Mt. Hebron District Missionary Baptist Association of AL, Inc. v. The Hartford Company et al

Filing 163

MEMORANDUM OPINION AND ORDER: it is ORDERED as follows: 1) pursuant to FRCP 41(a)(2), Mt. Hebron's 156 motion to dismiss claims against Sentinel is GRANTED and the claims against Sentinel are DISMISSED without prejudice; 2) Sentinel's 160 motion for discharge is GRANTED, and Sentinel is DISCHARGED; 3) pursuant to FRCP 41(a)(2), Mt. Hebron's 156 motion to dismiss claims against Alexande is GRANTED and the claims against Alexander are DISMISSED without prejudice; 4) Alexand er's 110 counterclaims against Mt. Hebron alleging breach of contract and declaratory judgment are DISMISSED without prejudice; and 5) Mt. Hebron' 156 & 162 motions for status or entry of final judgment and Alexander's 158 moti on entry of final judgment are GRANTED to the extent that a final judgment will be entered by separate order; 6) Prior to executing the remainder of this Order, the Clerk of the Court is DIRECTED to wait the requisite period for the expiration of the time for appeal, after the Clerk receives any necessary documentation from the payee, such as W-9 forms; If there is an appeal, then the Clerk of the Court shall delay payment pending resolution of the appeal; If no appeal is filed, then the Clerk o f the Court shall proceed to the remainder of the Order; 7_ the Clerk of the Court, without further notice, is DIRECTED and AUTHORIZED to draw a check on the funds on deposit in the Commercial Registry Account and DISBURSE just compensation, in the p rincipal sum of Seven Hundred and Eight thousand, Three Hundred and Thirty Five dollars ($708,335.00), plus 90% of accrued interest, in a check payable to Mt. Hebron District Missionary Baptist Association of Alabama, Inc., by certified mai l, with a return receipt, to its attorney, James R. McKoon, at his address of record; The balance of 10% of accrued interest shall be paid to the U.S. Treasury as a handling fee pursuant to 28 USC 1914(b) and FRDOC91-26415 reported at 56 Fed. Reg. 56356 and directions received from the Administrative Office of the U.S. Courts on 2/7/1992. Signed by Chief Judge Emily C. Marks on 3/31/2020. (Furnished: Finance) (amf, )

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
EASTERN DIVISION
MT. HEBRON DISTRICT MISSIONARY
BAPTIST ASSOCIATION OF ALABAMA,
INC.,
Plaintiff,
v.
SENTINEL INSURANCE COMPANY,
Defendant.
v.
LANDON ALEXANDER, SR.,
Third-Party Defendant

)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)

CIVIL ACT. NO. 3:16-cv-658-ECM
(WO)

MEMORANDUM OPINION and ORDER
INTRODUCTION
At issue in this case is an insurance policy issued by Defendant Sentinel Insurance
Company (“Sentinel”) on a building owned by Plaintiff Mt. Hebron District Missionary
Baptist Association of AL, Inc. (“Mt. Hebron”). After a tornado destroyed the insured
building on April 6, 2016, Mt. Hebron made a claim on its insurance policy seeking the
benefits of its insurance policy with Sentinel. When Mt. Hebron received the check, it was
made payable to Mt. Hebron, and third-party defendant Reverend Dr. Landon Alexander,
Sr. (“Alexander”).
Mt. Hebron filed suit against Sentinel for its failure to pay to it the proceeds due
under the insurance policy. It also asserted a bad faith failure to pay claim. (Doc. 11).
1

Sentinel then filed a Counterclaim and Complaint in Interpleader (doc. 21) against Mt.
Hebron and Alexander. Sentinel also deposited into the registry of the Court Seven
Hundred and Eight thousand, Three Hundred and Thirty-Five dollars ($708,335.00) which
constitute the Policy proceeds. (Doc. 89).
Mt. Hebron then filed a third-party complaint against Alexander asserting
intentional interference with a contract. (Doc. 34).
On October 18, 2016, Alexander filed a motion to sever in which he argued that the
Interpleader action should be resolved before the Court resolved Mt. Hebron’s tort claims
against Sentinel and Mt. Hebron’s claims against him. (Doc. 33). The Court subsequently
severed the interpleader claim from all the other claims and ordered that the interpleader
action be determined first. (Docs. 76, 80 & 83).
Mt. Hebron filed a motion for summary judgment regarding Sentinel’s interpleader
claim and Alexander’s counterclaims, asserting that it, and not Alexander, was the proper
party to receive the insurance proceeds. On January 16, 2019, the Magistrate Judge entered
a Report and Recommendation determining that Alexander did not have an insurable
interest in the property, and thus, Mt. Hebron was entitled to summary judgment on the
interpleader claim. (Doc. 144). Alexander objected to the Report and Recommendation,
but the Court overruled his objections, adopted said Recommendation, and granted Mt.
Hebron’s motion for summary judgment with respect to the interpleader action, and denied
the motion with respect to any other remaining claims. (Doc. 148). The Court’s adoption
of the Recommendation resolved the issue of who was entitled to the insurance proceeds
— Mt. Hebron is the rightful and sole recipient of the insurance proceeds.
2

However, because Mt. Hebron’s motion for summary judgment did not resolve all pending
claims, the Court held a status conference on November 21, 2019 to determine how this
case should move forward. The Court ordered the parties to brief whether final judgment
should be entered on Defendant Sentinel’s counterclaim and complaint in interpleader
consistent with the Court’s order granting Mt. Hebron’s motion for summary judgment on
that claim. (Doc. 154).
The parties agree that final judgment should be entered on Sentinel’s counterclaim
and complaint in interpleader. (Docs. 156, 158 &159). However, there remain pending
other claims: Mt. Hebron’s claims against Sentinel for failure to pay and bad faith failure
to pay insurance proceeds (doc. 11); Mt. Hebron’s third-party complaint against Alexander
alleging intentional interference with a contract (doc. 34); and Alexander’s counterclaim
against Mt. Hebron for breach of contract and declaratory judgment (doc. 110).
In conjunction with the filing of briefs, the parties filed motions to resolve the
remaining claims. Consequently, now pending before the Court are the following motions:
Mt. Hebron’s motion to dismiss claims against Sentinel (doc. 156) and motion for status
or entry of final judgment (doc. 162); Sentinel’s motion for discharge (doc. 160), and
Alexander’s motion for entry of final order (doc. 158). For the reasons that follow, the
Court concludes that the motions are due to be granted and judgment entered in favor of
Mt. Hebron.

3

II. DISCUSSION
A. Mt. Hebron’s Motion to Dismiss. Two counts remain pending against Sentinel
-- a failure to pay insurance benefits and a bad faith failure to pay insurance benefits. 1 (Doc.
11). On December 20, 2019, Mt. Hebron filed a motion to dismiss, pursuant to Fed. R.
Civ. P. 41(a)(2), to dismiss those claims. (Doc. 156). Sentinel does not oppose Mt.
Hebron’s motion to dismiss. (Doc. 160). Accordingly, the Court will grant Mt. Hebron’s
motion to dismiss Sentinel, (doc. 156), and dismiss Sentinel as a party to this action.
Also pending is Mt. Hebron’s third-party complaint against Alexander alleging
“wrongful interference with a contract” in which Mt. Hebron alleges that Alexander
wrongfully interfered with its insurance contract with Sentinel by placing his name on the
insurance policy as mortgagee, by making a claim for the insurance proceeds, and
preventing Mt. Hebron from collecting the insurance proceeds. (Doc. 34). On December
20, 2019, Mt. Hebron also move to dismiss, pursuant to Fed. R. Civ. P. 41(a)(2), its
remaining claims against Alexander. (Doc. 156). Although Alexander opposes Mt.
Hebron’s motion to dismiss, he “concedes that this Court’s Opinion and Order (Doc. 148)
effectively disposed of Dr. Alexander’s claims without procedurally doing so.” (Doc. 158
at 3). Alexander therefore “raises no objection to dismissal of Mt. Hebron’s claims against
Sentinel and Dr. Alexander himself.” (Id. at 4). Consequently, the Court will grant Mt.
Hebron’s motion to dismiss its claims against Alexander.

1

The Court has previously dismissed Count 3 of the amended complaint. (Doc. 83).

4

B. Motion to Discharge. Sentinel deposited into the registry of the Court Seven
Hundred and Eight thousand, Three Hundred and Thirty-Five dollars ($708,335.00) (doc.
89) which constitute the Policy proceeds. Sentinel now moves for discharge. (Doc. 160).
Interpleader is the means by which an innocent stakeholder,
who typically claims no interest in an asset and does not know
the asset’s rightful owner, avoids multiple liability by asking
the court to determine the asset’s rightful owner. A successful
interpleader suit results in the entry of discharge judgment on
behalf of the stakeholder; once the stakeholder turns the asset
over to the registry of the court, all legal obligations to the
asset’s claimants are satisfied.
In re Mandalay Shores Co-op, Housing Ass’n, Inc., 21 F.3d 380, 383 (11th Cir. 1994). See
also, Prudential Life Ins. Co. of Am. v. Hearndon, 2019 WL 5592470, *1 (M.D. Fla. 2019);
Life Ins. Co. of N. Am. v. Williams, 2015 WL 10961833, *2 (N.D. Ga. 2015).
An interpleader action proceeds in two stages. First, the Court must determine
“whether interpleader is proper and whether to discharge the stakeholder from further
liability to the claimants. At the second stage, the court evaluates the respective rights of
the claimants to the interpleaded funds.” Unum Life Ins. Co. of Am. v. Smith, 2018 WL
1977257, * 2 (M.D. Ala. 2018).
At this juncture, Sentinel has interpleaded the funds into the Court’s registry and
has satisfied its obligations with respect to insurance proceeds. Moreover, Mt. Hebron has
moved to dismiss its remaining claims against Sentinel (doc. 156). Because there are no
remaining claims against Sentinel, the Court will grant Sentinel’s motion to discharge (doc.
160).

5

C. Alexander’s counterclaims for breach of contract and declaratory judgment.
Also pending before the Court is Alexander’s counterclaims against Mt. Hebron alleging
breach of contract and declaratory judgment (doc. 110). While Mt. Hebron asks the Court
to dismiss these state law claims, it points the Court to no mechanism by which the Court
could dismiss these claims at this state of the ligation. Although Alexander concedes that
the Court’s prior opinions “effectively disposed” of his counterclaims (docs. 156 & 158),
he objects to dismissal. (Doc. 158 at 5).
Given the Court’s jurisdiction over Mt. Hebron’s claims, it has the authority to
exercise supplemental jurisdiction over Alexander’s state law counterclaims. See 28
U.S.C. § 1367(a). Where all federal claims are dismissed prior to trial, district courts are
encouraged to dismiss any remaining state law claims. Raney v. Allstate Ins. Co., 370 F.3d
1086, 1088-89 (11th Cir. 2004). Before dismissing the remaining state law claims, the
federal court must consider the factors of judicial economy, convenience, fairness, and
comity. See Ameritox, Ltd. v. Millennium Labs., Inc., 803 F.3d 518, 537 (11th Cir. 2015).
“Both comity and economy are served when issues of state law are resolved by state
courts.” Rowe v. City of Fort Lauderdale, 279 F.3d 1271, 1288 (11th Cir. 2002). “Federal
courts are (and should be) loath to wade into uncharted waters of state law, and should only
do so when absolutely necessary to the disposition of a case.” Ameritox, 803 F.3d at 540.
Indeed, the Supreme Court has declared that “[n]eedless decisions of state law should be
avoided both as a matter of comity and to promote justice between the parties, by procuring
for them a surer-footed reading of applicable law.” United Mine Workers v. Gibbs, 383
U.S. 715, 726 (1966).
6

The Court has considered these factors and determines that it should decline to
exercise supplemental jurisdiction over Alexander’s state law counterclaims. Accordingly,
Alexander’s state law counterclaims will be dismissed without prejudice to his right to
pursue them in state court.
D. Entry of Final Judgment. With all remaining claims now resolved, the Court
concludes that there is no reason to withhold entry of final judgment and will do so by final
order.
III. CONCLUSION
Accordingly, for the reasons as stated, and for good cause, it is
ORDERED as follows:
1.

pursuant to Fed. R. Civ. P. 41(a)(2), Mt. Hebron’s motion to dismiss claims

against Sentinel (doc. 156) is GRANTED and the claims against Sentinel are DISMISSED
without prejudice;
2.

Sentinel’s motion for discharge (doc. 160) is GRANTED, and Sentinel is

DISCHARGED.
3.

pursuant to Fed. R. Civ. P. 41(a)(2), Mt. Hebron’s motion to dismiss claims

against Alexander (doc. 156) is GRANTED and the claims against Alexander are
DISMISSED without prejudice;
4.

Alexander’s counterclaims against Mt. Hebron alleging breach of contract

and declaratory judgment (doc. 110) are DISMISSED without prejudice; and

7

5.

Mt. Hebron’s motions for status or entry of final judgment (docs. 156 & 162)

and Alexander’s motion entry of final judgment (doc. 158) are GRANTED to the extent
that a final judgment will be entered by separate order;
6.

Prior to executing the remainder of this Order, the Clerk of the Court is

DIRECTED to wait the requisite period for the expiration of the time for appeal, after the
Clerk receives any necessary documentation from the payee, such as W-9 forms. If there
is an appeal, then the Clerk of the Court shall delay payment pending resolution of the
appeal. If no appeal is filed, then the Clerk of the Court shall proceed to the remainder of
the Order.
7.

the Clerk of the Court, without further notice, is DIRECTED and

AUTHORIZED to draw a check on the funds on deposit in the Commercial Registry
Account and DISBURSE just compensation, in the principal sum of Seven Hundred and
Eight thousand, Three Hundred and Thirty Five dollars ($708,335.00), plus 90% of accrued
interest, in a check payable to Mt. Hebron District Missionary Baptist Association of
Alabama, Inc., by certified mail, with a return receipt, to its attorney, James R. McKoon,
at his address of record. The balance of 10% of accrued interest shall be paid to the U.S.
Treasury as a handling fee pursuant to 28 U.S.C. § 1914(b) and FRDOC91-26415 reported
at 56 Fed. Reg. 56356 and directions received from the Administrative Office of the U.S.
Courts on February 7, 1992.
DONE this 31st day of March, 2020.
/s/ Emily C. Marks
EMILY C. MARKS
CHIEF UNITED STATES DISTRICT JUDGE
8