Talcott Resolution Life Insurance Company v. Carlyle et al

Filing 48

MEMORANDUM OPINION. Signed by Judge Deborah K. Chasanow on 11/16/2020. (sat, Chambers)

Case 1:19-cv-01796-DKC Document 48 Filed 11/16/20 Page 1 of 13

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
TALCOTT RESOLUTION LIFE
INSURANCE COMPANY

:

v.

:

Civil Action No. DKC 19-1796

:
CARVET E. CARLYLE, et al.
:
:
AMERICAN GENERAL LIFE
INSURANCE COMPANY

:

v.

:

Civil Action No. DKC 20-1840

:
CARVET E. CARLYLE, et al.
:
MEMORANDUM OPINION
The instant case is a consolidation of two interpleader
actions in which Plaintiffs, Talcott Resolution Life Insurance
Company (“Talcott”) and American General Life Insurance Company
(“American General”), both issuers of annuities to Defendants
Carvet E. Carlyle (“Ms. Carlyle”) and Larry D. Martin (“Mr.
Martin”), seek to resolve competing claims to such annuities.
Presently pending for resolution in the Talcott case are: (1) a
motion for entry of default as to Mr. Martin filed by Talcott (ECF
No. 23); (2) a motion for entry of default and final judgment
against Mr. Martin filed by Ms. Carlyle (ECF No. 24); and (3) a
motion to be dismissed from further proceedings filed by Talcott.
(ECF No. 25).

Presently pending for resolution in the American

Case 1:19-cv-01796-DKC Document 48 Filed 11/16/20 Page 2 of 13

General case are: (1) a motion for entry of default as to Mr.
Martin filed by American General (ECF No. 40); (2) a motion for
entry of default and final judgment against Mr. Martin filed by
Ms. Carlyle (ECF No. 46); and (3) a motion for discharge from
further liability filed by American General.

(ECF No. 47).

The

issues have been briefed, and the court now rules, no hearing being
deemed necessary.

Local Rule 105.6.

For the following reasons,

the motions for entry of default will be denied, except for
Talcott’s which will be granted, and both motions for discharge
will be denied without prejudice.
I.

Background
A.

Talcott Annuity

Unless otherwise noted, the facts outlined here are set forth
in the Talcott complaint.

(ECF No. 1).

In February 2004, Talcott

issued Ms. Carlyle and Mr. Martin an annuity contract (the “Talcott
Annuity”) in which Mr. Martin was the Annuitant.
Carlyle

and

Mr.

Martin

were

a

couple

At the time, Ms.

residing

together

in

Baltimore, Maryland. Some years later, the couple terminated their
relationship and ceased living together.

Ms. Carlyle remained in

Maryland while Mr. Martin moved to and now resides in New York.
In January 2016, Talcott received a request for a full
surrender of the annuity contract.1

1

At the time the surrender

A successful surrender request has the effect of releasing
the saved value of the policy to the owner(s).
2

Case 1:19-cv-01796-DKC Document 48 Filed 11/16/20 Page 3 of 13

request

was

received,

$43,707.51.

The

the

request

value

of

contained

the
what

Talcott

Annuity

appeared

to

be

was
the

signatures of both Ms. Carlyle and Mr. Martin and instructed that
the proceeds be electronically deposited into an account owned
solely by Mr. Martin at J.P. Morgan Chase Bank.
Carlyle

was

not

a

joint

owner

of

this

bank

Because Ms.
account,

the

requirements for electronically depositing funds into an account
were not met.

Talcott instead mailed a check in the amount of

$43,707.51, payable to both Ms. Carlyle and Mr. Martin, to the
address on record.

The check was cashed, and the endorsement side

of the check showed what appeared to be the signatures of both Ms.
Carlyle and Mr. Martin.
Shortly thereafter, Ms. Carlyle informed Talcott that she did
not sign the surrender request or the cashed check and that the
signatures on those documents were forged.
Affidavit of Forgery in December 2018.
forwarded

the

affidavit

to

J.P.

She sent Talcott an

(ECF No. 1-3).

Morgan

Bank

and

Talcott
the

bank

subsequently returned the funds to Talcott.
On December 21, 2018, Talcott sent a letter to both Ms.
Carlyle and Mr. Martin stating that it wished to return the funds
and could do so pursuant to receipt of a mutual written agreement
directing disbursement of the funds or pursuant to a court order.
(ECF No. 1-4).
March 1, 2019.

A similar letter was again sent to Defendants on
Neither responded.
3

Talcott filed its interpleader

Case 1:19-cv-01796-DKC Document 48 Filed 11/16/20 Page 4 of 13

complaint on June 19, 2019, stating that “each of Ms. Carlyle and
Mr. Martin have separately asserted to [the company] a claim of
entitlement to the entirety of the [p]roceeds” and that it “has no
basis

of

knowing

[proceeds].”

who

is

entitled

(ECF No. 1, at 6).

to

what

portion

of

the

On November 11, 2019, Talcott

moved to deposit the proceeds of the annuity into the court
registry.

(ECF No. 7).

Ms. Carlyle filed her answer on November

15, 2019.

(ECF No. 6).

She then filed a cross-complaint against

Mr. Martin on November 17, 2019.

(ECF No. 12).

On January 13,

2020, Ms. Carlyle filed a motion for entry of default and final
judgment against Mr. Martin.

(ECF No. 13).

On January 29, 2020,

the court denied this motion on the ground that “service was
improper as to Cross-Defendant Martin.”

(ECF No. 15).

On April

15, 2020, the court granted Talcott’s motion to deposit the
proceeds of the Talcott Annuity into the court registry.
19).

(ECF No.

On July 7, 2020, Talcott moved for entry of an order of

default as to Mr. Martin, (ECF No. 23), as did Ms. Carlyle.
No. 24).

(ECF

On July 16, 2020, Talcott filed a motion for dismissal

from further proceedings and discharge from further liability.
(ECF No. 25).
B.

American General Annuity

Unless otherwise noted, the facts outlined here are set forth
in the American General complaint.

(ECF No. 30).

In addition to

the Talcott annuity, Ms. Carlyle and Mr. Martin had also jointly
4

Case 1:19-cv-01796-DKC Document 48 Filed 11/16/20 Page 5 of 13

purchased an annuity from American General2 in January 2004 (the
“American General Annuity”). In October 2015, Mr. Martin contacted
American General inquiring about the process for withdrawing funds
from the annuity.

Ms. Carlyle promptly notified American General

that she was initiating litigation regarding the annuity and that
no distributions should be made.
On August 4, 2020, American General filed its interpleader
complaint.

(ECF No. 30).

At the time the complaint was filed,

the annuity was valued at $8,862.28.

On August 14, 2020, Ms.

Carlyle answered, (ECF No. 32), filed a cross-complaint against
Mr.

Martin

(ECF

No.

33),

and

Judge

Bennett

consolidating the two interpleader actions.

issued

an

order

(ECF No. 34).

On

August 20, 2020, American General filed a motion for entry of
default as to Mr. Martin.

(ECF No. 40).

On September 15, 2020,

Ms. Carlyle filed a motion for entry of default and final judgment
against Mr. Martin. (ECF No. 46). On September 23, 2020, American
General submitted a motion for discharge from further liability.
(ECF No. 47).
II.

Standard of Review
Pursuant to Fed.R.Civ.P. 55(a), “[w]hen a party against whom

a judgment for affirmative relief is sought has failed to plead or

2

The annuity was purchased from AIG Annuity Insurance Company
which has since been merged into American General Life Insurance
Company.
5

Case 1:19-cv-01796-DKC Document 48 Filed 11/16/20 Page 6 of 13

otherwise defend, and that failure is shown by affidavit or
otherwise, the clerk must enter the party’s default.”

Although

this rule refers to entry of default by the clerk, “it is wellestablished that a default also may be entered by the court.”
Breuer Elec. Mfg. Co. v. Toronado Sys. of Am., Inc., 687 F.2d 182,
185 (7th Cir. 1982).

“It is axiomatic that service of process must

be effective under the [Fed.R.Civ.P.] before a default or a default
judgment may be entered against a defendant.”

Md. State Firemen’s

Ass’n v. Chaves, 166 F.R.D. 353, 354 (D.Md. 1996). Plaintiff bears
the burden of establishing that service of process was effective.
Ayres v. Ocwen Loan Servicing, LLC, 129 F.Supp.3d 249, 261 (D.Md.
2015).
Fed.R.Civ.P. 5(a) provides that a pleading must be served on
a

party

in

default

in

the

manner

prescribed

by

Rule

4.

Fed.R.Civ.P. 4(e)(2) permits service on an individual by:
(A) delivering a copy of the summons and of
the complaint to the individual personally;
(B) leaving a copy of each at the individual’s
dwelling or usual place of abode with someone
of suitable age and discretion who resides
there; or (C) delivering a copy of each to an
agent authorized by appointment or by law to
receive service of process.
Alternatively, an individual may be served by any means allowed by
the state where the district court is located or the state where
service is to be effected.

Fed.R.Civ.P. 4(e)(1).

law, service can be effected:

6

Under Maryland

Case 1:19-cv-01796-DKC Document 48 Filed 11/16/20 Page 7 of 13

(1) by delivering to the person to be served
a copy of the summons, complaint, and all
other papers filed with it; (2) if the person
to be served is an individual, by leaving a
copy of the summons, complaint, and all other
papers filed with it at the individual’s
dwelling house or usual place of abode with a
resident of suitable age and discretion; or
(3) by mailing to the person to be served a
copy of the summons, complaint, and all other
papers filed with it by certified mail
requesting: ‘Restricted Delivery--show to
whom, date, address of delivery.’
Md. Rules 2-121(a).

Under New York law, service on an individual

can be effected:
(1) by delivering the summons within the state
to the person to be served; or (2) by
delivering the summons within the state to a
person of suitable age and discretion at the
actual place of business, dwelling place or
usual place of abode of the person to be served
and by either mailing the summons to the
person at his or her last known residence or
. . . actual place of business[.]
N.Y. C.P.L.R. 308.

N.Y. C.P.L.R. 308(4) further provides that

where service under paragraphs one and two
cannot be made with due diligence, [an
individual may be served] by affixing the
summons to the door of either the actual place
of business, dwelling place or usual place of
abode within the state of the person to be
served and by either mailing the summons to
such person at his or her last known residence
or by mailing the summons by first class mail
to the person to be served at his or her actual
place of business[.]
This alternate method of service is commonly referred to as “nail
and mail” service.

Greene Major Holdings, LLC v. Trailside at

Hunter, LLC, 148 A.D.3d 1317, 1320 (N.Y.App.Div. 2017).
7

While the

Case 1:19-cv-01796-DKC Document 48 Filed 11/16/20 Page 8 of 13

precise manner in which due diligence is to be accomplished is
“not rigidly prescribed[,]” the requirement that due diligence be
exercised “must be strictly observed, given the reduced likelihood
that a summons served pursuant to [N.Y. C.P.L.R. 308(4)] will be
received[.]”

Id.

“What constitutes due diligence is determined

on a case-by-case basis, focusing not on the quantity of the
attempts at personal delivery, but on their quality[,]” and the
plaintiff, who bears the burden of establishing that personal
jurisdiction over the defendant was acquired, must show “that the
process

server

made

genuine

inquiries

whereabouts and place of employment[.]”
citations

omitted).

Compare

Greene

about

the

defendant’s

Id., at 1320-21 (internal
Major

Holdings,

LLC.

v.

Trailside at Hunter, LLC, 148 A.D.3d 1317, 1320 (N.Y.App.Div. 2017)
(holding that the trial court did not abuse its discretion in
ruling that the plaintiff did not establish due diligence when the
process server attempted to serve the defendant at a particular
residence three separate times, all of which were weekdays and two
of which were during hours the defendant could be expected to be
at work), with Est. of Waterman v. Jones, 843 N.Y.S.2d 462, 46465 (N.Y.App.Div. 2007) (“Due diligence may be satisfied with a few
visits on different occasions and at different times to the
defendant’s residence or place of business when the defendant could
reasonably be expected to be found at such location at those
times.”); Lemberger v. Khan, 794 N.Y.S.2d 416, 416 (N.Y.App.Div
8

Case 1:19-cv-01796-DKC Document 48 Filed 11/16/20 Page 9 of 13

2005) (finding three attempts to serve the defendant by process
server at his home satisfied the due diligence requirement).
III.

Analysis
A.

Talcott Annuity

1.

Talcott’s Motion for Entry of Default

Talcott filed a motion for entry of default against Defendant
Martin on July 7, 2020.

(ECF No 23).

Talcott states that Mr.

Martin “was personally served on June 4, 2020.”

(Id., at 1).

The

affidavit of service submitted by Talcott confirms that on June 4,
2020, at 11:55 AM, substitute service was made on Sharon Martin,
an individual between the age of 50 and 60 years old, at Mr.
Martin’s home address in Mount Vernon, New York.
21).

(See ECF No.

Md. Rules 2-121(a)(2) permits service on an individual by

“leaving a copy of the summons, complaint, and all other papers
filed with it at the individual’s dwelling house or usual place of
abode with a resident of suitable age and discretion.”

Thus,

service here was proper under Maryland law and satisfies Rule 4.
Therefore, the court will grant Talcott’s motion for entry of
default as to Mr. Martin.
2.
Ms. Carlyle’s Motion for Entry of Default and Final
Judgment
Ms. Carlyle filed a motion for entry of default and final
judgment against Mr. Martin on July 7, 2020.

(ECF No. 24).

She

asserts that “[o]n June 10, 2020, a copy of [the] Cross-Complaint
was served by the Cross-Plaintiff Carlyle upon Defendant Larry
9

Case 1:19-cv-01796-DKC Document 48 Filed 11/16/20 Page 10 of 13

Martin via first class mail at his residence located at 229 South
7th Avenue, Apt. 5k, Mount Vernon, NY 10550.”

(Id., at 2).

As the

court stated in its previous order, “Rule 4 is not satisfied by
simply mailing.”

(ECF No. 15).

Similarly, neither New York nor

Maryland law is satisfied by simple mailing.

Therefore, the court

will again deny Ms. Carlyle’s motion for entry of default and final
judgment and provide her with another opportunity to effect service
of process on Defendant Martin.
B.

American General Annuity

1.

American General’s Motion for Entry of Default

Plaintiff American General filed a motion for entry of default
against Mr. Martin on August 20, 2020.

(ECF No. 40).

It states

that “[o]n July 8, 2020, Martin was served by process server. [ECF
No.

38].

Therefore,

pursuant

to

Fed.R.Civ.P.

12(a)(1)(A)(i),

Martin’s response to the Complaint for Interpleader Relief was due
by Jul[y] 29, 2020.”

(Id., at 2).

The affidavit of service shows

that American General utilized the “nail and mail” method of
service: On July 8, 2020, a process server affixed a copy of the
summons, complaint, and corporate disclosure to the door of Mr.
Martin’s New York residence and mailed a copy of the same to Mr.
Martin’s residence that day.

(See generally ECF No. 38).

Thus,

the court must determine whether American General has established
the requisite due diligence required to permit “nail and mail”
service under N.Y. C.P.L.R. 308(4).
10

Case 1:19-cv-01796-DKC Document 48 Filed 11/16/20 Page 11 of 13

The affidavit first states that the “nail and mail” service
was performed on July 8, 2020 at 8:43 p.m.

(Id.).

It then goes

on to state that the summons and complaint were affixed to the
door of Mr. Martin’s residence after “Deponent was unable, with
due diligence to find the recipient, or person of suitable age or
discretion, thereat, having called there” at 8:43 a.m. on July 8,
2020, 11:03 a.m. on July 9, 2020, and 7:51 a.m. on July 10, 2020.
It also notes that the process server mailed the summons and
complaint to Mr. Martin’s home address on Wednesday, July 8, 2020.
Thus, the affidavit seems to indicate that both the nailing
and mailing occurred upon the process server’s very first attempt
to serve Mr. Martin on July 8, 2020.3 The second and third attempts
at service, on July 9, 2020 and July 10, 2020 came only after the
“nail and mail” service was already completed.

Given that the

“nail and mail” service occurred during the process server’s very
first attempt at service it cannot reasonably be said that the
process server was unable, with due diligence, to find Mr. Martin.
Hence, the service falls short of meeting the due diligence

3

It is unclear whether the process server attempted service
at 8:43 a.m. as indicated near the bottom of the affidavit of
service or at 8:43 p.m. as indicated in the first paragraph of the
affidavit of service. This detail is not insignificant as it is
directly relevant to whether the defendant could have been
reasonably expected to be at work at the time, a factor considered
in evaluating whether due diligence was satisfied. If the attempt
was in fact made at 8:43 a.m., then Mr. Martin could reasonably
have been expected to be at work at the time.
11

Case 1:19-cv-01796-DKC Document 48 Filed 11/16/20 Page 12 of 13

requirement of N.Y. C.P.L.R. 308(4).

See Est. of Waterman, 843

N.Y.S.2d at 464-65 (“Due diligence may be satisfied with a few
visits on different occasions and at different times to the
defendant’s residence or place of business when the defendant could
reasonably be expected to be found at such location at those
times.”).

Plaintiff has also not shown “that the process server

made genuine inquiries about [Mr. Martin’s] whereabouts and place
of employment[.]”

Greene Major Holdings, LLC, 148 A.D.3d at 1321.

Thus, American General has not met its burden of establishing that
service

was

properly

effectuated

Maryland law, or Fed.R.Civ.P. 4.

under

either

New

York

law,

Accordingly, the court will deny

American General’s motion for entry of default and provide it with
another opportunity to effect service of process on Defendant
Martin.
2.
Ms. Carlyle’s Motion for Entry of Default and Final
Judgment
On September 15, 2020, Ms. Carlyle filed a motion for entry
of default and final judgment as to Mr. Martin.

(ECF No. 46).

Ms. Carlyle states that on “August 14, 2020, a copy of [the] CrossComplaint was served by the Cross-Plaintiff Carlyle upon Defendant
Larry Martin via first class mail at his residence located at 229
South 7th Avenue, Apt. 5k, Mount Vernon, NY 10550.”

(Id., at 2).

As previously stated, Rule 4 is not satisfied by service via first
class mail.

Therefore, the court will deny Ms. Carlyle’s motion

12

Case 1:19-cv-01796-DKC Document 48 Filed 11/16/20 Page 13 of 13

for entry of default and final judgment and provide her with
another

opportunity

to

effect

service

of

process

on

Cross-

Defendant Martin.
C.

Plaintiffs’ Motions for Discharge

Because

the

cases

are

consolidated,

the

court

will

not

adjudicate the pending motions for discharge filed by Plaintiffs,
(ECF Nos. 25 and 47), until all of the parties cure the issues of
defective service.

Therefore, the court will deny Plaintiffs’

motions for discharge at this time.
IV.

Conclusion
For the foregoing reasons, three of the motions for entry of

default (ECF Nos. 24, 40, 46), will be denied, and Talcott’s (ECF
No. 23), will be granted, and both motions for discharge from
further liability (ECF Nos. 25 and 47), will be denied without
prejudice.

/s/
DEBORAH K. CHASANOW
United States District Judge

13