New York Life Insurance Company v. Hassan et al

Filing 27

DECISION AND ORDER holding plaintiff's pending motion in abeyance and directing plaintiff to provide supplemental information within 30 days of the date of this order. Signed by Hon. Richard J. Arcara on 4/22/2010. (JMB)

UNITED STATES DISTRICT COURT W E S T E R N DISTRICT OF NEW YORK

N E W YORK LIFE INSURANCE COMPANY, P la in tiff, D E C IS IO N AND ORDER 0 9 -C V -1 0 7 5 A v.

DANYAL HASSAN et al., D e fe n d a n ts .

IN T R O D U C T IO N O n April 16, 2010, plaintiff New York Life Insurance Company filed a m o tio n for dismissal from this case and for costs and attorney fees that it incurred w h e n commencing the case and depositing the insurance proceeds in question w ith the Clerk of the Court. In support of its motion, plaintiff asserts that it has s e rve d all of the named defendants and that the Court now has custody of the p ro c e e d s . For the reasons that follow, the Court will hold the motion in abeyance a n d will direct plaintiff to file supplemental information about the citizenship of the n a m e d defendants. B AC K G R O U N D T h is interpleader case concerns the proceeds of a life insurance policy that d e c e d e n t Aasiya Z. Hassan purchased several years before her death in F e b ru a ry 2009. In or around July 2006, decedent purchased a 20-year term life

insurance policy from plaintiff that had a death benefit of $450,000. According to th e information available in the docket, decedent's application for the policy listed five beneficiaries with percentage interests in the proceeds: her son, defendant D a n ya l Hassan (29%); her daughter, defendant Rania Hassan (29%); her sisters, d e fe n d a n ts Salma Zubair (22%) and Asma Firfrey (15%); and her brother, d e fe n d a n t Haaris Zubair (5%). In June 2008, plaintiff received a written change o f beneficiary form, ostensibly signed by decedent in the presence of a witness n a m e d Mujtaba Hassan. This change of beneficiary form would replace all p re vio u s beneficiaries with the following beneficiaries and corresponding p e rc e n ta g e interests: Muzzammil Hassan, decedent's husband (40%); Sonia H a s s a n , decedent's stepdaughter (20%); Michael Hassan, decedent's stepson (2 0 % ); and Ahmed Arif, decedent's nephew (20%). In the months after d e c e d e n t's death, however, a dispute arose between the original and the second s e t of beneficiaries concerning the validity of the change of beneficiary form. More specifically, plaintiff received information suggesting that the change of b e n e fic ia ry form was fraudulent and that decedent's signature was forged. U n a b le to resolve the dispute among the beneficiaries with the information th a t it had on file, and concerned about the possibility of double litigation, plaintiff c o m m e n c e d this case by filing an interpleader complaint on December 17, 2009. Plaintiff named both the original and the second set of beneficiaries as d e fe n d a n ts and asserted that this Court had jurisdiction over the case pursuant to 2

28 U.S.C. § 1335(a). On January 6, 2010, plaintiff deposited the proceeds of d e c e d e n t's life insurance policy with the Clerk of the Court. On January 27, 2010, p la in tiff filed a motion for permission to use alternative means of service of p ro c e s s for some of the named defendants. The Court granted that motion on F e b ru a ry 17, 2010. On March 10, 2010, defendants Danyal Hassan and Rania H a s s a n , by way of their guardian, filed an answer and claim. In support of the p e n d in g motion, plaintiff asserts that it has fulfilled all of the statutory criteria to s u s ta in an interpleader action and that it has fulfilled its obligations in this case. Plaintiff asserts further that it has incurred costs and fees related solely to this c a s e and not to any of its ordinary business, and that reimbursement of those c o s ts and fees is appropriate. D IS C U S S IO N U n d e r 28 U.S.C. § 1335(a), this Court has subject-matter jurisdiction over in te rp le a d e r cases of a minimum value if "(1) Two or more adverse claimants, of d iv e rs e citizenship as defined in subsection (a) or (d) of section 1332 of this title, a re claiming or may claim to be entitled . . . to any one or more of the benefits a ris in g by virtue of any . . . policy or other instrument, or arising by virtue of any s u c h obligation; and if (2) the plaintiff . . . has paid the amount of or the loan or o th e r value of such instrument . . . into the registry of the court, there to abide the ju d g m e n t of the court . . . ." Id. (emphasis added). This case involves life in s u ra n c e proceeds well above the minimum threshold value, proceeds that 3

plaintiff already has deposited with the Clerk of the Court. The more important q u e s tio n , therefore, is whether the named defendants are "diverse" for purposes o f Section 1335. Because the Court does not expect papers in opposition to p la in tiff's motion, and because diversity of citizenship affects subject-matter ju ris d ic tio n , this Court has reviewed the question of diversity of citizenship on its o w n initiative. See United Food & Commercial Workers Union, Local 919, A F L -C IO v. CenterMark Props. Meriden Square, Inc., 30 F.3d 298, 301 (2d Cir. 1 9 9 4 ) ("[I]n our federal system of limited jurisdiction any party or the court sua s p o n te , at any stage of the proceedings, may raise the question of whether the c o u rt has subject matter jurisdiction. W h e re jurisdiction is lacking, moreover, d is m is s a l is mandatory.") (internal quotation marks and citations omitted); see a ls o Herrick Co., Inc. v. SCS Commc'ns, Inc., 251 F.3d 315, 322 (2d Cir. 2001) ("W e cannot avoid addressing the threshold question of jurisdiction simply b e c a u s e our finding that federal jurisdiction does not exist threatens to prove b u rd e n s o m e and costly, or because it may undermine an expensive and s u b s ta n tia lly completed litigation.") (citation omitted). "The interpleader statute, 28 U.S.C. s. 1335, applies where there are `Two o r more adverse claimants, of diverse citizenship * * *.' This provision has been u n ifo rm ly construed to require only `minimal diversity,' that is, diversity of c itiz e n s h ip between two or more claimants, without regard to the circumstance th a t other rival claimants may be co-citizens." State Farm Fire & Cas. Co. v. 4

Tashire, 386 U.S. 523, 530 (1967) (citations omitted). Nonetheless, the minimal d ive rs ity in any interpleader case has to meet the definition of diversity under 28 U .S .C . § 1332. Section 1332 defines four acceptable types of diversity of c itiz e n s h ip : "(1) citizens of different States; (2) citizens of a State and citizens or s u b je c ts of a foreign state; (3) citizens of different States and in which citizens or s u b je c ts of a foreign state are additional parties; and (4) a foreign state, defined in section 1603(a) of this title, as plaintiff and citizens of a State or of different S ta te s ." Id. § 1332(a). All four of these definitions require that at least one litig a n t in question have citizenship in a domestic state, i.e., a state of the United S ta te s . Plaintiff's assertion that two of the defendants are citizens of Pakistan w h ile one is a citizen of South Africa (Dkt. No. 24 ¶ 16) will not satisfy the re q u ire m e n ts of Section 1332, because these defendants appear to be domiciled o u ts id e the United States. See Palazzo ex rel. Delmage v. Corio, 232 F.3d 38, 42 (2 d Cir. 2000) ("An individual's citizenship, within the meaning of the diversity s ta tu te , is determined by his domicile. Domicile is the place where a person has h is true fixed home and principal establishment, and to which, whenever he is a b s e n t, he has the intention of returning.") (internal quotation marks and citations o m itte d ). That defendants Danyal Hassan and Rania Hassan may be United S ta te s citizens (see Dkt. No. 1 ¶¶ 6­7) in itself does not help plaintiff because "U n ite d States citizens domiciled abroad are neither citizens of any state of the U n ite d States nor citizens or subjects of a foreign state, so that § 1332(a) does 5

not provide that the courts have jurisdiction over a suit to which such persons are p a rtie s ." Herrick, 251 F.3d at 322 (internal quotation marks and citations o m itte d ). Nor can the Court rely on the assertion in plaintiff's complaint (Dkt. No. 1 ¶¶ 12­14) that three named defendants--Muzzamil Hassan, Sonia Hassan, a n d Michael Hassan--have unknown citizenship but reside in Erie County. See L e v e ra g e d Leasing Admin. Corp. v. PacifiCorp Capital, Inc., 87 F.3d 44, 47 (2d C ir. 1996) ("It is also clear that a statement of the parties' residence is insufficient to establish their citizenship.") (citations omitted). A s a result of its inquiry into diversity of citizenship, the Court concludes th a t it cannot rule on plaintiff's motion at this time, and that it may lack subject m a tte r jurisdiction over this case. In fairness to plaintiff, however, the Court notes th a t information not currently filed in the docket may yet confirm the Court's ju ris d ic tio n . For example, plaintiff might be able to confirm that defendants M u z z a m il Hassan, Sonia Hassan, and Michael Hassan are considered domiciled in New York for purposes of Section 1332, or that they have a residency status th a t would satisfy the last sentence of Section 1332. See 28 U.S.C. § 1332(a) ("F o r the purposes of this section, section 1335, and section 1441, an alien a d m itte d to the United States for permanent residence shall be deemed a citizen o f the State in which such alien is domiciled."). If no defendant can be c o n s id e re d domiciled in New York then plaintiff might be able to argue that this C o u rt has jurisdiction pursuant to Rule 22 of the Federal Rules of Civil Procedure. 6

See, e.g., 7 Charles Alan W rig h t et al., Federal Practice and Procedure § 1703 (3 d ed. and 2010 update) (comparing rule and statutory interpleader). Alternatively, plaintiff might be able to establish that the citizenship or domicile s ta tu s of the two guardians or administrators involved in this case, Acea M. M o s le y or Thomas F. Hewner, can satisfy the requirements of Section 1332. In a n y event, and without commenting on the merits of any possible arguments, the C o u rt will give plaintiff an opportunity either to provide additional factual in fo rm a tio n that will address the Court's jurisdictional concerns, or to argue that th e information already provided somehow suffices to confer subject matter ju ris d ic tio n . Plaintiff shall have 30 days to file this information. The Court will h o ld plaintiff's motion in abeyance during this time. C O N C L U S IO N F o r all of the foregoing reasons, the Court will hold plaintiff's pending m o tio n (Dkt. No. 23) in abeyance and directs plaintiff to provide supplemental in fo rm a tio n as noted above. Plaintiff shall file this supplemental information w ith in 30 days of entry of this Order, at which time the Court will deem plaintiff's m o tio n submitted unless it directs otherwise. SO ORDERED.

s/ Richard J. Arcara
HONORABLE RICHARD J. ARCARA UNITED STATES DISTRICT JUDGE DATED: April 22, 2010 7