In a case drawing attention for its mix of family dispute, policyholder rights, and insurer defense strategy, the Texas Tenth Court of Appeals has upheld the dismissal of a lawsuit filed against State Farm Life Insurance Company. The ruling, issued on April 17, 2025, underscores the legal strength of interpleader actions when insurers face competing claims to policy proceeds.
The dispute began after the death of Howard LeJeune, who was covered by two State Farm life insurance policies with a combined value exceeding $800,000. Scarlett Robbins, the named beneficiary and former policy owner, filed a claim for the proceeds following LeJeune’s death in late 2022. However, LeJeune’s estate quickly contested the payout, notifying State Farm not to release any benefits while probate proceedings were underway.
State Farm, caught in the middle of conflicting demands, opted to file a federal interpleader action - a move that allows insurers to deposit funds with the court and step aside while potential beneficiaries litigate who is entitled to the money. Robbins, in turn, sued State Farm in state court, alleging breach of contract, violations of the Texas Prompt Pay Act, and seeking a declaratory judgment that she was the rightful recipient.
But the appellate court agreed with the trial judge's earlier decision to dismiss Robbins’ claims, siding with State Farm’s argument that the interpleader neutralized any liability it might have had. The judges emphasized that by initiating the interpleader and tendering the full value of the policies, State Farm had fulfilled its legal duties and removed itself from the conflict over who should receive the funds.
The court also addressed Robbins' objections about not receiving adequate notice for the hearing on the insurer’s dismissal motion. While she claimed she only learned of the hearing two days in advance, the court found she had received the motion weeks earlier, had time to respond, and failed to demonstrate that the short notice affected the outcome.
For the insurance industry, the case is a timely reminder of the protective power of interpleader actions, especially when a policy becomes the subject of contested ownership or conflicting claims. With two high-value policies, a prior settlement agreement, and ongoing probate litigation all in play, the Robbins case offered a textbook example of how insurers can shield themselves from liability while ensuring a fair forum for claim resolution.
The decision carries particular relevance for insurance claims professionals, compliance officers, and legal teams navigating the increasingly complex terrain of beneficiary disputes. And with State Farm - one of the nation’s largest life insurers - as the central figure, the case delivers both practical insights and headline value.
While the court’s ruling brings State Farm’s role in the matter to a close, the battle over the proceeds now shifts to federal court, where the competing claims from Robbins and LeJeune’s estate will ultimately be resolved.
