TRANSAMERICA LIFE INSURANCE COMPANY v. MAAS et al

Filing 36

AMENDED OPINION/ORDER denying 25 Motion to Dismiss. Signed by Judge John Michael Vazquez on 10/30/17. (DD, )

Not for Publication
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

TRANSAMERICA LIFE INSURANCE
COMPANY,
Plaintiff

Civil Action No. 16-44 19
(JMV) (MAR)

v.
DENNIS MAAS and the HOYT
CORPORATION,

AMENDED
OPINION & ORDER

Defendants.

John Michael Vazguezg U.S.D.J.
This matter comes before the Court on the motion to dismiss (D.E. 24, 25) filed by
Defendant Dennis Maas (“Maas”) in this interpleader action. Maas is one of the claimants, and
the other is Hoyt Corporation (“Hoyt”). The Court reviewed Maas’ motion, Hoyt’s opposition,
and Maas’ reply (D.E. 24, 25, 27 & 28), and decided the motion without oral argument pursuant
to Fed. R. Civ. P. 78(b) and L. Civ. R. 78.1(b). For the reasons that follow, Maas’ motion is
DENIED.
Background
• Stakeholder Transamerica Life Insurance Company (“Transamerica”) instituted this
interpleader action by filing a Complaint on July 20, 2016. D.E. 1. Transamerica is a citizen of
Iowa for purposes of jurisdiction, while both Hoyt and Maas are citizens of New Jersey. See
Compi.

¶J 3-6.

Transamerica issued a life insurance policy for the life of William H. Nixon. Id. at ¶J 7,
9. Hoyt was the owner of the policy and is the designated as the sole beneficiary. Id. at ¶J 8, 15.
Nixon passed away in May 2015, and Maas asserted a right to the insurance proceeds. Id. at ¶J
10, 18-20. Specifically, Transamerica received a claim from Maas as well as an email fron
Maas’ attorney warning Transamerica that it may be subject to a claim for damages if it wrongly
distributed the insurance proceeds.’ Id. at ¶ 18-20.
Thereafier, Transamerica, Maas, and Hoyt consented to an order allowing Transarnerica
to deposit the funds from the policy, $2,068,4$5.06,2 with the Court. D.E. 10. Judge Clark
entered the consent order on October 6, 2016. Pursuant to the order, Transamerica surrendered
all interest in the monies but was also discharged from any potential liability over the proceeds.
Id. Significantly, the express terms of the order, which Hoyt consented to, provides that “[Hoyt

and Maas] shall implead their respective rights to payment of or from the sum of money
deposited with the Court pursuant to this Order{.]” Id. In lieu of doing so, Maas filed a motion
to dismiss.
Defendant Maas’ motion was filed on December 5, 2016. D.E. 24, 25. The
accompanying letter brief is six pages long and includes only one page of legal arguments: the
Court no longer has subject matter jurisdiction now that Transamerica has been dismissed from

Maas claims that the policy proceeds were “specifically designated” to buy out Mr. Nixon’s
remaining shares in Hoyt, where Maas is a shareholder and also served as Vice President of
Finance. See D.E. 24-2. Maas claims that without relief, Nixon’s heirs will instead use the
insurance proceeds to further seize control of Hoyt, where they serve as directors and officers.
Id.
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The face value of the policy was $2,500,000, but the policy was encumbered by policy loans
and also included apro rata premium refund, leaving the total amount of $2,068,485.06. Compl.
atJ7, 11-13.
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the case, and regardless, the Court should abstain from deciding this case under the Younger
abstention doctrine. Id. Defendant Hoyt submitted its opposition on December 20, 2016. D.E.
27. Maas replied on December 27, 2016. D.E. 28.
Analysis

Motions to dismiss for lack of subject matter jurisdiction pursuant to Fed. R. Civ. P.
12(b)(1) may be raised at any time. Iwanowa v. Ford Motor Co., 67 F. $upp. 2d 424, 437-38
(D.N.J. 1999). Because subject matter jurisdiction cannot be waived, courts have an independent
obligation to satisfy themselves ofjurisdiction if it is in doubt. See Mt. Healthy City Sch. Dist.
3d. ofEduc. v. Doyle, 429 U.S. 274, 278 (1977). Rule 12(b)(1) challenges maybe either facial
or factual attacks. See Mortensen v. First Fed. Say. & Loan Ass’n, 549 F.2d 884, 89 1-2 (3d Cir.

1977). A facial challenge asserts that the complaint does not allege sufficient grounds to
establish subject matter jurisdiction. Iwanowa, 67 F. Supp.2d at 438. A court considering such a
facial challenge assumes that the allegations in the complaint are true. Cardio—Med. Assoc., Ltd.
v. Crozer—Chester Med. Ctr., 721 F.2d 68, 75 (3d Cir. 1983); Iwanowa, 67 F. Supp. 2d at 43.

This is not a statutory interpleader action under 28 U.S.C. § 1332 which requires diversity
of citizenship between or among the two or more claimants. See 2$ U.S.C. § 1332 (a)(1).
Rather, this case was properly brought as a Rule 22 interpleader action. See Fed. R. Civ. P. 22
Rule 22 does not itself confer subject matter jurisdiction on the court. Instead, it is a procedural
mechanism and requires an independent basis for jurisdiction, such as diversity under 2$ U.S.C.

§ 1332(a). In addition to diversity, § 1332(a) requires that the amount in controversy must exceed
$75,000.

Maas argues that Transamerica is now “absent” from the case so that there “is no
diversity between the remaining parties and no federal questions has been presented.” D.E. 24-2

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at 6. As a result, Maas argues, the Court no longer has subject matter jurisdiction. Maas
provides no legal precedent to support his argument.
In Rule 22 interpleader actions, it is “well-settled that diversity between the stakeholder
and claimants is sufficient to confer federal jurisdiction if the amount in controversy requirement
is met.” Angst v. Royal Maccabees Life Ins. Co., 77 F.3d 701, 703 (3d Cir. 1996). In other
words, the stakeholder must be diverse from the claimants, but the claimants need not be diverse
from each other. Even after the stakeholder is dismissed from the action, diversity is not
destroyed. See Travelers Ins. Co. v. Johnson, 579 F.Supp. 1457, 1459 (D.N.J. 1984); Reassure
America Lfe Ins. Co. v. The Gennaro I Perrillo & Minnie Perillo Irrevocable Trust, 2011 WL

832185, at *2 (D.N.J. March 2, 2011). Here, diversity existed between stakeholder
Transamerica, on the one hand, and claimants Maas and Hoyt, on the other, when the Complaint
was filed and continues after Transamerica’s dismissal. The amount in controversy exceeds the
$75,000 requirement for diversity jurisdiction under 28 U.S.C. § 1332. Thus, the Court retains
subject matter jurisdiction over this action.
The Court also denies Maas’ Younger argument as his letter brief did not include any
analysis on this point aside from listing the factors. Additionally, Maas’ Younger argument runs
contrary to the October 2016 consent order, which Maas expressly agreed to, obligating Maas to
implead his rights to the policy funds.
For the foregoing reasons, and for good cause shown,
It is on this

30th

day of October, 2017,

ORDERED that Defendant Maas’ motion to dismiss is DENIED.

5(7

John Michael Vaj4ue U.S.D.J.
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