Prudential Insurance Company of America v. Lee et al

Filing 50

REPORT AND RECOMMENDATION. IT IS HEREBY RECOMMENDED AS FOLLOWS:1. On or before a date set by the district judge, plaintiff should pay into court the One Hundred Twenty-five Thousand Dollars ($125,000) Death Benefit due as of 12/2/2016, plus interest accrued under the terms of the policy, less $6,000 in fees and costs; 2. Upon payment of that sum into court, defendants should be enjoined from instituting or prosecuting any proceeding in any state or United States court affectin g the Death Benefit and/or the Servicemenbers' Group Life Insurance Plan, group policy number G-32000 ("SGLI Plan"); 3. Upon payment of that sum into court, plaintiff should be discharged from any and all further liability to defen dants relating in any way to the SGLI Plan and/or Death Benefit; and 4. Faith Lee's 5 Motion for Summary Judgment should be denied. Objections to R&R due by 8/28/2017. Signed by Magistrate Judge Cam Ferenbach on 8/14/17. (Copies have been distributed pursuant to the NEF - MR)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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***

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THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA,

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Plaintiff,

2:17-cv-00900-JCM-VCF
REPORT AND RECOMMENDATION

vs.
FAITH LEE, et al.,
Defendants.

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On March 30, 2017, Plaintiff filed a Complaint in Interpleader alleging an inability to resolve
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conflicting claims to life insurance proceeds (ECF No. 1). The claimants are defendant Faith Lee and
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defendant Petra Wilson. Both are represented by counsel (ECF Nos. 4, 13, 23, 25). Six possible
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contingent beneficiaries were named as defendants and served with process (ECF No. 19). The six
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possible contingent beneficiaries, all children of the decedent, Rex Wilson, have disclaimed and released
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rights each of them may have to assert a claim to the insurance proceeds at issue. (ECF No. 44).
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A Local Rule 22-1 scheduling conference was held on June 26, 2017. Discovery is proceeding.
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No party opposes the payment of the insurance proceeds into court and the discharge of the plaintiff from
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any liability on this policy upon such payment. Plaintiff has requested $8,716.10 in attorneys’ fees and
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$400 in costs incurred in prosecuting the interpleader action to date (ECF No. 43). Appropriate support
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has been provided (ECF Nos. 43-1, 43-2 & 43-3). Ms. Lee and Ms. Wilson do not dispute that an award
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of fees and costs is proper, but do dispute the amount.
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The hourly rates charged by counsel are reasonable for a federal interpleader action. The parties
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must retain local counsel pursuant to court rules, and it is reasonable that they employ Pro Hac Vice
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counsel with whom they are familiar, and in the case of Prudential, presumably with whom they have

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experience handling interpleaders. The court notes some duplication of effort by counsel here. This may

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be unavoidable when one partner and three associates in the lead firm, as well as one partner and one

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associate in the local firm are assigned to work on the matter. Never-the-less, a downward adjustment to

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the fee request is recommended.

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Accordingly, reasonable reimbursement to prudential for attorneys’ fees and costs should total

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$6,000, allocated as $5,600.00 in attorneys’ fees and $400.00 in costs. Also, it is clear that a question of

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fact exists as to the competence and intentions of the decedent when completed the change of beneficiary

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form. Accordingly, Ms. Lee’s Motion for Summary Judgment (ECF No. 5) should be denied.

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IT IS HEREBY RECOMMENDED AS FOLLOWS:

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1. On or before a date set by the district judge, plaintiff should pay into court the One Hundred
Twenty-five Thousand Dollars ($125,000) Death Benefit due as of December 2, 2016, plus
interest accrued under the terms of the policy, less $6,000 in fees and costs;
2. Upon payment of that sum into court, defendants should be enjoined from instituting or
prosecuting any proceeding in any state or United States court affecting the Death Benefit
and/or the Servicemenbers’ Group Life Insurance Plan, group policy number G-32000 (“SGLI
Plan”);
3. Upon payment of that sum into court, plaintiff should be discharged from any and all further
liability to defendants relating in any way to the SGLI Plan and/or Death Benefit; and

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4. Faith Lee’s Motion for Summary Judgment (ECF No. 5) should be denied.
DATED this 14th day of August, 2017.

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_________________________
CAM FERENBACH
UNITED STATES MAGISTRATE JUDGE