Jacques v. The Prudential Insurance Company of America

Filing 95

ORDER: Sheryl Jacques' Motion for Prejudgment Interest (Doc. # 86 ) is DENIED. Sheryl, Kara, and Kristen Jacques are directed to file a stipulation regarding the distribution of the funds held in the Court's registry without delay. Signed by Judge Virginia M. Hernandez Covington on 2/2/2017. (KAK)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
KRISTEN JACQUES, KARA JACQUES,
and THE ESTATE OF JOHN JACQUES,
Plaintiffs,
v.

Case No.

8:16-cv-1297-T-33TGW

SHERYL JACQUES,
Defendant.
_________________________________/
SHERYL JACQUES,
Counterclaim Plaintiff,
v.
KRISTEN JACQUES, KARA JACQUES,
and THE ESTATE OF JOHN JACQUES,
Counterclaim Defendants.
__________________________________/
ORDER
This cause comes before the Court pursuant to Sheryl
Jacques’ Motion for Prejudgment Interest (Doc. # 86), which
was filed on December 21, 2016. As stated in the Motion, Kara
Jacques

and

prejudgment

Kristen

Jacques

interest.

At

the

join

in

the

direction

of

request
the

for

Court,

Prudential Insurance Company of America filed a Response in
Opposition on January 10, 2017. (Doc. # 92). For the reasons
that follow, the Court denies the Motion.1

1

Because many parties in this suit share the same last
(continued...)

I.

Background
When John Jacques passed away on October 12, 2015, he was

covered by two life insurance policies issued by Prudential.
On April 25, 2016, John’s ex-wife, Sheryl, filed an ERISA
complaint against Prudential in state court seeking payment of
life

insurance

policies - the

benefits

under

one

of

the

two

insurance

Basic Term Life Policy. (Doc. # 2).

On May

24, 2016, Prudential removed the action to this Court based on
a federal question - the ERISA life insurance policy - and, in
the alternative, diversity jurisdiction. (Doc. # 1).
Prudential demonstrated that interpleader relief was
appropriate by indicating it was a neutral stakeholder, ready,
willing, and able to disburse insurance proceeds, but not
certain as to the identity of the appropriate beneficiary or
beneficiaries and possibly subject to duplicate liability due
to

said

children,

uncertainty.
Kristen

Prudential
and

Kara,

identified
as

John’s

putative

adult

insurance

beneficiaries, and after some investigation, verified that a
second life insurance policy, the Group Universal Life Policy
(the GUL Policy), also covered John. The parties represent

1

(...continued)
name, the Court will sometimes refer to parties by their first
names.
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that the Basic Term Life Policy is an ERISA policy and that
the GUL Policy is a non-ERISA policy.
At

the

Court’s

direction,

Prudential

deposited

the

proceeds of the Basic Term Life Policy ($85,000) and the GUL
Policy ($119,041.35) into the Court’s registry. (Doc. ## 75,
76).

In an Order dated November 2, 2016, the Court granted a

broad release to Prudential:
[O]nce Prudential has deposited all funds in
question into the Court’s Registry, it shall be
dismissed from this action with prejudice.
Upon
the deposit of the insurance proceeds for both the
Basic Term Life Policy and the GUL Policy,
Prudential and its present and former parents,
subsidiaries
and
affiliated
corporations,
predecessors, successors and assigns and their
respective officers, directors, agents, employees,
representatives,
attorneys,
fiduciaries,
and
administrators shall be released and discharged
from any and all liability to Sheryl Jacques,
Kristen Jacques, Kara Jacques, and the Estate with
respect to the Basic Term Life Policy and the GUL
Policy.
In addition, once the deposit of the funds has
been made, Sheryl Jacques, Kristen Jacques, Kara
Jacques, the Estate, and/or any past, present or
future persons, representatives or conservators on
their behalf, are permanently enjoined from
bringing any action or proceeding in any forum, or
making any further actual or implied claims,
demands, causes of action asserted or unasserted,
liquidated or unliquidated, against Prudential
arising out of or in connection with the Basic Term
Life Policy or the GUL Policy.
(Doc. # 74 at 18)(emphasis added).

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On December 19, 2016, the Court was notified that Sheryl,
Kara,

and

Kristen

reached

a

settlement

regarding

the

distribution of all life insurance proceeds. (Doc. # 83). The
Court directed the parties to file a stipulation “includ[ing]
direction regarding disbursement of the funds held in the
Court’s registry.” (Id.).
Before providing the Court with any information about the
parties’

agreement

as

to

distribution

of

the

insurance

proceeds, Sheryl filed the instant Motion seeking prejudgment
interest from October 12, 2015, the date of John’s death,
until November 10, 2016, the date that Prudential deposited
the funds in the Court’s registry. (Doc. # 86).

In total,

Sheryl seeks $10,586.03 in prejudgment interest. Prudential
opposes the Motion. (Doc. # 92).
II.

Analysis
Prudential only “pays interest on life insurance death

benefits
payment

where
of

the

interest

applicable
and/or

contract

the

provides

applicable

for

the

state

statute

requires that claim interest be paid.” (Id. at 2).

Sheryl,

Kristen, and Kara have not pointed to any language in either
of the two insurance policies which can be construed as
allowing for the payment of prejudgment interest.

And,

Prudential affirmatively represents that “none of the terms of
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either policy provide for the payment of interest on the death
benefits.” (Id. at 2-3).
Tellingly, in Flint v. ABB Inc., 337 F.3d 1326, 1329
(11th Cir. 2003), the court explained:
The Supreme Court has observed repeatedly that
ERISA is a comprehensive and reticulated statute,
the product of a decade of congressional study of
the Nation’s private employee benefit system. The
Court has emphasized its unwillingness to infer
causes of action in the ERISA context, since that
statute’s
carefully
crafted
and
detailed
enforcement scheme provides strong evidence that
Congress did not intend to authorize other remedies
that it simply forgot to incorporate expressly.
Id. (internal citations and quotation marks omitted).

In

Flint, the court evaluated the terms of a disability plan,
rather than a life insurance policy. Nevertheless, that court
held that accrued interest was not recoverable by an ERISA
participant whose benefits were prematurely terminated and
later reinstated, because the ERISA plan’s provision did not
mandate such a recovery.

Although not exactly on point, the

Court is persuaded by the analysis in Flint.

The Court

declines to insert remedies into an ERISA policy that were not
previously agreed to by the contracting parties.
Because funds from a non-ERISA insurance policy are also
at issue, the Court evaluates whether any Florida statute
would provide for the payment of prejudgment interest. Sheryl

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argues: “Florida Statute § 55.03 establishes the statutory
interest rate for all matters which do not have specific
statutes

for

interest.

Based

upon

this

statute,

which

provided a rate of 4.75% up to March 31, 2016, then 4.78% from
April 1, 2016, to June 30, 2016, and then 4.84% since July 1,
2016, prejudgment interest on $204,041.35 for which Prudential
is liable is calculated [as] . . . $10,586.03.” (Doc. # 86 at
4).
Prudential counters that § 627.4615, Fla. Stat. is “the
sole Florida statute requiring the payment of interest on life
insurance policies” and that it “applies only to individual
life insurance policies.” (Doc. # 92 at 3).

Prudential

remarks, “there is no similar statute requiring the payment of
interest on group policies [such as the GUL Policy] in
Florida.” (Id.).

The Florida Statute that Sheryl relies upon

states, “Any judgment for money damages or for a judicial sale
and any process or writ directed to a sheriff for execution
shall bear, on its face, the rate of interest that is payable
on the judgment. The rate of interest stated in the judgment,
as adjusted in subsection (3), accrues on the judgment until
it is paid.”

Fla. Stat. § 55.03(2).

In Rainess v. Estate of Machida, 81 So. 3d 504, 512 (Fla.
3d DCA 2012), the court explained that prejudgment interest
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should not be included in interpleader actions.

In Rainess,

the ownership of the decedent’s $1.5 million IRA was contested
by a decedent’s widow and nephew because the bank lost the
decedent’s IRA paperwork. Id. at 507. The trial court divided
the IRA among the widow and the nephew and denied a motion for
prejudgment interest. Id. at 509. The trial court’s denial of
prejudgment interest was affirmed because:
Florida has adopted the position that prejudgment
interest is an element of pecuniary damages.
Argonaut Ins. Co. v. May Plumbing Co., 474 So. 2d
212, 215 (Fla. 1985). A plaintiff is entitled to
prejudgment interest as a matter of law when he
prevails on a claim and a verdict liquidates
damages on a plaintiff’s out-of-pocket, pecuniary
losses. . . . While the trial court determined
Rainess to be a co-equal beneficiary of [the] IRA,
that determination did not constitute an award of
damages, as interpleader is not an action for
damages. Rather, it has been established that . .
. interpleader remains an equitable remedy governed
by equitable principles. Thus, the trial court did
not err in denying Rainess’ claim for prejudgment
interest.
Id. (internal citations and quotation marks omitted).
In

Rainess,

the

trial

court

made

the

determination

regarding distribution of the disputed proceeds whereas here,
the parties reached a settlement regarding the distribution of
the

proceeds.

Under

either

scenario,

the

payment

of

prejudgment interest is not required under Florida law because

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this is an interpleader action and Sheryl has suffered no “out
of pocket” damages.
Sheryl points out that in National Companies Health
Benefit Plan v. St. Joseph’s Hospital, Inc., 929 F.2d 1558
(11th Cir. 1991), the court affirmed the trial court’s award
of 18% prejudgment interest in the context of an ERISA
dispute.

That case, however, can be easily distinguished and

cannot be used to support an award of prejudgment interest
here. In National Companies, both husband and wife were
independently covered by a health insurance plan, but when
their twin babies were born prematurely and with medical
complications, both insurance companies declined to make
appropriate payments and disclaimed coverage.

The family was

left scrambling to pay “substantial unpaid medical expenses”
with the hospital demanding payment plus 18% interest. Id. at
1574, 1576.

That case was decided in favor of the insured

family under ERISA, and the court made a specific finding of
bad faith on the part of the husband’s insurance company:
“National represented to Mr. Hersh that it would provide
continuation coverage to him and then, after Mr. Hersh had
detrimentally

relied

upon

this

representation,

National

changed its mind and tried to avoid its obligation.” Id. at
1575.

The court recognized that the award in favor of the
-8-

Hersh family, over $1 million, which included prejudgment
interest, was entered in part to deter insurance companies
from “forc[ing] underfinanced beneficiaries to sue them to
gain their benefits or accept undervalued settlements.” Id.
In

contrast,

after

both

insurance

policies

were

identified and the death benefit amounts confirmed, Prudential
timely paid all monies into this Court’s registry under the
equitable

doctrine

of

interpleader.

Prudential

did

not

attempt to deny or disclaim coverage as did the insurers in
National Companies.
Finally, Sheryl argues that although the life insurance
policies do not contain a provision requiring the payment of
prejudgment interest, prejudgment interest may be awarded
pursuant to this Court’s discretionary authority.

However,

Sheryl has not convinced the Court that such an award is
appropriate.

Notably, in authorizing interpleader, the Court

held that Prudential would be forever discharged with respect
to claims brought by Sheryl, Kristen, and Kara as to the two
relevant life insurance policies insuring John. It would take
compelling circumstances, akin to fraud or similar malfeasance
– which are not present here - for the Court to retract from
the broad release it granted to Prudential when interpleader

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was authorized.

Thus, after due consideration, the Court

denies the Motion.
Accordingly, it is
ORDERED, ADJUDGED, and DECREED:
(1)

Sheryl Jacques’ Motion for Prejudgment Interest (Doc. #
86) is DENIED.

(2)

Sheryl, Kara, and Kristen Jacques are directed to file a
stipulation regarding the distribution of the funds held
in the Court’s registry without delay.
DONE and ORDERED in Chambers in Tampa, Florida, this 2nd

day of February, 2017.

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