State Farm Life and Assurance Company v. Epps et al

Filing 51

DECISION and ORDER denying 47 Motion to Stay. Defendant Epps's response to Motion for Default Judgment due 6/16/2014; Replies due 7/1/2014. Signed by Hon. Leslie G. Foschio on 5/19/2014. (SDW)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
________________________________________
STATE FARM LIFE AND ASSURANCE COMPANY,

DECSION
and
ORDER

Plaintiff,
v.

12-CV-380S(F)

RONALD T. EPPS,
DONTE R. SMITH,
DOUGLAS JOHNSON, As Parent and Guardian of
Travante D. Johnson,
TRAVANTE D. JOHNSON,
MARY MOSS, As Guardian of Armontae Moss,
ARMONTAE MOSS,
MARY MOSS, Individually and as Custodian under
NY Uniform Transfers Minors Act for Donte R. Smith,
Travante D. Johnson and Armontae Moss,
Defendants.
________________________________________
APPEARANCES:

GOLDBERG SEGALLA LLP
Attorneys for Plaintiff
CARRIE P. APPLER, of Counsel
665 Main Street, Suite 400
Buffalo, New York 14203
MURPHY MEYERS LLP
Attorney for Defendant Epps
CHERYL MEYERS BUTH, of Counsel
6506 East Quaker Street, 2nd Floor
Orchard Park, New York 14127
MAGAVERN, MAGAVERN & GRIMM
Attorneys for Defendants Smith, Travante
Johnson, Mary Moss, Armontae Moss,
CHERYL SMITH FISHER, of Counsel
1100 Rand Building
14 Lafayette Square
Buffalo, New York 14203

1

In this interpleader action brought pursuant to Fed.R.Civ.P. 22 (“Rule 22”), to
determine entitlement to the proceeds of a life insurance policy on the life of Angela
Moss (“Moss”) the insured, Defendant Ronald T. Epps (“Epps”) moves for a stay of
proceedings by papers filed November 14, 2013 (Doc. No. 47) (“Defendant Epps’
motion”). The interpleader was brought by Plaintiff, State Farm Life (“State Farm”), the
insurance company, to establish whether Epps, as the primary beneficiary on the Moss
life insurance policy, or Defendants Travante Johnson, Armontae Moss and Donte
Smith, Moss’s children, as contingent beneficiaries (“Moss Defendants”), should receive
the proceeds of the insurance policy, now valued at approximately $106,000. Epps did
not file a timely answer to the interpleader action, and, on July 22, 2013 (Doc. No. 40),
Plaintiff’s motion for interpleader relief was granted, the proceeds ordered to be paid
into court, and Defendants ordered to litigate their competing claims to the proceeds.
Specifically, Epps requests the proceedings be stayed because he is facing
federal criminal charges predicated on his allegedly having murdered Moss (“the
pending charges”). At present, Epps has not been charged with the homicide. As
contingent beneficiaries, the Moss Defendants will be entitled to the proceeds based on
New York law disqualifying the killer, alleged to be Epps, of an insured like Moss, the
victim of an as yet unresolved homicide. In accordance with Rule 22 and the court’s
direction, the Moss Defendants have moved for a default judgment against Epps based
on his failure to oppose timely the interpleader complaint and for payment of the
insurance benefits to them (Doc. No. 43-1). On November 14, 2013, Epps filed an
answer (Doc. No. 46) along with a motion for a stay asserting, inter alia, that he had no
objection to State Farm’s request that the proceeds be paid into court, but that as the

2

primary beneficiary under the policy, the proceeds should be ordered to be paid to him
(Doc. No. 46). Epps’s request for a stay is based on the pending criminal charges and
Epps’s likely need to invoke his Fifth Amendment privilege in order to oppose the Moss
Defendants’ motion. Affidavit of Cheryl Meyers Buth, Doc. No. 47 (“Meyers Buth
Affidavit”) ¶ 19. Epps also asserts that the Moss Defendants have not properly pleaded
an entitlement to the proceeds. Id. ¶ 9.
Whether to stay civil proceedings where parallel criminal proceedings against a
party are pending requires consideration of several factors including the extent of
overlapping issues in the two cases, the status, i.e., imminence of prosecution, of the
parallel criminal case, plaintiff’s interest in an expedited disposition when weighed
against any prejudice to plaintiff’s interest from delay resulting from the requested stay,
the private interests of and burden on a defendant, the court’s interest in controlling its
docket and prompt disposition of pending cases, and the public interest in the subject
matter and a fair disposition. Louis Vuitton Malletier S.A. v. LY USA, Inc., 676 F.3d 83,
99 (2d Cir. 2012) (“Vuitton”) (citing Trs. of Plumbers and Pipefitters Nat’l Pension Fund,
886 F.Supp. 1134, 1139 (S.D.N.Y. 1995)). The decision to grant or deny a stay in this
circumstance is addressed to the discretion of the court, id., at 97 (internal citations
omitted), and the requesting party has the burden to establish a need for the stay. Id.
(quoting Clinton v. Jones, 520 U.S. 681, 708 (1997)). “’[A]bsent a showing of undue
prejudice upon defendant or interference with his constitutional rights, there is no
reason why plaintiff should be delayed in its efforts to diligently proceed to sustain its
claim.’” Id. (quoting Hicks v. City of New York, 268 F.Supp.2d 238, 241 (S.D.N.Y. 2003)
(internal quotation marks omitted)). In applying the relevant factors approved in Vuitton

3

to an application to stay a parallel civil action, the court is required to engage in “’a
particularized inquiry into the circumstances of, and the competing interests in, the
case.’” Id. (quoting Banks v. Yokemick, 144 F.Supp.2d 272, 275 (S.D.N.Y. 2001) (citing
Keating v. Office of Thrift Supervision, 45 F.3d 322, 325 (9th Cir. 1995))). The court’s
exercise of discretion must be reasonable and will not be disturbed unless the denial
results in “prejudice so great that, as a matter of law, it vitiates a defendant’s
constitutional rights or otherwise gravely and unnecessarily prejudices the defendant’s
ability to defend his or her rights.” Id. at 100.
Here, the only matter presently before the court is the Moss Defendants’ motion
for a default judgment against Epps and an order directing payment of the proceeds to
them based on Epps’s failure to timely oppose Plaintiff’s requested interpleader.
Whether the Moss Defendants are entitled to such relief is primarily an issue of law,
Finkel v. Romanowicz, 577 F.3d 79, 84 (2d Cir. 2009) (in considering motion for default
judgment, district court must determine whether allegations establish defaulting party’s
liability as a matter of law), and will not require the Moss Defendants to establish their
entitlement to the requested relief by demonstrating Epps’s guilt, and disqualification as
a beneficiary under New York law, as Moss’s putative killer, potentially requiring Epps to
provide evidence of his guilt by requests to admit, interrogatory answers, or deposition
should the Moss Defendants choose to exercise such discovery devices in addition to or
in lieu of any independent evidence of Epps’s guilt available to them. If Epps
determines that to defeat the Moss Defendants’ motion it is necessary to formally assert
his innocence, he could do so in an opposing affidavit, and such denial would not

4

constitute incriminating testimony bearing on his guilt even if it were considered to have
resulted from the denial of the requested stay.
Moreover, by denying the request stayed — requiring that Epps defend against
the Moss Defendants’ request for a default judgment — Epps is in no worse position
than if the stay were granted and the criminal case proceeded to verdict. In the event of
conviction, Epps’s ability to resist the requested payment of the proceeds to the Moss
Defendants based on a default judgment, or other pleadings, would be severely, if not
fatally, impaired, and, in the event of an acquittal, Epps would be faced with the Moss
Defendants’ probable determination to forge ahead with the instant interpleader action,
under the greatly reduced preponderance of evidence burden of proof standard
applicable to a civil case. Thus, requiring Epps to proceed to defend against the Moss
Defendants’ default judgment request does not gravely impair Epps’s Fifth Amendment
right against self-incrimination because his testimony will not be relevant to the question
of default and affects no substantial prejudice to his ability to oppose the Moss
Defendants’ motion caused by a refusal to provide discovery with a resulting adverse
inference. See Louis Vuitton Malletier, S.A., 676 F.3d at 100. Further, trial in the
criminal case is not imminent, see Meyers Buth Affidavit ¶ ¶ 17-18. In the criminal case,
motion practice continues, see United States v. Epps, 12-CR-305A(Sr), Doc. No. 24,
and no trial date has been established. Meyers Buth Affidavit ¶ 18. Moss Defendants’
interest in prompt disposition and payment of the proceeds is strong and further delay in
a resolution is unwarranted. The court’s interest in resolving the matter as promptly as
possible is substantial and the public interest in whether a suspected killer of the
insured should receive the proceeds of the insurance policy is palpable. Consideration

5

of the relevant factors thus indicates the Moss Defendants’ motion should be promptly
determined as fairness to both sides permits. The court therefore need not address at
this time whether, should it become necessary for the Moss Defendants to seek
discovery from Epps while the parallel criminal case is pending, a stay or protective
order at Epps’s request should be granted to avoid creating potential damaging adverse
inferences in the event Epps should assert the privilege, see Louis Vuitton Malletier
S.A., 676 F.3d at 102 (pointing to alternative discovery controls, including protective
orders, as a means to allow a civil proceeding to go forward while protecting against
potential prejudice based on assertions of a Fifth Amendment privilege in connection
with a parallel criminal proceeding), and the court expresses no view on that question.
Finally, in the interest of justice, Epps may file his response to the Moss
Defendants’ motion not later than June 16, 2014; any replies shall be filed not later than
July 1, 2014. Oral argument shall be at the discretion of the court.

CONCLUSION
Based on the foregoing, Defendants Epps’s motion (Doc. No. 47) is DENIED.
SO ORDERED.
/s/ Leslie G. Foschio
__________________________________
LESLIE G. FOSCHIO
UNITED STATES MAGISTRATE JUDGE
Dated: May 19, 2014
Buffalo, New York

6