The Prudential Insurance Company of America v. White et al
Filing
18
MEMORANDUM (Order to follow as separate docket entry). Signed by Honorable Yvette Kane on 6/29/17. (rw)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
THE PRUDENTIAL INS. COMPANY OF
AMERICA,
Plaintiff
:
:
:
:
v.
:
:
TRAVIS WHITE, BETH ELLEN
:
LIVERINGHOUSE, in her capacity as
:
Administratix of the Estate of Carol D.
:
White, and BETH ELLEN
:
LIVERINGHOUSE, in her capacity as
:
Administratix of the Estate of Floris Lewis, :
Defendants
:
No. 1:16-cv-1094
(Judge Kane)
MEMORANDUM
Before the Court in the above-captioned case is Plaintiff’s Motion for Interpleader Relief
and Default Judgment. (Doc. No. 16.) For the reasons that follow, the motion will be granted in
part and denied in part.
I.
BACKGROUND1
On June 8, 2016, Plaintiff The Prudential Insurance Company of America (“Prudential”),
filed an Interpleader Complaint to resolve competing claims to a $104,000.00 Death Benefit2 due
as a result of the death of Carol D. White (the “Insured”), who was insured under an ERISA
policy of group life insurance issued by Prudential to Wal-Mart Stores, bearing Group Policy
1
The following facts underlying Plaintiff’s claim are taken from Plaintiff’s Interpleader
Complaint. (Doc. No. 1.)
2
The Death Benefit consists of $29,000.00 in basic term life insurance, $50,000.00 in
optional term life insurance, and $25,000.00 in optional accidental death and dismemberment
insurance. (Id. ¶ 10.)
1
No. G-43939-AR (the “Group Policy”). (Doc. No. 1 ¶¶ 9, 10.) Prudential named as Defendants
Travis White (“White”), Beth Ellen Liveringhouse (“Liveringhouse”) (in her capacity as
Administratrix of the Estate of Carol D. White), and Beth Ellen Liveringhouse (in her capacity
as Administratrix of the Estate of Floris Lewis). The Insured’s husband, White, was named as
the designated beneficiary under the policy by the Insured on March 31, 2015. (Id. ¶¶ 2, 11.) On
July 13, 2015, the Insured died at 6:40 a.m. as a result of a gunshot to the head, and the Death
Benefit became payable. (Id. ¶ 12.) White has been charged with criminal homicide in
connection with the Insured’s death and currently awaits trial. (Id. ¶ 12; Commonwealth of
Pennsylvania v. Travis Allen White, Docket No. CP-44-CR-0000062-2016 (Mifflin Cty. C.C.P.).
The Insured had no children at the time of her death. (Doc. No. 1 ¶ 15.) She was predeceased
by her father, George M. Lewis, and had no siblings. (Id. ¶ 16.) The Insured’s mother, Floris
Lewis, was killed in the same incident as the Insured. (Id. ¶ 17.) According to the death
certificates issued for the Insured and Floris Lewis, Floris Lewis survived the Insured by five
minutes. (Id. ¶ 18.)
At issue in this action is a determination of which party is entitled to the Death Benefit.
Despite his status as the designated beneficiary under the policy, if White is convicted of the
death of the Insured, he would be barred from receiving the Death Benefit under Pennsylvania’s
Slayer Statute. (Id. ¶ 14; see 20 Pa. C.S.A. § 8811(a) “Insurance proceeds payable to the slayer
as the beneficiary or assignee of any policy or certificate of insurance on the life of the decedent
. . . shall be paid to the estate of the decedent, unless the policy or certificate designates some
person not claiming through the slayer as alternative beneficiary to him.”).
Further, Prudential asserts that the Pennsylvania Simultaneous Death Act is relevant to a
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determination as to which defendant is entitled to the Death Benefit, as it provides as follows
with respect to insurance policies: “[w]here the insured and the beneficiary in a policy of life or
accident insurance have died and there is no sufficient evidence that they have died otherwise
than simultaneously, the proceeds of the policy shall be distributed as if the insured had survived
the beneficiary.” (Doc. No. 1 ¶ 20; 20 Pa. C.S.A. § 8504.) Prudential asserts that it is unclear
whether ERISA preempts state simultaneous death statutes. (Doc. No. 1 ¶ 19.) Under the
Beneficiary Rules provision in the Group Policy governing payment of the life insurance
proceeds, benefits are payable to the designated beneficiary; however, if there is no designated
beneficiary, the benefits are payable to the first of the “(a) surviving spouse or domestic partner;
(b) surviving child(ren) in equal shares, (c) surviving parents in equal shares; (d) surviving
siblings in equal shares; [or] (e) [the] estate.” (Id. ¶¶ 21-22.)
Prudential asserts that on or about December 21, 2015, it received a letter from
Liveringhouse asserting a claim to the Death Benefit on behalf of the Insured’s Estate. (Id. ¶ 23.)
Prudential asserts that in the event that White is not disqualified from receiving the Death
Benefit, it will be payable to him as the named beneficiary under the Group Policy’s Beneficiary
Rules. (Id. ¶ 24.) However, in the event White is disqualified from receiving the death benefit,
and Floris Lewis is found to have survived the Insured, the Death Benefit will be payable to
Floris Lewis’ Estate as the next highest surviving class of heirs under the Group Policy’s
Beneficiary Rules. (Id. ¶ 25.) Further, Prudential alleges that in the event White is disqualified
from receiving the Death Benefit, and Floris Lewis is found to have predeceased the Insured,
then the Death Benefit will be payable to the Insured’s Estate under the Group Policy
Beneficiary Rules. (Id. ¶ 26.)
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Prudential claims no interest in the Death Benefit, and asserts that it is ready and willing
to pay the Death Benefit to the person or estate entitled to it, but under the circumstances, it
cannot make a determination as to the proper recipient of the Death Benefit without exposing
itself to potential multiple liability as a result of the competing claims made by or available to
the defendants. (Id. ¶ 27.) Accordingly, Prudential’s Interpleader Complaint seeks to deposit
the Death Benefit, together with accrued claim interest, if any, into the Court’s registry, and be
discharged from all liability to the defendants. (Id. ¶ 29.)
On October 12, 2016, Liveringhouse filed an Answer to Prudential’s Interpleader
Complaint on behalf of both the Estate of Carol D. White and the Estate of Floris Lewis. (Doc.
No. 11.) On September 30, 2016, Prudential filed a Request for Entry of Default as to White for
his failure to answer or otherwise defend this action. (Doc. No. 9.) On the same date, the Clerk
of Court filed on the docket in this matter an Entry of Default as to White. (Doc. No. 10.)
Subsequently, Prudential filed a “Notice of Motion for Interpleader Relief and for Default
Judgment” (Doc. No. 16), along with a supporting brief (Doc. No. 17). No response to
Prudential’s Motion has been filed. Accordingly, this matter is now ripe for disposition.
II.
DISCUSSION
A.
Interpleader Relief
Interpleader is an equitable remedy through which a person holding property, or a
stakeholder, can “join in a single suit two or more persons asserting claims to that property.”
Metropolitan Life Ins. Co. v. Price, 501 F.3d 271, 275 (3d Cir. 2007) (quoting NYLife Distrib.,
Inc. v. Adherence Grp., Inc., 72 F.3d 371, 372 n.1 (3d Cir. 1985)). When a stakeholder admits
liability to one of the claimants but seeks to avoid the possibility of multiple liability,
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interpleader permits it “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
Price, 501 F.3d at 275). As a result, “[t]he competing claimants are left to litigate between
themselves,” and the stakeholder is discharged from any further liability. Id. (quoting Price, 501
F.3d at 275).
There are two options for a party seeking interpleader relief: (1) the federal interpleader
statute, 28 U.S.C. § 1335, and (2) Federal Rule of Civil Procedure 22. District courts have
subject matter jurisdiction under 28 U.S.C. § 1335 if there is “minimal diversity” between two or
more adverse claimants and if the amount in controversy is $500.00 or more. 28 U.S.C. §
1335(a). However, by contrast, “rule interpleader is no more than a procedural device; the
plaintiff must plead and prove an independent basis for subject matter jurisdiction.” Price, 501
F.3d at 275. Prudential does not rely on the interpleader statute, as the adverse claimants seeking
the Death Benefit are all citizens of Pennsylvania. Instead, Prudential relies on rule interpleader,
and pleads jurisdiction pursuant to the federal question statute, 28 U.S.C. § 1331, as the
underlying claim involves rights and liabilities governed by federal law, specifically, the ERISA
statute, 29 U.S.C. § 1001 et seq.3 Rule 22 of the Federal Rules of Civil Procedure provides that
“[p]ersons with claims that may expose a plaintiff to double or multiple liability may be joined
as defendants and required to interplead.” Fed. R. Civ. P. 22(a)(1).
An interpleader action typically proceeds in two stages. Hovis, 553 F.3d at 262 (citing
NYLife, 72 F.3d at 375). In the first stage, the court determines if the interpleader complaint
3
Prudential also asserts that the requirements of diversity jurisdiction under 28 U.S.C.
§1332 are met here.
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was properly brought and whether the stakeholder should be discharged from further liability to
the claimants. Id. In the second stage of the proceeding, the court determines the rights of the
claimants to the interpleaded funds. Id.
The Court turns to an examination of Prudential’s Interpleader Complaint to determine
whether it is properly brought and whether Prudential should be discharged from further liability.
As the issuer of the Group Policy under which the Death Benefit is due, Prudential constitutes a
disinterested stakeholder, as it does not dispute that the Death Benefit is payable. Prudential
seeks to ensure that the proper party receives the Death Benefit and to protect itself against the
risk of future liability. As noted by Prudential in its Interpleader Complaint and brief in support
of its Motion for Interpleader Relief, White may well be prohibited from receiving the Death
Benefit depending on the outcome of his criminal trial, pursuant to the Pennsylvania Slayer
Statute, and therefore it is appropriate for it to seek deposit of the Death Benefit with the Court
and to interplead potential beneficiaries. See Overtstreet v. Ky. Cent. Life Ins. Co., 980 F.2d 931,
940 (4th Cir. 1991) (“An insurer faced with potentially conflicting claims by a possible slayer
and the insured’s estate may absolve itself of excess liability by paying the proceeds into the
registry of the court and filing an action in interpleader to determine the proper recipient.”);
Prudential Ins. Co. of Am. v. Podnebennyy, No. 4:16-cv-1927, 2017 WL 1021717, at * 1 (M.D.
Pa. Mar. 16, 2017); Primerica Life Ins. v. Amhold, No. 3:06-cv-5210-RBL, 2006 WL 727972, at
*2 (W.D. Wash. June 20, 2006). Accordingly, the Court finds that Prudential’s Interpleader
Complaint is properly brought and that Prudential should be discharged from future liability after
6
payment of the proceeds of the Death Benefit into the Court’s Registry.4
B.
Default Judgment
As to the portion of Prudential’s motion seeking a default judgment as to White, the
Court finds that such relief is more appropriately sought in the second stage of this proceeding,
where the Court will determine the rights of the claimants to the interpleaded funds. See
NYLife, 72 F.3d at 375 (“The second stage, which proceeds like any other action, is ultimately
resolved by the entry of a judgment in favor of the claimant who is lawfully entitled to the
stake.” (citation omitted)). Accordingly, the Court will deny that portion of Prudential’s motion,
without prejudice to any Defendant’s ability to pursue a similar motion during the second stage
of this proceeding.
4
Prudential seeks to deposit the Death Benefit into the Court’s Registry pursuant to
Federal Rule of Civil Procedure 67(a), which provides as follows:
If any part of the relief sought is a money judgment or the disposition of a
sum of money or some deliverable thing, a party – on notice to every other
party and by leave of court – may deposit with the court all or part of the
money or thing, whether or not that party claims any of it. The depositing
party must deliver to the clerk a copy of the order permitting deposit.
Fed. R. Civ. P. 67(a).
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III.
CONCLUSION
For the reasons discussed above, the Court will grant in part and deny in part Prudential’s
Motion for Interpleader Relief and Default Judgment. The motion will be granted as to
Prudential’s request for interpleader relief,5 and it will be denied as to its request for default
judgment against White. An Order consistent with this Memorandum follows.
s/ Yvette Kane
Yvette Kane, District Judge
United States District Court
Middle District of Pennsylvania
5
In its Interpleader Complaint and brief in support of its Motion for Interpleader Relief,
Prudential also seeks an award of attorneys’ fees and costs in an unspecified sum. “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.” Met. Life Ins. Co. v. Kubichek, 83
Fed. Appx. 425, 431 (3d Cir. 2003) (unpublished). Upon completion of the requirement that it
deposit the Death Benefit with the Court, the Court will permit Prudential to file an application
for fees and costs.
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