular result, the federal courts below have
overreached in their refusal to give the Louisiana TRO
the adjudicative force it deserves under Louisiana
divorce law; they have refused without reason to give
ths TRO the preclusive effect it warrants in this
diversity action; and they have enabled _ the
dispossession of marital property without hearing or
court order and thereby denied petitioner property
99
—
without due process of law.
This refusal by the federal courts to apply
preclusion principles is especially troublesome and
violates notions of comity when its ruling meddles with,
indeed overturns, established norms, expectations and
principles of Louisiana practice and procedure with
respect to divorce and ~marriage_ dissolution
proceedings, matters peculiarly within the province of
State jurisprudence. See Vanderbilt v. Vanderbilt, 354
U.S. 416, 418-419(1957); Sutton v. Leib, 342 U.S. 402,
406-410 (1952); Johnson v. Muelburger, 340 U.S. at 585-
DRS.
In the end, as a matter of State law, the
operative TRO, never challenged or diminished in State
court, never lost its “adjudicatory power” to control the
conduct of the wife and renders her attempt to change
the beneficiary of her life insurance policy a nullity. The
ensuing State court judgment in the wake of the wife’s
death on October 11, 2005, encompassed this TRO and
deserved to be enforced in the federal proceeding under
established preclusion principles, reinforced by an
ordinary application of Erie principles. See Semtek
Int'l, Inc. v. Lockheed Martin Corp., 531 U.S. 497, 500-
506(2001).
23
2. The Federal Courts Below Abused Summary
Judgment Procedure By Weighing Evidence and Finding
Facts In Order to Dispose of the Triable Fact Question
Of Whether Petitioner’s Wife Engineered A
Postponement of the Preliminary Injunction Hearing
So That She Could Dispose of Marital Property Before
Trial, Denying Petitioner the Jury Trial Guaranteed
Him by the Seventh Amendment On This Crucial Fact
Issue.
The seventh amendment to the federal
constitution provides that in suits at common law, “the
right of trial by jury shall be preserved....” As Justice
Scalia observed in Blakely v. Washington, 542 U.S.296,
305-306(2004), the right to a jury trial in civil cases is no
mere procedural formality but rather a fundamental
“reservation of power in our constitutional structure,”
assuring the people’s ultimate control of the judiciary.
Id. citing 2 The Complete Anti-Federalist 315, 320(H.
Storing ed. 1981). This guaranty of a jury trial in the
Constitution and the common law traditions it
entrenches “do not admit the contention that facts are
better discovered by judicial inquisition than by
adversarial testing before a jury.”/d. at 313 citing 3
Blackstone, Commentaries, at 373-374; 379-381.
Since one of the fundamental duties of the jury in
civil cases is to resolve factual disputes bearing on
material] issues in controversy, the summary judgment
procedure now contained in Fed. R. Civ. P. 56 does not
violate a party’s constitutional right to a jury trial
because it is presumed that if the entry of summary
judgment is appropriate, there are no genuine issues of
material fact for trial and therefore no right to a jury
trial is implicated. Fidelity & Deposit Co. v. United
States, 187 U.S. 315, 320(1902). See also Pease v.
24
Rathbone-Jones E'ng. Co., 243 U.S. 278, 278-279(1917).
However, both federal jurists and legal
commentators have noted that federal trial judges
regularly overuse summary judgment in order to take
triable cases away from juries. Hon. W.G. Young,
Vanishing Trials—Vanishing Juries—-Vanishing
Constitution, 40 Suffolk U. Law Rev. 67, 78 (2006).
Arthur R. Miller, The Pretrial Rush to Judgment: Are
the “Litigation Explosion,” “Liability Crisis,” and
Efficeency Cliches H’roding Our Day In Court And
Jury Trial Commitments?, 78 N.Y.U. Law Rev. 982,
1064; 1066;1071-1072;1133-1134(2003). As Professor
Miller observes, Rule 56's “paper trials” of crucial,
disputed fact issues
would be an unfortunate break with the past.
Our civil dispute resolution system has always
preferred adjudication based on oral testimony
in open court subject to cross
examination....[T]hey are considered aspects of
what often is referred to as a “day in court,” with
due process embracing notions of a fair trial
before an impartial tribunal.
Id. at 1072 & n. 476, citing Societe Internationale Pour
Participations Industrielles et Commerciales S.A. v.
Rogers, 357 U.S. 197, 209(1958)(“There are
constitutional limitations upon the power of courts,
even in aid of their own valid processes, to dismiss an
action without affording a party the opportunity for a
hearing on the merits of his case.”). See also Thomas,
Suja A., Why Summary Judgment Is Unconstitutional,
93 Va. L. Rev. 139, 143-144;158-160;177-178(2007).
25
This overuse of summary judgment has been
documented. One scholar concludes that federal courts
routinely weigh evidence, draw inferences in favor of
the moving party and make credibility determinations.
McGinley, Ann C., Credulous Courts and the Tortured
Trilogy: The Improper Use of Summary Judgment in
Title VII and ADEA Cases, 34 B.C. L. Rev. 208,
229(1993). Likewise, it was found that courts often
reject the plaintiffs’ attempts to create inferences of
intent and motive through a totality of circumstantial
evidence, thereby creating a triable issue, by treating
the evidence in a piecemeal fashion, isolating and
rejecting as insufficient each of the discrete elements of
the plaintiffs’ evidence rather than considering their
cumulative effect. Jd. at 233-236.
Such is the case here. First, on a disputed record
about why petitioner did not pursue the scheduled
show-cause hearing on August 16, 2005, or bring a
motion for a continuance, the district judge blamed
petitioner—not the wife or the respondents who
engineered this postponement of the show-cause
hearing--- for not pursuing successfully a continuance of
the show-cause hearing(App. 31). As the district judge
saw it on this disputed record,
this Motion to Consolidate and Motion for
Continuance was never signed by [petitioner’s
counsel]..., never signed by the Judge, and never
filed with the Court. See Rec. Doc. No. 85-6, p.
20-21. Therefore, the hearing date was never
effectively continued.
(/d.)(emphasis supplied).
26
Next, the court of appeals improperly resolved
in respondents’ favor the same crucial fact question of
whether they together with the wife engineered the
postponement of the scheduled hearing on _ the
preliminary injunction so that they could claim freedom
from a court order prohibiting them from changing
beneficiaries for the wife’s insurance policy. It found in
the face of the parties’ contradictory summary
judgment materials that regardless of the fact that the
wife wanted to consolidate their respective divorce
actions and continue the August 16'' show-cause
hearing, oniy the petitioner was to blame for the
hearing not taking place as “the ... hearing...passed
without any attempt by |petitioner] to prosecute his
application’ (App. 9).
As the court of appeals concluded, regardless of
the wife’s conduct----as well as the conduct of her own
attorney--- in seeking an extension of this hearing, the
petitioner
never filed a motion for continuance seeking a
new hearing date. And the state court never
entered an order before (or even after) the
August 16 hearing continuing the hearing to a
later date. Accordingly, the temporary
restraining order was not in effect when
[petitioner’s wife] later changed her beneficiary
designation.
(App. 9).
However, this was an inquiry not just about the
petitioner but about the state of mind of the wife, her
intentions in seeking with the respondents to sabotage
27
a valid court order by her foot-dragging conduct, and
whether her actions in seeking a consolidation and a
continuance of the show-cause hearing amounted to a
waiver of any claim on her part that the TRO was not
fully operative at all relevant times. Petitioner
deserves a trial by a judge or jury on these crucial fact
questions and denying him this opportunity was both
unfair and unconstitutional.
This abuse of Rule 56 procedure justifiably
invokes this Court’s power of superintendency over
the federal courts to reassert their proper role in
deciding summary judgment motions, i.e., reaffirming
the holdings of Reeves v. Sanderson Plumbing
Products, Inc., 530 U.S. 1833, 150-151(2000) and
Anderson v. Liberty Lobby, 477 U.S. 242, 249-255(1986)
which require them to draw all reasonable inferences in
favor of the party who opposes the motion for summary
judgment which was ultimately granted and to refrain
from making any credibility determinations in order to
resolve material factual disputes because this is a
function of a jury, not a judge. See Beard v. Banks, 548
us... (2006)(Ginsburg, J., dissenting).
,
CONCLUSION
For all of these reasons identified herein, a writ
of certiorari should issue to review the judgment of the
United States Court of Appeals for the Fifth Circuit
and, ultimately, to vacate that judgment and remand
the matter to the United States District Court for the
Eastern District of Louisiana with instructions that a
judgment enter granting petitioner’s own motion for
summary judgment and declaring that the attempt by
petitioner’s wife to change the beneficiaries of her life
28
insurance policy was prohibited by the TRO of August
2, 2005, is null and void for that reason and that
petitioner continues to be the named primary
beneficiary under the wife’s will with all the rights
appurtenant thereto; or provide petitioner such other
relief as is fair and just in the circumstances of this
case.
Respectfully submitted,
Dennis P. Derrick
Counsel of Record
7 Winthrop Street
Essex, MA 01929-1203
(978) 768-6610
Fred E. Salley
Salley & Associates
77378 Highway 1081
P.O. Box 3549
Covington, LA 70434
(985)867-9761
la
No. 08-30409 Summary Calendar
UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
FIRST COLONY LIFE INSURANCE COMPANY,
Plaintiff - Appellee
Vv.
ALFRED J KREPPEIN, JR,
Defendant - Appellant
v.
RYAN BRICE CRANE; LAUREL CRANE
LUQUETTE,
Defendants - Appellees
October 16, 2008, Filed
NOTICE: PLEASE REFER TO FEDERAL RULES
OF APPELLATE PROCEDURE RULE 32.1
GOVERNING THE CITATION TO UNPUBLISHED
OPINIONS.
Appeal from the United States District Court for the
Eastern District of Louisiana. No. 2:05-C V-6849.
JUDGES: Before KING, DENNIS, and OWEN,
Circuit Judges.
OPINION
PER CURIAM: *
Alfred Kreppein, Jr. appeals the district court's
judgment against him in an interpleader action filed to
determine who was the lawful beneficiary (or
beneficiaries) under a life insurance policy issued in the
2a
name of Stephanie Kreppein. For the reasons provided
below, we affirm.
I. BACKGROUND
Stephanie Kreppein and Alfred Kreppein, Jr. were
married in November 2000. According to Mr. Kreppein,
he and his wife were accumulating large amounts of
debt on real estate investments and, therefore, decided
to purchase life insurance policies to protect each other
in the event of the death of one of them. In or around
November 2002, Mr. Kreppein contacted Terry
Sullivan--a friend of the Kreppeins and an insurance
broker--who then assisted the Kreppeins in purchasing
separate life insurance policies from First Colony Life
Insurance Company ("First Colony"). Mrs. Kreppein's
insurance policy, issued on February 3, 20038, was a
term life insurance policy for $ 500,000. Mr. Kreppein
was named the primary beneficiary and Mrs.
Kreppein's children from another marriage--Ryan Brice
Crane and Laurel Crane Luquette--were named
contingent beneficiaries.
In May 2005, Mrs. Kreppein was diagnosed with
terminal brain cancer. On July 28, 2005, Mrs. Kreppein
moved from her marital home in New Orleans,
Louisiana to Baton Rouge in order to live with her
mother.! On July 29, 2005, a withdrawal of
approximately $ 140,000 was made from the Kreppeins'
joint bank account in a Baton Rouge branch office. On
or about that same day, Mr. Kreppein was advised by
Sullivan that an attorney purporting to represent Mrs.
Kreppein requested that the named beneficiary of Mrs.
Kreppein's life insurance’ policy be changed.
3a
Although Mr. Kreppein felt that Mrs. Kreppein was
mentally incompetent and was not acting of her own
accord, in order to protect his property, Mr. Kreppein
filed a petition for divorce in the Civil District Court for
the Parish of Orleans, State of Louisiana, on August 2,
2005. As part of the pleadings, Mr. Kreppein included a
proposed temporary restraining order, which was
signed and executed by the state court that same day.
The temporary restraining order prohibited Mrs.
Kreppein from “alienating, encumbering, or disposing of
any or all of the assets of the community . . . or from
changing the ownership and/or beneficiaries of any
" A show-cause hearing
was set in the order for August 16, 2005, to determine
whether a preliminary injunction should be issued. The
order was served on Mrs. Kreppein on August 12, 2005.
And, shortly thereafter, Mrs. Kreppein filed her own
petition for divorce with the same court.
The August 16 show-cause date passed without a
hearing; a preliminary injunction never issued; a
request for an extension of the temporary restraining
order was never made; and the hearing was never
rescheduled. The reason for inaction is in dispute.
However, the undisputed record evidence at least
shows that: (1) on or about August 138, 2005, the
Kreppeins' respective attorneys agreed to consolidate
their cross-petitions for divorce into a single action and
to continue the August 16 hearing; (2) on August 17,
2005, Mrs. Kreppein's attorney both faxed and mailed
Mr. Kreppein's attorney a proposed motion for
consolidation and a continuance; and (3) the proposed
motion was never filed with the state court. Mr.
Kreppein also offered evidence that his attorney did not
receive the mailed copy of the proposed motion until
4a
Friday, August 27, 2005, which was the last normal
court day for a number of weeks because Hurricane
Katrina struck the New Orleans area on August 29,
2005.
Meanwhile, on August 22, 2005, Mrs. Kreppein
executed a "Policy Change Form," which purported to
revoke all prior beneficiary designations and designate
her children, Crane and Luquette, as the primary
beneficiaries of her life insurance policy. First Colony
acknowledged receipt on August 30, 2005. On October
11, 2005--without any further action ever having been
taken with respect to the temporary restraining order--
Mrs. Kreppein died.
Following her death, First Colony received notices of
proof of loss and claims for insurance proceeds from
both Crane and Luquette and Mr. Kreppein. On
December 27, 2005, therefore, it filed an interpleader
action in federal district court against Mr. Kreppein,
Crane, and Luquette pursuant to Rule 22 of the
Federal Rules of Civil Procedure to determine who was
the rightful beneficiary (or beneficiaries) under Mrs.
Kreppein's life insurance policy. First Colony alleged
that it was "a mere stakeholder" with "no beneficial
interest in the death benefits" and that it could not
"make payment of the death benefits without incurring
the risk of" multiple adverse judgments.
Upon order of the district court, on January 17, 2006,
First Colony deposited the insurance proceeds into the
court's registry. On January 23, 2006, Crane and
Luquette filed their joint answer and counterclaims,
and on January 30, 2006, Mr. Kreppein filed his answer
and counterclaims. Thereafter, Fizst Colony moved for
5a
summary judgment, which was granted in part (with
respect to liability) on January 25, 2006.’
‘On April 25, 2007, Mr. Kreppein sought to amend his
pleadings. In his proposed counterclaims, Mr. Kreppein
alleged that he was entitled to the insurance proceeds —
from Mrs. Kreppein's life insurance policy because Mrs.
Kreppein was enjoined by the state court's temporary
restraining order from changing the beneficiary
designation. In addition, for the first time, Mr.
Kreppein claimed that Mrs. Kreppein's attempt to
amend the beneficiary designation was null and void
because she lacked mental capacity at the time and
because she had entered into a mutually reciprocal
agreement with him not to alter the beneficiary
designations in their respective life insurance policies.
Lastly, Mr. Kreppein sought to assert cross claims
against Crane and Luquette and third-party claims
against Mrs. Kreppein's mother and attorney.
On May 11, 2007, Crane and Luquette and Mr.
Kreppein filed crossmotions for summary judyment. In
their motion for summary judgment, Crane and
Luquette also moved to strike Mr. Kreppein's amended
cross claims and third-party claims. On June 25, 2007,
the district court granted their motion to strike in part
and granted Mr. Kreppein's motion to amend in part.
Specifically, the district court struck Mr. Kreppein's
proposed cross claims and third-party claims, but
permitted the amendment of Mr. _ Kreppein's
counterclaims. The district held that the case was
limited to the: (1) question of Mrs. Kreppein's mental
capacity on the day she executed the Policy Change
Form; and (2) effect on Mrs. Kreppein's change of the
beneficiary designation of both the state court's
6a
temporary restraining order and the Kreppeins'
alleged, mutually reciprocal contract.
On August 24, 2007, the district court entered summary
judgment for Crane and Luquette. The district found
that Mrs. Kreppein was mentally competent at the time
she changed the beneficiary designation, the state
court's temporary restraining order was not in effect at
that time, and the Kreppeins did not have a mutually
reciprocal agreement with respect to their life
insurance policies. On March 20, 2008, the district court
denied a motion for reconsideration filed by Mr.
Kreppein and entered final judgment against nim.
Mr. Kreppein then filed a timely notice of appeal.® He
raises three issues, namely, whether: (1) the state
court's temporary restraining order rendered Mrs.
Kreppein's change of beneficiaries null and void; (2)
Mrs. Kreppein lacked the capacity to change the
beneficiary designation because she had a mutually
reciprocal contract with Mr. Kreppein; and (3) the state
court's temporary restraining order was res judicata.
It. DISCUSSION
A. Standard of Review
We review a grant of summary judgment de novo,
viewing all the evidence in the light most favorable to
the nonmoving party and drawing all reasonable
inferences in that party's favor. See Crawford v.
Formosa Plastics Corp., 234 F.3d 899, 902 (5th Cir.
2000) (citations omitted). Summary judgment is proper
when the evidence reflects no genuine issues of
material fact and the movant is entitled to judgment as
7a
a matter of law. FED. R. CIV. P. 56(c). "A genuine
issue of material fact exists ‘if the evidence is such that
a reasonable jury could return a verdict for the non-
moving party." Crawford, 234 F.3d at 902 (quoting
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106
S. Ct. 2505, 91 L. Ed. 2d 202 (1986)). "Even if we do not
agree with the reasons given by the district court to
support summary judgment, we may affirm the district
court's ruling on any grounds supported by the record."
Berquist v. Wash. Mut. Bank, 500 F.3d 344, 349 (5th
Cir. 2007) (citation and internal quotation marks
omitted).
B. The Temporary Restraining Order
Y ‘
Mr. Kreppein argues that Mrs. Kreppein's attempt to
change the beneficiary designation of her life insurance
policy violated the express terms of the state court's
temporary restraining order. He asserts that the
temporary restraining order was legally valid when
executed and that it remained in full force and effect
throughout the divorce proceedings--under article
3604(B) of the Louisiana Code of Civil Procedure--
because the Kreppeins agreed to a continuance of the
August 16 show-cause hearing. Mr. Kreppein claims
that the continuance was requested by Mrs. Kreppein's
attorney and that the state court agreed to remove the
scheduled hearing from its calendar, although it would
not set a new date until pleadings were filed. Finally,
because Mrs. Kreppein failed to contest the temporary
restraining order's validity and Louisiana law does not
favor self help, Mr. Kreppein contends that the
temporary restraining order "prevented [Mrs.|
Kreppein from having the requisite legal capacity to
sa
effect a change of beneficiary, so her signature on the
change form was a legal nullity."
We agree with the district court that the temporary
restraining order expired before Mrs. Kreppein
executed the Policy Change Form on August 22, 2005.
Under Louisiana law, a temporary restraining order
expires on its own terms within such time as the court
orescribes. LA. CODE CIV. PROC. ANN. art. 3604(A).
Ordinarily, the state court may not fix a time that
exceeds ten days.‘ See id. However, "a temporary
restraining order issued in conjunction with a rule to
show cause for a preliminary injunction prohibiting a
spouse from .. . [dl]isposing of or encumbering
community property ... shall remain in foree until a
hearing is held on the rule for the preliminary
injunction." LA. CODE CIV. PROC. ANN. art. 3604(B).
In such instances, "the application for a preliminary
injunction shall be assigned for hearing at the earliest
possible time... ." LA-CODE CIV.PROC.ANN. art.
3606. And "(t]he party who obtains a temporary
restraining order shall proceed with the application for
a preliminary injunction when it comes on for hearing."
Id. (emphasis added). "If the party who obtains a TRO
does not proceed with the application for a preliminary
injunction when it comes on for hearing, then the court
is required to dissolve the TRO." Lewis v. Adams, 679
So. 2d 493, 496 (La. Ct. App. 1996) (citation omitted);
see also Powell v. Cox, 228 LA. 708, 83 So. 2d 908, 910
(La. 1955) ("[A] temporary restraining order . . . ceases
to exist and its legal effectiveness is of no moment as of
the date of the hearing of the rule nisi for either the
granting or refusing of a preliminary injunction.");
Austin v. Currie, 16 LA. APP. 375, 134 So. 723, 724-25
9a
(La. Ct. App. 1931) (holding that a temporary
restraining order expired on the day it was set for
hearing because nothing in the record indicated that it
was continued even though the parties proceeded to
trial on the theory that there was an injunction in
force).
In this case, the August 16 hearing to show cause why a
preliminary injunction should be issued passed without
any attempt by Mr. Kreppein to prosecute his
application. Nor did the state court continue the August
16 hearing.” Mrs. Kreppein's attorney stated in her
affidavit that on August 15, 2005, Meghan Hinyub, her
legal assistant, "called the [c]lourt to reschedule the
August 16[] hearing and was unable to obtain a new
date for the hearing since the Motion to Continue had
not yet been filed." Hinyub submitted an affidavit
stating that she called the state court and that,
although she "was unable to obtain a new date for the
hearing since the Motion to Continue had not yet been
filed[,|" she "was informed that, once the Motions had
been filed, then a new date would be set." According to
Hinyub's contemporaneous notes, it was the "clerk" of
court with whom she spoke, not the state court.
Regardless, Mr. Kreppein never filed a motion for
continuance seeking a new hearing date. And the state
court never entered an order before (or even after) the
August 16 hearing continuing the hearing to a later
date. Accordingly, the temporary restraining order was
not in effect when Mrs. Kreppein later changed her
beneficiary designation.°
C. The Mutually Reciprocal Contract
Mr. Kreppein argues that Mrs. Kreppein "contracted
10a
away her right to change the insurance beneficiary
when she entered into a bilateral contract for reciprocal
insurance policies with [him]." In support of the alleged
existence of such a contract, Mr. Kreppein relies on his
own affidavit testimony that: "[Mrs. Kreppein] and I
specifically agreed that the proceeds of the respective
policies would reciprocally ensure each the other, in the
event of death, ... and that there would be no change
regarding the insurance policies or beneficiaries." He
also attempts to rely upon Sullivan's affidavit; the most
relevant statement therein consisting of the comment
that Mr. Kreppein ‘indicated that he and [Mrs.
Kreppein] wanted to discuss obtaining life insurance
policies that would protect each of them in the event of
the death of the other." Mr. Kreppein neither submitted
a copy of the alleged agreement nor alleged that the
contract was in writing. Based solely on the affidavits
described above and without citation to any legal
authority, Mr. Kreppein argues that the alleged
contract prevented Mrs. Kreppein from validly
changing her beneficiary designation because one
cannot "validly twice sell a car or a property after it has
been sold once."
We need not consider whether the district court
properly found that Mr. Kreppein failed to raise a
genuine fact issue concerning the existence of a
mutually reciprocal agreement because we agree with
Crane and Luquette that Mr. Kreppein has _ not
demonstrated that such a contract would alter the
outcome of this case. Under Louisiana law, life
insurance proceeds are considered "sui generis and
therefore not subject to many traditional civilian
principles." Fowler v. Fowler, 861 So. 2d 181, 183 (La.
2003) (explaining that the Louisiana Code of 1808
lla
provided that insurance was foreign to the code
because insurance contracts derived from common law
countries and were considered a form of gambling
under the French Civil Code (citation omitted)). "[T]he
principle that life insurance proceeds are sui generis
has led Louisiana courts for decades to look to the
provisions of the policies themselves and any pertinent
portions of the Insurance Code to resolve disputes
concerning such policies." Jd. at 185. The rules of
contract also provide a basis for the protection of life
insurance proceeds because the insurance contracts are
generally interpreted as ordinary contracts. See id. But
if nothing in the laws of insurance or contract control,
the policy terms prevail. See Jackson Nat'l Life Ins. Co.
v. Kennedy-Fagan, 873 So. 2d 44, 50 (La. Ct. App.
2004).
Here, Mrs. Kreppein's insurance policy specifically
provided that the "Owner may change the designations
of Owner, Contingent Owner, and Beneficiary during
the Insured's lifetime. Any change is subject to the
consent of an irrevocable beneficiary." This is consistent
with the notion under Louisiana law that, "absent a
conventional agreement, no one has the vested right to
the status of a beneficiary under a life insurance
contract, if the contingent event which vests such right,
the death of the insured, has not occurred. Until then,
the parties to the insurance contract are free to change
the beneficiary, if such a change is permitted by its
terms." Jd. at 49. Although Mrs. Kreppein's life
insurance policy clearly vested Mrs. Kreppein with the
right to name an irrevocable beneficiary, nothing in the
policy itself or the record in this case suggests that she
did so. Nor is there evidence that she assigned
ownership of the policy to Mr. Kreppein, which would
12a
have had the same effect. See Kambur v. Kambur, 652
So. 2d 99, 103 n.4 (La. Ct. App. 1995) (citation omitted).
Indeed, Mr. Kreppein seeks to diminish these facts by
arguing that nothing in the record indicates that either
he or Mrs. Kreppein was aware of such options.
Mr. Kreppein would have us overlook the plain meaning
of the insurance policy based on the alleged existence of
another contract Mrs. Kreppein entered into with a
third party. He provides no legal authority for this
argument. See Jackson Nat'l Life Ins. Co., 873 So. 2d at
50 ("Louisiana [law] simply does not address this
situation; it is therefore governed by the policy terms,
which constitute the law between the parties."). And he
does not respond to Crane and Luquette's contention
that his allegations amount to no more than a potential
breach of contract claim against Mrs. Kreppein's estate.
See id. (holding that while a wife's succession may have
claims against a husband's succession arising from a life
insurance policy, the policy proceeds must be disbursed
in accord with the policy language). Because Crane and
Luquette were the named beneficiaries and nothing in
Mrs. Kreppein's insurance policy indicates that she
lacked legal capacity to change the _ beneficiary
designation, the district court correctly awarded the
proceeds to Crane and Luquette. See Fowler, 861 So. 2d
at 186 ("[TJhe beneficiary is a named individual. Thus,
the right to ownership of the proceeds should devolve
in accordance with the contract provisions which are
clear and unambiguous.").
Ill, CONCLUSION
For the reasons stated above, we AFFIRM the district
court's judgment.
l3a
Footnotes
*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.
1Mr. Kreppein claimed that Mrs. Kreppein was in fact
"kidnapped" by Crane's wife and Luquette.
2The district court refused to award attorneys’ fees and
costs, although it later did so after additional briefing.
A judgment dismissing First Colony was not entered
until the final judgment was issued on March 20, 2008.
5Mr. Kreppein's notice of appeal includes the judgment
in favor of First Colony. First Colony filed a brief with
this court arguing that Mr. Kreppein waived any of his
potential arguments against it by failing to raise them
in his initial brief. Mr. Kreppein did not respond in his
reply brief. We therefore agree with First Colony. See
Green v. State Bar of Tex., 27 F.3d 1083, 1089 (5th Cir.
1994) (citation omitted).
4Crane and Luquette argue that article 3604(A)'s ten-
day limit applied to the state court's temporary
restraining order in this case because life insurance
proceeds are not community property. We note that
this co:.clusion is seemingly at odds with the schedule
the state court set because the temporary restraining
order would have expired before the August 16
hearing. However, we need not resolve the issue
because we conclude that the temporary restraining
order would have expired before August 22 under
either article 3604(A) or 3604(B).
14a
5We also note that the summary judgment evidence
does not support Mr. Kreppein's assertion that Mrs.
Kreppein sought a continuance. Mr. Kreppein's
attorney did not swear in her affidavit that Mrs.
Kreppein requested the continuance. Rather, she
testified that during an August 13, 2005, telephone
conversation with Mrs. Kreppein's attorney she said
she "“weuld not object to a continuance of the Rules
previously set for hearing on August 16, 2005." On the
other hand, there is evidence that Mr. Kreppein's
attorney sought the continuance because his attorney
mistakenly believed that Mrs. Kreppein had not been
served. On August 15, 2005, a legal assistant for Mr.
Kreppein's attorney noted in the firm's "online
organization system" that "I spoke with the Sheriff's
office to see if M[rJs. Kreppein has been served. She has
not been served and there was no problem. I spoke with
Mr. Kreppein and told him that there would be no court
tomorrow because she had not been served." An earlier
notation that same day stated that if Mrs. Kreppein had
not been served a motion for continuance should be
filed.
6Our decision that the temporary restraining order
expired necessarily means that it was not entitled to
res judicata effect. See LA. REV. STAT. ANN. §
13:4232(B) (providing that judgments resulting from an
action for divorce only have res judicata effect as to
causes actually adjudicated); Associates Financial
Services, Inc. v. Rogell, 449 So. 2d 526, 528 (La. Ct. App.
1984).
ld5a
CIVIL ACTION NO. 05-6849 SECTION "T" (1)
UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF LOUISIANA
FIRST COLONY LIFE INSURANCE COMPANY
VERSUS
ALFRED J. KREPPEIN,JR., RYAN BRICE
CRANE AND LAUREL CRANE LUQUETTE
March 20, 2008, Decided
March 20, 2008, Filed
JUDGES: G. THOMAS PORTEOUS, JR., UNITED
STATES DISTRICT JUDGE.
OPINION BY: G. THOMAS PORTEOUS, JR.
OPINION
ORDER AND REASONS
Before the Court is a Motion for Entry of Final
Judgment pursuant to FRCP 54(b) filed by Plaintiif in
Interpleader, First Colony Life Insurance Company.
Rec. Doc. 102. No Opposition to the Motion was filed by
any other party in this action. The Motion came for
hearing on September 5, 2007, without oral argument
and was submitted on the briefs. The Court, having
considered the arguments of the parties, the Court
record, the law and applicable jurisprudence, is fully
advised in the premises and ready to rule.
I. BACKGROUND
First Colony Life Insurance Company (hereinafter,
"First Colony") filed this Action for Interpleader
requesting an order mandating Defendants’ to
interplead and settle amongst themselves their rights
to the $ 500,000.00 life insurance policy of the decedent,
Stephanie B. Kreppin. Rec. Doc. 1. All Defendants
answered the Interpleader action and asserted counter-
claims for statutory penalties and damages under
Louisiana law. See Kec. Docs. 9, 10. First Colony filed a
Motion for Summary Judgment arguing that it was
entitled to attorney's fees and costs incurred in
bringing this action and further, requested that the
statutory penalties and attorney's fees sought be
dismissed as a matter of law. Rec. Doc. 25. On January
25, 2007, Judge Zainey granted First Colony's Motion
dismissing the counter-claims of Defendants, dismissing
First Colony from any further liability, and dismissing
First Colony from the action "except for the hmited
issue of determining entitlement to attorney's fees and
eosts, which will be resolved on the briefs." Ree. Doc.
age |
ot.
After furthering briefing on the issues of entitlement to
the fees and costs, Judge Zainey referred the matter to
United States Magistrate Shushan "in order to
determine reasonable att rney's fees." Rec. Doc. 70.
Magistrate Shushan issued a Report = and
Recommendation recommending that First Colony be
awarded $ 20,161.66 in attorney's fees and costs. Rec.
No. 86. Over objection by Deic ndant, Alfred J. Kreppin,
Judge Zainey adopted that port) o of the Magistrate's
Report and Recommendation finding that First Colony
was entitled to attorney's fees and costs. However,
17a
Judge Zainey decreased the amount to be awarded
from $ 22,108.36 to $ 10,789.66." Ree. Doc. 95.
First Colony brings this Motion arguing there is no just
reason to delay the entry of final judgment relative to
the granting of its Motion for Summary Judgment, and
the award of attorney's fees in the amount of $ 10,789.66
should be awarded from the registry of the Court
without further delay. Rec. Doc. 102.
Il. LAW AND ARGUMENT
Federal Rule of Civil Procedure 54(b) provides, in
pertinent part:
(b) Judgment Upon Multiple Claims or Involving
Multiple Parties. When more than one claim is
presented in an action, whether as a claim, counter-
claim, cross-claim, or third party claim, or when
multiple parties are involved, the Court may direct the
entry of a final judgment as to one or more but fewer
than all of the claims or parties only upon an express
determination that there is no just reason for delay and
upon an express direction for the entry of judgment.
After reviewing the record, the Court finds that there
is no just reason for delaying the entry of a final
judgment in favor of First Colony. The Counter-claims
against First Colony have been dismissed and the
Court has ruled that it is entitled to its fees and costs.
First Colony no longer has any role in this litigation as
it has deposited the funds at stake into the registr. of
the Court. Further, First Colony's continued
participation in this litigation for an indefinite period
would certainly cause it to expend additional resources
18a
and time for no good reason. The entry of a final
judgment in favor of First Colony in this case is in
keeping with the spirit of Rule 54(b), which is to avoid
the possible injustice which could result from a delay in
entering judgment as to fewer than all of the parties
until the final adjudication of the entire case. See 10
Wright & Miller Federal Practice and Procedure: Civil,
23 § 2654 (2007). For these reasons, First Colony's
FRCP 54(b) Motion is GRANTED.
Accordingly,
IT IS ORDERED that First Colony Insurance
Company's Motion for FRCP 54(b) Final Judgment
(Ree. Doc. 102) is GRANTED. The Court will enter
Judgment dismissing First Colony Insurance Company
and directing the Clerk of Court to disburse $ 10,789.66
from the funds held in the registry of the Court.
New Orleans, Louisiana this 20th day of March, 2008.
G. Thomas Porteous, Jr.
/s/ G. Thomas Porteous
G. THOMAS PORTEOUS, JR.
UNITED STATES DISTRICT JUDGE
19a
CIVIL ACTION NO. 05-6849 SECTION "T" (1)
UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF LOUISIANA
FIRST COLONY LIFE INSURANCE COMPANY
VERSUS
ALFRED J. KREPPEIN, JR., RYAN BRICE
CRANE AND LAUREL CRANE LUQUETTE
JUDGMENT
The Court has granted Co-Defendants, Ryan Brice
Crane and Laurel Crane Luquette’s Motion for
Summary Judgment finding these Defendants are the
sole beneficiaries entitled to the insurance proceeds
pursuant to the policy of life insurance issed by First
Colony Insurance Company to Stephanie 3. Kreppein.
The Court has denied Co-Defendant Alfred J. Kreppin’s
Motion seeking entitlement to the same proceeds as
well as denied his Motion for Reconsideration of the
Order granting Ryan Brice Crane and Laurel Crane
Luquette’s Motion for Summary Judgment.
Further, the Court has granted First Colony Life
Insurance Company’s Motion for FRCP 54(b)
Judgment on the issue of its dismissal and _ its
entitlement to attorney’s fees and costs.
Accordingly,
IT IS ORDERED, ADJUDGED AND DECREED
that Judgment is hereby entered
20a
dismissing First Colony Life Insurance from this action
and the Clerk of Court is hereby ordered to pay the
sum of Ten Thousand Seven Hundred Fighty-Nine and
66/100 ($10,789.66) Dollars to First Colony Life
Insurance Company as attorney’s fees and costs.
IT IS FURTHER ORDERED, ADJUDGED AND
DECREED that Judgment is hereby entered declaring
Ryan Brice Crane and Laurel Crane Luquette as the
sole beneficiaries to the death benefits of the life
insurance policy issued by First Colony Life Insurance
Company to Stephanie B. Kreppin.
IT IS FURTHER ORDERED, ADJUDGED AND
DECREED that the Clerk of Court pay the remaining
sum deposited into the Registry of the Court with all
accrued interest to Ryan Brice Crane and Laurel Crane
Luquette as recognized beneficiaries of the First
Colony Life Insurance Policy insuring the life of
Stephanie Boyter Kreppein.
New Orleans, Louisiana, this 20" day of March, 2008.
21a
Filed 8/24/2007
CIVIL ACTION NO. 05-6849 SECTION “T" (1)
UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF LOUISIANA
FIRST COLONY LIFE INSURANCE COMPANY
VERSUS
ALFRED J. KREPPEIN,JR., RYAN BRICE
CRANE AND LAUREL CRANE LUQUETTE
ORDER & REASONS
Before the Court are defendant Alfred Kreppein and
defendants Ryan Crane and Laurel Luquette’s Cross
Motions for Summary Judgment. [Rece. Doc. No. 83, 85].
On June 26, 2007, Judge Zainey ordered the parties to
proceed in this litigation with cross-dispositive motions
exclusively on the issues of: 1) effect of the temporary
restraining order on the change of beneficiary of the life
insurance policy, 2) the mental capacity of the deceased
and 3) breach of contract in changing the listed
beneficiary. [Rec. Doc. No. 96] The Court, having
considered the arguments of the parties, the Court
record, the law and applicable jurisprudence, is fully
advised in the premises and ready to rule.
I. BACKGR.OUND
22a
This case surrounds a dispute over decedent Stephanie
Royter Kreppein’s insurance proceeds between the
decedent’s ex-husband, Alfred Kreppein (“Mr.
Kreppein”), and the decedent’s children, Ryan Brice
Crane and Laurel Crane Luquette (“Crane” and
“Luquette”).
The decedent and Mr. Kreppein were married in
November, 2000. Subsequently, each of them
purchased a life insurance policy naming the other as
the sole beneficiary. Mrs. Kreppein named Crane and
Luquette as Contingent Beneficiaries of her policy.
(Rec. Doc. No. 25-2, p. 1). On July 28, 2005, the decedent
moved out sf her home with Mr. Kreppein to Baton
Rouge with members of her family. (Rec. Doc. No. 85, p.
3). On August 2, 2005, Mr. Kreppein filed a petition for
divorce from the decedent. Id. Subsequently, on August
29, 2005, First Colony received a Policy Change Form,
signed by Mrs. Kreppein, revoking all prior beneficiary
designations and designating Crane and Luquette as
the Primary Beneficiaries under the Policy. (Rec. Doc.
No. 25-2, p. 2). Mrs. Kreppein died on October 11, 2005.
Under the applicable policy, upon the death of the
insured, First Colony became obligated to pay the sum
of $500,000, plus applicable interest, to the person/s
rightfully entitled to the death benefit. On December
27, 2005, Plaintiff First Colony Life Insurance Company
(“First Colony”) filed a Complaint for Interpleader
(Ree. Doe. No. 1) pursuant to Rule 22 of the Federal
Rules of Civil Procedure to determine the rightful
beneficiary/beneficiaries of the insurance proceeds.
After depositing the funds into the registry of the
court, First Colony filed a motion for summary
judgment which was granted by Judge Zainey on
23a
January 25, 2007. (Rec. Doe. No. 57). Judge Zainey
dismissed First Colony from the suit, except for the
limited issue of entitlement of attorney’s fees and costs,
which is still pending before this Court on Objection
from the Magistrate’s Ruling. (Rec. Doc. No. 91).
Il. STANDARD FOR SUMMARY JUDGMENT
Federal Rule of Civil Procedure 56 instructs that
summary judgment is proper if the record discloses no
genuine issue as to any material fact such that the
moving party is entitled to judgment as a matter of law.
No genuine issue of fact exists if the record taken as a
whole could not lead a rational trier of fact to find for
the non-moving party. See Matsushita Elec. Indus. Co.
v. Zenith Radio., 475 U.S. 574, 586 (1986). A genuine
issue of fact exists only "if the evidence is such that a
reasonable jury could return a verdict for the non-
moving party." Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 248 (1986).
The Court emphasizes that the mere argued existence
of a factual dispute does not defeat an otherwise
properly supported motion. See id. Therefore, "[i]f the
evidence is merely colorable, or is not significantly
probative," summary judgment is appropriate. Id. at
249-50 (citations omitted). Summary judgment is also
proper if the party opposing the motion fails to
establish an essential element of his case. See Celotex
Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). In this
regard, the non-moving party must do more than
simply deny the allegations raised by the moving party.
See Donaghey v. Ocean Drilling & Exploration Co., 974
F.2d 646, 649 (5th Cir. 1992). Rather, he must come
forward with competent evidence, such as affidavits or
24a
depositions, to buttress his claims. Id. Hearsay
evidence and unsworn documents do not qualify as
competent opposing evidence. Martin v. John W. Stone
Oil Distrib., Inc., 819 F.2d 647, 549 (5th Cir. 1987).
Finally, in evaluating the summary judgment motion,
the court must read the facts in the light most favorable
to the non-moving party. Anderson, 477 U.S. at 255.
Judge Zainey instructed the parties to support the
cross-dispositive motions for summary judgment with
evidence concerning the decedent’s mental capacity, the
issue of whether the decedent had “contracted away”
her right to change the beneficiary on her policy, and
the effect of the TRO. As such this Court will now turn
to those issues.
Il. CONTRACTUAL CAPACITY
Mr. Kreppein suggests that the decedent lacked the
required contractual capacity at the time that she
changed the beneficiary of her life insurance policy. His
affidavit states that “she was unable to perform routine
tasks,” “she began to lose her ability to think,” and “she
could not remember people she had known for long
periods of time.” [Rec. Doc. No. 85-6]. The affidavit of
the insurance agent who procured the policies for the
Kreppeins states that on July 29, 2005, the decedent,
her mother and another woman came to see him about
changing the beneficiary on the insurance policy. The
agent, l'erry Sullivan states “LaJt the time, it was clear
that Stephanie was not able to understand or
comprehend what was going on....She smiled sweetly
but did not recognize me or seem to comprehend
anything that [ said.” (Rec. Doc. No. 85-6, p. 7).
25a
However, the decedent was not interdicted by law at
the time of her death, and it is well settled that the law
presumes contractual capacity. Standard Life & Acc.
Ins. Co. v. Pylant, 424 So.2d 377 (La.App.2d Cir.1982).
Exceptions to the presumption of capacity to contract
must be shown quite convincingly and by the great
weight of the evidence. First Nat. Bank of Shreveport
v. Williams, 346 So.2d 257 (La.App.3d_ Cir.1977);
Kennedy v. Bearden, 471 So.2d 871 (La.App.2d
Cir.1985). Therefore, to determine whether the change
of beneficiary should be nullified due to lack of
contractual capacity, the Court looks to Louisiana Civil
Code Article 1926:
A contract made by a noninterdicted person deprived of
reason at the time of contracting may be attacked after
his death, on the ground of incapacity, only when the
contract is gratuitous, or it evidences lack of
understanding, or was made within thirty days of his
death, or when application for interdiction was filed
before his death.
La. Civ. Code Art. 1926. The changing of a beneficiary
under a life insurance policy is not a gratuitous
contract, Martin v. Metropolitan Life Ins. Co., 516
So.2d 1227, 1229 (La. Ct. App. 2nd Cir.1987)(citing
Standard Life Ins. Co. v. Taylor, 428 So.2d 1294
(La.App.3d Cir.1983); Sizeler v. Sizeler, 170 La. 128, 127
So. 388 (La.1930)); there was no application for
interdiction filed before the decedent’s death; and the
Change of Beneficiary Form signed by the deceased
was executed on August 22, 2005, more than thirty days
before the decedent’s death.
Therefore, the only way that the decedent’s Change of
26a
Beneficiary Form can be challenged for lack of capacity
is if it “evidences a lack of understanding.” There is no
evidence that the contract itself “evidences a lack of
understanding.” The Policy Change Form bears the
decedent’s signature and —learly sets forth a change of
beneficiary from Mr. Kreppein to a 50% interest in
Ryan Crane and a 50% interest in Laurel Crane
Luquette. [Rec. Doc. No. 83-8, p. 56]. Furthermore,
the sworn affidavit of Mary Elizabeth Perry, who
witnessed the signing of the document notes that the
decedent “made it clear it was something she wanted to
do. She expressed understanding concerning the
implications of signing the Change of Beneficiary
Designation Form.” [Rec. Doc. No. 83-6, p. 41]. As
such, there is insufficient evidence to overcome the
presumption that the decedent had contractual capacity
at the time she executed the Policy Change Form
document. !
Il. RECIPROCAL INSURANCE OBLIGATION
Mr. Kreppein argues that even if the decedent did not
lack contractual capacity to change the insurance policy
beneficiary, she was precluded from doing so because
she and Mr. Kreppein had mutually contracted away
their rights to change the beneficiary of their
respective policies.
Mr. Kreppein states in his affidavit: “Stephanie and I
had specifically agreed to secure two insurance policies
on each other’s lives to enable us to pay debts which we
were continuing to incur as a result of business and
other property we purchased during our marriage.”
(Rec. Doc. No. 85-6, p. 3). The two allegedly agreed
that the proceeds of the respective policies would
27a
reciprocally ensure each other and there would be “no
change regarding the insurance’ policies’ or
beneficiaries.” Id.
The only evidence that Mr. Kreppein has to attest to
this seemingly oral agreement to reciprocally insure
was Mr. Kreppein’s own affidavit and that of Terry
Sullivan, the agent who helped the Kreppeins procure
their policies. Terry Sullivan states in his depositions:
“Al was aware that I had an insurance license and he
indicated that he and Stephanie wanted to discuss
obtaining life insurance policies that would protect each
of them in the event of the death of the other.” (Rec.
Doc. No. 85-6, p. 6).
The decedent’s insurance policy states that the “Owner
may change the designations of Owner, Contingent
Owner, and Beneficiary during the insured’s lifetime.
Any change is subject to the consent of an irrevocable
beneficiary.” (Rec. Doc. No. 83-8, p. 35). There is no
indication in the policy nor any argument made by
either party that Mr. ‘.reppein was made an
“irrevocable beneficiary” unc2r the policy. Without a
designation of an irrevocab'e beneficiary, the decedent
would be free to change the beneficiary under the
policy at any time before his or her death. If the
Kreppeins had truly intended to contract out of their
right to change the designation of beneficiary, each
should have designated the other as “irrevocable
beneficiary” under the policy.
If they had done so, any change to the _ policy
beneficiary could only be made with the irrevocable
beneficiary’s consent. It is well settled in Louisiana law
that the owner of an insurance policy, usually also the
28a
insured, has the right to change the designation of the
beneficiary of his or her policy under the terms of the
policy without the consent of th -riginal beneficiary.
15 La. Civ. L. Treatise, Insuranee Law & Practice § 256
(3d ed.). This is because absent a conventional
agreement, “no one has the vested right to the status of
a beneficiary under a life insurance contract, if the
contingent event which vests such right, the death of
the insured, has not occurred; until then, the parties to
the insurance contract are free to change the
beneficiary, if such a change is permitted by its terms.”
Jackson Nat. Life Ins. Co. v. Kennedy-Fagan, 873 So.2d
44, 49 (La. Ct. App. 1* Cir. 2004).
Such a case is present here. Mr. Kreppein has adduced
no evidence that the deceased sought to designate him
as an irrevocable beneficiary. Furthermore, he has
failed to introduce any evidence, other than his own
testimony and the generalized testimony of his
insurance agent, Terry Sullivan, that the deceased
intended to enter into a binding conventional obligation
to maintain Mr. Kreppein as the beneficiary of her
policy.
IV. EFFECT OF THE TEMPORARY
RESTRAINING ORDER
Mr. Kreppein’s third basis for requesting this Court
deem the decedent’s Change of Beneficiary ineffective
is the existence of a temporary restraining order (TRO)
that he argues was in effect at the time of the change of
beneficiary that would apply to the First Colony life
insurance policy. The TRO in question was signed by
Judge Ethel Simms Julien on August 2, 2005. The TRO
states:
29a
[the] temporary restraining orders issue directed unto
the defendant, Stephanie Boyter Kreppein, restraining,
enjoining and prohibiting Stephanie Boyter Kreppein,
or any other persons, entities, firms, corporations or
partnerships acting or claiming to act in Stephanie
Boyter Kreppein’s behalf from in any manner
whatsoever alienating, encumbering or disposing of any
or all of the assets of the community of aquets and gains
between them; and, from borrowing against the cash
surrender values, or from changing the ownership
and/or beneficiaries of any policies of life insurance
insuring the lives of either of the parties hereto, all
without bond.
Rec. Doc. No. 85-6, p. 16. The TRO further orders
Stephanie Boyter Kreppein to show cause on the 16" of
August, 2005 why a preliminary injunction should not
be issued, why she should not return the funds removed
from community and separate bank accounts, and for all
other equitable relief to which Mr. Kreppein is entitled.
Id.
The Louisiana Code of Civil Procedure provides the
procedure for obtaining a temporary restraining order.
La. Code Civ. Pro. Art. 3604. There is no disputed fact
as to whether or not the TRO was validly issued in this
case. The TRO was properly endorsed, signed by the
Judge, filed by the Court, and otherwise met the
requirements of Article 3604. However, the issue that
is in dispute is whether or not the TRO was still in
effect at the time Mrs. Kreppein changed the
beneficiary of her life insurance policy, and whether
that TRO, if still in effect, extended to the life insurance
policy.
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The Code also provides that a TRO shall expire by its
terms within such time after entry, not to exceed ten
days. La. Code Civ. Pro. Art. 3604. (emphasis added).
In this case, the TRO was signed by the Judge on
August 2, 2005, and served on Mrs. Kreppein on August
12, 2005.
A TRO is considered effective against the parties from
the time that they receive actual notice of the order, by
personal service or otherwise. La. Code Civ. Pro. Art.
3605. (emphasis added).
Mr. Kreppein argues that Mrs. Kreppein was served
with the notice of the TRO on August 12, 2005, and
therefore, that is when the TRO took effect. As such,
Mr. Kreppein argues that the TRO was effective for 10
days, and when Mrs. Kreppein attempted to change the
beneficiary of her policy on August 22, 2005, she was
doing so in violation of a court order.
Rec. Doc. No. 85-2, p. 4-5, Rec. Doc. No. 88, p. 3.
However, the service of process of the TRO or the
notice thereof does not change the length or the start
date of the effectiveness of the TRO.
The date of notice or service merely serves to indicate
the time at which the parties’ compliance is required.
Therefore, since the TRO could be in effect no longer
than 10 days after entry, the TRO expired by its own
terms on August 12, 2005, the day that it was served on
Mrs. Kreppein.
Furthermore, the August 16, 2005 Rule to Show Cause
came and went without a hearing on the matter.
Article 3606 states: The party who obtains a temporary
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restraining order shall proceed with the application for
a preliminary injunction when it comes on for hearing.
Upon his failure to do so, the court shall dissolve the
temporary restraining order. La. Code Civ. Pro. Art.
3606. See also, Austin v. Currie, 134 So. 723 (La. Ct.
App. 2d. Cir. 1931)(temporary restraining order, where
not extended, expired on date fixed to show cause why
preliminary injunction should not issue).
There is some evidence that the parties intended to
request a continuance from the Court for their hearing
on the preliminary injunction. See Rec. Doc. No. 85-6,
p. 20-21. However, this Motion to Consolidate and
Motion for Continuance was never signed by Sandra 8.
Salley, counsel for Mr. Kreppein, never signed by the
Judge, and never filed with the Court. See Rec. Doc.
No. 85-6, p. 20-21. Therefore, the hearing date was
never eifectively continued.
Furthermore, even if the Court were to consider the
agreement to continue effective, the agreement
continued the hearing date on the _ preliminary
injunction but did not reinstate the TRO which had
already expired. Plaintiffs argument that the TRO
stayed in effect from its issuance on August 2, 2005
until the decedent’s death on October 11, 2005 is clearly
in contrast to well established law that a temporary
restraining order should not be kept in effect for many
months without making it a temporary injunction.
Metalock Repair Service v. Harman, 1954, 216 F.2d 611
(6'" Cir. 1954).
Accordingly,
IT IS ORDERED that the Motion for Summary
Judgment filed on behalf of Ryan Brice and Laurel
Crane Luquette be GRANTED.
IT IS FURTHER ORDERED that the Motion for
Summary Judgment filed on behalf of Alfred J.
Kreppein, Jr. be DENIED.
Footnote
| It is also noteworthy that on July 11, 2007, Judge
Kern A. Reese of the Civil District Court for the Parish
of Orleans, in an extensive Reasons for Judgment held
that Mr. Kreppein did not overcome the presumption of
testamentary capacity in his challenge to the decedent’s
revocation of Mr. Kreppein as the executor of her will.
See Rec. Doc. No. 99, Written Reasons of Judgment in
the Succession of Stephanie Boyter Kreppein. That
court, while determining the decedent’s capacity in
revoking a testament, which took place on a different
occasion than the Change of Beneficiary, examined
much of the same evidence that is before this Court and
likewise found it insufficient to overcome the heavy
burden placed on those seeking to nullify a testament.
G. Thomas Porteous, Jr.
UNITED STATES DISTRICT JUDGE
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11/14/2008
No. 08-30409 Summary Calendar
UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
FIRST COLONY LIFE INSURANCE COMPANY,
Plaintiff - Appellee
v.
ALFRED J KREPPEIN, JR,
Defendant - Appellant
v.
RYAN BRICE CRANE; LAUREL CRANE
LUQUETTE,
Defendants - Appellees
Appeal from the United States District Court for the
Eastern District of Louisiana. No. 2:05-C V-6849.
ON PETITION FOR REHEARING EN BANC
Before KING, DENNIS, and OWEN, Circuit Judges.
PER CURIAM:
Treating the Petition for Rehearing En Banc as a
Petition for Panel Rehearing, the Petition for Panel
Rehearing is DENIED. No member of the panel nor
judge in regular active service of the court having
requested that the court be polled on Rehearing En
Banc (Fed. R.App.P. and 5" Cir, R. 35), the Petition for
Rehearing En Banc is DENIED.
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2005-10347
CIVIL DISTRICT COURT
FOR THE PARISH OF ORLEANS
STATE OF LOUISIANA
ALFRED J. KREPPEIN, JR.
VERSUS
STEPHANIE BOYTER KREPPEIN
The petition of Alfred J. Kreppein, Jr., a major resident
and domiciliary of Orleans Parish, State of Louisiana,
respectfully represents:
1.
Made Defendant herein is Stephanie Boyter Kreppein,
who is a major resident and domiciliary of East Baton
Rouge Parish, State of Louisiana who can be served
with notice and citation at 12718 East Millburn Drive,
Baton Rouge, Louisiana 70815.
2
wwe
The parties hereto were married unto each other on
ry
November 17, 2000, in Jefferson Parish, State of
Louisiana.
3.
The last matrimonial domicile of the parties was located
at 7300 Lakeshore Drive, Unit 41, New Orleans,
Louisiana 70124.
4.
This Court has jurisdiction over this proceeding
pursuant to the provisions of Louisiana Code Civil
Procedure, Article 10(a)(7), in that this is a suit for
divorce and matters incidental thereto, and both of the
spouses are domiciled in this State.
).
Venue for this action is proper in this Court pursuant to
the provisions of Louisiana Code Civil Procedure,
Article 3941, as Orleans Parish is the parish where both
of the parties are domiciled.
6.
As Petitioner and Defendant ceased living together and
physicaliy separated on July 26, 2005, Plaintiff seeks a
jucgment of divorce from the defendant pursuant to the
provisions of Louisiana Civil Code, Article 102.
ro
The parties hereto have acquired community properties
and have incurred community obligations.
ra
Petitioner, Alfred J. Kreppeln, Jr., fears that before a
hearing can be had or notice given, the defendant,
Stephanie Boyter Kreppein, will or may dispose of,
alienate or encumber some or all of the assets belonging
to the community of acquets and gains existing
between them, and will or may borrow against the cash
surrender values and/or change the ownership and/or
beneficiaries of the policies of life insurance insuring
the lives of the parties hereto, causing Alfred J.
Kreppein, Jr. immediate irreparable injury and harm.
Alfred J. Kreppein, Jr. seeks, therefore and is entitled
to the issuance of a Temporary Restraining Order
herein directed unto the defendant, Stephanie Boyter
Kreppein, restraining, enjoining and prohibiting
Stephanie Boyter Kreppein, or any other persons,
entities, firms, corporations or partnerships acting or
claiming to act in Stephanie Boyter Kreppein's behalf
from in any manner’ whatsoever alienating,
encumbering or disposing of any or all of the assets of
the community of acquets and gains between them; and,
from borrowing against the cash surrender values, or
changing the ownership and/or beneficiaries of any
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policies of life insurance insuring the lives of either of
the parties hereto, all without bond.
9.
Petitioner seeks and is entitled to the issuance of a rule
nisi herein, directed unto the defendant, Stephanie
Boyter Kreppeln, ordering Stephanie Boyter Kreppeln
to show cause, if any she can, on a date and at a time to
be set by this Court, why a Preliminary Injunction in
the form and substance of the temporary restraining
order sought immediately hereinabove should not issue
herein, without bond.
10.
Stephanie Boyter Kreppeln withdrew funds in the
amount $142,000.00 from various bank accounts
containing both community and separate funds of
Petitioner, on July 28, 2005. Petitioner seeks and is
entitled to the issuance of a rule nisi herein, directed
unto the defendant, Stephanie Boyter Kreppein,
ordering Stephanie Boyter Kreppein to show cause, if
any she can, on a date and at a time to be set by this
Court, why said funds should not be retumed to a
community account.
11.
Petitioner seeks and is entitled to a judgment
terminating the community of acquets and gains,
retroactive to date of the judicial demand herein,
decreeing each of the parties hereto to be owners of an
undivided one-half interest In and thereto.
12
Pursuant to provisions of LBA-R.S. 9:2801 et seq.,
Petitioner seeks and is entitled to a judgment from this
Court partitioning the community of acquets and gains
previously existing between the parties.
13.
Petitioner requests that this Court order the parties to
ola
file Sworn Detailed Descriptive Lists within forty-five
(45) days of service of this petition, pursuant to
Louisiana Revised Statute 9:2801(1)(a) and that the
parties file Traversals of the Sworn Detailed
Descriptive Lists within sixty (00) days of the ding of
the last Sworn Detailed Descriptive List.
WHEREFORE, Petitioner, Alfred J. Kreppein, Jr.,
PRAYS THAT:
A. The defendant, Stephanie Boyter Kreppein, be
served with notice and citation as set forth in
Paragraph 1 hereinabove;
B. The parties be ordered to file Sworn Detailed
Descriptive Lists within forty-five (45) days of service
of this petition, pursuant to Louisiana Revised Statute
9:2801(1)(a) and that the parties file Traversals of the
Swom Detailed Descriptive Lists within sixty (60) days
of the filing of the last Sworn Detailed Descriptive List.
C. A temporary restraining order issue herein
directed unto the defendant, Stephanie Boyter
Kreppein, restraining, enjoining and_ prohibiting
Stephanie Boyter Kreppein and any other person,
entities, claiming to act in Stephanie Boyter Kreppeln's
behalf, from in any manner whatsoever alienating,
encumbering or disposing of any or all assets of the
community of acquets and gains previously existing
between the parties hereto; from borrowing against the
cash surrender values, from changing the ownership
and/or beneficiaries of any policies of life insurance
insuring the lives of either of the parties hereto;
[). A rule nisi issue herein directed unto the
38a
defendant, Stephanie Boyter Kreppein, ordering her to
show cause, if any she can, on a date and at a time to be
set by this Court, why:
1. A preliminary injunction in the form and
substance of the temporary restraining order Alfred J.
Kreppein, Jr. sought hereinabove should not issue
herein, without bond; and
2. Stephanie Boyter Kreppein should not return
the funds removed from the bank accounts containing
both community and separate funds, to a community
account.
Petitioner FURTHER PRAYS that after all legal
delays and due proceedings had herein, there be further
judgment herein in Alfred J. Kreppein Jr.'s.favor and
against the defendant, Stephanie Boyter Kreppeln:
A. Granting unto Alfred J. Kreppein, Jr. a
judgment of final divorce, a vinculo matrimonil;
B. Terminating the community of acquets and gains
previously existing between the parties hereto,
retroactive to date of judicial demand herein, decreeing
each of the parties to be owners of an undivided one-
half interest in and thereto;
OF Partitioning the community of acquets and gains
previously existing between the parties in accordance
with provisions of LSA-R.S. 9:2801et seq.;
D. For all further equitable relief to which Alfred J.
Kreppein, Jr. is entitled to in these premises. |
2K OK K
ORDER
CONSIDERING THE ABOVE AND FOREGOING,
IT IS ORDERED that the parties shall file Swom
39a
Detailed Descriptive Lists of all community
property,.the fair value and the location of each asset
and all community liabilities, within forty-five (45) days
of service of this order and that the parties shall file
Traversals of the Sworn Detailed Descriptive Lists
within sixty (60) days of the fling of the last Swom
Detailed Descriptive List.
IT IS FURTHER ORDERED that temporary
restraining orders issue directed unto the defendant,
Stephanie Boyter Kreppein, restraining, enjoining and
prohibiting Stephanie Boyter Kreppein or any other
persons, entities, firms, corporations or partnerships
acting or claiming to act in Stephanie Boyter
Kreppein's behalf from in any manner whatsoever
alienating, encumbering or disposing of any or all of the
assets of the community of acquets and gains between
them; and, from borrowing against the cash surrender
values, or from changing the ownership and/or
beneficiaries of any policies of life insurance insuring
the lives of either of the parties hereto, all without
bond,
IT IS FURTHER RDERED that Stephanie Boyter
Kreppein show cause on the 16" day of August, 2005 at
8:30 am why:
1. A preliminary injunction in the form and
substance of the temporary restraining order Alfred J.
Kreppein, Jr. sought hereinabove should not issue
herein, without bond;,.
2. Stephanie Boyter Kreppeln should not return
the funds removed from the community and separate
bank accounts to a community account.
3. For all further equitable relief to which Alfred J.
40a
Kreppein, Jr. is entitled to in these premises.
August 2, 2005 and it needs to show that
Judge Ethel Simms Julien
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