American General Life Insurance Company v. Stickney et al

Filing 16

ORDER signed by District Judge Kimberly J. Mueller on 1/12/2017 ORDERING the court DIRECTS the parties to file a supplemental joint statement within 14 days.(Reader, L)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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SACRAMENTO DIVISION

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AMERICAN GENERAL LIFE INSURANCE
COMPANY,

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Plaintiff,

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Case No.: 2:16-cv-02460-KJM-KJN
ORDER TO SHOW CAUSE RE: PARTIES’
JOINT STIPULATION FOR AMERICAN
GENERAL LIFE INSURANCE COMPANY
TO RETAIN ANNUITY BENEFIT SUBJECT
TO LEGAL HOLD

v.
JOCELINE STICKNEY, MOLLY HILL
GRAY, KEVYN MORGAREIDGE, BANK
OF STOCKTON TRUST & INVESTMENT
GROUP AS ADMINISTRATOR OF THE
ESTATE OF MICHAEL NORMAN HILL,
Interpleader Defendants.

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On October 14, 2016, plaintiff American General Life Insurance Company (“AGLIC”)

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filed a Complaint in Interpleader. The Complaint asserts the court’s jurisdiction based, inter

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alia, on 28 U.S.C. § 1335 as well as Federal Rule of Civil Procedure 22. On December 12,

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2016, the parties filed a Joint Stipulation for AGLIC to retain the annuity benefit subject to a

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legal hold. The value of the Annuity equaled $391,476.67 (the “Annuity benefit”), when the

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complaint was filed on October 14. This sum represents the benefit payable under American

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General Portfolio Plus Fixed & Variable Annuity contract number 5953228 (the “Annuity”).

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AGLIC cannot determine to whom the Annuity benefit is payable due to the defendants’

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conflicting claims.

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Order to Show Cause With Respect to the Parties’ Joint Stipulation for AGLIC to Retain the Annuity Benefit Subject to a Legal Hold

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The court having considered the Joint Stipulation is considering the parties’ proposal

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that AGLIC retain control and possession of the Annuity benefit subject to a “legal hold,” and

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does not rule out approving a proposed order that allows the avoidance of adverse tax

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consequences. The court does require additional information from the parties prior to making a

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final decision whether to approve the proposed order in the form submitted. Accordingly, good

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cause appearing, the court directs the parties to file a supplemental joint statement addressing

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the following questions with citation to authority:

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1.

What authority supports the conclusion that the proposed “legal hold” satisfies

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28 U.S.C. § 1335(a)(2), assuming that statutory subsection applies here, which

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subsection provides in relevant part that if plaintiff does not deposit the funds at issue

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here with the court, it shall provide a “bond payable to the clerk of the court in such

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amount and with such surety as the court or judge may deem proper, conditioned upon

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the compliance by the plaintiff with the future order or judgment of the court with

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respect to the subject matter of the controversy”?

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2.

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approves that proposal in substance, to reflect that plaintiff should be prepared to pay

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interest on any funds it retains for the duration of this action, if the court awards interest

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in light of equitable considerations? See Gelfgren v. Republic National Life Ins. Co.,

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680 F.2d 79, 82 (9th Cir. 1982) (citations omitted).

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The supplemental joint statement shall be filed within fourteen (14) days.

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Is there any reason the court should not clarify the parties’ proposal, if it

SO ORDERED.
Dated: January 12, 2017.

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UNITED STATES DISTRICT JUDGE

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Order to Show Cause With Respect to the Parties’ Joint Stipulation for AGLIC to Retain the Annuity Benefit Subject to a Legal Hold

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