Metropolitan Life Insurance Company v. Smith et al

Filing 34

MEMORANDUM OPINION. Signed by Judge Deborah K. Chasanow on 4/14/2016. (sat, Chambers)

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

:
:

Civil Action No. DKC 14-3697

v.
:
CARL SMITH, et. al.
:
MEMORANDUM OPINION
Presently
are:

(1)

a

pending

motion

in

for

this

statutory

summary

interpleader

judgment

filed

by

action

Defendant

Starelle Gladden (ECF No. 23); and (2) a motion for discharge
filed

by

Plaintiff

Metropolitan

Life

(“Plaintiff” or “MetLife”) (ECF No. 28).
briefed,

and

necessary.

the

court

Local

Rule

now

rules,

105.6.

no

For

Insurance

Company

The issues have been
hearing

the

being

following

deemed

reasons,

Defendant Gladden’s motion for summary judgment will be denied,
and Plaintiff’s motion for discharge will be granted.
I.

Background
A. Factual Background
James

gunshot

Innocent

wounds

homicide.
participated

on

(the
June

“Decedent”)
24,

(ECF No. 1-4).
in

the

2010.

died
His

due

to

death

was

multiple
ruled

a

Prior to his death, the Decedent

Washington

Metropolitan

Area

Transit

Authority (“WMATA”) Employee Health & Welfare Plan (the “Plan”).

The

Plan

funded

included

by

a

group

group
life

life

insurance

insurance

policy

Plaintiff MetLife (the “Group Policy”).

coverage,
issued

which

to

was

WMATA

by

Under the terms of the

Group Policy Certificate of Insurance (the “Certificate”), the
Decedent was permitted to name his beneficiary.
1).

(See ECF No. 1-

At the time of his death, the Decedent maintained life

insurance

coverage

Benefits”).
The

totaling

$102,000.00

(the

“Life

Insurance

(ECF No. 1-2).

Life

Insurance

Benefits

became

payable

to

the

authorized beneficiary upon the Decedent’s death, pursuant to
the terms of the Certificate.
“Designation

of

Beneficiary

According to the most recent

and

Contingent

Beneficiary(ies)”

(the “Designation”) on file dated December 1, 2008, the Decedent
listed

Defendant

Gladden

as

the

primary

beneficiary

Defendant Carl Smith as the contingent beneficiary.
3).
Smith

and

(ECF No. 1-

Defendant Gladden was the Decedent’s fiancée, and Defendant
was

Decedent’s

the

Decedent’s

death,

friend.

Defendant

Gladden

Immediately
made

a

after

funeral

the
home

assignment to Defendant Beta Capital Corp. (“Beta Capital”) for
$6,695.00.

(ECF No. 1-5).

Defendant Gladden also completed and

submitted a beneficiary claim form (the “Claim”) requesting that
MetLife distribute the Life Insurance Benefits to her.
1-6).

2

(ECF No.

MetLife

informed

Defendant

Gladden

that

because

the

Decedent’s death was ruled a homicide, a copy of the police
report was needed to process the Life Insurance Benefits.
No. 28-8).

(ECF

Defendant Gladden responded by providing a copy of

the reward poster in connection with the investigation into the
Decedent’s death, as well as contact information for Detective
Allyson Hamlin of the Prince George’s County Police Department
(the “Department”).
Detective

Hamlin

in

(ECF No. 28-9, at 2).
October

2010.

(ECF

MetLife contacted
No.

28-10).

She

informed MetLife that Defendant Gladden had not been ruled out
as a suspect in the Decedent’s death.

(ECF No. 28-11).

MetLife

requested a statement from the Department again in December 2010
and throughout 2011.

(ECF Nos. 28-12; 28-13).

In January 2012,

Detective Hamlin advised MetLife that the Department still could
not rule out Defendant Gladden as a suspect in the Decedent’s
death.

(ECF No. 28-14).

According to MetLife, it continued to

contact the Department seeking updated information.
28-1, at 4).

(ECF No.

In April 2013, Detective Hamlin informed MetLife

that although the Decedent could be ruled out as an aggressor,
Defendants Gladden and Smith had not been ruled out as suspects.
(ECF No. 28-15).
MetLife

that

no

The following month, Detective Hamlin notified
charges

had

been

filed

against

Defendants

Gladden and Smith, and that the status of the case was unlikely
to change.

(ECF No. 28-16).
3

MetLife
affidavit

contacted

that

would

Defendant
allow

Gladden

MetLife

to

seeking

determine

a

claimant

whether

the

Decedent’s relatives or heirs have potential claims to the Life
Insurance

Benefits.

(ECF

No.

28-17).

Defendant

Gladden

provided a properly notarized claimant affidavit on January 18,
2014.

(ECF

No.

28-19).

MetLife

also

requested

a

claimant

affidavit from Defendant Smith, the contingent beneficiary, but
he never responded to multiple attempts to contact him at his
last known address.

(ECF Nos. 28-1, at 4-5; 28-18).

By letter

on February 6, 2014, MetLife advised Defendants Gladden, Smith,
and J.I. (the minor son of Defendant Gladden and the Decedent)
that their potential claims to the Life Insurance Benefits were
adverse to one another and “raise questions of fact and law that
cannot be resolved by MetLife without exposing the [P]lan to the
danger of double liability.”

(ECF No. 28-20, at 1).

MetLife

noted that, before initiating an interpleader action, it sought
to give the defendants “the opportunity to try to resolve the
matter

amicably

in

order

litigation costs and fees.”

to

preserve

(Id. at 2).

the

benefits

from

According to MetLife,

it received no response from Defendants Gladden, Smith, J.I.,
and Beta Capital (collectively, the “Defendants”).
1, at 5).

4

(ECF No. 28-

B. Procedural Background
On

November

interpleader

25,

pursuant

2014,
to

28

MetLife
U.S.C.

filed

§

1335

a

complaint

seeking

in

certainty

regarding Defendants’ respective rights to the Life Insurance
Benefits.

(ECF No. 1).

J.I. answered.

Defendants Beta Capital, Gladden, and

(ECF Nos. 11; 14; 18).

Defendant Smith did not

answer, and his default was entered on September 30, 2015.

(ECF

No. 22; see ECF Nos. 19; 20).
MetLife also moved to deposit the Life Insurance Benefits
into a court registry, and Defendant Gladden consented.
Nos.

21;

24).

The

court

granted

MetLife’s

motion,

(ECF

and

counsel provided a check in the amount of $104,691.78.

its
(ECF

Nos. 25; 27).
On October 8, Defendant Gladden moved for summary judgment
requesting that the Life Insurance Benefits be distributed to
Defendant Gladden and that MetLife’s demand for attorneys’ fees
and costs be denied because, according to her, there was no
basis

to

MetLife

initiate
responded

an
in

interpleader
opposition.

action.
(ECF

(ECF
No.

26).

No.

23).
As

a

disinterested stakeholder, MetLife explains that it “does not
oppose

Defendant

Gladden’s

summary

judgment

motion

to

the

exten[t] that she contends that there are no genuine factual
disputes to a finding that she is the appropriate beneficiary
and that she is entitled to the [Life Insurance Benefits] as a
5

matter

of

law.”

(Id.

at

2).

MetLife

challenges

Defendant

Gladden’s motion, however, to the extent that she contends that
it

lacked

a

reasonable

basis

to

pursue

this

matter

as

an

interpleader and is not entitled to attorneys’ fees and costs.
(Id.).
Shortly

after

depositing

MetLife moved for discharge.

the

Life

Insurance

(ECF No. 28).

Benefits,

Defendant Gladden

filed a response noting that she does not object, and MetLife
replied.

(ECF Nos. 29; 30).1

In March 2016, MetLife’s counsel

Thomas Bundy withdrew from the case and was replaced by Gail
Westover.
II.

(ECF Nos. 31; 32; 33).

Plaintiff MetLife’s Motion for Discharge
A. Standard of Review
An interpleader action involves two steps or stages.

7

Charles A. Wright, Arthur R. Miller, & Mary K. Kane, Federal
Practice

and

Procedure

§

1714

(3d

ed.

2001);

see

Rapid

Settlements, Ltd. v. U.S. Fid. & Guar. Co., 672 F.Supp.2d 714,
717 (D.Md. 2009).

In Metro. Life Ins. Co. v. Vines, No. WDQ-10-

1

Defendant Gladden’s position in her motion for summary
judgment is inconsistent with her response to MetLife’s motion
for discharge. In her summary judgment motion, she asserts that
it was unreasonable or improper for MetLife to initiate this
interpleader action.
(ECF No. 23, at 5).
Responding to the
motion for discharge, however, Defendant Gladden does not oppose
the discharge of MetLife from the case at this stage. (ECF No.
29 ¶ 1).
6

2809, 2011 WL 2133340, at *2 (D.Md. May 25, 2011), Judge Quarles
explained them:
During
the
first
stage,
it
must
be
determined
whether
the
stakeholder
has
properly
invoked
interpleader.
United
States v. High Tech. Prods., Inc., 497 F.3d
637, 641 (6th Cir. 2007); Fed. Ins. Co. v.
Parnell, No. 6:09CV00033, 2009 WL 2848667,
at *4 (W.D.Va. Sept. 3, 2009).
The
propriety of interpleader depends on whether
the
stakeholder
“legitimately
fears”
multiple litigation over a single fund. The
Court
considers
whether:
(1)
it
has
jurisdiction over the suit; (2) a single
fund is at issue; (3) there are adverse
claimants to the fund; (4) the stakeholder
is
actually
threatened
with
multiple
liability;
and
(5)
equitable
concerns
prevent the use of interpleader.
High
Tech., 497 F.3d at 641; Rhoades v. Casey,
196 F.3d 592, 600 (5th Cir. 1999).
If interpleader is proper, the Court
may direct the funds plus interest to be
deposited
with
the
Clerk,
dismiss
the
stakeholder with prejudice and discharge it
from all liability with respect to the
deposited funds, and prohibit the claimants
from initiating or pursuing any action or
proceeding against the stakeholder regarding
the relevant insurance policy or plan. See,
e.g.,
High
Tech.,
497
F.3d
at
641;
[Companion Life Ins. Co. v. Haislett, No.
3:10-1586-JFA,
2010
WL
3879338,
at
*3
(D.S.C. Sept. 28, 2010)].
During the second stage, a scheduling
order is issued and the case continues
between the claimants to determine their
respective rights.
See, e.g., Rhoades, 196
F.3d at 600; Leventis v. First Nat’l Ins.
Co. of Am., No. 3:09–1561–JFA, 2010 WL
2595305, at *2 (D.S.C. June 23, 2010). The
claimants engage in the “normal litigation
processes, including pleading, discovery,
motions, and trial.”
High Tech., 497 F.3d
at 641.
7

In federal interpleader actions, a district court has the
authority to:
issue its process for all claimants and
enter
its
order
restraining
them
from
instituting or prosecuting any proceeding in
any State or United States court affecting
the
property,
instrument
or
obligation
involved in the interpleader action until
further order of the court.
. . .
Such
district court shall hear and determine the
case, and may discharge the plaintiff from
further
liability,
make
the
injunction
permanent, and make all appropriate orders
to enforce its judgment.
28 U.S.C. § 2361.
“admit

liability,

Generally, the interpleader plaintiff will
deposit

the

fund

with

permitted to withdraw from the proceedings.”

the

court,

and

be

CMFG Life Ins. Co.

v. Schell, No. GJH-13-3032, 2014 WL 7365802, at *2 (D.Md. Dec.
22, 2014) (citing J.G. Wentworth Origination, LLC v. Mobley,
2012 WL 4922862 at *5 (D.Md. Oct. 12, 2012)); see Parnell, 2009
WL

2848667,

at

*4

(“[T]he

Interpleader

Act

permits

[the

plaintiff] to [interplead] its [p]olicy limit and to obtain ‘a
discharge . . . from further liability’ with prejudice, as well
as

a

permanent

injunction

restraining

claimants

‘from

instituting or prosecuting any proceeding in any State or United
States court affecting the’ [p]olicy.” (citations omitted)).

8

B. Analysis
28 U.S.C. § 1335(a) grants the district courts original
jurisdiction over interpleader claims involving at least $500.00
in funds or property and claimants of diverse citizenship.
Developed over six hundred years ago by the
common law courts of England, interpleader
is a procedure used to avoid excessive
litigation
in
instances
of
multiple
claimants to a single stake.
For the
uncertain stakeholder, interpleader is the
law’s answer to the mythical dilemma of
Scylla and Charybdis. Without the option of
interpleading
funds,
and
faced
with
genuinely competing claims to a stake, the
stakeholder is left with the unappealing
prospect of either choosing one claimant
over the other and facing action by the
disappointed suitor or holding the stake and
awaiting suit by both.
The repository of
the Court provides the stakeholder with the
only safe harbor when caught between such a
rock and a hard place.
Commerce Funding Corp. v. S. Fin. Bank, 80 F.Supp.2d 582, 584-85
(E.D.Va.

1999)

predicated

upon

(citation
the

federal

omitted).
interpleader

Here,

jurisdiction

statute

is

proper.

MetLife is a New York corporation; two of the defendants are
Maryland citizens and two are citizens of Virginia.
already

paid

into

the

court

registry

MetLife has

$104,691.78

in

Life

Insurance Benefits pursuant to a free standing order (ECF Nos.
25; 27), but now seeks discharge (ECF No. 28).

Responding to

the motion for discharge, Defendant Gladden asserted that she

9

“has no objection to, and would welcome the discharge of MetLife
from this case.”

(ECF No. 29, at 1).

MetLife is a disinterested stakeholder seeking a judicial
determination as to the proper beneficiary of the Life Insurance
Benefits.
already

It does not contest its obligation to pay and has
deposited

Insurance

Benefits

Accordingly,

the

plus

MetLife

respect

$104,691.78,

to

has

Plan

which

interest,

into

the

fulfilled

thus

and

comprises

its

will

be

the

court

registry.

obligations

discharged

from

Life

with

further

liability.
C. Recovery of Attorneys’ Fees and Costs
MetLife argues that it “is entitled to an award of its
attorneys’ fees and costs [reasonably incurred] in bringing this
interpleader

action

where

the

parties

potential conflict themselves.”

could

not

resolve

the

(ECF No. 28-1, at 9 (citing

Aetna Life Ins. Co. v. Outlaw, 411 F.Supp. 824, 826-27 (D.Md.
1976))).

Defendant

Gladden

requests

that

the

court

deny

MetLife’s recovery of attorneys’ fees and costs in connection
with this interpleader action.

(ECF No. 29, at 2-4).2

“Despite the lack of an express reference in the federal
interpleader statute to costs or attorney’s fees, federal courts
2

In her motion for summary judgment, Defendant Gladden
again requests that the court deny MetLife’s recovery of
attorneys’ fees because, she contends, “the withholding of the
[Life Insurance Benefits] was without a reasonable factual
basis.” (ECF No. 23, at 5).
10

have held that it is proper for an interpleader plaintiff to be
reimbursed

for

costs

associated

with

bringing

the

action

forward.”

Trustees of Plumbers and Pipefitters Nat. Pension

Fund v. Sprague, 251 F.App’x 155, 156 (4th Cir. 2007) (citations
omitted).

District courts have the discretion to award fees

when “the party initiating the interpleader is acting as a mere
stakeholder,

which

means

he

has

admitted

liability,

has

deposited the fund in court, and has asked to be relieved of any
further liability.”

Rapid Settlements, 572 F.Supp.2d at 722

(quoting Safemasters Co. v. D’Annunzio & Circosta, No. K-933883, 1994 WL 512140, at *5 (D.Md. July 18, 1994)).
The theory behind the award of attorneys’
fees in interpleader actions, an exception
to the usual American rule by which parties
generally bear their own legal costs, is
that plaintiff by seeking resolution of the
multiple claims to the proceeds benefits the
claimants and that plaintiff should not have
to absorb attorneys’ fees in avoiding the
possibility of multiple litigation.
Outlaw, 411 F.Supp. at 826.
Here,

MetLife

meets

the

requirements

of

a

disinterested

stakeholder, as it acknowledges that it has an obligation to pay
the

Life

MetLife

Insurance

has

Benefits

deposited

the

under

the

interpleaded

Plan.
funds

Furthermore,
into

the

court

registry and requested that the court resolve the dispute over
who is entitled to the Life Insurance Benefits.

See Metro. Life

Ins.

2148714,

Co.

v.

Davis,

No.

JFM-10-2785,
11

2011

WL

at

*7

(D.Md. May 31, 2011).

In order to consider Defendant Gladden’s

request to deny MetLife fees and costs, however, a review of the
facts is necessary.

See Outlaw, 411 F.Supp. at 826 (awarding

attorneys’ fees to the interpleader plaintiff when the “widow of
the deceased, and prime beneficiary under the life insurance
policies, was suspected in her husband’s death but that the
evidence as then known was inconclusive”).
MetLife

asserts

that

under

Maryland

law,

potential

beneficiaries could be “disqualified because they are suspected
or

involved

in

the

Decedent’s

death.”

(ECF

No.

1

¶

18).

Maryland’s common law slayer rule “generally provides that one
who feloniously and intentionally causes the death of another
may not profit by taking any portion of . . . the proceeds of
the victim’s life insurance policy.”

Clark v. Clark, 42 F.3d

1385, 1994 WL 669501, at *3 (4th Cir. 1994) (unpublished table
decision) (citing Ford v. Ford, 307 Md. 105, 111-12 (1986)).3
Given the Department’s lengthy homicide investigation involving
Defendants Gladden and Smith, MetLife could not “determine the
proper

beneficiaries

of

the

Life

3

Insurance

Benefits

without

The applicability of Maryland’s slayer rule is determined
in a civil proceeding, and “[t]he burden of proof is on the
party asserting the slayer’s rule to show by a preponderance of
the evidence that the homicide was felonious and intentional.”
Clark, 1994 WL 669501, at *3 (citing Ford, 307 Md. at 121).
Here, no party asserts or provides evidence that Defendant
Gladden
is
responsible
–
feloniously,
intentionally,
or
otherwise – for the Decedent’s death.
12

risking

exposure

liabilities.”

of

itself

(ECF

No.

1

and

¶¶

the

Plan

20-21).

to

MetLife

multiple
maintained

periodic contact with Detective Hamlin and the Department from
October

2010

through

May

2013

to

keep

apprised

of

any

developments and information regarding Defendants’ complicity in
the

Decedent’s

death.

Moreover,

MetLife

advised

Defendants

Gladden, Smith, and J.I. that their potential claims to the Life
Insurance Benefits were adverse to one another and provided them
“the opportunity to try to resolve the matter amicably in order
to preserve the benefits from litigation costs and fees.”
No. 28-20, at 2).

(ECF

Receiving no response, MetLife initiated this

interpleader action.
Although

significant

time

elapsed

between

Defendant

Gladden’s Claim and the commencement of this interpleader suit,
MetLife “acted reasonably expeditiously in its conduct of this
matter.”
homicide

Outlaw, 411 F.Supp. at 826.
investigation

and

Given the Department’s

Defendants’

“concomitant

possible

disentitlement to the insurance proceeds, [MetLife] faced the
real possibility of bona fide conflicting claims to the [Life
Insurance Benefits].

In light of this prospect, [MetLife] was

entitled to a reasonable time to investigate the circumstances
surrounding

the

demonstrate

that

claim.”
MetLife

Id.
acted

Defendant
in

bad

Gladden

faith

or

cannot
delayed

unnecessarily in communicating with the Department and seeking
13

resolution

among

interpleader.

Defendants

filing

the

complaint

in

Rather, MetLife moved diligently to initiate this

interpleader

action

investigation

was

Accordingly,

before

once
not

Defendant

it

appeared

coming

to

Gladden’s

that

request

Department’s

swift

any

the

resolution.

that

the

court

deny

MetLife’s recovery of attorneys’ fees and costs will be denied.
The

court

will

direct

MetLife

to

provide

documentation

and

affidavits within 30 days specifying reasonable attorneys’ fees
and costs in connection with this action.
III. Defendant Gladden’s Motion for Summary Judgment
Defendant

Gladden

moves

for

summary

judgment

seeking

a

court order entitling her to the Life Insurance Benefits without
further delay and denying MetLife’s request for attorneys’ fees
and costs.

(ECF No. 23, at 5).

Responding in opposition,

MetLife asserts that it “does not oppose Defendant Gladden’s
summary judgment motion to the exten[t] she contends that there
are no genuine factual disputes to a finding that she is the
appropriate beneficiary and that she is entitled to the benefits
as a matter of law.”

(ECF No. 26, at 2).

Moreover, in response

to MetLife’s motion for discharge, Defendant Gladden contends
“[t]hat

there

[defendants]

has
.

.

always
.

that

been

agreement

[Defendant]

between

Gladden,

all
the

of

the

primary

beneficiary of 100% of the [Life Insurance Benefits] . . . , is
the sole beneficiary of [the Plan], and that judgment should be
14

entered in her favor.”

(ECF No. 29, at ¶ 2).

According to

Defendant Gladden, the other defendants have not contested her
entitlement.

(See id. ¶ 3).

Defendant

Gladden’s

premature and misplaced.

motion

for

summary

judgment

is

Defendant Gladden claims entitlement

to the Life Insurance Benefits, but so does at least one other
claimant.

Defendant Beta Capital answered and asserts a claim

to $6,695.00, plus attorneys’ fees and interest.
at

4).

The

other

defendants

do

not

(ECF No. 11,

currently

assert

an

interest.

Defendant Smith is in default and has forfeited any

interest.

(ECF No. 22).

The minor, J.I., has appeared, but

disclaimed through counsel any interest in the proceeds.
No. 18; see ECF No. 29, at 1).
challenges

MetLife’s

complaint

(ECF

Defendant Gladden’s motion
as

to

the

potential

disqualification of a beneficiary under Maryland’s slayer rule.
It

is

not

addressed

to

the

potential

claims

of

the

other

defendants and does not address at all the claim of Defendant
Beta Capital.
While no party appears to contend that Defendant Gladden is
disqualified
cannot

be

Defendant

due

to

resolved
Gladden’s

Maryland’s
in

the

motion

slayer

present
will

not

rule,

the

posture.
be

granted.

entire

case

Accordingly,
Instead,

Defendant Gladden will be designated as plaintiff for future
proceedings and Defendants J.I., Smith, and Beta Capital will
15

remain defendants.

See 7 Wright, Miller, & Kane, supra § 1714

(“At this juncture, each claimant occupies an adversary position
to the others and must proceed accordingly.”).

Counsel for the

remaining parties will be directed to confer and notify the
court whether further pleading or discovery is requested.
as

it

appears,

necessary,

the

neither
case

may

further

pleading

proceed

on

nor

summary

discovery

judgment.

If,
is
Any

motions addressing present claims to the Life Insurance Benefits
must be filed within 30 days.
IV.

Conclusion
For the foregoing reasons, the motion for summary judgment

filed by Defendant Gladden will be denied.
discharge will be granted.

MetLife’s motion for

A separate order will follow.

/s/
DEBORAH K. CHASANOW
United States District Judge

16