Texas Appeals Court Upholds Dismissal in State Farm Life Insurance Dispute

The Texas Tenth Court of Appeals has upheld the dismissal of a lawsuit against State Farm Life Insurance Company involving a beneficiary dispute over two life insurance policies valued at over $800,000. Following the death of policyholder Howard LeJeune in 2022, Scarlett Robbins, the named beneficiary, filed a claim for the insurance proceeds, which was contested by LeJeune's estate amid ongoing probate proceedings.

State Farm responded by filing a federal interpleader action, depositing the funds with the court and requesting relief from liability while the competing claims were resolved externally. The appellate court affirmed the dismissal of Robbins' claims against State Farm, concluding the insurer fulfilled its legal obligations by executing the interpleader and tendering the full policy amount, thereby removing itself from the dispute.

Additionally, the court rejected Robbins' contention of inadequate notice regarding the dismissal hearing, noting she had been given sufficient opportunity to respond. This ruling demonstrates the strategic utility of interpleader actions for insurers managing contested beneficiary claims, providing a mechanism to protect against liability while facilitating fair adjudication. The case highlights critical considerations for claims examiners, compliance personnel, and legal teams in handling complex beneficiary conflicts, especially involving high-value policies and concurrent probate litigation. The underlying dispute over the insurance proceeds continues in federal court between the competing claimants.