United States Court of Appeals
for the Fifth Circuit
____________
No. 23-40375
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Transamerica Life Insurance Company,
Plaintiff,
versus
Holly L. Moore,
Defendant—Appellee,
versus
Jeffrey H. Simpson,
Defendant—Appellant.
______________________________
Appeal from the United States District Court
for the Eastern District of Texas
USDC No. 4:22-CV-340
______________________________
Before Richman, Chief Judge, and Graves and Wilson, Circuit
Judges.
Cory T. Wilson, Circuit Judge:
Texas Family Code § 9.301 generally operates to strip “the insured’s
spouse” of beneficiary interests in insurance policies once a divorce decree
renders the policy beneficiary an ex-spouse. This case turns on whether “the
United States Court of Appeals
Fifth Circuit
FILED
June 28, 2024
Lyle W. Cayce
Clerk
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2
insured’s spouse” includes someone who was named a policy beneficiary
before she became the insured’s spouse: Ian Simpson took out a life insurance
policy and named his fiancée Holly Moore primary beneficiary and his father
Jeffrey Simpson contingent beneficiary. The couple then married, then
divorced, and then Ian died without ever changing the policy beneficiaries.
The district court held that § 9.301 comes into play only if the insured
and the beneficiary were married when the insurance policy was purchased.
The court reasoned that because a policy purchased prior to marriage did not
name “the insured’s spouse,” a later divorce decree would not divest the
beneficiary of insurance proceeds. But § 9.301’s text indicates that “the
insured’s spouse” centers on an individual’s status at the time a divorce
decree is rendered, regardless of when a policy was first obtained. Therefore,
we reverse the district court’s judgment awarding Ian’s policy proceeds to
Holly and render judgment in favor of Jeffrey Simpson.
I.
Ian Simpson purchased a $100,000 life insurance policy (the Policy)
from Transamerica Life Insurance Company in February 2018. Ian named
his fiancée Holly Moore as the primary beneficiary and his father Jeffrey
Simpson (Simpson) as the contingent beneficiary. Ian and Holly married in
September 2018 but divorced in January 2021. Their divorce decree
stipulates that Holly was “divested of all right, title, interest, and claim in and
to . . . [a]ll policies of life insurance (including cash values) insuring [Ian]’s
life.” Ian remained owner of the Policy, but he never changed its beneficiary
designations.
Ian died on May 2, 2021. Holly filed a claim with Transamerica for
the Policy proceeds in August 2021. Invoking Texas Family Code § 9.301,
Transamerica responded in November 2021 that “Holly [] is not the
beneficiary,” and declined to pay her the Policy benefits. Instead,
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Transamerica notified Simpson that he had succeeded to the position of
primary beneficiary, and Simpson followed with a claim for the life insurance
proceeds. Facing competing claims and asserting ambiguity in Texas law,
Transamerica filed an interpleader action in federal district court. The
district court granted Transamerica’s motion for interpleader relief,
Transamerica deposited the disputed funds minus attorneys’ fees into the
court registry, and the case continued between Holly and Simpson.
The parties cross-moved for summary judgment. The district court,
making an Erie guess,
1
concluded that § 9.301 did not apply to separate
property acquired prior to marriage because “the text of § 9.301 makes clear
that the statute applies only to ‘community property life insurance policies
acquired during marriage.’” Transamerica Life Ins. Co. v. Moore, 675 F. Supp.
3d 744, 753 (E.D. Tex. 2023) (quoting Primamerica Life Ins. Co. v. Simpson,
No. 1:10-cv-163, 2011 WL 13238321, at *12 (W.D. Tex. Feb. 23, 2011)).
Building on this interpretation, the court found that the Policy had been Ian’s
separate property under Texas’s “inception-of-title” rule, and thus not part
of the marital estate, and entered summary judgment for Holly. Id. at 751–
52. The court awarded her the interpleaded funds plus interest. Simpson
moved for reconsideration, which the court denied.
Simpson now appeals, contending that either the text of § 9.301 or the
terms of Ian and Holly’s divorce decree operate to divest Holly of any right
to the Policy proceeds.
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1
Erie R. Co. v. Tompkins, 304 U.S. 64 (1938); see, e.g., Weyerhaeuser Co. v. Burlington
Ins. Co., 74 F.4th 275, 284 (5th 2023) (outlining that a federal court may make an “Erie
guess” to interpret state law when a state’s highest court has not rendered an on-point
decision).
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II.
We review summary judgments de novo. In re La. Crawfish Producers,
852 F.3d 456, 462 (5th Cir. 2017). We likewise review de novo the district
court’s determination of underlying questions of law, including those of
statutory interpretation. Evanston Ins. Co. v. Mid-Continent Cas. Co., 909
F.3d 143, 146 (5th Cir. 2018); United States v. Tilford, 810 F.3d 370, 371 (5th
Cir. 2016). “When we interpret a Texas statute, we follow the same rules of
construction that a Texas court would apply—and under Texas law the
starting point of our analysis is the plain language of the statute.” Cruz v.
Abbott, 849 F.3d 594, 599 n.8 (5th Cir. 2017) (quoting Wright v. Ford Motor
Co., 508 F.3d 263, 269 (5th Cir. 2007)). “Texas courts aim to give effect to
legislative intent, and they ‘rely on the plain meaning of the text as expressing
legislative intent.’” Id. (quoting Tex. Lottery Comm’n v. First State Bank of
DeQueen, 325 S.W.3d 628, 635 (Tex. 2010)). “Where text is clear, text is
determinative of that intent.” Evanston Ins. Co. v. Dillard Dep’t. Stores, Inc.,
602 F.3d 610, 615 (5th Cir. 2010).
Texas Family Code § 9.301 states:
Pre-Decree Designation of Ex-Spouse as Beneficiary of Life
Insurance
(a) If a decree of divorce or annulment is rendered after an
insured has designated the insured’s spouse as a beneficiary
under a life insurance policy in force at the time of rendition, a
provision in the policy in favor of the insured’s former spouse
is not effective unless:
(1) the decree designates the insured’s former spouse as
the beneficiary;
(2) the insured redesignates the former spouse as the
beneficiary after rendition of the decree; or
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(3) the former spouse is designated to receive the
proceeds in trust for, on behalf of, or for the benefit of a
child or a dependent of either former spouse.
(b) If a designation is not effective under Subsection (a), the
proceeds of the policy are payable to the named alternative
beneficiary or, if there is not a named alternative beneficiary, to
the estate of the insured.
Simpson contends that “the insured’s spouse” refers to a beneficiary’s
status at the time of a divorce decree’s rendition, such that § 9.301(a) divests
a divorcing spouse of interests in a life insurance policy if she was named
beneficiary any time prior to the decree. Holly counters that “the insured’s
spouse” “refers to the beneficiary’s status at the time of designation, not to
the beneficiary’s status at the time of a divorce decree.” In her view,
Ҥ 9.301 does not apply to a life insurance policy that was separate property
of the decedent and issued prior to the marriage.”
Neither the Supreme Court of Texas nor Texas’s intermediate
appellate courts have squarely resolved whether Simpson’s or Holly’s
reading is correct. Instead, prior Texas cases, like ours, have delimited
beneficiary designations occurring before and after the decree, rather than the
marriage. E.g., Gray v. Nash, 259 S.W.3d 286, 291 (Tex. App. 2008, pet.
denied) (concluding that § 9.301 did not nullify designation where insured
designated ex-spouse as beneficiary after a divorce decree, as the statute
applies “to life insurance policies issued before a trial court renders a
decree”); see also Baker v. Bizzle, 687 S.W.3d 285, 297 (Tex. 2024) (noting
that § 9.301 “places conditions on the validity of a provision in a life
insurance policy issued before a divorce naming the former spouse as a
beneficiary”) (Lehrmann, J., concurring); accord Provident Life & Acc. Ins. Co.
v. Cleveland, 460 F. App’x 359, 361 (5th Cir. 2012) (“[B]ecause [the insured]
designated [his ex-spouse] as the beneficiary before the divorce decree was
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entered, he was required to re-designate her if he wished for her to remain as
the beneficiary after the divorce.”).
Nonetheless, the more straightforward reading of § 9.301 indicates
that “the insured’s spouse” refers to the marital relationship at the time of a
divorce decree’s rendition, regardless of when an insurance policy was
purchased, and the beneficiary initially named. The text of § 9.301 addresses
what happens when a divorce decree is “rendered after an insured has
designated the insured’s spouse as a beneficiary” of a policy “in force at the
time of rendition.” Tex. Family Code § 9.301(a). The whole focus is
on the divorcing spouses—one, the insured and the other, the named
beneficiary—at the time of rendition, not at the inception of the policy.
Section 9.301’s text nowhere distinguishes between beneficiary designations
made before marriage, or during.
2
If an insured has designated as beneficiary
the person who is his or her spouse at the time a divorce decree is rendered,
§ 9.301(a) makes that designation ineffective, absent a cognizable exception.
Because Ian and Holly’s divorce was rendered “after [Ian] ha[d] designated
[his] spouse as a beneficiary under a life insurance policy in force at the time
of rendition,” § 9.301(a)’s predicates were met, the “provision in the
[P]olicy in favor of [Holly] is not effective,” and under § 9.301(b), “the
proceeds . . . are payable to the named alternative beneficiary,” i.e., Simpson.
Section 9.301(a)’s enumerated exceptions reinforce this conclusion.
A beneficiary designation in favor of a former spouse survives rendition if
“the decree designates the insured’s former spouse as the beneficiary,” id.
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2
The heading of § 9.301 likewise centers on the timing of the divorce decree: “Pre-
Decree Designation of Ex-Spouse.” (emphasis added); see A. Scalia & B. Garner,
Reading Law: The Interpretation Of Legal Texts 221 (2012) (explaining
that under the “Title-and-Headings” Canon, statute titles can aid in resolving drafters’
intent).
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§ 9.301(a)(1), or if the insured himself “redesignates the former spouse as
the beneficiary after rendition,” id. § 9.301(a)(2); see Gray, 259 S.W.3d at
288–89. The statute thus anticipates that either the decreeing court or the
divorcing policy owner may opt-out of the general rule, by so specifying either
at the time of the decree or thereafter. But again, the exceptions to the rule
focus on beneficiary designations either at the time of rendition, or afterward;
there is no exception for designations made pre-marriage that persist through
marriage up to rendition. Cf. Quick v. City of Austin, 7 S.W.3d 109, 122–23
(Tex. 1998) (noting that Texas courts presume that when the Texas
Legislature decides “not to include [] an express provision . . . [the] omission
has a purpose”). And of course, neither exception applies here: The divorce
decree expressly states that it “divested [Holly] of all right, title, interest, and
claim in and to . . . [a]ll policies of life insurance (including cash values)
insuring [Ian]’s life,”
3
and Ian made no change to the Policy designation after
the divorce.
Finally, nothing in our reading of the statute “necessarily create[s] a
risk of divesting a spouse of their separate property.” Transamerica, 675 F.
Supp. 3d at 753. True enough, and as the district court reasoned, Texas law
makes clear that “a [Texas] court cannot divest an owner of separate
property.” Pearson v. Fillingim, 332 S.W.3d 361, 363 (Tex. 2011) (citing
Tex. Const. art. I, § 19). And “[i]nsurance policies are governed by the
inception-of-title doctrine, meaning the separate or community character of
a policy is determined by the time and circumstances of its acquisition.” Rolls
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3
Because § 9.301 divested Holly of her beneficiary interest by operation of law, we
need not decide whether the divorce decree independently stripped her beneficiary
interest. But the decree clearly did not re-designate her as the beneficiary to bring her
within § 9.301(a)(1).
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v. Rolls, No. 03-14-00435-CV, 2016 WL 284373, at *2 (Tex. App. Jan. 14,
2016, no pet.) (citing Barnett v. Barnett, 67 S.W.3d 107, 111 (Tex. 2001)).
But the question of whether the Policy here was Ian’s separate
property, as opposed to community property of the spouses’ marital estate,
is beside the point. Ian remained the owner of the Policy before marriage,
arguendo during marriage, and after rendition. The relevant question is who
the proper beneficiary was, specifically who it was after Ian and Holly’s
divorce decree. Contra the district court’s holding, Ian never risked being
divested of any property interest, separate or otherwise—and Holly never
had one, because “a named beneficiary has no vested interest in the policy
proceeds . . . .” Rotating Servs. Ind. Inc. v. Harris, 245 S.W.3d 476, 481 (Tex.
App.—Houston [1st Dist.] 2007) (rev. den’d Sep. 21, 2007) (citations
omitted).
4
“[T]he beneficiary . . . obtains no vested interest in the proceeds
of the policy prior to the death of the insured. The insured may change the
beneficiary at will and thereby divest a prior beneficiary of all interest in the
proceeds of the policy.” Volunteer State Life Ins. v. Hardin, 197 S.W.2d 105,
107 (Tex. 1946).
Where an individual purchases an insurance policy before marriage—
even assuming it remains his separate property, § 9.301 thus does not modify
the policy owner’s property interest.
5
Instead, § 9.301 sets a default rule
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4
There are two exceptions to the rule that a named beneficiary has no vested
interest in a policy: (1) when a separate contract proscribes beneficiary changes, and
(2) when the policy itself does not authorize its owner to change the beneficiary. See Harris,
245 S.W.3d at 481 (citations omitted). Neither exception is relevant here.
5
As the district court concluded, the Policy likely remained Ian’s separate property
during the marriage. Under Texas law, life insurance policies do not become community
property after marriage, even if premiums are paid with community funds. See Rolls, 2016
WL 284373, at *2 (holding that the insurance policy at issue was husband’s separate
property under the inception-of-title rule because he acquired it prior to the marriage).
Reversing the trial court’s division of the policy’s cash value, the Rolls court instructed that
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divesting a beneficiary-spouse of her interest in the policy upon rendition of
a divorce decree. That default rule applies here, and Holly was divested of
her interest in the Policy upon rendition of Ian and Holly’s divorce.
III.
Under Texas Family Code § 9.301, “the insured’s spouse” refers to
a policy beneficiary’s status at the time a divorce decree is rendered—not
when that beneficiary is initially designated by the policy owner. And by
operation of § 9.301, absent an exception, a divorce decree divests a divorcing
spouse of his or her beneficiary interest in such a policy. Applied here,
§ 9.301 divested Holly of her beneficiary interest in the Policy after the
divorce decree’s rendition, and Simpson is entitled to the Policy proceeds as
the contingent beneficiary. Thus, the judgment of the district court is
REVERSED and RENDERED.
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“[a]t most, [the ex-spouse] could only seek a portion of the reimbursement the community
estate might be entitled to for premiums paid during the marriage.” Id. (citation omitted).
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James E. Graves, Jr., Circuit Judge, concurring:
The majority’s interpretation of Texas Family Code § 9.301 is
compelling. But the district court’s contrary Erie guess is equally compelling.
In the “Statement Regarding Oral Argument” section of the Appellant’s
brief, the Appellant remarks that our panel “may consider certifying a
question to the Supreme Court of Texas regarding the interpretation of
§ 9.301 as applied to the facts of this appeal.” Neither the Appellant nor the
Appellee otherwise addresses or urges certification. But the majority notes,
“[n]either the Supreme Court of Texas nor Texas’s intermediate appellate
courts has squarely resolved” whether the Appellant’s reading or the district
court’s reading is correct, Op., 5. For that reason, certification to the
Supreme Court of Texas “is prudent and appropriate in this case.” Silguero
v. CSL Plasma, Inc., 907 F.3d 323, 333 (5th Cir. 2018), certified question
accepted (Oct. 26, 2018), certified question answered, 579 S.W.3d 53 (Tex.
2019).
“Texas rules provide that we may certify ‘determinative questions of
Texas law having no controlling Supreme Court [of Texas] Precedent’ to the
Supreme Court of Texas. Tex. R. App. P. 58.1.” Id. at 332. We analyze
the following factors to determine whether a question of state law is fit for
certification:
(1) the closeness of the question and the existence of sufficient
sources of state law; (2) the degree to which considerations of
comity are relevant in light of the particular issue and case to
be decided; and (3) practical limitations of the certification
process: significant delay and possible inability to frame the
issue so as to produce a helpful response on the part of the state
court.
Id. at 333. The first factor favors certification because there is no state law
guidance. The Texas cases cited by the majority regarding § 9.301 pertain to
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beneficiary designations that occur before and after a divorce decree. Op., 5.
This case asks us to determine whether § 9.301 applies to a beneficiary
designation that occurred before a marriage.
The second factor favors certification because “important state
interests are at stake.” Free v. Abbott Lab’ys, Inc., 164 F.3d 270, 274 (5th Cir.
1999). All ex-spouses who were designated beneficiaries before their
marriage are denied any beneficiary interests by today’s interpretation of
§ 9.301.
“With respect to the final factor, [I] perceive no hardship in certifying
the question. We can formulate discrete issues for consideration, and the
Supreme Court of Texas has been prompt in its responses.” Silguero, 907
F.3d 323, 333 (5th Cir. 2018).
Despite my view regarding certifying the question to the Supreme
Court of Texas, I acquiesce in today’s ruling because the Erie guess of the
district court and the Erie guess of today’s opinion are equally forceful.
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