STONEBRIDGE LIFE INSURANCE COMPANY v. KISSINGER et al

Filing 28

OPINION. Signed by Judge Noel L. Hillman on 2/19/2015. (TH, )

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
_________________________________
STONEBRIDGE LIFE INSURANCE
COMPANY,

Civil No. 14-2489 (NLH/KMW)

Plaintiff,
v.

OPINION

SHERRY M. KISSINGER, et al.,
Defendants.
__________________________________
APPEARANCES:
Kevin J. Thornton, Esq.
Cooper Levenson, P.A.
1125 Atlantic Avenue
Atlantic City, New Jersey 08401
Counsel for Plaintiff
Timothy J. Buckley, Esq.
P.O. Box 71
256 S. White Horse Pike
Hammonton, New Jersey 08037
Counsel for Defendant Diane M. Latko
HILLMAN, District Judge:
In this interpleader action, Plaintiff, Stonebridge Life
Insurance Company, contends that it has been presented with
multiple claims for the proceeds of a life insurance policy of
its insured, Randall M. Latko, Sr. (hereafter, the “insured”),
who passed away on November 24, 2013.

Presently before the

Court is Plaintiff’s motion [Doc. No. 20] for entry of an Order
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(1) requiring Defendants to interplead their rights to the funds
Plaintiff deposited with the Registry of the Court, 1 (2)
restraining Defendants from instituting any action against
Plaintiff to recover the sum, (3) discharging Plaintiff from
liability, and (4) granting an award of attorney’s fees and
costs.

The only defendant who has appeared in this matter is

Diane M. Latko, the ex-wife of the insured. 2

Ms. Latko opposes

the present motion to the extent Plaintiff seeks an award of
attorney’s fees and costs, but does not otherwise object to the
relief sought by Plaintiff.
The Court has considered the submissions of the parties and
decides this matter pursuant to Federal Rule of Civil Procedure
78.

For the reasons that follow, Defendant’s motion is granted

in its entirety.

1

Plaintiff’s motion also sought to deposit the life insurance
proceeds into the Court’s Registry. By Order dated January 28,
2015 [Doc. No. 25], the Court granted Plaintiff’s motion with
respect to this request, and reserved decision on the remaining
aspects of Plaintiff’s application until Plaintiff deposited
such funds with the Court. Plaintiff deposited the funds in the
Court’s Registry on February 9, 2015. This Opinion addresses
the remaining requests contained in Plaintiff’s motion.
2

The other defendants in this matter -- Sherry M. Kissinger,
Janet Latko, Randall M. Latko, Jr., Lynn Uddin, and Lindsay J.
Latko -- are the children of the insured. At Plaintiff’s
request [Doc. Nos. 14, 15, 16, 17, 18], the Clerk entered
default against these defendants on July 14, 2014. None of
these defendants has since entered an appearance, sought to
vacate the default, or filed opposition to the present motion.
Plaintiff moved for default judgment on February 18, 2015.
2

I.

JURISDICTION
The Court has jurisdiction over this matter pursuant to 28

U.S.C. § 1335(a), because two of the adverse claimants are of
diverse citizenship as defined in 28 U.S.C. § 1332, and
Plaintiff has deposited the life insurance proceeds, which are
greater than $500, into the Registry of the Court.
II.

BACKGROUND
According to the allegations in the complaint, the insured

purchased a life insurance policy in the sum of $50,000 from
JCPenney Life Insurance Company on or about November 15, 1991.
(Compl. ¶ 17.)

The sole beneficiary under the JCPenney Policy

was the insured’s daughter, Sherry Kissinger. 3

(Id.)

On January

2, 1993, the insured executed a “Change of Beneficiary Form” and
named his then-wife, Defendant Diane Latko, as the beneficiary
under the JCPenney Policy.

(Id. ¶ 21.)

Subsequently,

Plaintiff, a life insurance company, succeeded to the rights and
duties of JCPenney Life Insurance Company and issued to the
insured a Stonebridge Life Insurance Policy in the sum of
$50,000.

(Id. ¶ 18.)

or about June 9, 2006.

The insured and Diane Latko divorced on
(Id. ¶ 22.)

3

Although “Sherry Latko” was named as the beneficiary, Ms. Latko
is now known as “Sherry Kissinger.” (See, e.g., Compl., Exs. C,
H.)
3

The insured passed away on November 24, 2013.

(Id. ¶ 19.)

On November 30, 2013, the insured’s daughter, Ms. Kissinger,
submitted a Life Claim Statement and an Affidavit of Heirship to
Plaintiff requesting to be paid the Death Benefit under the
insurance policy.

(Id. ¶ 23.)

Shortly thereafter, on January

10, 2014, the insured’s ex-wife, Diane Latko, submitted a Life
Claim Statement and an Affidavit of Heirship requesting to be
paid the Death Benefit.

(Id. ¶ 24.)

Additionally, Diane Latko

is the executrix of the insured’s estate and claims to be a
creditor of the estate.

(Id. ¶ 27.)

Plaintiff contends that it

is a mere stakeholder, and thus filed this action seeking to
deposit the Death Benefit with the Court so that the Court may
resolve the competing claims.
Plaintiff filed the present motion seeking, inter alia, an
order permitting Plaintiff to pay the Death Benefit into the
Court’s Registry and an award of attorney’s fees and costs.

As

noted above, the Court entered an Order on January 28, 2015
directing Plaintiff to submit the insurance proceeds to the
Court’s Registry.

Plaintiff complied with the Court Order, and

$50,304.00 was deposited into the Registry of the Court on
February 9, 2015.
No. 26].)

(Clerk’s Certificate of Cash Deposit [Doc.

The only aspect of Plaintiff’s motion that is in

dispute is whether Plaintiff is entitled to an award of

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attorney’s fees and costs in connection with this interpleader
action.
In opposition to the request for attorney’s fees and costs,
Diane Latko argues that Plaintiff is not entitled to any such
award because Plaintiff’s own conduct purportedly created the
confusion that resulted in the submission of competing claims.
(Br. in Partial Opp. to Pl.’s Mot. to Deposit Funds into Court
(hereafter, “Def.’s Br.”) [Doc. No. 21] 2.)

Specifically, Ms.

Latko asserts that Sherry Kissinger only submitted a Life Claim
Statement and Affidavit of Heirship because she was informed by
an agent for Plaintiff that she was the sole beneficiary of the
insured’s policy.

(Id.) 4

Ms. Latko argues that “but for the

misinformation provided to the parties by the Plaintiff, there
would have been only one claim for benefits and that would have
been Diane M. Latko’s claim.”

(Id.)

Additionally, Ms. Latko asserts that even though Ms.
Kissinger submitted a claim for the Death Benefit, Plaintiff
should not have filed an interpleader action, but rather should

4

Ms. Latko attached to her brief a letter from Ms. Kissinger, in
which Ms. Kissinger states that she submitted a claim to the
Death Benefit because “Bruna” from Stonebridge Insurance Company
advised Ms. Kissinger that she is the beneficiary under the
policy. Plaintiff argues that the Court should not consider the
letter from Ms. Kissinger because the letter was not attached to
an affidavit or otherwise authenticated. The Court agrees that
the letter from Ms. Kissinger was not submitted in evidentiary
form and, therefore, will not be considered in deciding the
present motion.
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have simply denied Ms. Kissinger’s meritless claim because she
was not a designated beneficiary under the policy.

(Id. at 4.)

Further, Ms. Latko contends that although she and the insured
had divorced, which “may have” nullified her standing as the
sole death beneficiary under N.J. Stat. Ann. § 3B:3-14,
Plaintiff would not have been liable for making payment to Ms.
Latko because the statute absolves a payor of liability when it
does not have “written notice of a claimed revocation.”
(quoting N.J.S.A. § 3B:3-14(d)).

(Id.)

Finally, Ms. Latko notes that

she is the representative of the insured’s estate and, as such,
is entitled to the proceeds of the policy for disbursement
pursuant to the terms of the insured’s Last Will and Testament.
(Id.)

Ms. Latko summarizes that she is entitled to receipt of

the funds, either as the beneficiary under the policy or as the
executor of the insured’s estate, and there simply was no need
for Plaintiff to institute this action and thereby incur fees
and costs.

(Id. at 5.)

In reply, Plaintiff contends that there is sufficient
ambiguity as to the proper claimant to the Death Benefit to
warrant this interpleader action.

Plaintiff notes that Ms.

Kissinger never withdrew her claim to the proceeds.

(Pl.’s

Reply to Diane M. Latko’s Partial Opp. to Pl.’s Mot. to Deposit
Funds into Court [Doc. No. 23] 2.)

Moreover, Plaintiff contends

that it filed this interpleader action not only because of the
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competing claims of Ms. Latko and Ms. Kissinger, but also
because Ms. Latko first sought the policy benefits on her own
behalf, and then sought the benefits as the executrix of the
estate, but never withdrew her claim in her own name.
3-4.)

(Id. at

Plaintiff also argues that Ms. Latko’s status as

executrix of the insured’s estate is in question given that she
was divorced from the insured.

(Id.)

III. ANALYSIS
There are two sources of interpleader relief in federal
court: statutory interpleader under 28 U.S.C. § 1335, and rule
interpleader under Federal Rule of Civil Procedure 22.
Plaintiff brings this interpleader action under the interpleader
statute.

“[I]t has long been recognized that the interpleader

statute is remedial, aimed at assisting a party who fears the
vexation of defending multiple claims to a fund or property
under his control by providing him the opportunity to satisfy
his obligation in a single proceeding.”

NYLife Distrib., Inc.

v. Adherence Group, Inc., 72 F.3d 371, 381 (3d Cir. 1995)
(citing State Farm Fire & Cas. Co. v. Tashire, 386 U.S. 523,
533, 87 S. Ct. 1199, 18 L. Ed. 2d 270 (1967)), cert. denied, 517
U.S. 1209, 116 S. Ct. 1826, 134 L. Ed. 2d 931 (1996).
“[I]nterpleader allows a stakeholder who ‘admits it is liable to
one of the claimants, but fears the prospect of multiple

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liability[,] . . . to file suit, deposit the property with the
court, and withdraw from the proceedings.’”

Prudential Ins. Co.

of Am. v. Hovis, 553 F.3d 258, 262 (3d Cir. 2009) (quoting Metro
Life Ins. Co. v. Price, 501 F.3d 271, 275 (3d Cir. 2007)).

As a

result of an interpleader action, “‘[t]he competing claimants
are left to litigate between themselves,’ while the stakeholder
is discharged from any further liability with respect to the
subject of the dispute.”

Id. (quoting Metro Life, 501 F.3d at

275).
An interpleader action usually proceeds in two stages.

Id.

First, the Court must determine whether the interpleader
complaint was properly brought and whether to discharge the
stakeholder from further liability to the claimants.

Id.

Second, the Court must determine the rights of the claimants to
the funds.

Id.

With respect to the first stage, “[t]he key

prerequisite . . . is that there be two or more claimants to the
fund who are ‘adverse’ to each other.”

New Jersey Sports Prod.,

Inc. v. Don King Prod., Inc., 15 F. Supp. 2d 534, 539 (D.N.J.
1998) (citing 7 Charles A. Wright & Arthur R. Miller & Mary Kay
Kane, Federal Practice and Procedure § 1705 at 507-09 (1986 &
1996 supp.)).

“This requirement is not met where (a) one of the

claims clearly is devoid of substance; (b) one of the claimants
is under the control of the stakeholder or has dropped his
claim, such that the fear of multiple liability is baseless; or
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(c) the claims are not asserted against the same fund, or the
stakeholder may be liable to both claimants.”

Allstate

Settlement Corp. v. United States, Civ. A. No. 07-5123, 2008 WL
2221897, at *3 (E.D. Pa. May 28, 2008) (citing New Jersey
Sports, 15 F. Supp. 2d at 539).
The Court must at this time decide whether an interpleader
action is appropriate, thus warranting Plaintiff’s dismissal
from the case.

Plaintiff claims no interest in the disputed

funds and has deposited such funds in the Court Registry.
Further, there is a dispute as to the proper beneficiary of the
life insurance proceeds of the insured -- Ms. Kissinger
submitted a claim as the insured’s daughter, Ms. Latko submitted
a claim in her personal capacity, and Ms. Latko has also sought
payment as the executrix and purported creditor of the insured’s
estate.

Although Ms. Latko’s position is that there is no

dispute as to the funds because she should have received the
proceeds either individually or as the executrix of the estate,
she concedes that such claims are “part of the ultimate decision
this Court will have to make as to the payment of the proceeds.”
(Def.’s Br. at 5.)
Indeed, Ms. Latko has taken inconsistent positions
concerning her rights individually to the insurance proceeds.
For example, in her Answer to the Complaint, Ms. Latko admitted
that she submitted a Life Claim Statement and Affidavit of
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Heirship which did not indicate that she was filing as the legal
representative of the estate.

(Answer ¶ 24.)

Ms. Latko argues

that she did not need to identify herself as the representative
of the estate because she was the named beneficiary under the
insurance policy.

(Id.)

In her opposition brief, Ms. Latko

states that her divorce “may have nullified” her standing as the
sole beneficiary, but she does not expressly agree that her
divorce nullified her rights to the insurance proceeds.
Br. at 4.)

(Def.’s

Similarly, Ms. Latko states that “[i]f it is

Plaintiff’s position that Ms. Latko is not due the proceeds as
she is a divorced individual, discriminating against her based
on her marital status . . . the only legal beneficiary is the
Estate of Randall Latko, over which Ms. Latko is the
representative.”

(Id. at 4-5.)

Clearly, Ms. Latko has not

agreed that she is no longer entitled to the proceeds because of
her divorce, and she has not abandoned her claim to the funds on
her own behalf.
Notwithstanding the foregoing, Ms. Latko also takes the
position that she would only be entitled to the funds as the
executrix of the estate.

She states in this regard that she “is

the Court Ordered representative of the decedent’s probate
estate and is entitled to the proceeds of the policy as if no
beneficiary at all had been designated by the decedent under the
policy.”

(Def.’s Br. at 4.)

Moreover, Ms. Latko contends that
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“there is no dispute that Diane Latko, as representative of the
Estate of Randall M. Latko, is the lawful beneficiary of this
policy.”

(Id. at 5.)

Given Ms. Latko’s inconsistent positions, there remains a
dispute as to whether she is entitled to the insurance proceeds
as the beneficiary under the policy, notwithstanding her
subsequent divorce from the insured, whether the estate is the
proper contingent beneficiary under the policy, or whether Ms.
Latko as a creditor of the estate is entitled to the Death
Benefit.

The Court thus finds that this interpleader action was

appropriate and, indeed, Ms. Latko does not object to
Plaintiff’s request for interpleader relief.

Accordingly, the

Court will permit interpleader and discharge Plaintiff from
further participation in this matter and from all liability in
connection with the Death Benefit at issue.
As a corollary to its discharge from this action, Plaintiff
seeks an award of attorneys’ fees and costs in an unspecified
sum.

As previously discussed, Ms. Latko contends that the

interpleader action was prompted only by Plaintiff’s own
conduct, and any attorneys’ fees resulting therefrom are
purportedly unwarranted.

The Court disagrees.

“The prevailing principle in interpleader actions brought
in the federal courts, whether under the interpleader statute or
under Fed. R, Civ. P. 22, is that it is within the discretion of
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the court to award the stakeholder costs, including reasonable
attorneys fees, out of the deposited fund.”

Prudential Ins. Co.

of Am. v. Richmond, Civ. A. No. 06-525, 2007 WL 1959252, at *4
(D.N.J. July 2, 2007)(citing 3a Moore's Federal Practice ¶
22.16(2), p. 22-169), aff’d, 336 F. App’x 232 (3d Cir. 2009).
“A court has the discretion to award to an interpleader
plaintiff attorneys fees and costs if the plaintiff is (1) a
disinterested stakeholder, (2) who had conceded liability, (3)
has deposited the disputed funds with the court, and (4) has
sought a discharge from liability.”

Metropolitan Life Ins. Co.

v. Kubicheck, 83 F. App’x 425, 431 (3d Cir. 2003) (citation
omitted).

“Because the stakeholder ‘is considered to be helping

multiple parties to an efficient resolution of the dispute in a
single court,’ courts find that the stakeholder attorney’s fees
are justified.”

Banner Life Ins. Co. v. Lukacin, Civ. A. No.

13-cv-6589, 2014 WL 4724902, at *3 (D.N.J. Sept. 22, 2014)
(citing Frontier Ins. Co. v. Mission Carrier, Inc., No. 91-5151,
1992 WL 209299, at *2 (D.N.J. Aug. 24, 1992)).
The Court will allow Plaintiff to offset its reasonable
legal fees and costs because it is a disinterested stakeholder.
It has conceded liability, deposited the disputed funds with the
Court, and sought a discharge from liability.

It therefore

meets the four factors discussed above for an award of
attorney’s fees and costs.

However, as Plaintiff does not
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specify the amount of fees it seeks, the Court will require
Plaintiff to file a separate application for the amount of fees
to be awarded. 5
Ms. Latko’s argument in opposition to the request for
attorney’s fees is that Plaintiff’s own conduct caused the
filing of multiple claims.

The Court recognizes that an award

of attorney’s fees and costs may not be appropriate where the
stakeholder acts in a manner that creates disputed claims.

See,

e.g., Reliastar Life Ins. Co. v. Moore, No. 1:CV-08-1942, 2010
WL 773457, at *6 (M.D. Pa. Mar. 1, 2010) (denying request for
attorney’s fees where interpleader plaintiff contacted counsel
for another potential claimant, thereby creating confusion about
payment of policy proceeds); Prudential Ins. Co., 2007 WL
1959252, at *5 (where interpleader plaintiff was responsible in
part for confusion concerning determination of who was proper
claimant, court denied fees to plaintiff, noting that “[i]t was
only after [the insurer] created the commotion that it filed
this suit in order to absolve itself of liability.”).

Here,

however, the Court has not considered the letter of Ms.

5

In making its application for fees, Plaintiff should note that
“the work required to bring an interpleader suit is minimal; and
thus, ‘the fee award should not seriously deplete the fund.’”
United States Life Ins. Co. in the City of New Yrok v. Holtzman,
Civ. A. No. 14-00113, 2014 WL 5149707, at *7 (D.N.J. Oct. 14,
2014) (quoting Banner, 2014 WL 4724902, at *4). The Court will
not award fees for work that was excessive, unnecessary or
redundant. Id.
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Kissinger in which she states that she was directed by
Plaintiff’s agent to submit a claim, and the record is therefore
devoid of evidence that Plaintiff’s conduct created the dispute
over the insurance proceeds.

Moreover, even if Ms. Kissinger

had not submitted a claim, the Court must nonetheless resolve
whether Ms. Latko is entitled to the insurance proceeds as the
designated beneficiary, whether the estate is the proper
beneficiary given Ms. Latko’s subsequent divorce from the
insured, or whether Ms. Latko is entitled to the proceeds as a
creditor of the estate.

The Court therefore rejects Ms. Latko’s

argument that Plaintiff’s conduct necessitated this interpleader
action, and likewise rejects any argument that Plaintiff is not
entitled to an award of fees because of its conduct.
IV.

CONCLUSION
In sum, the Court concludes that Plaintiff has met the

requirements of the interpleader statute and may be relieved
from liability at this time.

Accordingly, the Court grants

Plaintiff’s motion [Doc. No. 20] to the extent Plaintiff seeks
an Order requiring Defendants to interplead their rights to the
funds deposited by Plaintiff in the Court’s Registry,
restraining Defendants from instituting any action against
Plaintiff to recover such sum, discharging Plaintiff from all
liability to Defendants, and granting Plaintiff an award of

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attorney’s fees and costs.

Plaintiff must file, within ten

days, a separate application with the Court for the amount of
fees to be awarded in accordance with this Opinion.
An Order consistent with this Opinion will be entered.

s/ Noel L. Hillman
NOEL L. HILLMAN, U.S.D.J.
Dated: February 19, 2015
At Camden, New Jersey

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