IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
August 12, 2009
No. 08-40351
Charles R. Fulbruge III
Clerk
ALEJANDRA GOMEZ CANTU,
Plaintiff-Appellant,
versus
JACKSON NATIONAL LIFE INSURANCE COMPANY,
a Michigan Corporation Doing Business in California;
ROMEO CUELLAR, an Individual;
JESSE GUTIERREZ, JR., an Individual,
Defendants-Appellees.
Appeal from the United States District Court
for the Southern District of Texas
Before SMITH, GARZA, and CLEMENT, Circuit Judges.
JERRY E. SMITH, Circuit Judge:
In a suit brought by Alejandra Cantu seeking proceeds from an insurance
policy, the district court entered summary judgment for the defendants. We af-
firm.
No. 08-40351
I.
Jose Martinez, a citizen and resident of Mexico, sought to purchase life
insurance. He was approached by Jesse Gutierrez, who worked for Romeo Cuel-
lar, who in turn was an agent for Jackson National Life Insurance Company
(“JNL”). Martinez eventually submitted applications for two $1 million policies;
both named Cantu, his wife, as the beneficiary.
JNL will not issue policies for more than $500,000 to Mexican nationals.
It therefore approved Martinez’s applications but reduced the amount of the re-
quested benefit. It sent the approved policies to Cuellar (who lives in Texas),
along with a cover letter explaining that the policies would not go into effect
until Martinez had submitted the first month’s premiums and a signed adden-
dum indicating that he accepted the reduction in benefit.
Gutierrez visited Martinez to deliver the approved policies on April 1,
2004. Martinez signed the documents and gave Gutierrez a check to pay the pre-
miums. The check was drawn on a Merrill Lynch cash management account at
Bank One in Texas. Because the account had insufficient funds when JNL pre-
sented the check for payment, the bank rejected it. On April 15, a week after
JNL learned that the check had bounced, it sent letters to Cuellar and Martinez
informing them of the nonpayment. Martinez died in an automobile accident the
next day, April 16.
Cantu received JNL’s letter regarding the bounced check on April 19 and
immediately sent a replacement check by overnight delivery. She filed a claim
for death benefits a few weeks later. JNL rejected the claim, explaining that the
policy had not become effective during Martinez’s lifetime.
Cantu sued JNL, Gutierrez, and Cuellar (collectively, “defendants”) in
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No. 08-40351
California state court. She primarily alleged that JNL had breached the policies
by failing to pay proceeds; she also included various bad faith, misrepresenta-
tion, and fraud claims. The case was removed to federal court and transferred
to the Southern District of Texas. Cantu then sought to amend her complaint
to add claims under Mexican law and Texas state law, including alleged viola-
tions of the Texas Insurance Code and the Texas Deceptive Trade Practices Act
(“DTPA”). The district court granted the request as to the Texas law claims but
denied it as to the Mexican law claims, finding that Mexican law was inapplica-
ble. The court then granted summary judgment for the defendants.
II.
In denying Cantu’s motion to assert claims under Mexican law, the court
concluded that the Texas choice-of-law clauses in both policies precluded claims
under foreign law. Cantu appeals, arguing that, because the policies have no
reasonable relationship to Texas, the choice-of-law clauses are unenforceable,
and Mexican insurance law should govern the dispute.
A.
The defendants contend that we do not have jurisdiction to consider the
issue, because Cantu’s notice of appeal mentions only the order granting sum-
mary judgment and does not separately specify the order rejecting the applica-
tion of Mexican law. That is a technical violation of F ED. R. A PP. P. 3(c)(1)(B),
which requires a notice of appeal to “designate the judgment, order, or part
thereof being appealed[.]”
“[A] mistake in designating a judgment appealed from should not bar an
3
No. 08-40351
appeal as long as the intent to appeal a specific judgment can be fairly inferred
and the appellee is not prejudiced or misled by the mistake.” Turnbull v. United
States, 929 F.2d 173, 177 (5th Cir. 1991). We have inferred an “intent to appeal”
where the issue is addressed in the appellant’s opening brief. See, e.g., United
States v. Knowles, 29 F.3d 947, 950 (5th Cir. 1994).
Cantu’s opening brief directly indicates her intent to appeal the order re-
jecting the application of Mexican law. JNL claims that it “would be prejudiced
by being forced to address this issue for the very first time at the response stage
of appeal,” but even had Cantu correctly filed her notice, JNL would be in the
same positionSSappellees always address the issue for the first time at the re-
sponse stage. Because there is no evidence of prejudice, we have jurisdiction to
consider the issue.
B.
“This Court reviews questions of law, including conflicts of law questions,
de novo[.]” Abraham v. State Farm Mut. Auto. Ins. Co., 465 F.3d 609, 611 (5th
Cir. 2006). As a federal court sitting in diversity, we apply the choice-of-law
rules of the forum state. Canton v. Leach Corp., 896 F.2d 939, 942 (5th Cir.
1990).
The Texas Uniform Commercial Code contains two provisions that plausi-
bly govern this question. The first instructs that “when a transaction bears a
reasonable relation to this state . . . the parties may agree that the law . . . of this
state . . . shall govern their rights and duties.” T EX B US. & C OM. C ODE § 1.301(a).
When applying that provision, Texas courts look to the R ESTATEMENT (S ECOND)
OF C ONFLICT OF L AWS § 187 (“the restatement”) to determine whether a “reason-
4
No. 08-40351
able relation” exists. 1
The second provision states that “[i]f a transaction . . . is a ‘qualified trans-
action,’ as defined in Section 271.001, then . . . Chapter 271 governs” a choice of
law clause. T EX B US. & C OM. C ODE § 1.301(c). Choice of law under chapter 271
is similar to § 1.301 in that both provide that choice-of-law clauses will be en-
forced where “the transaction bears a reasonable relation to [the chosen] juris-
diction.” T EX B US. & C OM. C ODE § 271.005(a)(2).2 Unlike § 1.301, however, chap-
ter 271 is not interpreted with reference to the restatement but instead directly
defines the five situations in which a “reasonable relation to a particular juris-
diction” exists:
(1) a party to the transaction is a resident of that jurisdiction;
(2) a party to the transaction has the party’s place of business or, if
that party has more than one place of business, the party’s chief ex-
ecutive office or an office from which the party conducts a substan-
tial part of the negotiations relating to the transaction, in that juris-
diction;
(3) all or part of the subject matter of the transaction is located in
that jurisdiction;
(4) a party to the transaction is required to perform in that jurisdic-
1
See, e.g., DeSantis v. Wackenhut Corp., 793 S.W.2d 670, 677 (Tex. 1990) (“We believe
the rule is best formulated in section 187 of the [restatement] and will therefore look to its
provisions in our analysis of this case.”).
2
At the time the parties submitted their briefs, the various subsections of chapter 271
discussed here were all located at TEX BUS . & COM . CODE § 35.51. For ease of reference, we
use the recent renumbering and non-substantive language changes that became effective Ap-
ril 1, 2009. See 2007 Tex. Sess. Law Serv. ch. 885 § 1.01(a) (describing the renumbering as
part of a “program [that] contemplates a topic-by-topic revision of the state’s general and per-
manent statute law without substantive change.”); see also TEX . GOV ’T CODE § 323.007(b)
(“When revising a statute the council may not alter the sense, meaning, or effect of the stat-
ute.”).
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No. 08-40351
tion a substantial part of its obligations relating to the transaction,
such as delivering payments; or
(5) a substantial part of the negotiations relating to the transaction
occurred in that jurisdiction and an agreement relating to the trans-
action was signed in that jurisdiction by a party to the transaction.
T EX B US. & C OM. C ODE § 271.004(b).
The first question, then, is whether the two insurance policies constitute
a “qualified transaction.” If yes, we decide whether the Texas choice-of-law
clauses are enforceable by checking whether one of the five “reasonable relation-
ship” factors supplied by § 271.004(b) is met. If no, our analysis is governed by
the restatement.
A “qualified transaction” is one “under which a party . . . is obligated to
pay or is entitled to receive[] consideration with an aggregate value of at least
$1 million[.]” T EX B US. & C OM. C ODE § 271.001(1). Further, § 271.002 states
that “two or more substantially similar or related transactions are considered a
single transaction if the transactions: (1) are entered into contemporaneously;
and (2) have at least one common party.”
Cantu argues that the two policies are not “qualified transactions,” be-
cause each is worth only $500,000. But under a plain reading of the statute,
they should be aggregated as a single $1 million transactionSSthe two policies
are substantially similar, they were entered into simultaneously, and the parties
to them are identical. As further evidence, Martinez attempted to pay for both
policies with a single check.
The next question is whether one of the five “reasonable relationship” fac-
tors of § 271.004(b) is met. JNL argues that factor 1 (“a party to the transaction
is a resident of that jurisdiction”) applies, because Cuellar, one of the agents who
6
No. 08-40351
negotiated the insurance policies, lives in Texas. Cantu responds that “Cuellar
is not a party to the contracts, but only an agent of [JNL] which is a party.”
Cantu may be correct that Cuellar, as an agent, is not a party to the final
insurance contract between JNL and Cantu, but the language of § 271.004(b)(1)
requires only that a “party to the transaction” be a resident of the jurisdiction.
Under the broad definition of transactionSScombining substantially similar
transactions that were entered into contemporaneously and had at least one
common partySSCuellar qualifies as a party. He negotiated with Martinez, co-
signed Martinez’s insurance applications, and received remuneration from JNL
for closing the sale. Accordingly, because one of the § 271.004(b) factors is satis-
fied, the Texas choice-of-law clause is enforceable, and the district court correctly
denied Cantu’s motion to assert Mexican law claims.
III.
The primary issue is whether JNL owes proceeds under the insurance con-
tract. The district court concluded that, because of the bounced check, the re-
quired premiums were not paid during Martinez’s lifetime. It further deter-
mined that, under Texas law, an insurance contract cannot come into effect after
the death of the insured, so Cantu’s second attempt to pay the premiums could
not consummate the agreement.
Summary judgment is proper “if the pleadings, the discovery and disclos-
ure materials on file, and any affidavits show that there is no genuine issue as
to any material fact and that the movant is entitled to judgment as a matter of
law.” F ED. R. C IV. P. 56(c). Disputes about material facts are genuine “if the evi-
dence is such that a reasonable jury could return a verdict for the nonmoving
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No. 08-40351
party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). We review a
summary judgment de novo. Skotak v. Tenneco Resins, Inc., 953 F.2d 909, 912
(5th Cir. 1992).
A.
Cantu argues that JNL caused the check to bounce and so cannot use non-
payment of the premium as an excuse to void the contract. On April 1, Gutierrez
traveled to Mexico to present Martinez with the final policies and collect pay-
ment of the first premium. Cantu contends that when Martinez gave Gutierrez
the check, they agreed it would not be cashed until April 8 to give Martinez time
to transfer money into the Merrill Lynch account from which the check would
draw. Any such promise was broken; Gutierrez sent the check to JNL on April 2,
JNL deposited it on April 5, and the bank returned it as “uncollected” for insuf-
ficient funds on April 8.
The defendants dispute that an agreement to hold off on cashing the check
ever existed, but they point out that even if the check had been cashed on the
agreed date, the account would not have contained enough funds. The starting
balance of the account was negative $150; Martinez transferred $2000 into the
account on April 7; and on April 8, a routine annual fee of $125 was deducted.
Thus, on the day Cantu says that JNL agreed to cash the $1885 check, the ac-
count contained a still-insufficient $1725.
Cantu responds that had JNL waited until April 8 to cash the check, a
Merrill Lynch bank associate would have called Martinez to discuss the shortfall
and authorize payment on the check on receiving assurance that Martinez would
quickly cover the negative balance. Cantu therefore concludes that failure to
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No. 08-40351
abide by Gutierrez’s wait-to-cash-the-check agreement was the “but for” cause
of the initial premium’s not being paid.
The district court found that Cantu had not produced enough evidence to
survive even the low threshold to defeat summary judgment on either argument.
It first concluded that “there is no evidence to support a finding that an agree-
ment to delay depositing the first premium check existed between any [JNL]
agent and Gonzalez Martinez.” It then said that the evidence that Merrill Lynch
would have cleared the check after a phone call was “simply too speculative” and
did not create an issue of material fact. “At most, the evidence reveals that Mer-
rill Lynch may or may not have exercised its unfettered discretion and contacted
Gonzalez Martinez about the shortfall in his account[.]”
Even assuming arguendo that there was an agreement to delay deposit,3
3
The evidence of any such agreement is thin. Gutierrez says that “there was never a
discussion about holding a checkSSnever.” Cantu relies entirely on (1) the fact that the check
was undated and (2) testimony that Martinez instructed his secretary to “transfer $2,000 [into
the bank account] on Wednesday, the 7th” in Gutierrez’s presence, and Gutierrez did not ob-
ject.
To demonstrate an agreement, “there must be shown the element of mutual agreement
which . . . is inferred from the circumstances. The conception is that of a meeting of the minds
of the parties as implied from and evidenced by their conduct and course of dealing, the es-
sence of which is consent to be bound.” Haws & Garrett Gen. Contractors, Inc. v. Gorbett Bros.
Welding Co., 480 S.W.2d 607, 609 (Tex. 1972) (citations omitted). Neither of Cantu’s two piec-
es of evidence is significantly probative of whether Gutierrez consented to be bound by an
agreement to delay cashing the check.
Cantu argues that “[i]t is inconceivable that Martinez could have [instructed his sec-
retary to transfer money on April 7] in front of GutierrezSSwithout eliciting any reaction from
himSSunless Gutierrez understood that the check was given upon condition that the deposit
be delayed.” But the Texas Supreme Court, in the context of a dispute over interest charges,
stated that “mere failure to object within a reasonable time . . ., without more, could not es-
tablish an agreement between the parties[.]” Triton Oil & Gas Corp. v. Marine Contractors
& Supply, Inc., 644 S.W.2d 443, 445 (Tex. 1982) (discussing Preston Farm & Ranch Supply,
Inc. v. Bio-Zyme Enters., 625 S.W.2d 295 (Tex. 1981)). In fact, although it was not a summary
(continued...)
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No. 08-40351
Cantu cannot demonstrate that her check would not still have bounced. Her
contention that a bank associate would have contacted Martinez and authorized
clearing the check is based solely on the following testimony by a bank repre-
sentative:
Q: If the check had not been presented for collection until the wire
transfer had been received, would you have contacted [Martinez]
about making up the shortfall before any decision was made to clear
the check?
A: Merrill Lynch financial advisors and/or client associates have the
option to attempt to contact an account holder in regard to a check
presented against insufficient funds; however, . . . [they] are under
no obligation to do so. If the factual scenario set forth in the above
question would have occurred, Mr. Martinez’s financial advisor or
client associate would have likely attempted to contact Mr. Martinez.
Q: If . . . Mr. Martinez said that he would immediately cover the
shortfall, did you have the authority to clear the check?
A: If Mr. Martinez’s financial advisor or client associate had con-
tacted Mr. Martinez . . . and [he] indicated that he would “immedi-
ately cover the short fall,” the financial advisor would have had the
authority to clear the check. As stated above, although the financial
advisor would have had the authority to clear the check, he would
have been under no obligation to do so.
Q: . . . would have [sic] likely cleared the check?
A: As the hypothetical factual scenario set forth in this question did
not occur, Merrill Lynch, at present, is not able to speculate as to
whether or not the financial advisor would have agreed to pass the
(...continued)
judgment case, the court added that the failure to object did not “raise a fact question as to the
existence or nonexistence of an agreement.” Id. at 446. It is therefore difficult, even under the
deferential summary judgment standard, to conclude that Cantu presented evidence of an
agreement.
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No. 08-40351
check at that time.
(Emphasis added.)
Based on that testimony, and construing the facts in the light most favor-
able to the plaintiff, there is evidence that the bank likely would have contacted
Martinez. Beyond that, however, the bank expressly refused to speculate wheth-
er it would have permitted the check to pass. There is thus no evidence indicat-
ing that the check would have cleared, so there is no basis on which a jury could
conclude that the check bounced because JNL did not wait to present it. We
therefore agree with the district court that JNL did not cause the non-payment
of the first premium.
B.
The next question is whether the insurance policies ever took effect despite
the first check’s bouncing. The district court determined that the only way to ac-
cept the offer of insurance and create a binding contract was to pay the initial
premium, which did not successfully occur until Cantu sent a replacement check
after Martinez’s death. The court then concluded that the death extinguished
the offer of insurance, so the policies were void by the time Cantu made her pay-
ment. Accordingly, Cantu was not entitled to the proceeds, because the policies
never took effect.
Cantu urges that the second check was an effective acceptance of the offer
of insurance. She relies heavily on the wording of the policies and alleged ambi-
guities therein.4 But regardless of the policies’ language, the district court
4
As summarized by the district court:
Plaintiff points to that portion of the application that . . . states that
(continued...)
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No. 08-40351
accurately recognized that under Texas law, “[t]he essential foundation of a life
insurance policy is the life of a human being.” Gibraltar Colo. Life Co. v. Taylor,
123 S.W.2d 318, 321 (Tex. Comm’n App. 1939).5 Because Martinez had died by
the time the second check arrived, no insurance policy could come into effect.
In her reply brief, Cantu concedes the point. She says that she “has no
dispute with the general notion that a post-loss payment will not create a con-
tract,” but she contends that the general rule is still “subject to waiver either
under equitable principles or pursuant to the doctrine of prevention of perfor-
mance.” Those arguments, however, rely on the already-rejected proposition
that JNL caused the first check to bounce.6 Accordingly, the court did not err in
4
(...continued)
[JNL] must receive the first premium payment within “30” days of the policy’s
“issue date” in order for the policy to become effective. Plaintiff argues that, be-
cause the “3” in “30 days” is not discernable in the best available copy of the ap-
plication, this term must be construed against [JNL]. Furthermore, Plaintiff
argues that . . . the clause itself is ambiguous because the meaning of the term
“issue date” is unclear. Plaintiff proposes that the term “issue date” . . . should
be interpreted to mean the date the policies were physically “handed to” the in-
sured, which in this case was April 1, 2004. . . . Plaintiff asserts that the second
premium check, which was received by [JNL] on April 20, 2004, was received
within 30 days of the “issue date” and was therefore sufficient to bring coverage
into effect.
5
A more recent decision, Allstate Ins. Co. v. Mooney, 562 S.W.2d 950, 952 (Tex. Civ.
App.SSAmarillo 1978) (writ ref’d n.r.e.), makes the same point: “At the time of his death, All-
state had no policy of insurance in effect on the life of Kevin Mooney. After he died, there was
no subject matter to which the insurance provisions of the terminated policy could attach.”
Mooney also stated that “the death of the insured while the policy is in effect is the one condi-
tion under which payment may be enforced. The two facts, death of the insured and life in the
policy, must concur, or no liability exists.” Id. (quoting Grand Lodge Colored Knights of Pythi-
as v. Preston, 91 S.W.2d 496, 498 (Tex. Civ. App.SSBeaumont 1936) (writ ref’d)).
6
Cantu cites Monumental Life Ins. Co. v. Hayes-Jenkins, 403 F.3d 304 (5th Cir. 2005),
as a case in which we allowed an insurance policy to come into existence after the subject of
the policy had died. But there, the terms of the policy were so confusing that they might have
led the insured to believe that payment of an initial premium was not a necessary predicate
(continued...)
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No. 08-40351
concluding that the contracts never took effect, and therefore Cantu is entitled
to none of their benefit.
IV.
Cantu appeals the dismissal of her various other claims, including fraud,
breach of duty of good faith and fair dealing, negligent misrepresentation, and
assorted violations of the Texas Insurance Code and the DTPA. Her arguments
all rely, however, on JNL’s having caused the non-formation of the contract.7 We
have rejected that conclusion, so we affirm the dismissal of those claims.
The summary judgment is AFFIRMED.
6
(...continued)
to obtaining coverage. We therefore reversed summary judgment, holding that the insurance
company “might ultimately be found to have waived its right to assert prepayment of the first
premium as a condition precedent to coverage.” Id. at 315. Monumental is easily distinguish-
able from the present case, because here, JNL made plain that it expected to receive a premi-
um before coverage took effect.
7
During oral argument, Cantu’s counsel candidly acknowledged that if (1) we rejected
his argument that JNL caused the non-payment and (2) concluded that the second premium
check did not create a contract, then “the district court was right, and I ought to lose,” and
“there is probably no cause under the Deceptive [Trade] Practices Act.” He later said, “I take
that back” and explained that “[i]f [JNL] would have not been deceptive and taken a check in
pesos, which they could have done if they weren’t trying to be deceptive and [make] it appear
like this was a transaction that occurred in TexasSSwhich it obviously was notSSthen we
wouldn’t be here. The check would have been issued in pesos, the coverage would [have] oc-
curred, and the claim should have been and would have been good.” But that argument was
not made in either of Cantu’s briefs.
13