FINSERV CASUALTY CORPORATION; A.M.Y. PROPERTY & CASUALTY INSURANCE CORPORATION, Plaintiffs - Appellees
SYMETRA LIFE INSURANCE COMPANY; SYMETRA ASSIGNED BENEFITS SERVICE COMPANY, Defendants - Appellants FINSERV CASUALTY CORPORATION; A.M.Y. PROPERTY & CASUALTY INSURANCE CORPORATION, Plaintiffs - Appellees
SYMETRA LIFE INSURANCE COMPANY; SYMETRA ASSIGNED BENEFITS SERVICE COMPANY, Defendants - Appellants
Appeals from the United States District Court for the
Southern District of Texas
SMITH, DENNIS, and HAYNES, Circuit Judges.
HAYNES, CIRCUIT JUDGE:
Life Insurance Co. and Symetra Assigned Benefits Service Co.
(collectively, "Symetra") appeal a jury verdict in
favor of appellees FinServ Casualty Corp.
("FinServ") and A.M.Y. Property & Casualty
Insurance Corp. ("A.M.Y."). We REVERSE the district
court's judgment and REMAND with instruction to RENDER
judgment as a matter of law for Symetra.
parties operate in the structured-settlement
market. Symetra is an issuer and obligor of
annuity contracts, meaning it acquires money to make annuity
payments to tort victims with structured settlements.
Non-parties Rapid Settlements, Ltd. ("Rapid") and
RSL-3B-IL, Ltd. ("RSL-3B") purchase structured
settlements from such victims for a discounted lump
To fund their business, Rapid and RSL-3B obtained secured
loans from FinServ and A.M.Y., which are casualty insurance
entities have been litigating against each other for nearly
two decades. The present consolidated cases involve
structured settlement payments Symetra owed to two
individuals, Ana Meza and Patrick Reihs. Symetra owed $25,
000 to Meza and $60, 000 to Reihs. RSL-3B acquired the rights
to the Meza and Reihs payments from those individuals in 2004
and 2005, respectively, with Rapid acting as broker. Both
payments were subject to security interests held by FinServ
and A.M.Y. in all of Rapid and RSL-3B's then-owned and
after-acquired property. UCC-1 financing statements were filed
with the Texas Secretary of State in 2004 and 2008 disclosing
FinServ's and A.M.Y.'s rights in Rapid's and
has obtained several judgments against RSL-3B and Rapid. In
2006 and 2008, Washington courts awarded $39, 287.04 in
attorney fees and costs to Symetra from Rapid due to
Rapid's violations of the Washington Structured
Settlement Protection Act ("SSPA"), Wash. Rev. Code
Ann. §§ 19.205.010-.901, and an unsuccessful appeal
from that judgment. In re Rapid Settlements, Ltd.
(Rapid II), 271 P.3d 925, 927-28 (Wash.Ct.App.
2012); Rapid Settlements, Ltd. v. Symetra Life Ins.
Co. (Rapid I), 139 P.3d 411, 412, 414
(Wash.Ct.App. 2006). Symetra was granted a right to offset
the Reihs payment with the attorney-fee award in 2010.
Rapid II, 271 P.3d at 929, 931 (affirming the trial
court's grant of the right to offset). As a result of
separate litigation concerning Rapid's circumvention of
the Washington and Texas SSPAs, a Texas federal district
court directed Rapid to pay Symetra $901, 297.63 in fees and
costs in 2015. Symetra Life Ins. Co. v. Rapid
Settlements, Ltd., No. H-05-3167, 2015 WL 6739022, at *1
(S.D. Tex. Nov. 4, 2015). Finally, in 2013, a Washington
state court awarded Symetra a substantial amount in sanctions
when RSL-3B violated a temporary restraining order enjoining
it from collaterally attacking the offset order from
Rapid II. In re Rapid Settlements, Ltd.
(Rapid III), 359 P.3d 823, 830, 835-40 (Wash.Ct.App.
2015) (affirming in part the trial court's award of
2012, FinServ and A.M.Y. notified Symetra via letter that
they claimed security interests in the Reihs payment. Symetra
then notified RSL- 3B that it would offset the Reihs and Meza
payments pursuant to the offset order from Rapid II
and the sanctions judgment from Rapid III,
respectively. In all, Symetra offset $83, 543.77, including
the entire Meza payment and all but $1, 456.23 of the Reihs
filed suit in Texas state court to challenge Symetra's
offsets, and the case was removed to the Southern District of
Texas. FinServ and A.M.Y. joined as plaintiffs based on their
stated security interests, claiming that the rights to
payment arising from their security interests were not
subject to Symetra's offset rights. The court granted
summary judgment against all RSL-3B's claims, leaving
only claims by FinServ and A.M.Y. Symetra moved for summary
judgment against FinServ and A.M.Y., arguing that they had
failed to provide timely notice of their security interests.
The district court denied the motion, stating in relevant
part that "there [were] fact issues relevant to whether
Symetra received notification of [the] assignments of the
disputed payments [to FinServ and A.M.Y.] prior to the
accrual of Symetra's offsetting claims." The court
also denied Symetra's subsequent motion for a judgment as
a matter of law.
case went to a jury, which found that Symetra had received
notice that RSL-3B had assigned the Meza and Reihs payments
by 2005, well before its offsetting claims accrued.
Therefore, the district court ruled that Symetra could not
assert its rights to offset against assignees FinServ and
A.M.Y. Symetra filed a renewed motion for judgment as a
matter of law, arguing that, if the law were properly
applied, no reasonable jury could find that Symetra had
notice of assignment in 2005. The district court denied the
motion. Symetra also moved for a new trial, arguing that the
notice finding was unsupported by the evidence. That motion
was likewise denied. Symetra timely appealed.
Standard of Review
review the denial of a motion for judgment as a matter of law
de novo but apply the same legal standard as the district
court." OneBeacon Ins. Co. v. T. Wade Welch &
Assocs., 841 F.3d 669, 675 (5th Cir. 2016). We will
reverse the district court "if the legal conclusions
implied from the jury's verdict cannot in law be
supported by [the jury's factual] findings."
Id. at 676 (quoting Am. Home Assurance Co. v.
United Space All., LLC, 378 F.3d 482, 488 (5th Cir.
2004)). Notice is generally "an inference of fact."
Exxon Corp. v. Raetzer, 533 S.W.2d 842, 846 (Tex.
Civ. App.-Corpus Christi 1976, writ ref'd n.r.e.). Notice
"becomes a question of law only when there is no room
for ordinary minds to differ as to the proper conclusion to
be drawn from the evidence." BarclaysAmerican/Bus.
Credit, Inc. v. E & E Enters., Inc., 697 S.W.2d 694,
700 (Tex. App.-Dallas 1985, no writ). The issue here is not
the jury's construction of the facts, to which great
deference would be owed, but rather the district court's
construction of the law of "notice," which is
reviewed de novo. United States v. Posada Carriles,
541 F.3d 344, 353 (5th Cir. 2008) ("[W]e review de novo
the district court's interpretation of the law.");
Pendarvis v. Ormet Corp., 135 F.3d 1036, 1038 (5th
Cir. 1998) ("We review the district court's
construction of state law de novo."); see Palmco
Corp. v. Am. Airlines, Inc., 983 F.2d 681, 685 (5th Cir.
1993) ("[T]he issue [of notice for breach of contract]
is a matter of law based upon the undisputed facts of this