Farmers New World Life Insurance Co. v. Rees

Frank Rees (defendant) and Rosamaria Rees were married. Rosamaria had a $150,000 life-insurance policy from Farmers New World Life Insurance Company (Farmers) (plaintiff). On September 19, 2009, Rosamaria was murdered outside of her home. The police considered Frank a suspect. Frank applied for the life-insurance money, and Farmers decided not to pay out while the police investigation was ongoing. If it were found that Frank feloniously and intentionally killed his wife, Rosamaria’s mother (defendant), as the sole heir to Rosamaria’s estate, would be entitled to the insurance proceeds instead of Frank. Frank’s attorney sent a letter to Farmers with several requests. However, Rosamaria’s mother did not make any claim on the proceeds. Farmers decided to file an interpleader action for the life-insurance proceeds. This meant Farmers transferred the $150,000 of life-insurance proceeds into the court to resolve the disputes about the money’s ownership. Farmers’ interpleader action brought Frank and Rosamaria’s mother into the lawsuit as the two competing claimants for the insurance proceeds. However, Rosamaria’s mother defaulted in the interpleader action, and Frank was then awarded the life-insurance proceeds. Farmers moved to recover the attorneys’ fees and costs it spent filing the interpleader action. The trial court granted the motion and paid Farmers out of the insurance proceeds. Frank appealed to the California Court of Appeal.