              IN THE UNITED STATES COURT OF APPEALS

                       FOR THE FIFTH CIRCUIT

                           ______________

                             No. 95-60511
                           Summary Calendar
                            ______________


NEW YORK LIFE INSURANCE AND ANNUITY COMPANY,
                                                              Plaintiff,

                                 versus

MARIE W. CULPEPPER, ET. AL,
                                                              Defendant.

STEPHANIE SEVERANCE, WILLIAM S. CULPEPPER, EILEEN WHITE,
CHARLES NAYLOR, JR., RUTH NAYLOR, ELIZABETH COMBUS,
                           Defendants-Cross Claimants-Appellants,

MARIE W. CULPEPPER,
                                         Cross Defendant-Appellee.
_________________________________________________________________

           Appeal from the United States District Court
             for the Southern District of Mississippi
                           (4:93CV152LN)
_________________________________________________________________

                           March 14, 1996

Before KING, SMITH, and BENAVIDES, Circuit Judges.

FORTUNATO P. BENAVIDES, Circuit Judge:*

     Appellants   appeal   the   district   court's   order   and   final

judgment finding Appellee successor owner of four annuity policies,

and awarding Appellee the funds from those annuities.         Finding the

district court erred in admitting and relying on inadmissible

hearsay that is not harmless, we reverse and render.



    *
       Pursuant to Local Rule 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in Local Rule 47.5.4.
                                   BACKGROUND

       Appellee Marie Culpepper is the widow of Bryan Culpepper, who

died on May 1, 1993.        Bryan Culpepper lost both his eyes and his

left arm in World War II.         After being discharged, he moved in with

his parents and siblings in Meridian, Mississippi until he met and

married Marie Culpepper eleven years later.1                 Bryan and Marie

Culpepper divorced within a few years, but remarried a short time

later, remaining married until Bryan Culpepper's death in 1993.

Bryan Culpepper managed a courthouse concession stand.                He was a

bright man with a good business sense, who invested his money well.

He died leaving a sizable estate to his wife as sole beneficiary

under his will.

       Despite his interest and ability to handle his own business

affairs, Bryan Culpepper required assistance with his day-to-day

activities, which his wife provided.           Marie Culpepper often either

assisted her husband in signing documents or signed his name for

him.       Over the years, Marie Culpepper signed checks, credit cards,

medical forms, and insurance policies for her husband.                However,

she    usually    signed   such    documents    in   the   presence   of   Bryan

Culpepper and a third party.

       Bryan Culpepper purchased four annuity policies from New York

Life Insurance and Annuity Corporation ("New York Life").                  At the

time of the purchase, Bryan Culpepper had his wife sign his name

       1
        Appellants in this case include a brother, three sisters,
a nephew, and a niece of Bryan Culpepper. One sister, Ruth Naylor,
and one brother, William S. Culpepper, testified at trial about the
care they provided Bryan Culpepper both before and after he married
Marie Culpepper.

                                        2
for him as owner and annuitant in the presence of his insurance

agent and close friend, Ron Gardner ("Gardner").

      In August 1984, following a change in federal tax law, New

York Life issued a mass mailing, consisting of several hundred

thousand      letters,    to     all     of     its      annuitants        "strongly

recommend[ing]" that a successor owner be named on the policies.

Bryan Culpepper was sent four of theses letters, one for each

policy.     A form was included to be used in naming a successor

owner. Marie Culpepper signed Bryan Culpepper's name to the forms,

designating her as successor owner, and mailed them directly to New

York Life.2      No third party witnessed the signing, and none of the

forms required a witness or notary.                   Neither Bryan nor Marie

Culpepper notified Gardner of the change in successor owner.

      In   May   1992,   while   Bryan       Culpepper    was   in   the    hospital

undergoing treatment for cancer, he called Gardner to his hospital

room and presented Gardner with a slip of paper upon which he had

listed the names of his relatives and certain amounts of money he

wished these relatives to receive upon his death.                Gardner drafted

the   appropriate    documents,    which       Bryan     Culpepper    signed    with

Gardner's assistance, naming the listed relatives as beneficiaries

on certain annuity and life insurance policies, including the four

annuities in which Marie Culpepper had been named successor owner

back in 1984.


      2
        Because some many customers were affected by the new tax
law, New York Life sent the letters and successor owner forms
directly to the annuitants to avoid flooding its local agents with
calls from its customers.

                                         3
     Bryan Culpepper died a year later from cancer. Soon after his

death, Marie Culpepper and Gardner received a letter from New York

Life stating that Marie Culpepper was named as successor owner of

the four annuity policies.             However, after Marie Culpepper was

informed    of    her    status   as   successor   owner,    she   changed    the

beneficiaries on the four annuity policies to her estate.

     New York Life brought an interpleader action in the district

court, asking for directions as to whom to pay proceeds of the four

annuities.       They named as defendants Marie Culpepper and those

relatives    of   Bryan    Culpepper     named   as   beneficiaries    in    1992

("Appellants").         Marie Culpepper filed an answer making claim to

the proceeds of the annuities, and Appellants filed a separate

answer making claim to the proceeds, along with an action against

New York Life and Gardner for failing to effectuate the change of

beneficiaries made by Bryan Culpepper in 1992.              The district court

dismissed New York Life and Gardner upon its ruling on a motion for

summary judgment. The case then proceeded to a bench trial between

Marie Culpepper and Appellants.              On July 26, 1995, judgment was

entered in favor of Marie Culpepper.             The court found that Marie

Culpepper was authorized to sign the successor owner forms because

she did so at her husband's request and therefore, her rights as

successor owner were superior to Appellants.

                             INADMISSIBLE HEARSAY

     "District courts are given broad discretion in rulings on the

admissibility of evidence; we will reverse an evidentiary ruling

only when the district court has clearly abused this discretion and


                                         4
'a substantial right of [a] party is affected.'"       Rock v. Huffco

Gas & Oil Co., 922 F.2d 272, 277 (5th Cir. 1991) (citing Muzyka v.

Remington Arms Co., Inc., 774 F.2d 1309, 1313 (5th Cir. 1985);

McNeese v. Reading and Bates Drilling Co., 749 F.2d 270, 275 (5th

Cir. 1985); FED. R. EVID. 103(a)).

     Appellants contend that the district court erred in admitting

Marie Culpepper's testimony that Bryan Culpepper told her to sign

the successor owner forms in 1984 because the statement is hearsay

tending to show Bryan Culpepper's intent. Specifically, Appellants

argue that Marie Culpepper's statement that her husband instructed

her to sign the successor owner forms directly addresses the

validity of the 1984 designation of Marie Culpepper as successor

owner to the four annuity policies at issue in this case.         The

district court overruled Appellants' objection, finding that Marie

Culpepper's statement was not hearsay because it was not offered

for the truth of what was said, but to the reason why she signed

Bryan Culpepper's name to the successor owner forms.     We disagree.

     An out-of-court statement constitutes hearsay when offered in

evidence "to prove the truth of the matter asserted."    See Anderson

v. United States, 417 U.S. 211, 219, 94 S.Ct. 2253, 41 L.Ed.2d 20

(1974); FED. R. EVID. 801(c).    The hearsay rule applies even when

the statement is made by a witness unavailable to testify due to

death.   See FED. R. EVID. 804(a)(4).   We find that Marie Culpepper's

statement is clearly hearsay because it speaks to the validity of

the signature on the successor owner forms.     Although the district

court ruled that the statement was only offered to show Marie


                                   5
Culpepper's state of mind, the court's memorandum opinion and order

filed after the bench trial makes apparent that the court relied on

Marie Culpepper's statement as evidence in support of its judgment.

The court's memorandum and order states: "Marie testified credibly

that she completed and signed the forms at Bryan's request."

     Marie Culpepper argues that her testimony as to her husband's

out-of-court statement falls under the hearsay exceptions listed in

Rule 804, without specifying which exception applies.3           The only

exception that is remotely relevant is the residual exception, Rule

804(b)(5).4   However, this Court has held that this exception must

only be used sparingly.     Rock, 922 F.2d at 282.      The admission of

Bryan Culpepper's statement to Marie Culpepper instructing her to

designate herself as successor owner and sign his name to the

applicable    forms   establishes   not   only   the   reason   why   Marie

Culpepper signed her husband's name to the successor owner forms,

but also Bryan Culpepper's intent that Marie Culpepper become

         3
           Any challenge to Gardner's testimony regarding Bryan
Culpepper's out-of-court statements is not properly before this
Court because no objection was raised during the testimony to
preserve error for appeal.
     4
         The Rule states in pertinent part:

     A statement not specifically covered by any of the
     foregoing exceptions but having equivalent circumstantial
     guarantees of trustworthiness, if the court determines
     that (A) the statement is offered as evidence of a
     material fact; (B) the statement is more probative on the
     point for which it is offered than any other evidence
     which the proponent can procure through reasonable
     efforts; and (C) the general purposes of these rules and
     the interests of justice will best be served by admission
     of the statement into evidence.

FED. R. EVID. 804(b)(5).

                                    6
successor owner and consent for her to sign his name to the forms.

Such a statement is inherently unreliable, and therefore cannot

meet the requirement of Rule 804(b)(5) that the statement have

"equivalent     circumstantial   guarantees   of   trustworthiness."

Therefore, we find that Marie Culpepper's testimony regarding Bryan

Culpepper's out-of-court statement is not admissible under any

hearsay exception.

     Having determined that Marie Culpepper's testimony regarding

Bryan Culpepper's out-of-court statement constitutes inadmissible

hearsay, we must next determine whether the admission of hearsay

was harmless.   "The question of harmless error is inseparable from

that of the sufficiency of the evidence to support the finding or

verdict the erroneously admitted evidence went toward proving. For

if, without it, the remaining evidence is insufficient to support

the final result, the error cannot be said to have been harmless."

Lubbock Feed Lots, Inc. v. Iowa Beef Processors, Inc., 630 F.2d

250, 269 (5th Cir. 1980) (citing 11 Wright & Miller, Federal

Practice and Procedure: Civil § 2885, at 289-90 (1973).      Because

Bryan Culpepper did not sign the successor owner forms himself, the

evidence presented apart from the inadmissible hearsay testimony is

insufficient to prove the validity of the signature on the forms

and is therefore not harmless.     The evidence clearly proves that

the change of beneficiary documents signed by Bryan Culpepper in

1992 were properly executed, and as there is no proper evidence in

the record sufficient to support a reasonable conclusion that the

successor owner forms were executed with the consent of Bryan


                                  7
Culpepper or that it was his intent that Marie Culpepper be the

successor owner, we reverse the final judgment of the district

court and render judgment in favor of Appellants.

                           CONCLUSION

     For the reasons articulated above, the final judgment of the

district court is REVERSED, and judgment is RENDERED in favor of

Appellants.




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