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

Filing 86

ORDER: it is ORDERED that, on or before July 7, 2017, Sentinel shall interplead the policy proceeds by paying into the Clerk of Court the amount of $708,335.00; it is futher ORDERED that the motion (Doc. 73 ) is DENIED. Signed by Honorable Judge Gray M. Borden on 6/16/2017.(kh, )

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
EASTERN DIVISION
MT. HEBRON DISTRICT
MISSIONARY BAPTIST
ASSOCIATION OF AL, INC.,

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Plaintiff,
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v.
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SENTINEL INSURANCE COMPANY, )
LIMITED,
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Defendant,
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v.
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LANDON ALEXANDER, SR,
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Third-Party Defendant.
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CASE NO.: 3:16-cv-658-CDL-GMB
[WO]

ORDER
Before the court are the Position Statement Regarding Interpleading Policy
Proceeds Without Interest (Doc. 68) filed by Defendant Sentinel Insurance Company,
Limited (“Sentinel”) and the Motion for Rule 11(c) Sanctions Against Sentinel Insurance
Company, Limited (Doc. 73) filed by Plaintiff Mt. Hebron District Missionary Baptist
Association of AL, Inc. (“Mt. Hebron”).
A.

Interpleader
Sentinel argues that interpleader of the policy proceeds at issue in this case is proper

because it makes no claim to the proceeds and Mt. Hebron and third-party Defendant
Landon Alexander, Sr. each have competing claims to the proceeds. Doc. 7 at 12. The

court recently denied Mt. Hebron’s motion to dismiss the interpleader complaint, see Docs.
76 & 83, and no other party opposes interpleader.
Under Rule 22 of the Federal Rules of Civil Procedure, a defendant potentially
exposed to double or multiple liability may seek interpleader through a crossclaim or
counterclaim. See Fed. R. Civ. P. 22(a). The defendant may do so even though it denies
liability “in whole or in part to any or all of the claimants.” Id. Because the requirements
for Rule 22 interpleader are satisfied given the respective positions of Mt. Hebron,
Alexander, and Sentinel, the court concludes that interpleader is proper.
Furthermore, the court finds that Sentinel need not tender interest along with the
policy proceeds. Whether interest has accrued is a question closely intertwined with the
outcome of the interpleader action and, potentially, Mt. Hebron’s underlying tort claims.
See Doc. 68 at 2. Therefore, a determination of whether interest is owed and when it began
to accrue would be premature at this time. The court will order Sentinel to interplead only
the policy proceeds, not interest that might be owed on those proceeds.
Accordingly, it is ORDERED that, on or before July 7, 2017, Sentinel shall
interplead the policy proceeds by paying into the Clerk of Court the amount of
$708,335.00.
B.

Sanctions
In the motion for sanctions, Mt. Hebron claims that Sentinel has violated Rule

11(b)(1) of the Federal Rules of Civil Procedure, caused unnecessary delay, and needlessly
increased the cost of litigation, by filing its Position Statement Regarding Interpleading
Policy Proceeds Without Interest. See Doc. 73 at 1–2. This motion is due to be denied.
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Sentinel filed a counterclaim in interpleader and later filed a brief requesting that it not be
required to pay interest on the funds to be interplead. See Doc. 68. There is no evidence
before the court suggesting that Sentinel has attempted to delay the interpleader action it
initiated, particularly when Sentinel filed its position statement before the court resolved
Mt. Hebron’s motion to dismiss the interpleader action. Mt. Hebron’s motion makes no
meaningful showing in support of any sanction against Sentinel, and with no additional
justification proffered during yesterday’s telephonic status conference, it is ORDERED
that the motion (Doc. 73) is DENIED.
DONE this 16th day of June, 2017.

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