Allstate Indemnity Company v. Collura et al

Filing 94

MEMORANDUM & ORDER granting in part and denying in part 91 Motion for Reconsideration; For the foregoing reasons, Allstate's motion for reconsideration (Docket Entry 91) is GRANTED IN PART and DENIED IN PART. Allstate is directed to deposit $69,596.04 with the Court within ten (10) days of the date of this Memorandum and Order. The Colluras are directed to file a stipulation of discontinuance dismissing their counterclaim against Allstate within fifteen (15) days of the date of th is Memorandum and Order. After the deposit of the Settlement Amount and submission of the stipulation of discontinuance, Allstate will be dismissed from this action. However, as discussed above, if Allstate seeks to withhold the recoverable depreciation of $4,013.86 until proof of repairs is submitted, it will remain a party to the case until that issue is resolved. So Ordered by Judge Joanna Seybert on 2/5/2018. C/ECF (Valle, Christine)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
-------------------------------------X
ALLSTATE INDEMNITY COMPANY,
Plaintiff,

MEMORANDUM & ORDER
15-CV-5047(JS)(AKT)

-against–
PAUL COLLURA, CHRISTINE COLLURA,
BANK OF NEW YORK MELLON f/k/a BANK
OF NEW YORK AS TRUSTEE FOR CERTIFICATE
HOLDER CWALT, INC., UNITED STATES OF
AMERICA, CAPITAL ONE HOME LOANS, LLC,
and COUNTRYWIDE HOME LOANS, INC.,
Defendants.
-------------------------------------X
APPEARANCES
For Plaintiff:
Karen Maria Berberich, Esq.
Rosa M. Feeney, Esq.
Caroline Knoepffler Hock, Esq.
Lewis Johs Avallone Aviles, LLP
One CA Plaza, Suite 225
Islandia, NY 11749
For Defendants:
Paul and Christine
Collura

Lloyd M. Eisenberg, Esq.
Eisenberg & Carton
535 Broadhollow Road, Suite M105
Melville, NY 11747
Donna Rosanne Ruggiero, Esq.
Eisenberg & Carton
1227 Main Street, Suite 101
Port Jefferson, NY 11777

Bank of New
York Mellon

Sarah Joanne Greenberg, Esq.
Eckert Seaman
10 Bank Street, Suite 700
White Plains, NY 10606

1

United States of
America

Capital One Home
Loans, LLC and
Countrywide Home
Loans, Inc.

Wallace D. Dennis, Esq.
Department of Justice, Tax Division
Ben Franklin Station, PO Box 55
Washington, D.C. 20044

No appearances

SEYBERT, District Judge:
Plaintiff Allstate Indemnity Company (“Plaintiff” or
“Allstate”) commenced this interpleader action against Paul and
Christine

Collura

(the

“Colluras”),

Bank

of

New

York

Mellon

(“BNY”), the United States of America (the “United States” or the
“Government”), Capital One Home Loans, LLC (“Capital One”), Bank
of America (“Bank of America”), and Countrywide Home Loans, Inc.
(“Countrywide” and collectively, “Claimants”) on August 28, 2015.
(Compl., Docket Entry 1.)

The Court entered a default judgment

against Capital One and Countrywide, and Bank of America was
dismissed from the case.

(Apr. 2016 Stip. & Order, Docket Entry

54; Default J., Docket Entry 89.)

As a result, the remaining

Claimants are the Colluras, BNY, and the United States.

Currently

before the Court is Allstate’s motion for reconsideration of this
Court’s March 22, 2017 Order directing Allstate to deposit $363,000
with the Court to proceed with this action pursuant to 28 U.S.C.
§ 1335. (Docket Entry 91).

For the following reasons, Allstate’s

motion is GRANTED IN PART and DENIED IN PART.

2

BACKGROUND
The Court assumes familiarity with Judge Tomlinson’s
Report and Recommendation issued on February 7, 2017 (the “R&R,”
Docket Entry 83), and this Court’s March 22, 2017 Order (“March
2017 Order”) addressing BNY’s objections to the R&R.

See Allstate

Indemnity Co. v. Collura, No. 15-5047, 2017 WL 1076328 (E.D.N.Y.
Mar. 22, 2017).
I.

Relevant Facts
Allstate

issued

a

homeowners

insurance

policy

(the

“Policy”) on a property owned by the Colluras (the “Property”) in
Southhampton, New York.

(Compl. ¶ 12.)

On March 16, 2015, the

Property sustained damage, and the Colluras filed a claim. (Compl.
¶¶ 2-3, 15.)

Allstate inspected the damage and estimated the

replacement cost value to be $75,460.04.
at 65-90,

at 85.)

(Estimate, Compl. Ex. B

Allstate further estimated that the actual

cash value of the net claim was $65,582.18, after reductions for
depreciation

of

$4,013.86

(Estimate at 85.)

and

prior

payments

of

$5,864.00.

On August 11, 2015, Allstate provided the

estimate to the Colluras and advised that it would settle the claim
for $65,582.18.

(Settlement Ltr., Compl. Ex. C, at 91-93, at 92.)

Pursuant to the terms of the Policy, if the insured does not repair
the damage, payment will be made on an actual cash value basis and
depreciation is not recoverable.
64, at 40, ¶ 5(b).)

(Policy, Compl. Ex. A, at 22-

Conversely, the Policy provides that if the
3

insured repairs the damage within 180 days of receiving the actual
cash value payment, Allstate will “make additional payment to
reimburse [the insured] for cost in excess of actual cash value”
and depreciation is recoverable.1

(Policy at 40, ¶ 5(c).)

After forwarding the estimate to the Colluras, Allstate
discovered that there were multiple lienholders with potential
claims to the settlement proceeds, including: (1) Capital One,
which issued a mortgage and was on the deed for the Property; (2)
BNY, to which the mortgage was assigned by Capital One; (3) Bank
of America, the mortgage servicer; (4) the United States, which
had two federal tax liens on the Property of $75,690.80 and
$80,537.52; and (5) a third party who filed a Notice of Pendency
against the Colluras.

(Compl. ¶ 18.)

Allstate alleges that it

cannot determine which lienholders, if any, are entitled to the
proceeds and commenced this action to resolve the competing claims.
II.

Procedural History
As stated, Allstate filed the Complaint on August 28,

2015.

The Government answered the Complaint on November 15, 2015

and acknowledged the tax liens.

(U.S. Answer, Docket Entry 21.)

Although not material to the pending motion, the Settlement
Letter states that “[y]ou may make a claim for additional
payment as described in the Building Structure Reimbursement
provision and, when applicable, the Personal Property
Reimbursement provision if you repair or replace the damaged,
destroyed or stolen covered property ‘within two years after the
date of the loss.’” (Settlement Ltr., at 92.)
1

4

Bank of America answered the Complaint on November 30, 2015 and
disclaimed any right to the settlement proceeds.
Answer, Docket Entry 25.)

(Bank of America

BNY filed its answer on November 30,

2015 and asserted crossclaims against each of the Claimants.
Answer, Docket Entry 24.)
Complaint

and

asserted

(BNY

The same day, the Colluras answered the
a

counterclaim

against

Allstate

and

crossclaims against each of the Claimants. (Collura Answer, Docket
Entry 26.)
the case.

On April 6, 2016, Bank of America was dismissed from
(See Apr. 2016 Stip. & Order.)

On April 15, 2016, Allstate filed a motion requesting
permission to deposit the settlement proceeds with the Court and
to be released from this litigation.

(Mot. to Deposit, Docket

Entry 56; Pl.’s Deposit Br., Docket Entry 58.)

Specifically,

Allstate requested permission to deposit the cash value of the net
claim, $65,582.18, immediately, and to deposit depreciation of
$4,013.86 at a later date should proof of repairs be submitted
(the

“Settlement

Amount”).

(Pl.’s

Deposit

Br.

at

2.)

On

October 24, 2016, the undersigned referred the motion to Judge
Tomlinson for an R&R regarding whether the motion should be
granted.

(Referral Order, Docket Entry 82.)

A. The R&R
On February 7, 2017, Judge Tomlinson recommended that
the Court grant the motion to deposit and allow Allstate to deposit
$69,596.04 with the Court and be dismissed from the case.
5

(R&R,

Docket Entry 83, at 34.)
jurisdictional

Judge Tomlinson determined that the

requirements

were

satisfied

for

statutory

interpleader under 28 U.S.C. § 1335 (“Statutory Interpleader”),
but that Allstate could only proceed in that manner if it deposited
(R&R at 17-28.)

the policy maximum of $363,000.2

Alternatively,

Judge Tomlinson found that Allstate could proceed under Federal
Rule of Civil Procedure 22 (“Rule Interpleader”) because Allstate
demonstrated an independent basis for subject matter jurisdiction-diversity jurisdiction under 28 U.S.C. § 1332.

(R&R at 28-31.)

In light of this determination, and having found that Allstate was
a neutral stakeholder with no interest in the proceeds, Judge
Tomlinson recommended that the Court discharge Allstate from this
action after it deposited $69,596.04 with the Court.
Without

deciding

the

issue,

Judge

(R&R at 36.)

Tomlinson

also

addressed whether, in addition to diversity jurisdiction, there
was a basis for federal question jurisdiction.

(R&R at 31, n.11.)

Acknowledging that there was some authority to support federal
question jurisdiction in these circumstances, Judge Tomlinson
determined that “the United States has not brought a ‘coercive
action’ against the Colluras at this juncture which could provide

As Judge Tomlinson explained, “BNY has disputed the sufficiency
of th[e] [settlement] amount and instead invokes the Policy to
assert that Plaintiff should deposit the maximum amount of
dwelling coverage provided for.” (R&R at 27.)
2

6

the Court with the requisite federal question jurisdiction based
[ ] on the outstanding tax liens.”
BNY

objected

to

(R&R at 31, n.11.)

Judge

Tomlinson’s

Report

and

Recommendation, and the Government filed a response to those
objections.

(See BNY Obj., Docket Entry 86; U.S. Reply, Docket

Entry 87.)

Significantly, the Government argued that diversity

jurisdiction was not a basis for subject matter jurisdiction
because the presence of the United States as a party destroyed
complete diversity.

(U.S. Reply at 4.)

B. The Court’s March 2017 Order
On March 22, 2017, this Court issued its order addressing
BNY’s objections and the Government’s jurisdictional argument.
See generally Allstate Indemnity Co., 2017 WL 1076328.

The Court

concluded that because the United States was a defendant, complete
diversity was lacking.

Id. at *4.

Additionally, citing to Judge

Tomlinson’s R&R, the Court noted that “there [was] no basis for
federal question jurisdiction at this juncture.”

Id. at *5, n.8.

In light of its determination that there was neither diversity nor
federal question jurisdiction, the Court concluded that “Rule 22
[was] not a proper basis for interpleader jurisdiction,” and
directed Allstate to proceed via Statutory Interpleader.
*5.

Id. at

Thus, Allstate was directed to deposit the policy maximum,

$363,000, before it could be discharged.

7

Id.

The Court indicated

that it would revisit the issue of whether Allstate should be
discharged upon deposit of the funds.

Id.

C. The Motion for Reconsideration
On

April

reconsideration,

3,

2017,

arguing

Allstate

that

the

Court

filed

a

motion

overlooked

for

authority

“regarding federal question jurisdiction when Federal Tax Liens
are

at

issue.”

Specifically,

(Pl.’s

Allstate

Br.,

contends

Docket
that

Entry

because

91-2,
“there

at

2.)

would

be

federal [question] jurisdiction if the Defendant had filed a
coercive action,” there is federal question jurisdiction over this
interpleader action.

(Pl.’s Br. at 6.)

Thus, Allstate maintains

that Rule Interpleader is appropriate here and requests that it be
permitted to deposit $69,596.04 and be discharged from this action.
(Pl.’s Br. at 2.)

Additionally, Allstate renews its request that

the Court dismiss the Colluras’ counterclaim.

(Pl.’s Br. at 7-

9.)
BNY opposed the motion for reconsideration on April 17,
2017.

(BNY Opp., Docket Entry 92.)

BNY argues that Allstate’s

motion is “a clear attempt to plug the gaps in its earlier motion.”
(BNY Opp. at 1 (internal quotation marks omitted).)

It argues

that the authority cited by Allstate does not support federal
question jurisdiction because the Government has not brought any
coercive action against Allstate.

(BNY Opp. at 3-4.)

Further,

it contends that even if the Court were to find jurisdiction on
8

this basis, Allstate should not be discharged until it deposits
the policy maximum of $363,000 with the Court.

(BNY Opp. at 1.)

In response, Allstate points out that it did raise
federal question jurisdiction in its initial motion to deposit
funds.

(Pl.’s Reply Br., Docket Entry 93, at 1;3 see also Pl.’s

Deposit Br., at 4-5.)

Moreover, Allstate emphasizes that the

appropriate inquiry is whether federal question jurisdiction would
exist in a coercive action, regardless of whether one has been
commenced.

(Pl.’ Reply Br. at 2.)
DISCUSSION

I.

Legal Standards
Motions for reconsideration may be brought pursuant to

Rules 59(e) and 60(b) of the Federal Rules of Civil Procedure and
Local Rule 6.3.

See Wilson v. Pessah, No. 05-CV-3143, 2007 WL

812999,

(E.D.N.Y.

at

*2

Mar.

14,

2007).

A

motion

for

reconsideration is appropriate when the moving party believes the
Court overlooked important matters or controlling decisions that
would have influenced the prior decision.
Factors

Corp.,

187

F.R.D.

148,

151

Shamis v. Ambassador
(S.D.N.Y.

1999).

Reconsideration is not a proper tool to repackage and reiterate
arguments and issues already considered by the Court in deciding
the original motion.

United States v. Gross, No. 98-CR-0159, 2002

The page numbers for Plaintiff’s Reply Brief are those
generated by the Electronic Case Filing System.
3

9

WL

32096592,

at

*4

(E.D.N.Y.

Dec.

5,

2002).

Additionally,

reconsideration does not provide an opportunity to raise new
arguments and issues.

Lehmuller v. Inc. Vill. of Sag Harbor, 982

F. Supp. 132, 135 (E.D.N.Y. 1997).

Reconsideration may only be

granted when the Court did not evaluate decisions or data that
might reasonably be expected to alter the conclusion reached by
the Court.

Wechsler v. Hunt Health Sys., 186 F. Supp. 2d 402, 410

(S.D.N.Y. 2002).
Interpleader

actions

are

“designed

to

protect

stakeholders from undue harassment in the face of multiple claims
against

the

same

fund,

and

to

relieve

the

assessing which claim among many has merit.”

stakeholder

from

Fidelity Brokerage

Servs., LLC v. Bank of China, 192 F. Supp. 2d 173, 177 (S.D.N.Y.
Mar. 18, 2002).

Interpleader actions may proceed under Federal

Rule of Civil Procedure 22 or 28 U.S.C. § 1335.

Under Rule 22,

the plaintiff must demonstrate either diversity jurisdiction or
federal question jurisdiction.

CF 135 Flat LLC v. Triadou SPV

S.A., No. 15-CV-5345, 2016 WL 1109092, at *2, n.1 (S.D.N.Y.
Mar. 18, 2016).

Additionally, the interpleader plaintiff must

also show that the “claims in question may expose [that] party .
. . to double or multiple liability.”

Id. at *2 (quoting FED. R.

CIV. P. 22(a)(1)) (internal quotation marks omitted).

Generally,

“[a] neutral stakeholder having no claim to the subject matter of
the

action”

may

be

discharged
10

after

the

disputed

funds

are

deposited with the Court.

Aon Corp. v. Hohlweck, 223 F. Supp. 2d

510, 514 (S.D.N.Y. Sept. 3, 2002).
II.

Federal Question Jurisdiction
Because there is no diversity jurisdiction, in order to

maintain this action under Rule 22, Allstate must demonstrate that
there is federal question jurisdiction over this action pursuant
to 28 U.S.C. § 1331.

That section provides that “[t]he district

courts shall have original jurisdiction of all civil actions
arising under the Constitution, laws, or treaties of the United
States.”

28 U.S.C. § 1331.

Because “[b]oth interpleader and

declaratory judgment actions ‘enable a defendant to precipitate a
plaintiff’s suit in order to avoid multiple liability or other
inconvenience,’”

courts

have

likened

actions seeking declaratory judgments.

interpleader

actions

to

Com. Union Ins. Co. v.

United States, 999 F.2d 581, 585 (D.C. Cir. 1993) (quoting Bell &
Beckwith v. United States, 766 F.2d 910, 914 (6th Cir. 1985)).

In

these cases, “although the plaintiff’s claim does not raise a
federal question, [the court] may stake . . . jurisdiction on ‘a
defense to a claim that would raise a federal question and that
defendant could have asserted in a coercive action.’”

Id. at 585

(quoting Bell & Beckwith, 766 F.2d at 912).
Although the Second Circuit has not addressed the issue,
the majority of courts to address whether there is federal question
jurisdiction when the Government makes a claim to funds in an
11

interpleader
courts

in

action
this

based

on

unpaid

Circuit--have

taxes--including

held

that

federal

several
question

jurisdiction exists. See, e.g., Woods Oviatt Gilman, LLP v. United
States, No. 12-CV-6286T, 2013 WL 1636042, at *4 (W.D.N.Y. Apr. 16,
2013) (holding that the fact that “the IRS, acting pursuant to
federal law, has made a claim to the funds held by the plaintiff”
was

sufficient

to

confer

federal

question

jurisdiction

in

interpleader action); Advantage Title Agency, Inc. v. Rosen, 297
F. Supp. 2d 536, 539 (E.D.N.Y. 2003) (finding that the court had
subject matter jurisdiction in interpleader action when federal
government was seeking to enforce federal tax liens); Allstate
Settlement Corp. v. United States, No. 07-CV-5123, 2008 WL 2221897,
at *4 (E.D. Pa. May 28, 2008) (holding that the court had subject
matter jurisdiction over Rule 22 interpleader action in part
because “this case involves a tax lien by the United States
Internal Revenue Service”); Shelter Mutual Ins. v. Gregory, 555 F.
Supp. 2d 922, 928 (M.D. Tenn. 2008) (holding that “given the United
States’ effort to enforce a federal tax lien,” the court had
federal question jurisdiction because the interpleader action
“directly affect[ed] the nature or operation of a lien”); CPS
Electric, Ltd. v. United States, 166 F. Supp. 2d 727, 730-31
(N.D.N.Y.

2001)

(holding

that

there

was

federal

question

jurisdiction when the Government was a claimant and resolving the

12

competing claims to the fund was “dependent upon . . . whether the
[federal] tax lien is valid”).
For example, in Rosen, the plaintiff was involved in the
closing of a sale of property when a title search revealed that
the property was subject to four federal tax liens.
Supp. 2d at 537-38.

Rosen, 297 F.

After the sale proceeds were deposited into

an escrow account, several parties (including the government)
asserted

claims

to

the

funds,

and

interpleader action in state court.

the

plaintiff

Id. at 538.

filed

an

Subsequently,

the government removed the action to federal court.

Id.

The

district court found that there was federal question jurisdiction
because the action was effectively an action to enforce the federal
tax liens.

Id. at 539.
Here, as in Rosen, before Allstate remitted payment

pursuant to the Colluras’ insurance policy, it discovered that
there were two federal tax liens on the Property and commenced an
interpleader action.

Based on those liens, the Government claims

that it is entitled to the Settlement Amount.4

Because there would

The Court recognizes that the Government has not asserted a
counterclaim or crossclaim in its Answer. However, the
Government does assert that based on federal law, its claim to
the funds is superior, which this Court finds is sufficient to
confer jurisdiction. (See U.S. Reply to Mot. to Deposit, Docket
Entry 74, ¶ 1 (“The United States is a creditor of defendants
Paul and Christina Collura . . . and claims that it has a valid
lien that is superior to BNY Mellon’s lien regarding the
insurance funds at issue. . . . [A]s a matter of law, the United
States--not BNY Mellon--would have priority over the insurance
4

13

be federal question jurisdiction in an independent action brought
by the Government to enforce the liens, there is federal question
jurisdiction when the Government is seeking to enforce the liens
through interpleader.

See Blackmon Auctions, Inc. v. Van Buren

Truck Ctr., Inc., 901 F. Supp. 287, 290 (W.D. Ark. 1995) (“[I]t
could not be clearer that the IRS action to enforce the tax lien
arises under federal law, since federal law created the cause of
action . . . [and] Congress has specifically provided for federal
jurisdiction in any case involving federal tax law.”); see also 26
U.S.C. § 7403(a) (“In any case where there has been a refusal or
neglect to pay any tax, or to discharge any liability in respect
thereof, whether or not a levy has been made, the Attorney General
or his delegate, at the request of the Secretary, may direct a
civil action to filed in a district court of the United States to
enforce the lien of the United States.”); 26 U.S.C. § 7402(a) (“The
district courts of the United States at the instance of the United
States shall have such jurisdiction to make and issue civil
actions, writs and order of injunction, and of ne exeat republica,

funds. See 26 U.S.C. § 6321. . . .”).) See also Stockton
Christian Life Ctr., Inc., v. U.S.Internal Revenue Serv., 172 F.
Supp. 2d 1292, 1297 (E.D. Cal. 2001) (acknowledging that “if the
IRS were actively litigating its tax lien . . . or pursuing its
claim to the interpled funds, . . . federal question
jurisdiction would lie” but finding no jurisdiction based on
Government disclaiming its right to the funds) (emphasis
supplied).
14

orders appointing receivers, and such other orders and processes,
and to render such judgments and decrees as may be necessary or
appropriate for the enforcement of the internal revenue laws.”).
Moreover, when there are competing claims to a fund which will
require the Court to look to federal law to determine priority,
there is federal question jurisdiction since “‘matters directly
affecting the nature or operation of such [tax] liens are federal
questions, regardless of whether the federal statutory scheme
deals with them or not.’”

Blackmon Auctions, Inc., 901 F. Supp.

at 290 (quoting St. Louis Union Trust Co. v. Stone, 570 F.2d 833,
835 (8th Cir. 1978)) (alteration in original); see also Allstate
Settlement Corp., 2008 WL 2221897, at *4.
While the Sixth and Seventh Circuits have dismissed
interpleader actions involving federal tax liens for lack of
jurisdiction,

these

cases

are

distinguishable.

See

Bell

&

Beckwith, 766 F.2d at 916-17; Com. Nat’l Bank of Chicago v. Demos,
18 F.3d 485 (7th Cir. 1994).

In Bell & Beckwith, for example, the

government and another individual were each claiming that they
were entitled to the proceeds of an investment account.
Beckwith, 766 F.2d at 911.

Bell &

The critical issue was who owned the

account, which the Sixth Circuit found would be determined by state
law.

Id. at 916.

As a result, it concluded that “[b]ecause

determination of a state-law issue could have obviated the need
for resolution of any federal issue,” there was no federal question
15

jurisdiction.

Id.

Additionally, the Sixth Circuit distinguished

Bell & Beckwith, which involved a “threshold question of [the]
validity”

of

the

lien,

from

cases

involving

the

“nature

or

operation” of a lien, implying that if the “nature or operation”
of a lien were at issue, the result may be different.

Id. at 916.

In Demos, the Seventh Circuit held that there was no
federal question jurisdiction for the same reason--“because the
only question [was] one of ownership of the accounts, an issue
governed solely by state law.”

Demos, 18 F.3d at 490.

Further,

the Seventh Circuit acknowledged that while priority was not an
issue

due

to

a

settlement,

“a

question

of

priority

of

[the

attorney’s] lien as against the government’s lien might otherwise
raise a federal question because the priorities of tax liens are
governed by the federal statutory scheme.”

Demos, 18 F.3d at 489

n.6.
Here,
determining

the

resolving

the

priority

competing

of

the

claims

claims,

will

require

including

the

Government’s, and the Government has specifically asserted that it
is entitled to the Settlement Amount pursuant to federal law. (See
supra at 13 n.3.)

As a result, the Court is not persuaded by the

reasoning in Bell & Beckwith and Demos.
1636042,

at

*4

(“While

it

is

true

that

See Woods, 2013 WL
resolution

of

the

conflicting claims made against any funds may turn on issues of
state law, ‘since a federal tax lien is wholly a creature of
16

federal law, the consequences of a lien that attaches to property
interests, e.g., priority determinations, are matters of federal
law.’”) (quoting Atl. States Constr. Inc., v. Hand, Arendall,
Bedsole, Greaves and Johnston, 892 F.2d 1530, 1534 (11th Cir.
1990)).

Moreover, putting aside the factual distinctions, the

reasoning underlying both decisions has been questioned by several
courts.

See, e.g., Blackmon Auctions, Inc., 901 F. Supp. at 290-

93 (“It appears to the court that the reasons for dismissal given
by the Sixth and Seventh Circuits are deficient.”); CPS Electric,
166 F. Supp. 2d at 731 & n.3 (finding that contrary reasoning in
several district court cases “raises serious concerns about the
basis for the Sixth Circuit’s decision in Bell & Beckwith”).
Therefore,

the

Court

holds

that

there

is

federal

question jurisdiction over this action and that it can be properly
maintained

under

Rule

22.

$69,596.04 with the Court.

Allstate

is

directed

to

deposit

Because Allstate has no interest in

the allocation of the Settlement Amount, it is entitled to be
discharged from this action pending the deposit.5
223 F. Supp. 2d at 514.

See Aon Corp.,

However, if Allstate seeks to withhold

the recoverable depreciation of $4,013.86 until proof of repairs

BNY claims--without any support--that Allstate is not entitled
to discharge because it is not a neutral stakeholder. (BNY Opp.
at 5-6.) The Court is not persuaded. As discussed, it is
undisputed that Allstate does not have any interest in the
Settlement Amount. Therefore, discharge is appropriate.
5

17

is submitted, it will remain a party to the case until that issue
is resolved.

(See R&R at 36, n.14.)

III. The Colluras’ Counterclaim
For

the

second

time,

Allstate

requests

Colluras’ counterclaim against it be dismissed.

that

the

(Pl.’s Br. at 7.)

Previously, the Colluras advised the Court that they did not oppose
this request.

(Eisenberg Decl., Docket Entry 70, at ¶ 2.)

On

that basis, and in light of uncertainty regarding whether Allstate
would continue to seek a discharge from this action, the Court
advised the Colluras to dismiss the counterclaim under Federal
Rule of Civil Procedure 41(a)(2).
1076328, at *5 n.10.
they

did

not

file

reconsideration.

Allstate Indemnity Co., 2017 WL

The Colluras have not done so.
any

opposition

to

Allstate’s

However,

motion

for

Accordingly, the Colluras are directed to file

a stipulation of discontinuance dismissing their counterclaim
against Allstate within fifteen (15) days of the date of this
Memorandum and Order.
CONCLUSION
For

the

foregoing

reasons,

Allstate’s

motion

for

reconsideration (Docket Entry 91) is GRANTED IN PART and DENIED IN
PART.

Allstate is directed to deposit $69,596.04 with the Court

within ten (10) days of the date of this Memorandum and Order.
The Colluras are directed to file a stipulation of discontinuance
dismissing their counterclaim against Allstate within fifteen (15)
18

days of the date of this Memorandum and Order.

After the deposit

of the Settlement Amount and submission of the stipulation of
discontinuance,

Allstate

will

be

dismissed

from

this

action.

However, as discussed above, if Allstate seeks to withhold the
recoverable depreciation of $4,013.86 until proof of repairs is
submitted, it will remain a party to the case until that issue is
resolved.

SO ORDERED.
/s/ JOANNA SEYBERT______
Joanna Seybert, U.S.D.J.
Dated:

February
5 , 2018
Central Islip, New York

19