## Facts

- Frank Allan Rees and Rosamaria Rees married in 1997.
- In 1998, each bought a $150,000 life insurance policy from Farmers New World Life Insurance Company and named the other as sole primary beneficiary; no contingent beneficiaries were listed.
- On September 18, 2009, Rosamaria was shot and killed outside the couple’s home; police treated the death as a homicide and had not ruled out any suspects, including Frank.
- Rosamaria died intestate, without children; her mother was her sole heir.
- Frank submitted a claim for policy benefits on October 14, 2009.
- Farmers delayed payment while the homicide investigation remained unresolved and indicated that no suspect had been ruled out.
- Frank’s counsel demanded payment or an explanation, arguing the “slayer” rule would apply only upon a determination that Frank feloniously and intentionally killed Rosamaria; the mother did not submit a claim.
- Farmers filed an interpleader action, deposited the policy proceeds plus interest with the court, and named Frank and the mother as potential claimants.
- The mother defaulted; the trial court awarded the proceeds to Frank but awarded Farmers attorney’s fees and costs payable from the interpleaded fund.
- Frank appealed only the fee and cost award, arguing interpleader was improper because there was no real competing claim.

## Issues

1. Whether an insurer may bring statutory interpleader when only the named beneficiary has demanded payment but an alternative claimant could take by operation of the slayer rule if the beneficiary is disqualified.
2. Whether the existence of an unresolved homicide investigation, with the beneficiary a potential suspect, creates a sufficient risk of multiple liability to justify interpleader.
3. Whether the trial court may award the insurer reasonable attorney’s fees and costs from the interpleaded fund when interpleader is based on a potential (not asserted) adverse claim.

## Decision

- The Court of Appeal affirmed the interpleader judgment, including the award of attorney’s fees and costs to Farmers from the policy proceeds.
- The court held Farmers was entitled to file interpleader because the slayer rule could disqualify Frank and shift entitlement to Rosamaria’s mother as sole heir.
- The court held interpleader did not require the mother to have filed a formal claim; a reasonable fear of conflicting obligations was enough.
- The court found Farmers acted as a disinterested stakeholder by depositing the full proceeds plus interest and seeking only to avoid multiple liability.
- The court found no abuse of discretion in the fee award because the interpleader was proper and the fees related to the interpleader process.

## Legal Principles

- Statutory interpleader is available when a stakeholder faces adverse or mutually exclusive claims, including potential claims that create a reasonable risk of multiple liability.
- A stakeholder need not wait for a second claimant to file a claim or lawsuit if facts show a nonfrivolous possibility of competing entitlement to the same fund.
- In slayer-rule contexts, an insurer may reasonably fear conflicting obligations where a beneficiary could be disqualified by a felonious and intentional killing and the insured’s heir would then be entitled to proceeds by operation of law.
- When interpleader is proper and the stakeholder is disinterested, the court may, in its discretion, award the stakeholder reasonable attorney’s fees and costs from the interpleaded fund.

## Conclusion

The court upheld an insurer’s use of interpleader and a discretionary fee award where an unresolved homicide investigation created a real possibility that the named beneficiary could be barred under the slayer rule and the insured’s heir could become entitled to the same policy proceeds, even though the heir had not asserted a claim and later defaulted.


Farmers New World Life Ins. Co. v. Rees, 219 Cal. App. 4th 307, 161 Cal. Rptr. 3d 678 (Ct. App. 2013)