White Marlin Open, Inc. v. Heasley et al

Filing 70

MEMORANDUM OPINION. Signed by Judge Richard D. Bennett on 2/3/2017. (kw2s, Deputy Clerk)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
WHITE MARLIN OPEN, INC., et al.,
Plaintiffs,

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Defendant.
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Civil Action No.: RDB-16-3105

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PHILLIP G. HEASLEY,

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v.

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MEMORANDUM OPINION
Plaintiff White Marlin Open, Inc. (“WMO”) filed this Interpleader action in order to
obtain a judicial determination of entitlement to the over $2.8 million in first place prize
money from WMO’s 2016 Open Tournament, held in Ocean City, Maryland on August 8 –
12, 2016. (ECF No. 2.)
Currently pending before the Court is defendant Philip G. Heasley’s (“Heasley”)
Motion to Dismiss: (1) plaintiff WMO as a party to this case; (2) WMO’s demand for
reimbursement of five times its attorney’s fees and costs (ECF No. 2 at ¶ 44); (3) the
Crossclaim of plaintiffs Richard Kosztyu and Mark Hutchison (“K&H”) against WMO
(ECF No. 53); (4) the Crossclaim of K&H against all other parties (ECF No. 54); and (5) the
Complaint of K&H against Heasley (ECF No. 55). 1 (“Heasley’s Motion,” ECF No. 56.)

Heasley asks in the alternative that the Court stay the Crossclaims and Complaint of plaintiffs Kosztyu and
Hutchison (“K&H”) pending resolution of the underlying Interpleader action. (ECF No. 56.)
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The parties’ submissions have been reviewed, and no hearing is necessary. See Local Rule
105.6 (D. Md. 2016).
For the reasons stated below, Heasley’s Motion (ECF No. 56) is GRANTED IN
PART and DENIED IN PART. Specifically, it is DENIED with respect to a dismissal of
WMO, and WMO shall remain as a plaintiff in this case; the Motion is GRANTED with
respect to WMO’s demand for reimbursement of five times its attorney’s fees and costs
(ECF No. 2 at ¶ 44) pursuant to the 2016 Tournament Rules. However, WMO eventually
may petition this Court for recovery of its actual attorney’s fees and costs pursuant to Local
Rule 109 and Appendix B.3 of this Court’s Local Rules (D. Md. 2016).
Furthermore, Heasley’s Motion (ECF No. 56) is DENIED with respect to a dismissal
of plaintiffs’ Kosztyu and Hutchison’s Crossclaim against WMO (ECF No. 53), but shall be
GRANTED with respect to a STAY of that Crossclaim pending resolution of the underlying
Interpleader action.
Finally, Heasley’s Motion (ECF No. 56) is GRANTED with respect to a dismissal of
Kosztyu and Hutchison’s Crossclaim against all other parties (ECF No. 54) and Complaint
against Heasley (ECF No. 55). The Crossclaim (ECF No. 54) and Complaint (ECF No. 55)
are DISMISSED WITHOUT PREJUDICE.
BACKGROUND
Plaintiff White Marlin Open, Inc. (“WMO”) operates the world’s largest billfish
tournament, the “White Marlin Open,” in Ocean City, Maryland. (WMO’s Complaint, ECF
No. 2 at ¶ 2.) Defendant Heasley and each of the individual plaintiffs participated as anglers
in WMO’s forty-third annual Open Tournament, held from August 8 through August 12,
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2016.

(Id. at ¶ 3.)

The prize money for catching the first place white marlin was

$2,818,662.00. (Id. at ¶ 5.) Defendant Heasley, competing on board the vessel Kallianassa,
caught the tournament’s only qualifying white marlin, potentially entitling him to the first
place prize money. 2 (Id. at ¶¶ 4-5, 38.) Several of the plaintiffs already have received prize
money based on their catches of fish other than white marlin during the tournament. (Id. at
¶¶ 5-18.)
Under the Tournament’s rules, “any angler winning $50,000.00 or more may be
required to take, and pass at the determination of the test administrator, a polygraph
examination prior to the distribution of award money” by WMO. (ECF No. 2 at ¶ 20.) The
purpose of this rule is “to ensure that the winning anglers complied with the rules of the
Open Tournament when they caught their winning fish.”

(Id.)

Defendant Heasley

underwent polygraph examinations on August 13, 2016 and again on August 21, 2016. (Id.
at ¶ 21.) Heasley’s shipmates also underwent polygraph examinations. (Id. at ¶ 37.) WMO
determined that because Heasley and his shipmates failed to pass the polygraph
examinations, WMO would not award Heasley the first place prize money. (Id. at ¶ 40.)
WMO then filed this Interpleader action pursuant to Maryland Rule 2-221 in the Circuit
Court of Maryland for Worcester County requesting judicial determination of the rights and
liabilities of the parties. (Id. at ¶ 41.) On September 8, 2016, defendant Heasley, a Florida
citizen and the only citizen of that state named in WMO’s Interpleader Complaint, removed
the case to this Court on the basis of diversity of citizenship jurisdiction, 28 U.S.C. § 1332.
(ECF No. 1.)

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As explained below, Heasley has not been paid any prize money to date.

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Following Heasley’s Removal, plaintiff (then defendant) Mark Hutchison moved to
remand this case to the Circuit Court of Maryland for Worcester County. (ECF No. 21.)
Heasley opposed Hutchison’s Motion and cross-moved to realign the parties’ based on their
interests. (ECF No. 24.) The Court conducted a hearing on these and several related
motions on November 18, 2016. As set forth on the record and in the Order that followed,
the Court concluded that jurisdiction was proper pursuant to 28 U.S.C. § 1332 and re-aligned
the parties to designate Philip Heasley as the sole defendant and WMO and all other anglers
as plaintiffs. (ECF No. 44.) The Court also ordered WMO to deposit the tournament prize
money in the Court’s Registry; WMO deposited the funds on November 23, 2016. See ECF
No. 45.
On December 19, 2016, plaintiffs Kosztyu and Hutchison filed a Crossclaim against
WMO alleging breach of contract based on WMO’s alleged failure to comply with its own
Tournament Rules. (ECF No. 53.) WMO filed a timely Answer to the Crossclaim and
asserted a series of affirmative defenses. (ECF No. 58.)
On December 22, 2016, plaintiffs Kosztyu and Hutchison filed a Crossclaim against
all other parties seeking declaratory relief (ECF No. 54) and a Complaint against Heasley,
also seeking declaratory relief (ECF No. 55). Plaintiffs Jim Conway and WMO filed separate
answers to the Crossclaim (ECF Nos. 59, 65), and defendant Heasley moved to dismiss both
the Crossclaim and the Complaint (ECF No. 56).
STANDARDS OF REVIEW
The pending Motion arises in a somewhat unique procedural posture based on the
nature of the Interpleader action and the subsequent realignment of the parties to conform
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with their respective interests. Nevertheless, Rules 12 and 22 of the Federal Rules of Civil
Procedure remain the touchstones for the Court’s analysis of Heasley’s Motion and the
parties’ responses thereto.
I.

Motion for Judgment on the Pleadings Pursuant to Rule 12(c)
Rule 12(c) provides that “[a]fter the pleadings are closed--but early enough not to

delay trial--a party may move for judgment on the pleadings.” Fed. R. Civ. P. 12(c). “A Rule
12(c) motion for judgment on the pleadings is appropriate when all material allegations of
fact are admitted in the pleadings and only questions of law remain.” Wells Fargo Equip. Fin.,
Inc. v. State Farm Fire & Cas. Co., 805 F. Supp. 2d 213, 216 (E.D. Va. 2011), aff’d, 494 F.
App’x 394 (4th Cir. 2012) (quoting Republic Ins. Co. v. Culbertson, 717 F. Supp. 415, 418 (E.D.
Va. 1989). See 5C C. Wright & A. Miller, Federal Practice & Procedure § 1367 (3d ed.). The
reviewing Court “is required to view the facts presented in the light most favorable to the
nonmoving party.” Corrigan v. Methodist Hosp., 158 F.R.D. 70, 71 (E.D. Pa. 1994) (internal
citation omitted). This Court has treated 12(b)(6) motions to dismiss filed after an Answer
had been filed as motions for judgment on the pleadings pursuant to Rule 12(c). Yakovets v.
Bailin, JKB-13-3439, 2014 WL 279697, at *1 (D. Md. Jan. 23, 2014).
II.

Motion to Strike Pursuant to Rule 12(f)
Under Rule 12(f) of the Federal Rules of Civil Procedure, the Court “may strike from

a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous
matter” on its own or on a party’s timely motion. Fed. R. Civ. P. 12(f). In Waste Mgmt.
Holdings, Inc. v. Gilmore, 252 F.3d 316, 347 (4th Cir. 2001), the United States Court of Appeals
for the Fourth Circuit noted that, “Rule 12(f) motions are generally viewed with disfavor

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‘because striking a portion of a pleading is a drastic remedy and because it is often sought by
the movant simply as a dilatory tactic’” (citing 5A C. Wright & A. Miller, Federal Practice &
Procedure § 1380, 647 (2d ed.1990)). See also Stockart.com, LLC v. Caraustar Custom Packaging
Grp., Inc., RDB-05-2409, 240 F.R.D. 195, 199 (D. Md. 2006).
III.

Interpleader Pursuant to Rule 22

“Rule 22 allows a party (often referred to as the ‘stakeholder’) to file a claim for
interpleader when confronted with “claims that may expose [the party] to double or multiple
liability.” J.G. Wentworth Originations, LLC v. Mobley, ELH-11-1406, 2012 WL 4922862, at *5
(D. Md. Oct. 12, 2012). Interpleader “affords a party who fears being exposed to the
vexation of defending multiple claims to a limited fund or property that is under his control
a procedure to settle the controversy and satisfy his obligation in a single proceeding.” See 7
C. Wright, A. Miller, & M. Kane, Federal Practice & Procedure § 1704, at 540–41 (3d ed. 2001);
see also Equitable Life Ins. Soc. v. Jones, 679 F.2d 356, 358 n. 2 (4th Cir. 1982). “Generally, a
stakeholder seeking interpleader relief will admit liability regarding the property and deposit
the property with the court, and then will be permitted to withdraw from the
proceedings.” Mobley, 2012 WL 4922862, at *5 (emphasis added). “The competing claims to
the property may subsequently be resolved without the further involvement of the
stakeholder.” Id.
IV.

Declaratory Judgment
The federal Declaratory Judgment Act provides that:
In a case of actual controversy within its jurisdiction…any court of the United
States, upon the filing of an appropriate pleading, may declare the rights and
other legal relations of any interested party seeking such declaration, whether

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or not further relief is or could be sought. Any such declaration shall have the
force and effect of a final judgment or decree and shall be reviewable as such.
28 U.S.C. 2201(a). 3 Thus, this Court considers three factors in determining whether to grant
declaratory relief:
(1) the complaint must allege an actual controversy between the parties of
sufficient immediacy and reality to warrant issuance of a declaratory judgment;
(2) the court must possess an independent basis for jurisdiction over the
parties; and
(3) the court must decide whether to exercise its discretion to determine or
dismiss the action.
Ledo Pizza Sys., Inc. v. Ledo Rest., Inc., DKC–06–3177, 2010 WL 1328538, at *6 (D. Md.
March 29, 2010). See A.L. Mechling Barge Lines v. United States, 368 U.S. 324, 331, 82 S.Ct. 337,
7 L.Ed.2d 317 (1961) (whether to grant declaratory relief is a matter of the Court’s
discretion); Nat’l Wildlife Fed’n v. United States, 626 F.2d 917, 923 (D.C. Cir. 1980) (same).
In determining whether to exercise its discretion to grant declaratory relief, the Court
should consider “‘(1) whether the judgment will serve a useful purpose in clarifying the legal
relations in issue; or (2) whether the judgment will terminate and afford relief from the
uncertainty, insecurity, and controversy giving rise to the proceeding.’”

Corsair Special

Situations Fund, L.P. v. Engineered Framing Sys., Inc., PWG-09-1201, 2010 WL 2367390, at *4
(D. Md. June 9, 2010), aff’d, 442 F. App’x 66 (4th Cir. 2011) (quoting N.E. Ins. Co. v. N.
Brokerage Co., 780 F. Supp. 318, 320 (D. Md. 1991)).

The identical considerations apply under Maryland’s Uniform Declaratory Judgments Act, Md. Code Ann.,
Cts. & Jud. Proc. § 3-401, et seq. See Converge Servs. Grp., LLC v. Curran, 383 Md. 462, 485, 860 A.2d 871, 884
(2004). See also Brohawn v. Transamerica Ins. Co., 276 Md. 396, 405–06, 347 A.2d 842, 849 (1975).
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ANALYSIS
The several objects of Heasley’s Motion (ECF No. 56) are addressed in turn below.
I.

Plaintiff White Marlin Open
A. WMO as a Party to this Action
Heasley moves to dismiss plaintiff White Marlin Open from this case pursuant to

Rules 12 and 21 of the Federal Rules of Civil Procedure. 4 (ECF No. 56-1 at 4-7.) Heasley
argues that dismissal is proper because WMO, as interpleader plaintiff, has already deposited
the Tournament prize money in the Court’s registry and has no further interest in this case.
(Id.) Perhaps more importantly, Heasley asserts, WMO’s claimed entitlement to five times
its litigation costs and attorney’s fees is “grounds for its immediate dismissal.” (Id. at 6.)
Thus, “[a]s long as WMO stays in the case, the prize money could be materially reduced
since that is the source from which WMO seeks to be paid its attorney’s fees and costs.”
(Id.) Finally, Heasley argues that “[k]eeping WMO in this case also creates an undue burden
on Heasley because it allows WMO, a disinterested party, to oppose positions taken by
Heasley and prosecute a case against Heasley at trial either together or separate from the
other plaintiffs.” (Id. at 7.)
WMO asserts in opposition that because “Heasley’s claim to the interpleaded funds
would be an attack upon the actions and practices of WMO’s directors,” including the
“decisions of WMO with regard to the prize money,” “WMO has an interest relating to the
4 Rule 21 governs misjoinder and nonjoinder of parties. Fed. R. Civ. P. 21. The rule provides that:
“Misjoinder of parties is not a ground for dismissing an action. On motion or on its own, the court may at
any time, on just terms, add or drop a party. The court may also sever any claim against a party.” Id. This
Court has explained that “[a]lthough the rule concerns misjoinder and non-joinder of parties… this provision
authorizes the severance of any claim, even without a finding of improper joinder, where there are sufficient
other reasons.” CVI/Beta Ventures, Inc. v. Custom Optical Frames, Inc., 896 F. Supp. 505, 506 (D. Md. 1995)
(internal citations omitted) (quoting Wyndham Associates v. Bintliff, 398 F.2d 614, 618 (2d Cir. 1968)).

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subject of the action, which WMO could not protect if it did not remain a party to the case.”
(ECF No. 67 at 1-2.) WMO further argues that Heasley’s Motion regarding WMO’s demand
for attorney’s fees is procedurally improper, premature, and unsupported by authority. (Id.
at 3.) 5
While it is true that under Rule 22, a party may “be permitted to withdraw from
[Interpleader] proceedings” after deposit of the stake in the Court’s Registry, the practical
benefits of dismissal (namely, relief from potential liability) are not mandatory and need not
be thrust upon a party which retains an interest in participating in the Interpleader action.
Mobley, 2012 WL 4922862, at *5. In this case, there can be little doubt that WMO retains a
significant interest in the subject matter of the Interpleader action. As Heasley’s entitlement
to the prize money is based on WMO’s purported failure to follow the Tournament Rules,
and as the integrity of these rules and the Tournament itself are very much in dispute in this
case, WMO retains a significant interest in the outcome of this case. Only by remaining
party to this action will WMO be able to sufficiently protect its interests in this matter.
Accordingly, Heasley’s Motion (ECF No. 56) is DENIED with respect to a dismissal,
and WMO shall remain as a plaintiff in this case. 6
B. WMO’s Demand for Attorney’s Fees
Heasley also seeks dismissal of WMO’s demand for reimbursement of five times its
attorney’s fees and costs pursuant to the Tournament Rules. (ECF No. 56 at 6.) See
5 Plaintiffs Kosztyu and Hutchison have not filed a response in opposition (or support) to Heasley’s Motion
with respect to WMO. See ECF No. 64.

Dismissal of WMO as a party would be similarly unwarranted under Rule 12(b)(6) or Rule 12(c). Whether
accepting as true WMO’s factual allegations (Rule 12(b)(6)) or viewing the facts in the light most favorable to
WMO (Rule 12(c)), either result would preclude dismissal of WMO as a party.
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Tournament Rules, ¶ I.F.6, ECF No. 2-2 at 3. Heasley’s (and the other plaintiffs’) obvious
interest in preserving the corpus of the over $2.8 million in prize money at issue in this case
is well-founded.

As there is no issue of material fact regarding WMO’s claim for

reimbursement, it may be decided as a matter of law pursuant to Rule 12(c).
The Tournament Rules provide, in pertinent part, that WMO “shall be entitled to
reimbursement for 5 times its costs and fees, including attorney fees, which result from the
determination and resolution of the validity of unjustified protests.” (Tournament Rules, ¶
I.F.6, ECF No. 2-2 at 3.)

The Tournament Rules describe WMO’s demand for

reimbursement of five times its attorney’s fees and costs as “liquidated damages.” Id.
Although Maryland courts will enforce contractual in terrorem and liquidated damages
provisions, penalty provisions are not given the same effect. See Barrie Sch. v. Patch, 401 Md.
497, 507, 933 A.2d 382, 388 (2007). The Maryland Court of Appeals in Barrie reiterated the
“settled rule of law” that:
[W]here the parties, at or before the time of the execution of the contract,
agree upon and name a sum therein to be paid as liquidated damages, in lieu of
anticipated damages which are in their nature uncertain and incapable of exact
ascertainment, that the amount so named in the agreement will be regarded as
liquidated damages and not as a penalty, unless the amount so agreed upon
and inserted in the agreement be grossly excessive and out of all
proportion to the damages that might reasonably have been expected to
result from such breach of the contract. And whether it is excessive or
whether the damages are incapable of exact ascertainment should be
determined from the subject-matter of the contract considered in the light of
all the surrounding facts and circumstances connected therewith and known
to the parties at the time of its execution.
Barrie, 401 Md. at 508, 933 A.2d at 388–89 (quoting Balto. Bridge Co. v. United Rys. & Electric
Co., 125 Md. 208, 214–15, 93 A. 420, 422–23 (1915)) (emphasis added). The Court in Barrie
went on to explain that:
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There are three essential elements of a valid and enforceable liquidated
damages clause. First, such a clause must provide in clear and
unambiguous terms for a certain sum. Secondly, the liquidated damages
must reasonably be compensation for the damages anticipated by the breach.
Thirdly, liquidated damage clauses are by their nature mandatory binding
agreements before the fact which may not be altered to correspond to actual
damages determined after the fact.
Barrie, 401 Md. At 509, 933 A.2d at 389 (quoting Bd. of Educ. of Talbot Cty. v. Heister, 392 Md.
140, 156, 896 A.2d 342, 352 (2006)) (emphasis added).
Even viewing the clause in the light most favorable to WMO, these principles make
clear that the five times multiplier set forth in Tournament Rule ¶ 1.F.6 is a penalty provision
and not an enforceable liquidated damages clause. Several considerations point the Court to
this conclusion. First, in an era in which attorney’s fees quickly and routinely amount to tens
or even hundreds of thousands of dollars, a clause granting WMO five times such an
amount likely would be “grossly excessive and disproportionate” in light of the $2.8 million
stake in this case. 7 That is, were WMO’s reasonable attorney’s through trial to reach even
$100,000, WMO would then ‘recover’ $500,000 of the $2.8 million (approximately 17.9%);
$200,000 in attorney’s fees through trial would translate into a reduction of nearly 36% of
the prize money. While the exact percentage of the Tournament prize money that WMO
would recover under the clause remains to be determined, the foregoing calculations point to
the threat of a “grossly excessive and disproportionate” damages provision. This concern is
particularly acute in light of WMO’s assertion that it “remains a disinterested stakeholder
with no financial stake in the case.” (ECF No. 67 at 2) (emphasis added). Similarly fatal to
the five times multiplier provision is the fact that the amount of the purported liquidated
In their submissions to this Court, counsel for WMO have acted conscientiously and with an apparent
appreciation for the impact of their legal fees on the other parties to this case.
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damages is not for a “certain sum.” See Barrie, 401 Md. At 509, 933 A.2d at 389. Finally, the
Court notes that it was WMO—and not an angler—who initiated this suit. While the clause
appears to be targeted at discouraging Tournament participants from rushing to the
courthouse, its intended (and otherwise permissible) in terrorem effect should not be accorded
the same weight when the Tournament itself was the party seeking judicial assistance.
In sum, Heasley’s Motion (ECF No. 56) is GRANTED with respect to WMO’s
demand for reimbursement of five times its attorney’s fees and costs pursuant to the 2016
Tournament Rules. (ECF No. 2 at ¶ 44.) WMO eventually may petition this Court for
recovery of its actual attorney’s fees and costs pursuant to Local Rule 109 and Appendix B.3
of this Court’s Local Rules (D. Md. 2016).
II.

Plaintiffs Kosztyu and Hutchison’s Crossclaim against WMO (ECF No. 53)
Notwithstanding the fact that this Crossclaim (ECF No. 53) is made against a party

other than himself, Heasley argues that dismissal of this Crossclaim is appropriate because
cross-plaintiffs Kosztyu and Hutchison failed to comply with Rules 7 and 15 of the Federal
Rules of Civil Procedure. (ECF No. 56-1 at 8-9.) Specifically, Heasley asserts that the
Crossclaim cannot stand as an independent pleading under Rule 7 and that cross-plaintiffs
failed to seek leave to file the Crossclaim, as required under Rule 15. 8 (Id.)
Kosztyu and Hutchison argue in opposition to Heasley’s Motion that courts have
accepted cross-claims filed in the manner theirs was presented and that their filing was
8 It bears note that WMO does not oppose dismissal of the Crossclaims: “WMO does not oppose the
dismissal of the Crossclaims, believing those pleadings to be unnecessary. Regardless of the existence of the
Crossclaims, this Court will decide in this case whether Kosztyu and Hutchison are entitled to any part of the
interpleaded funds. Because all parties seem to agree that Kosztyu and Hutchison may pursue their claim to
the interpleaded funds, the Crossclaims serve no additional purpose in this case. However, to the extent that
the Crossclaims and Complaint filed by Kosztyu and Hutchison serve only as their claim to the interpleaded
funds, WMO has no objection to them.” (ECF No. 67 at 1, n. 1.)

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timely—and, thus, leave to amend not required—in light of the Court’s decision to realign
the parties. 9 (ECF No. 64-1 at 3-5.)
Among the cases cited by the parties is this Court’s decision in Kennell v. Avis Budget
Grp., Inc., WMN-09-833, 2009 WL 2426016, at *4 (D. Md. Aug. 6, 2009), in which the Court
found “some merit” in similar arguments advanced by the movants seeking dismissal, but
nonetheless declined to dismiss the cross-claims for reasons of judicial economy: “[t]he
result of striking the cross-claims, however, would be that the cross-claimants would simply
seek leave to re-file their cross-claims as amendments to their answers. At this stage, the
Court sees no benefit in generating another round of pleadings.” Id.
So, again, does this Court conclude that judicial economy will be served and no unfair
prejudice inflicted by accepting the proposed pleadings. While K&H’s Crossclaim against
WMO may not have been filed in strict compliance with this Court’s Rules, there is no
indication that the target of the Crossclaim, WMO, was not served properly, deprived an
opportunity to respond, or otherwise prejudiced by Kosztyu and Hutchison’s pleading. To
the Contrary, WMO filed a timely Answer to the K&H Crossclaim and asserted a series of
affirmative defenses therein.

(ECF No. 58.)

Thus, the Court declines to dismiss or

otherwise strike K&H’s Crossclaim. Nevertheless, in light of the affirmative defenses pled
by WMO in its answer, several of which (e.g., res judicata, collateral estoppel, release) depend

The Court need not reach several alternative arguments raised by Kosztyu and Hutchison in opposition to
Heasley’s Motion. See ECF No. 64-1.
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on the resolution of the underlying Interpleader action, K&H’s Crossclaim against WMO for
breach of contract shall be stayed. 10
Thus, Heasley’s Motion (ECF No. 56) is DENIED with respect to a dismissal of
plaintiffs’ Kosztyu and Hutchison’s Crossclaim against WMO (ECF No. 53), but shall be
GRANTED with respect to a STAY of that Crossclaim pending resolution of the underlying
Interpleader action.
III.

Plaintiffs Kosztyu and Hutchison’s Crossclaim and Complaint for
Declaratory Relief (ECF Nos. 54, 55)
Heasley moves to dismiss Kosztyu and Hutchison’s declaratory judgment Crossclaim

against all other parties and Complaint against him (ECF Nos. 54, 55) for the technical
reasons addressed above and because these claims are “duplicative of their claim as plaintiff
in the Interpleader.” (ECF No. 56-1 at 10.)
Kosztyu and Hutchison argue that WMO and Heasley are independently liable to
them as plaintiffs and cross-plaintiffs, and that Heasley has failed to assert any sufficient
reason to dismiss their claims under Rule 12 of the Federal Rules of Civil Procedure. (ECF
No. 64-1 at 8-10.)
Notably absent from the parties’ briefing—but nonetheless pertinent to the
resolution of Heasley’s Motion—is the fact that the Crossclaim and Complaint (ECF Nos.
54, 55) both seek declaratory relief only.

While there exists among the parties an actual

controversy within this Court’s jurisdiction, the declaratory relief sought in K&H’s

While their arguments opposing a stay have been considered, the Court does not agree with Kosztyu and
Hutchison’s assertion that allowing the Crossclaim to proceed contemporaneously with the Interpleader
action would permit consistent judicial decisions and conserve all parties’ resources. (ECF No. 64-1 at 10.)
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Crossclaim (ECF No. 54) and Complaint (ECF No. 55) is almost entirely duplicative of the
relief being sought in the underlying Interpleader action based on WMO’s original
Complaint (ECF No. 2). The core question which this Court has been called upon by that
Complaint to answer is whether Heasley is entitled to the distribution of the first place
Tournament prize money, or whether that prize money shall be distributed among the other
interested parties. See id. Plaintiffs Kosztyu and Hutchison’s entitlement to any prize
money—the relief sought by these pleadings—is at issue in and inextricably linked to the
resolution of WMO’s original Interpleader Complaint. Thus, the Court concludes that
K&H’s Crossclaim (ECF No. 54) and Complaint (ECF No. 55) would not “serve a useful
purpose in clarifying the legal relations in issue,” and declines to exercise jurisdiction over
these claims. 11

Corsair, 2010 WL 2367390, at *4.

Accordingly, Heasley’s Motion is

GRANTED as to K&H’s Crossclaim (ECF No. 54) and Complaint (ECF No. 55), and these
claims are DISMISSED WITHOUT PREJUDICE. 12
CONCLUSION
For the foregoing reasons, Heasley’s Motion (ECF No. 56) is GRANTED IN PART
and DENIED IN PART. Specifically, it is DENIED with respect to a dismissal of WMO,
and WMO shall remain as a plaintiff in this case; the Motion is GRANTED with respect to
WMO’s demand for reimbursement of five times its attorney’s fees and costs (ECF No. 2 at
¶ 44) pursuant to the 2016 Tournament Rules. However, WMO eventually may petition this
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The Court would reach the same conclusion under Maryland law.

If, following the resolution of the underlying Complaint in this case, the issues raised in K&H’s Crossclaim
(ECF No. 54) and Complaint (ECF No. 55) remain unresolved and are not otherwise barred by principles of
res judicata or collateral estoppel, plaintiffs Kosztyu and Hutchison may re-file their claims for declaratory
relief.

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Court for recovery of its actual attorney’s fees and costs pursuant to Local Rule 109 and
Appendix B.3 of this Court’s Local Rules (D. Md. 2016).
Furthermore, Heasley’s Motion (ECF No. 56) is DENIED with respect to a dismissal
of plaintiffs’ Kosztyu and Hutchison’s Crossclaim against WMO (ECF No. 53), but shall be
GRANTED with respect to a STAY of that Crossclaim pending resolution of the underlying
Interpleader action.
Finally, Heasley’s Motion (ECF No. 56) is GRANTED with respect to a dismissal of
Kosztyu and Hutchison’s Crossclaim against all other parties (ECF No. 54) and Complaint
against Heasley (ECF No. 55). The Crossclaim (ECF No. 54) and Complaint (ECF No. 55)
are DISMISSED WITHOUT PREJUDICE.

Dated: February 3, 2017

_________/s/_______________
Richard D. Bennett
United States District Judge

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