CMFG Life Insurance Company v. Harrison et al

Filing 35

ORDER granting 29 Motion to Intervene. Signed by Magistrate Judge G. R. Smith on 10/27/16. (jlm)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF GEORGIA
SAVANNAH DIVISION
CMFG LIFE INSURANCE
COMPANY, f/k/a CUNA
MUTUAL INSURANCE
SOCIETY,

)
)

Interpleader Plaintiff,
v.

CV415-287

MARCIA BASHLOR
HARRISON,
Defendant, Cross-Claimant
and Cross-Defendant,
and BEVERLY BASHLOR
TAYLOR,
Defendant, Cross-Claimant
and Cross-Defendant.

ORDER
Hilda Bashlor moves to intervene to protect her claim for annuity
proceeds currently deposited in the registry of this Court. Despite the
procedural irregularities in her motion, there is a preference for
permitting intervention in this Circuit in close cases. See Fed. Sav. &

Loan Ins. Corp. v. Falls Chase Special Taxing Dist. , 983 F.2d 211, 216

(11th Cir. 1993) (“Any doubt concerning the propriety of allowing
intervention should be resolved in favor of the proposed intervenors
because it allows the court to resolve all related disputes in a single
action.”); see also Ohio Sec. Ins. Co. v. Newsome , 2015 WL 1419341 at * 8
(S.D. Ga. March 27, 2015). Given that preference, her motion to
intervene is GRANTED .

I. BACKGROUND1
Ralph Morris Bashlor, Sr., Hilda Bashlor’s late husband, purchased
two annuities from CMFG Life Insurance Company and named her as
the primary beneficiary. Doc. 1 at ¶¶ 7, 10; doc. 23 at 6-7, ¶ 6 . CMFG
received “Change of Beneficiary” forms for both annuities in May 2013
and April 2015. The first purported to make defendants co-primary
1

Defendants Marcia Bashlor Harrison and Beverly Bashlor Taylor (Marcia and
Beverly) argue that Hilda’s allegations should not be considered in support of her
motion to intervene “because [the motion] is neither substantiated, sworn/verified,
nor declared (per 28 U.S.C. § 1746) . . . .” Doc. 30 ¶ 18; doc. 31. But there is no
general requirement that pleadings be sworn, or otherwise supported by evidence.
See Fed. R. Civ. P. 11(a) (stating “unless a rule or statute specifically states
otherwise, a pleading need not be verified or accompanied by an affidavit”). The
well-pleaded non-conclusory factual allegations asserted in a motion to intervene, and
accompanying pleading, are taken as true for purposes of evaluating the motion. See
Dudley v. Se. Factor & Fin. Corp. , 57 F.R.D. 177, 184 (N.D. Ga. 1972) (“[F]or
purposes of judging the satisfaction of the conditions for intervention of right the
well pleaded allegations of the proposed complaint are taken as true”); see also Foster
v. Gueory , 655 F.2d 1319, 1324 (D.C. Cir. 1981) (“motions to intervene are usually
evaluated on the basis of well pleaded matters in the motion, the complaint, and any
responses of opponents to intervention”). The Court therefore will accept Hilda’s
allegations, both in her motion and incorporated pleading, as true.
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beneficiaries, while the second aimed to make Beverly the sole
beneficiary. Doc. 1 at ¶¶ 8-9. Marcia and Hilda dispute the forms’
effects. Doc. 7 at ¶¶ 8-9 (admitting the May 2013 forms and their effect,
but alleging that the April 2015 forms were the result of Beverly’s
“undue influence”); doc. 23 at ¶¶ 3, 13-14. Morris died in August 2015,
doc. 1 at ¶ 10, after which CMFG filed this action to interplead the
proceeds, doc. 1 at ¶¶ 13-14.
The Court dismissed CMFG after it deposited the funds. Doc. 11.
Marsha and Beverly then settled their claims against each other and
agreed to a division of the interpleaded funds. Doc. 21 at ¶ 2. On May
25, 2016, they moved the Court to disburse those funds to them. Doc. 21.
Hilda moved to intervene six days later. Doc. 23.
Because Marsha and Beverly insist that Hilda moved too late, doc.
30 at ¶ 14-15; doc. 312, some additional background is warranted. Hilda
first sought to intervene by filing an “Answer and Crossclaims of
Defendant Hilda Hallows Bashlor” on May 31, 2016. Doc. 23. On June
13, 2016, she formally opposed (via opposition brief) the defendants’
disbursement motion. Doc. 24. Marcia and Beverly then moved to
2

Beverly’s response, doc. 31, “adopts and incorporates” Marcia’s response, doc. 30.
All references to Marcia’s response, therefore, should be construed as their joint
response.
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dismiss “and/or” strike Hilda’s pleading. Docs. 25 and 27. 3 Meanwhile,
Hilda had waited about two months after defendants’ dismissal motions
to formally move to intervene. Doc. 29. She explained that she had
intended to file the pleading and motion together, but omitted the
motion due to an “administrative error.” Doc. 29 at 2. After defendants
responded to her motion, she filed a document entitled “Brief in Support
of Motion to Intervene and Reply to Defendants’ Opposition to Motion to
Intervene.” Doc. 33. There, for the first time, she argued that she
satisfied Rule 24’s intervention criteria. Id.
Hilda does not explain, however, why she did not raise her
arguments in her motion, as required by the Local Rules. See generally
doc. 33; doc. 29 (stating, in support of intervention, that she “has a clear
3

Both motions rely on Hilda’s purporting to file her “Answer and Crossclaim,”
without having first sought and obtained an intervention order. See docs. 25 and 27.
Hilda failed to file any response to those motions, indicating that they were
unopposed. S.D. Ga. Loc. Civ. R. 7.5 (“Failure to respond within the applicable time
period shall indicate that there is no opposition to a motion.”) Her motion to
intervene incorporated the previously filed Answer and Crossclaim to satisfy the
requirement of Rule 24(c). See Fed R. Civ. P. 24(c) (requiring that a motion to
intervene be “accompanied by a pleading that sets out the claim or defense for which
intervention is sought”). In the Eleventh Circuit, as in a majority of other circuits,
“nonprejudicial technical defects” in motions to intervene are disregarded. Piambino
v. Bailey , 757 F.2d 1112, 1121 (11th Cir. 1985). Hilda’s Answer and Crossclaim
provided notice of the substance of her claims in this matter. Thus, even if her
original pleading failed to satisfy Rule 24, her subsequent motion incorporating it
cured her intervention motion’s procedural defect. Incidentally, the defense motions
to dismiss Hilda’s claim to the annuity proceeds remain before the district judge.
Docs. 25 and 27.
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interest relating to this matter, and is so situated that the disposition of
this action my impair or impede her ability to protect her interest in the
life insurance proceeds [sic] that are the subject of this action); S.D. Ga.
Loc. Civ. R. 7.1(b) (requiring every motion to “cite to supporting legal
authorities,” and allowing supporting memorandum and motion to be
filed as one document). Despite the introduction of novel arguments in
her reply, and because of this Court’s duty to advance Fed. R. Civ. P. 1’s
“just, speedy, and inexpensive determination” command (hence, its
unlimited reply brief policy), 4 the Court will consider them.

II. ANALYSIS
Hilda can intervene in one of two ways: by showing a right to
intervene or with the Court’s permission. 5 See Fed. R. Civ. P. 24(a)-(b).
A right to intervene requires (1) a timely motion, and (2) an interest
relating to the property or transaction at issue, which (3) might be
4

See Waddy v. Globus Medical, Inc., 2008 WL 3861994 at * 1 (S.D. Ga. Aug 18, 2008)
(“[P]arties may file as many reply briefs as they want.”) (citing Podger v. Gulfstream
Aerospace Corp. , 212 F.R.D. 609, 609 (S.D. Ga. 2003)); see also S.D. Ga. Loc. Civ. R.
7.6 (authorizing reply briefs but imposing notice requirements and time limits);
Brown v. Chertoff, 2008 WL 5190638 at * 1 n. 2 (S.D. Ga. Dec. 10, 2008) (reminding
that “[o]nce the initial round of briefs have been filed, subsequent replies run the
risk of ‘sudden death.’ That is, the Court is free to issue its decision at any time.”) .
5

Permissive intervention requires a timely motion showing a claim or defense that
shares a common question of law or fact with the main action. Fed. R. Civ. P.
24(b)(1)(B). Since Hilda has a right to intervene, the Court does not need to consider
whether to grant permission.
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practically impeded or impaired by the disposition of the action, and (4)
is inadequately represented by the existing parties. Angel Flight of Ga.,

Inc. v. Angel Flight of Am., Inc. , 272 F. App’x 817, 819 (11th Cir. 2008).
“Once a party establishes all the prerequisites to intervention, the
district court has no discretion to deny the motion.”

United States v.

Georgia, 19 F.3d 1388, 1393 (11th Cir. 1994).
A motion to intervene must be timely, but “timeliness” has no
exact definition. Georgia v. U.S. Army Corps of Eng’rs , 302 F.3d 1242,
1259 (11th Cir. 2002). Determination of timeliness is committed to the
Court’s discretion, United States v. Jefferson Cty. , 720 F.2d 1511, 1516
(11th Cir. 1983), and it “is to be determined from all the circumstances .”

Nat’l Ass’n for Advancement of Colored People v. New York , 413 U.S.
345, 366 (1973) (emphasis added). There are four factors for evaluating
timeliness: (1) the length of time the proposed intervenor knew or
reasonably should have known of his interest in the case before moving;
(2) the extent of any prejudice to the existing parties caused by the
proposed intervenor’s delay; (3) the extent of any prejudice to the
proposed intervenor if the motion is denied; and (4) whether there are

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any “unusual circumstances” weighing for or against timeliness.

Jefferson Cty. , 720 F.2d at 1516.
The Court cannot evaluate the first factor -- the length of any delay
between Hilda’s discovery of her interest in this action and her motion -because she has failed to disclose when or how she learned of this case.

See doc. 29 (no mention of timeliness); doc. 33 at 3, ¶ 15 (stating that she
exercised “proper due diligence”); id . at 6 (discussing reasons she did not
discover action sooner and stating she moved “[a]s soon as was
practicable”). 6
Nevertheless, there are mitigating facts. Even the longest possible
delay, between the October 2015 commencement of this action and
Hilda’s reply, is not sufficient alone to deem her motion untimely.

See

Diaz v. S. Drilling Corp. , 427 F.2d 1118, 1125-6 (5th Cir. 1970) (passage
of a year after knowledge of suit not untimely under the circumstances,
and citing cases allowing intervention after longer delays); Ohio Sec. Ins.

Co. , 2015 WL 1419341 at * 6 (finding “several month” delay did not
make motion untimely). Even if she knew of this action from its filing,
6

Hilda states that she “filed her Motion to Intervene” on June 16, 2016. Doc. 33 at 6.
In fact, she filed it August 16, 2016. Doc. 29. She filed her Answer on May 31, 2016.
Doc. 23. She responded to defendants’ motion to distribute the funds on June 14,
2016. Doc. 24. Finally, she did not file her reply brief, which includes her first
argument in favor of intervention, until September 14, 2016.
7

Hilda’s motion is not necessarily untimely; thus, the Court will focus on
the other factors in determining timeliness.
The next factor is prejudice. Marcia and Beverly argue that they
would be prejudiced by Hilda’s intervention, given the pendency of their
settlement.

See doc. 30 at 4, ¶15. But prejudice here is limited to

prejudice caused by the intervenor’s delay in moving. See Stallworth v.

Monsanto Co. , 558 F.2d 257, 265 (5th Cir. 1977) (“the prejudice to the
original parties to the litigation that is relevant to the question of
timeliness is only that prejudice which would result from the would-be
intervenor’s failure to request intervention as soon as he knew or
reasonably should have known about his interest in the action”).
Defendants do not discuss when they contend Hilda knew or should have
known about this action, see doc. 30, so it is impossible to determine
whether the alleged prejudice was caused by her delay.
Disruption of a settlement (what Marcia and Beverly claim here)
may be a basis for denying intervention as untimely.

See Cohen v.

Republic of the Philippines , 146 F.R.D. 90, 92 n. 2 (S.D.N.Y. 1993) (“[A]
motion to intervene may be denied when it would jeopardize an existing
settlement.”) But the settlement here occurred relatively early in this
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litigation and thus does not justify the denial of intervention.

See id.

(rejecting argument that disruption of pending settlement precluded
intervention where “proceedings have not reached . . . an advanced
stage”). Hilda’s intervention, at worst, will delay final adjudication of
their respective rights, and “mere delay” on those grounds “is not a
relevant consideration.” Meek v. Metro. Dade Cty. Fla. , 985 F.2d 1471,
1479 (11th Cir. 1993), abrogated on other grounds by Dillard v. Chilton

Cty. Comm’n , 495 F.3d 1324 (11th Cir. 2007). The money, after all, isn’t
going anywhere.
Speaking of (the third factor) prejudice, that factor supports Hilda.
She claims a superior interest in the interpleaded funds. See doc. 23, at
2, 11 3, and at 8, 1111 12-14. If intervention is denied, her only alternative
to protect that alleged interest would be to pursue additional litigation.

See doc. 33, at 7 (stating that denial of intervention “will likely require
an additional lawsuit”). That’s enough. See Cohen , 146 F.R.D. at 92; see

also John v. Sotheby’s, Inc. , 141 F.R.D. 29, 35 (S.D.N.Y. 1992) (finding
intervenor, claiming interest in interpleaded painting, would suffer
prejudice if painting were “award[ed] to an adverse party,” and

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intervenor were “compell[ed] ... to institute a separate action either to
recover the painting or for damages”).
The “unusual circumstances” factor also weighs in Hilda’s favor.
On the one hand, her unexplained failure to follow proper procedure to
intervene weighs against her.

See doc. 30 ¶ 20 (motions to dismiss

pleading put Hilda on notice of defects in her pleading, but she took no
corrective action until, at earliest, approximately two months later, and
without substantial explanation). But two considerations tip the balance
in her favor: (1) the promotion of interpleader’s purpose, which includes
avoidance of additional litigation; and (2) the public policy choice to
prefer intervention in close cases. The interpleader statute, after all,
“was designed to bring into one court all of the claimants to a particular
fund so that it could be equitably divided among all rather than being a
race to the swift.” United States v. Sentinel Fire Ins. Co. , 178 F.2d 217,
225 (5th Cir. 1949). Hence, courts have recognized that interpleaders
often present particularly appropriate cases for intervention.

See MGM

Grand Hotel, Inc. v. Smith-Hemion Prods., Inc. , 158 F.R.D. 677, 681 (D.
Nev. 1994) (discussing Cascade Nat. Gas Corp. v. El Paso Nat. Gas Co.,
386 U.S. 129 (1967) (Stewart, J. dissenting) (noting that interpleader
10

practice is a “traditional basis” for intervention, under Rule 24(a))). The
general appropriateness of a claimant’s intervention in an interpleader,
along with “the Eleventh Circuit’s preference of resolving related actions
concurrently,” Ohio Sec. Ins. Co. , 2015 WL 1419341 at * 8, trump the
Court’s untimeliness concerns.
Hilda also satisfies the other prerequisites of a right to intervene.
She asserts that the interpleaded funds are rightfully hers. See, e.g., doc.
23 at 2, ¶ 3. A claim of ownership of the property at issue in a suit is a
sufficient interest to support intervention.

See Mountain Top Condo.

Ass’n v. Dave Stabbert Master Builder, Inc. , 72 F.3d 361, 366 (3d Cir.
1995) (“an intervenor’s interest in a specific fund is sufficient to entitle
intervention in a case affecting that fund”); John , 141 F.R.D. at 35
(stating “claiming ownership of the [interpleaded property], which is the
object of this litigation, ... satisfies the requirement that [the proposed
intervenor] have a direct and protectable interest in this action”).
Hilda’s claim will be impeded if intervention is not granted because the
funds will likely be disbursed to defendants and she will have to pursue a
separate action to recover any funds to which she claims entitlement.

See John , 141 F.R.D. at 35 (“awarding to an adverse party what [the
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proposed intervenor] claims to own, and then compelling him to institute
a separate action either to recover [the property] or for damages, burdens
his interest”). Finally, since Hilda’s alleged interest is adverse to the
existing parties, they are clearly not adequate representatives.

See 7C

F ED . P RAC . & P ROC . § 1909 (3d ed. 2016) (“[I]f all existing parties are
adverse to the absentee, then there is no adequate representation”).
Because Hilda Bashlor has established the prerequisites of a right
to intervene, the Court GRANTS her motion to intervene. Doc. 29.
Again, the current parties’ motions (docs. 25 and 27) to dismiss Hilda’s
claim to the annuity proceeds remain before the district judge.

SO ORDERED , this 27th day of October, 2016.

UMIED STATES MAGISTRATE JUDGE

SOUTHERN DISTRICT OF GEORGIA

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