In Re: Succession of Bettie Martin Catchings ( 2023 )

IN RE: SUCCESSION OF NO. 22-CA-460
BETTIE MARTIN CATCHINGS
FIFTH CIRCUIT
COURT OF APPEAL
STATE OF LOUISIANA
ON APPEAL FROM THE TWENTY-FOURTH JUDICIAL DISTRICT COURT
PARISH OF JEFFERSON, STATE OF LOUISIANA
NO. 798-037, DIVISION "B"
HONORABLE R. CHRISTOPHER COX, III, JUDGE PRESIDING
September 06, 2023
STEPHEN J. WINDHORST
JUDGE
Panel composed of Judges Marc E. Johnson,
Robert A. Chaisson, and Stephen J. Windhorst
AFFIRMED
SJW
MEJ
RAC
COUNSEL FOR PLAINTIFF/APPELLEE,
NANCY SUE GREGORIE, INDEPENDENT EXECUTRIX OF THE
SUCCESSION OF BETTIE MARTIN CATCHINGS
Beau P. Sagona
Bryan J. O'Neill
COUNSEL FOR PLAINTIFF/APPELLANT,
MARY "PENNY" THOMPSON
William D. Aaron, Jr.
DeWayne L. Williams
Thomas A. Robichaux
WINDHORST, J.
Appellant, Ms. Mary P.A. Thompson, appeals the trial court’s July 19, 2022
written judgment, declaring that Ms. Bettie Marie Catchings’ transfer on death
(“TOD”) beneficiary designation1 of a brokerage account in favor of Ms.
Thompson for the Lord, Abbett & Co., LLC account ending in 7462 is invalid and
ordering that the funds in the account belong to Ms. Catchings’ estate. For the
following reasons, we affirm the trial court’s judgment.
FACTS and PROCEDURAL HISTORY
Ms. Catchings, a resident of Jefferson Parish, Louisiana, died testate on July
17, 2019. Ms. Catchings never married and never had children. She executed a last
will and testament on March 9, 2017 in which she named Nancy Sue Gregorie as the
executrix. In her last will and testament, Ms. Catchings’ first bequest was to her
cousin, Ms. Thompson, upon whom she bestowed most of her furnishings and
household goods.
At the time of her death, Ms. Catchings maintained two brokerage accounts
with Lord Abbett. She did not mention either of these accounts in her will.
Approximately nine months after executing her last testament, in December 2017,
Ms. Catchings converted one of her Lord Abbett accounts into a transfer on death
stock account, in which she named her cousin, Ms. Thompson, as the beneficiary.
The TOD designation form stated that “If you reside in a state that has adopted the
Uniform Transfer on Death Registration Act, you may designate a beneficiary who
will automatically own the account assets upon your death, outside of probate or
other court proceedings.”
On August 6, 2019, Ms. Gregorie filed a petition to file and execute Ms.
Catchings’ testament and for confirmation of independent executrix. That same day,
1 The purpose of TOD designation is to enable an owner of a mutual fund account to designate one or
more beneficiaries to receive the shares in the account upon the owner’s death, outside of probate.
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Ms. Gregorie was also confirmed as the independent executrix of Ms. Catchings’
succession.
Subsequently, in her capacity as independent executrix of Ms. Catchings’
estate, Ms. Gregorie filed a petition for declaratory judgment in the succession solely
regarding the Lord Abbett account, of which Ms. Catchings had designated the
appellant, Ms. Thompson, as beneficiary.2 In the petition, the executrix sought a
declaration from the court that the TOD designation form was invalid, and that the
funds formerly held in the Lord Abbett account be declared succession funds to
which appellant was not entitled. Upon receipt of the petition for declaratory
judgment regarding the account, Lord Abbett transferred the funds into the estate
account where they remain pending resolution of this litigation.
The executrix and Ms. Thompson filed competing motions for summary
judgment regarding the validity of the TOD designation form. The executrix
asserted in her motion for summary judgment that the TOD designation form in
favor of the appellant was invalid because the Louisiana Uniform Transfer on Death
Security Registration Act did not become effective until January 1, 2022, after Ms.
Catchings died in 2019. The executrix also argued that under La. C.C. art. 1570, a
disposition mortis causa may be made only in the form of a testament authorized by
law, that the TOD designation form did not meet Louisiana law requirements for
either a handwritten or notarial testament, and that there was no statutory exception
to these requirements during Ms. Catchings’ lifetime. The executrix relied on the
Succession of Angus case rendered on January 12, 2022 by the Louisiana Second
Circuit Court of Appeal, in which the Second Circuit found the TOD designation
2 The petition named as defendants, Ms. Thompson and Lord Abbett. Lord Abbett never appeared and the
trial court entered a judgment of default as to Lord Abbett. As Lord Abbett has transferred the funds from
the relevant account into the estate’s account pending resolution of this litigation, its nonappearance and
default is inconsequential to this appeal.
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form at issue in that case invalid. Succession of Angus, 54,180 (La. App. 2 Cir.
1/12/22), 333 So.3d 555.
In her motion for summary judgment, Ms. Thompson, the appellant, asserted
that no one disputed it was Ms. Catchings’ intent to name her as the beneficiary of
the account, and that this intent should be honored given a person’s right to dictate
the distribution of their assets upon death, a person’s freedom to contract, and
Louisiana Investment Security laws, La. R.S. 10:8-101 et seq. Ms. Thompson relied
on the Succession of Schimek case rendered by the Louisiana Fourth Circuit Court
of Appeal on June 10, 2020, in which the Fourth Circuit found the TOD designation
form at issue in that case valid. Succession of Schimek, 19-1069 (La. App. 4 Cir.
6/10/20), 302 So.3d 78. Ms. Thompson also argued that the Louisiana Legislature’s
passage of the Uniform Transfer on Death Security Registration Act indicates that
TOD designation forms are not against public policy and, thus should not be found
invalid under Louisiana law.
The trial court denied Ms. Thompson’s motion, granted the executrix’s
motion, and declared the TOD designation form invalid under Louisiana law. As a
result, the trial court ordered that the funds belonged to the estate. In oral reasons
provided in open court, the trial court stated that the TOD designation form was
contrary to the Louisiana public policy in favor of honoring testaments and requiring
that assets pass through succession proceedings after the owner’s death. The trial
court found the Second Circuit case more persuasive, and specifically referred to its
reasoning that Louisiana has carved out very limited explicit exceptions that allow
for non-probative transfer of assets, and that a TOD designation form for a brokerage
account such as Ms. Catchings’ account was not one of them. The trial court also
noted that the recently passed Louisiana Uniform Transfer on Death Act does not
permit ownership of a security to be passed at death to decedent. Instead, the
beneficiary is limited to the ability to register the security under his own name. In
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finding the TOD designation form invalid, the trial court noted that preventing the
transfer of ownership at death to a TOD beneficiary is evidence of the strong public
policy favoring the transfer of ownership of assets after death through successions.
This appeal followed.
LAW and ANALYSIS
Appellate courts review summary judgments de novo using the same criteria
as the trial courts to determine whether summary judgment is appropriate. Neville v.
Redmann, 22-175 (La. App. 5 Cir. 12/31/22), 356 So.3d 568, 575, writ denied, 23-
126 (La. 4/4/23). Therefore, appellate courts consider the same questions as the trial
court: whether there is any genuine issue of material fact, and whether mover is
entitled to judgment as a matter of law. Id. at 575. Courts must decide whether to
grant a motion for summary judgment based on the substantive law applicable to the
case. Ducote v. Whitney Nat’l Bank, 16-574 (La. App. 5 Cir. 2/22/17), 212 So.3d
729, 732, writ denied, 17-0522 (La. 5/26/17), 221 So.3d 860.
An individual acquires the ownership of things or property by succession
either testate or intestate, by the effect of obligations, and by the operation of law.
La. C.C. art. 870 A. Testate and intestate succession rights are governed by the law
in effect on the date of the decedent’s death. La. C.C. art. 870 B. Louisiana law has
a few specific exceptions to the general rule that a decedent’s property owned at
death passes to her heirs through her succession. Those exceptions include the non-
probate disposition of retirement accounts, life insurance, annuities, and deposit and
savings accounts, credit union accounts, and savings and loan associations accounts.
Succession of Angus, 54,180 (La. App. 2 Cir. 1/12/22), 333 So.3d 555, 560. In the
absence of a specific exclusion from Louisiana property and succession law, assets
of a decedent remain subject to distribution under controlling Louisiana law. Id.The parties in this matter dispute the validity of a TOD designation form for
one of the decedent’s brokerage accounts. A TOD designation form allows for the
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disbursement of funds by banks and certain savings institutions upon a depositor’s
death, notwithstanding a contrary designation in the depositor’s will. Succession of
Angus, 333 So.3d at 560-61.
Many states have statutorily authorized TOD designation forms based on the
Uniform Transfer on Death Security Registration Act (the “Uniform Act”) drafted
by the National Conference of Commissioners on Uniform State Laws in 1989 and
amended in 1998. Id. The Uniform Act allows securities owners to register their
shares, and mutual funds accounts in a TOD designation form, which permits a non-
probate transfer of securities accounts. Succession of Schimek, 302 So.3d at 87. The
prefatory note of the Uniform Act states that “TOD registration achieves for
securities a certain parity with existing TOD and pay-on-death (POD) facilities for
bank deposits and other assets passing at death outside the probate process.” Id.
In this appeal, appellant, Ms. Thompson, asserts the trial court erred in finding
Ms. Catchings’ TOD designation form invalid and contrary to public policy in
Louisiana, in granting appellee’s motion for summary judgment, and in denying her
motion for summary judgment. She argues that the TOD designation form is valid
and relies on the Louisiana Fourth Circuit Court of Appeal’s decision in Succession
of Schimek, supra. The Schimek court held that the TOD designation in that case
was not contrary to Louisiana law or against public policy and, thus was valid. Id.
at 90-91.
Appellee, the executrix, asserts the TOD designation form is invalid and relies
on the Louisiana Second Circuit Court of Appeal’s decision in Succession of Angus,
supra. The Angus court held that the TOD designation form in that case was invalid
and contrary to Louisiana law and public policy. Id. We discuss the reasoning of
both of these cases below.
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Succession of Schimek
The Fourth Circuit, in finding the TOD designation form valid, reasoned that
the Louisiana legislature has neither explicitly authorized nor specifically prohibited
TOD designation forms for securities accounts, but it has authorized the non-probate
transfer to designated beneficiaries for retirement accounts, life insurance, pensions,
and certain bank accounts. Id. at 91. Based on this legislation allowing the transfer
of similar assets by designation of a beneficiary, the Fourth Circuit found support
for declaring the TOD designation in that case valid. Id.
The Fourth Circuit rejected arguments that the TOD designation form was
invalid based on Louisiana’s compelling state interest in requiring donations be in
authentic form to ensure that the true intent of the donor was carried out. Id. Because
there was no dispute regarding the decedent’s intent as to the intended beneficiary
of the accounts at issue, the Fourth Circuit found there was no basis to warrant the
court refusing to honor the decedent’s TOD designation form. Id.
Further, with regard to Louisiana’s public policy of protecting forced heirs
and the community property regime, the Fourth Circuit indicated that the record did
not reflect that forced heirship was an issue in the case, or that the accounts at issue
were a part of the community property regime. Id.
Succession of Angus
The Second Circuit, in finding the TOD designation form at issue invalid,
concluded that Louisiana law has carved out specific and limited exceptions for
certain assets to be transferred at death without probate, and a TOD designation form
from brokerage accounts is not included among them. Succession of Angus, 333
So.3d at 563. It also concluded that Louisiana has a strong public policy interest in
honoring a decedent’s last will and testament, and that allowing the TOD designation
form to transfer community assets after Mrs. Angus’ death to someone other than
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the residual legatee identified in her later-executed testament is antithetical to this
policy interest. Id.
In Angus, the Second Circuit reasoned that the Uniform Act allowing TOD
designation forms is intended to simplify the process of transferring assets to
beneficiaries outside of the probate process in states where that process can be slow
and expensive, but in Louisiana, the probate process is usually easier, quicker, and
less expensive than in the common law states. The Second Circuit rationalized that
this influenced the Legislature to refuse to adopt the Uniform Act on the six different
occasions that it considered the legislation over the past 24 years. Id.
The Second Circuit recognized that the Louisiana Legislature had recently
adopted the Uniform Act, but pointed out that the version that the Legislature
adopted deviated from the Uniform Act to adapt to Louisiana law. La. R.S. 9:1711
et seq. The court referred to the comments stating that Louisiana’s version of the
Uniform Act is significantly modified and stated the following:
The Louisiana Uniform TOD Act, unlike the Uniform Act, does not
transfer the ownership of the security to the named beneficiary upon
the death of the registered owner. Rather, it provides that the named
beneficiary can reregister the account in his name. Because there is
no ownership transferred, the heirs or legatees of the decedent may
be entitled to ownership of the security, even if the beneficiary may
have the security reregistered in his name. In fact, those heirs or
legatees have the ability under Louisiana law to seek a revendicatory
action to recover the security or recover damages if recovering the
security is not possible. See, La. C.C. art. 526; La. R.S. 9:1711.6 D.
Succession of Angus, 333 So.3d at 562.
In reaching its conclusion, the Second Circuit distinguished the Schimek from
the Angus case in that the decedent in Schimek had executed the TOD designation
form after his will and confirmed his beneficiary designations via a letter dated after
the TOD designation form was executed. In Angus, the decedent executed her will
eight months after she signed the TOD designation form and her will did not refer
to or confirm any TOD beneficiary designation of the account at issue. In addition,
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the Angus will was particularly clear that each of her children would receive a
specific bequest of $10,000 from her estate, and that the entire remainder of her
estate would pass to her husband.
The two cases were further distinguishable by the TOD designation forms
used in each case. In Angus, the TOD form was extremely brief and did not state
that it was intended to pass assets to beneficiaries outside of the probate process.
The Schimek form specifically disclosed that it may not constitute an effective
transfer instrument and to consult with estate planning and tax professionals.
Ms. Catchings’ TOD Designation Form
We have considered how both of these cases relate to the TOD designation
form in the present case. Like in Schimek, Ms. Catchings, the decedent, executed
the TOD designation form after she executed her will, and there is evidence
supporting that Ms. Catchings intended for appellant, the designated beneficiary, to
receive the proceeds of the account outside of probate. Ms. Catchings and Ms.
Thompson were very close, and she was the first person mentioned in her will.
While we recognize that the purported intent of Ms. Catchings was for Ms.
Thompson to receive the proceeds from the brokerage account through the TOD
designation form, we are compelled to apply the dictates of the Louisiana Civil Code
as intended and written by the Louisiana Legislature. Taking into consideration the
language of La. C.C. arts. 870 and 1467, we see that the transfer of ownership of
things or property is acquired by succession either testate or intestate, the effect of
obligations, and operation of law, and that property can neither be acquired nor
disposed of gratuitously except by donations inter vivos or mortis causa, made in
one of the forms established by law.
We have at issue in this case a donation mortis causa. A donation mortis
causa is an act to take effect at the death of the donor by which he disposes of the
whole or a part of his property. La. C.C. art. 1469. A disposition mortis causa may
22-CA-460 8
be made only in one of the two forms of testaments authorized by law, olographic
and notarial. La. C.C. arts. 1570 and 1574. The formalities for the execution of a
testament must be observed or the testament is absolutely null. La. C.C. art. 1573.
The TOD designation form does not comply with the requirements of an
olographic or notarial testament. The TOD designation form is not handwritten by
Ms. Catchings, and it is not dated, as required for an olographic will. La. C.C. art.
1575. The TOD designation form also does not contain any of the requirements for
a notarial will. La. C.C. art. 1576. Because it does not comply with the requirements
prescribed for a valid testament, we cannot conclude that it is a valid donation mortis
causa unless it falls within an exception.
As recognized by both the Schimek court and the Angus court, Louisiana law
has carved out only very limited specific exceptions to the general rule that property
owned by a decedent at death will pass to her heirs via succession. Those exceptions
are the non-probate disposition of retirement accounts,3 life insurance,4 annuities,5
and deposit and savings accounts, credit union accounts, and savings and loan
associations accounts.6 Succession of Angus, 333 So.3d at 560; Succession of
Schimek, 302 So.3d at 91. We do not believe that the TOD designation form for a
brokerage account falls within these exceptions. In addition, while we acknowledge
the Schimek court’s logic that the Legislature has neither explicitly authorized nor
specifically prohibited TOD transfers for brokerage accounts, we do not agree that
the TOD form can be used to circumvent application of the Civil Code relative to
the transfer of things and property via succession law.
We acknowledge that after Ms. Catchings’ death, during the 2021 regular
legislative session, the Louisiana Legislature adopted its own version of the Uniform
3 La. R.S. 9:2449.
4 La. R.S. 22:912 A.
5 La. R.S. 22:912 B.
6 La. R.S. 6:314, 6:653.1, 6:766.1, and 6:1255.
22-CA-460 9
Act. Because Ms. Catchings died before the passage of the Louisiana Uniform Act,
it does not apply here. Testate and intestate succession rights are governed by the
law in effect on the date of the decedent’s death. La. C.C. art. 870 B. Nonetheless,
like the Second Circuit, we believe the Louisiana Uniform Act speaks of the
legislative intent and perspective on TOD designation forms.
We point out certain pertinent provisions of the Louisiana Uniform Act below.
La. R.S. 9:1711.2 provides as follows:
A. A security may be registered in beneficiary form if the form is
authorized by this or a similar statute of the state of organization of
the issuer or registering entity, the location of the registering entity's
principal office, the office of its transfer agent or its office making
the registration, or by this or a similar statute of the law of the state
listed as the owner's address at the time of registration. A registration
governed by the law of a jurisdiction in which this or similar
legislation is not in force or was not in force when a registration in
beneficiary form was made is nevertheless presumed to be valid and
authorized as a matter of contract law.
B. The registration in beneficiary form shall be executed by the
owner in authentic form or an act under private signature executed
in the presence of two persons.
La. R.S. 9:1711.4 states that “A registration of a security in beneficiary form does
not constitute a donation inter vivos or mortis causa.” La. R.S. 9:1711.5 provides
that “security registered in beneficiary form may be registered in the name of the
beneficiary or beneficiaries who survived the death of all owners, in compliance with
this Chapter, but this registration in the name of the beneficiary or beneficiaries has
no effect on ownership.” [Emphasis added.]
These parts of the Louisiana Uniform Act lend support to stricter adherence
to Louisiana succession law and the transfer of the proceeds of these accounts via
probate. The comments to La. R.S. 9:1711.5 note that the Louisiana Uniform Act is
loosely based on the Uniform Act, but with significant modifications. Most notably,
Louisiana’s version differs from the Uniform Act insofar as it does not effectuate a
transfer of ownership to the named beneficiary after the death of the registered
owner. Instead, it provides only that the security can be reregistered in the name of
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the beneficiary. Because the Louisiana Uniform Act does not allow the transfer of
ownership of the security to the named beneficiary, other parties, such as heirs or
legatees of the decedent, may be entitled to ownership of the security even though the
named beneficiary may have the security reregistered in his name. As a result, the
heirs or legatees may file a revendicatory action7 to recover the security or damages
if recovering the security is not possible. Succession of Angus, 333 So.3d at 562. In
addition, the Act expressly provides that the registration of a security in beneficiary
form does not constitute a donation inter vivos or mortis causa. La. R.S. 9:1711.4.
Considering the legislative intent expressed through the Act, we cannot find
that the TOD designation form transferred ownership of the Lord Abbett brokerage
account to Ms. Thompson based on the reasoning that the non-probate transfer of
similar assets is expressly provided for by law at the time of Ms. Catchings’ death.
Thus, we agree with the Second Circuit that the TOD designation form does not
comply with Louisiana law.
In concluding the TOD designation form in this case is invalid, the trial court,
in its oral reasons, referred to the “pervasive public policy in Louisiana in honoring
testaments and requiring that assets pass through succession proceedings after the
death of the owner.” The Fourth and Second Circuits presented differing views on
this issue. While the Second Circuit distinguished the Angus case from the Schimek
case, it ultimately concluded, unlike the Fourth Circuit, that the TOD designation
form at issue in that case violated Louisiana public policy.
Louisiana has a strong public policy favoring the transfer of ownership of
assets after death through succession. Nonetheless, an individual’s freedom to
contract and giving effect to a testator’s intent are also important public policy
considerations. It appears that our legislature has resolved those competing public
7 Under La. C.C. art. 526, the owner of a thing has the right to recover it from anyone who possesses it
without right and to obtain judgment recognizing his ownership and ordering delivery of the thing to him.
22-CA-460 11
policy interests by its enactment of the Uniform Transfer on Death Security
Registration Act which authorizes use of TOD designation forms that do not conflict
with current successions law.
La. C.C. art. 1612 states: “A disposition should be interpreted in a sense in
which it can have effect, rather than in one in which it can have none.” The cardinal
principle of the interpretation of a person’s last will is to ascertain and honor the
intent of the testator ascribing meaning to the disposition so that it can have effect.
In re Succession of Dean, 12-0832 (La. App. 4 Cir. 4/3/13), 115 So.3d 526, 531;
Succession of Martin, 262 So.2d 46, 47 (La. App. 1st Cir. 1972).
La. C.C. art. 1971 provides that parties are free to contract for any object that
is lawful, possible, and determined or determinable. The freedom of contract
“signifies that parties to an agreement have the right and power to construct their
own bargains.” Nelson v. Nelson, 08-85 (La. App. 5 Cir. 6/19/08), 985 So.2d 1285,
1293. The only exceptions to this rule are where the government or the state has
restricted the parties’ right to contract because the proposed bargain has a deleterious
effect on the public or otherwise violates public policy. Id. Courts do not have “the
prerogative to disregard public policy decisions underlying legislation or to reweigh
balances of interests and policy considerations already struck by the legislature” in
laws providing broad freedom to contract. Daigle v. Clemco Industries, 613 So.2d
619, 624 (La. 1993).
Given the contrastive public policy interests and the recent passage of the
Louisiana Uniform Act, we do not find the TOD designation form is against public
policy. We, however, do find that the execution of TOD designation form in this
case does not comply with Louisiana requirements for the legal transfer of assets
upon death. See, La. C.C. arts. 1570 and 1573. As a result, we hold that the TOD
designation form in this case is invalid.
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DECREE
For the reasons stated herein, we affirm the trial court’s judgment finding that
the TOD designation form is invalid. We therefore affirm the trial court’s judgment
granting the executrix’s motion for summary judgment and denying Ms.
Thompson’s motion for summary judgment.
AFFIRMED
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SUSAN M. CHEHARDY CURTIS B. PURSELL
CHIEF JUDGE CLERK OF COURT
SUSAN S. BUCHHOLZ
FREDERICKA H. WICKER
CHIEF DEPUTY CLERK
JUDE G. GRAVOIS
MARC E. JOHNSON
ROBERT A. CHAISSON LINDA M. WISEMAN
STEPHEN J. WINDHORST
FIRST DEPUTY CLERK
JOHN J. MOLAISON, JR.
SCOTT U. SCHLEGEL FIFTH CIRCUIT
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JUDGES 101 DERBIGNY STREET (70053)
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I CERTIFY THAT A COPY OF THE OPINION IN THE BELOW-NUMBERED MATTER HAS BEEN DELIVERED
IN ACCORDANCE WITH UNIFORM RULES - COURT OF APPEAL, RULE 2-16.4 AND 2-16.5 THIS DAY
SEPTEMBER 6, 2023 TO THE TRIAL JUDGE, CLERK OF COURT, COUNSEL OF RECORD AND ALL PARTIES
NOT REPRESENTED BY COUNSEL, AS LISTED BELOW:
22-CA-460
E-NOTIFIED
24TH JUDICIAL DISTRICT COURT (CLERK)
R. CHRISTOPHER COX, III (DISTRICT JUDGE)
BEAU P. SAGONA (APPELLEE) THOMAS A. ROBICHAUX (APPELLANT)
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