Navy Federal Credit Union v. McEntire et al

Filing 39

ORDER that Plaintiff's Motion (Doc. [6)] seeking to deposit the disputed Navy Federal Weyer accounts into the Court's registry is GRANTED. Plaintiff must deposit the funds from the Navy Federal Weyer accounts, totaling $201,994.78, plus applicable interest, into the Court's registry. ORDERED that Plaintiff may file a Motion for Attorney's Fees within 30 days of this Order. IT IS FURTHER ORDERED that when the disputed funds are deposited with the Clerk of Court, Plaintiff shall file a Notice of Deposit, after which Plaintiff will be dismissed from this action. The Defendants are hereby ordered to interplead their claims. Signed by Judge Diane J Humetewa on 9/25/2024. (LFIG)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Navy Federal Credit Union,
Plaintiff,

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v.

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Travis McEntire and Wendy Armstrong,

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Defendants.

No. CV-24-01699-PHX-DJH
ORDER

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Plaintiff Navy Federal Credit Union (“Plaintiff”) has filed a Motion for Interpleader

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Deposit. (Doc. 6). Plaintiff seeks leave to deposit with this Court the sum of $201,994.78,

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pursuant to Federal Rule of Civil Procedure 67(a) (allowing for disputed funds to be

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deposited in the Court’s registry “on notice to every other party and leave of court.”). The

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Court will grant Plaintiff’s Motion and allow it to deposit this sum with the Court’s registry

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for the following reasons.

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I.

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Background
This action arises from a dispute among two siblings regarding their mother’s bank

accounts. (See Doc. 1). Plaintiff’s Complaint alleges the following:

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Plaintiff is a not-for-profit credit union. (Id. at ¶ 1). One of its customers, Kayleen

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McEntire Weyer (“Decedent”) has passed away, leaving behind $206,715.86. (Id. at ¶ 10).

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Decedent has two children involved in a dispute: Travis McEntire (“Decedent’s son”), who

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is named as the beneficiary to these accounts, and Wendy Armstrong (“Decedents

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daughter”), who is not. (Id. at ¶¶ 2–3). Decedent designated her son as the Payable on

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Death Beneficiary of her accounts held with Plaintiff. (Id. at ¶ 16). Decedent executed

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various wills within the last few years, with her latest will being executed on August 14,

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2023. (Id. at ¶ 15). Decedent and her spouse, Clarence Weyer, established a trust providing

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for the division of trust property upon the death of the survivor trustee giving a 50% share

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to Decedent’s son and daughter. (Id. at ¶ 14). This trust was also amended after Decedent’s

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spouse died. (Id. at ¶ 15).

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Decedent passed away on January 26, 2024, and Plaintiff states that Decedent’s

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daughter contacted it alleging that: “(a) [Decedent’s son] may have improperly used the

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Decedent’s debit card; (b) the Decedent may have been pressured to sign the change in

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beneficiary designation and Payable on Death Designation; and (c) a police report had been

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filed related to [Decedent’s son’s] alleged treatment of the Decedent’s finances.” (Id. at ¶¶

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18–19). Decedent’s daughter also informed Plaintiff that she was going to contest the

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disbursement—upon which Plaintiff notified Decedent’s son that it could not proceed with

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settlement of the Decedent’s accounts. (Id. at 21). Decedent’s son threatened to contact

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the FBI and the media. (Id. at ¶ 22). Plaintiff has encouraged Decedent’s children to reach

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some sort of settlement, but they have not. (Id. at ¶¶ 23–25). Now, fearful to being subject

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to double liability, Plaintiff has filed an interpleader action and seeks to deposit the

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proceeds from the Decedent’s accounts with the Clerk of this Court and be discharged of

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liability. (Id. at ¶¶ 26–29). Plaintiff also seeks to recover its attorneys’ fees and costs

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related to this matter. (Id. at ¶ 30).

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II.

Deposit of Disputed Funds

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Plaintiff asks the Court for an Order instructing it to “deposit the funds from the

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Decedent’s [] accounts into the registry of the Court for future disbursement according to

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the judgment of this Court.”

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28 U.S.C. § 1335, Federal Rules of Civil Procedure 22 and 67, as well as Local Rule of

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Civil Procedure 67.1. (Id.).

(Doc. 6 at 1).

Plaintiff seeks such an Order under

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“Interpleader is a procedural device used to resolve conflicting claims to money or

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property. It enables a person or entity in possession of a tangible res or fund of money (the

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stakeholder) to join in a single suit two or more claimants asserting mutually exclusive

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claims to that stake.” Metro. Life Ins. Co. v. Reynolds, 2013 WL 6048808, at *2 (D. Ariz.

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Nov. 15, 2013) (citing Nevada v. Pioneer Cos., Inc., 245 F Supp.2d 1120, 1125 (D. Nev.

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2003)). Interpleader is designed to protect the stakeholder “against the problems posed by

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multiple claimants to a single fund.” Mack v. Kuckenmeister, 619 F.3d 1010, 1024 (9th Cir.

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2010) (quoting Minnesota Mut. Life Ins. Co. v. Ensley, 174 F.3d 977, 980 (9th Cir. 1999)).

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An “[i]nterpleader's primary purpose is not to compensate, but rather to protect

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stakeholders from multiple liability as well as from the expense of multiple litigation.”

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Aetna Life Ins. Co. v. Bayona, 223 F.3d 1030, 1034 (9th Cir. 2000).

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An interpleader action usually proceeds in two stages: first, the court determines

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whether the interpleader action is appropriate. Reynolds, 2013 WL 6048808, at *2. If so,

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the Court “may order the plaintiff to deposit the disputed funds, discharge the plaintiff, and

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direct the claimants to interplead.” Id. Second, the Court “adjudicates the defendants’

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competing claims to the interplead funds, and the action usually proceeds as any other civil

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action.” Id. (citing Wells Fargo Bank, N.A. v. Magellan Owners Ass’n, 2010 WL 46794,

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at *2 (D. Ariz. Jan. 4, 2010)).

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Plaintiff has demonstrated that this action is appropriate. QBE Specialty Ins. Co. v.

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Kane as Tr. for Hawaii Island Air, Inc., 653 F. Supp. 3d 780, 790 (D. Haw. 2023).

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Interpleader is appropriate, where, as here, a plaintiff has filed a motion alleging that there

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are competing claims to a single fund. See id. (“Interpleader is proper [when] there is a

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single fund at issue [and] adverse claimants to that fund.”); Lincoln Nat'l Life Ins. Co. v.

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Ridgway, 293 F. Supp. 3d 1254, 1261 (W.D. Wash. 2018) (“Interpleader is proper when a

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stakeholder has at least a good faith belief that there are present or prospective colorable

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competing claims to the stake.”). A plaintiff need only show that it has a “real and

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reasonable fear of exposure to double liability or the vexation of conflicting claims.”

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Michelman v. Lincoln Nat. Life Ins. Co., 685 F.3d 887, 894 (9th Cir. 2012). To do this, it

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can “merely demonstrate that potential adverse claims meet ‘a minimal threshold level of

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substantiality.’ ” QBE Specialty, 653 F. Supp. 3d at 790. A party may initiate an

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interpleader “even if some or all of the claims against the stake are prospective.” Ridgway,

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293 F. Supp. 3d at 1260.

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The Court finds that Plaintiff has demonstrated it may face exposure to double

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liability due to competing claims for funds it is holding on behalf of Decedent. Michelman,

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685 F.3d at 894. Plaintiff has alleged that Defendant Armstrong contacted it because she

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believed that Defendant McEntire may have improperly used the Decedent’s debit card,

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that he pressured Decedent to sign the change in beneficiary designation and Payable on

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Death Designation and that a police report had been filed related to Defendant McEntire’s

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alleged treatment of the Decedent’s finances. (Doc. 1 at ¶ 19). Plaintiff also notes that,

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after Decedent’s death, Defendant McEntire sought to withdraw the funds from Decedent’s

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Accounts and informed Plaintiff that Defendant Armstrong had been removed from the

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Decedent’s will and trust. (Id. at ¶ 20). These facts demonstrate that Plaintiff could be

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subject to multiple liability as well as the expense of multiple litigation. See Bayona, 223

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F.3d at 1034. Thus, this interpleader action is appropriate under Section 1335. Reynolds,

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2013 WL 6048808, at *2.

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Accordingly,

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IT IS ORDERED that Plaintiff’s Motion (Doc. 6) seeking to deposit the disputed

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Navy Federal Weyer accounts into the Court’s registry is GRANTED. Plaintiff must

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deposit the funds from the Navy Federal Weyer accounts, totaling $201,994.78, plus

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applicable interest, into the Court’s registry.
IT IS FURTHER ORDERED that Plaintiff may file a Motion for Attorney’s Fees

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within thirty (30) days of this Order.

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IT IS FINALLY ORDERED that when the disputed funds are deposited with the

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Clerk of Court, Plaintiff shall file a Notice of Deposit, after which Plaintiff will be

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dismissed from this action. The Defendants are hereby ordered to interplead their claims.

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Dated this 25th day of September, 2024.

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Honorable Diane J. Humetewa
United States District Judge

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cc: Finance

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