Unum Life Insurance Company of America v. Brookshire et al

Filing 108

ORDER adopting as modified 104 Report and Recommendation. Signed by the Honorable R. Bryan Harwell on 5/20/2016. (hcic, )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
FLORENCE DIVISION
Unum Life Insurance Company
of America,

)
)
)
Plaintiff / Counter-Defendant,
)
)
v.
)
)
Donna Brookshire, Bryant Weaver, and
)
Jennifer Weaver,
)
)
Defendants / Cross-Defendants,
)
)
and
)
)
S.W., a minor,
)
)
Defendant / Counter-Claimant /
)
Cross-Claimant.
)
____________________________________)

Civil Action No.: 4:15-cv-01226-RBH

ORDER

This interpleader action concerns the disbursement of proceeds from a $170,000 life insurance
policy (“the Policy”) issued by Unum Life Insurance Company of America (“Unum”) to the decedent
Clifford Weaver and governed by the Employee Retirement Income Security Act of 1974 (“ERISA”),
29 U.S.C. § 1001 et seq. The Policy designated Cross-Defendant Donna Brookshire, Cross-Defendant
Bryant Weaver, and Cross-Claimant S.W.1 as the primary beneficiaries with respective interests of 50%,
25%, and 25%. ECF No. 1-2. Unum filed this case seeking interpleader relief pursuant to 29 U.S.C.
§ 1132 and Federal Rule of Procedure 22. See ECF No. 1. Unum filed a motion seeking (1)
authorization to deposit the Policy proceeds into the Court’s registry, (2) an award of attorney’s fees in
the amount of $2,464.13, and (3) dismissal with prejudice from this action. See ECF No. 22. The Court

1

S.W . is a minor represented by a guardian ad litem, Candy Kern-Fuller. See ECF Nos. 27 & 34.

granted Unum’s motion in its entirety,2 and Unum then deposited the Policy proceeds into the Court’s
registry. See ECF Nos. 72, 75, 91, & 94. Thereafter, the Magistrate Judge issued an order giving the
parties notice that she would be considering summary judgment on her own initiative and making a
report and recommendation to this Court regarding the propriety of summary judgment. See ECF No.
97; see generally Fed. R. Civ. P. 56(f).
The matter is now before the Court for review of the Report and Recommendation (R & R)
issued by United States Magistrate Judge Kaymani D. West and made in accordance with 28 U.S.C.
§ 636(b)(1)(B) and Local Rule 73.02 for the District of South Carolina.3 See R & R, ECF No. 104.
Considering summary judgment on her own initiative, the Magistrate Judge recommends that the Court
award Cross-Defendant Donna Brookshire 50% of the Policy, award Cross-Defendant Bryant Weaver
25% of the Policy, and award Cross-Claimant S.W. 25% of the Policy. R & R at 9-10, 12. The
Magistrate Judge further recommends that the Court, before distributing the Policy proceeds, order
Cross-Defendant Jennifer Weaver to establish a special needs trust naming Cross-Claimant S.W. as the
sole beneficiary and requiring S.W.’s share of the Policy proceeds be used to fund the trust. Id. at 1012. No parties have filed objections to the R & R.
The Magistrate Judge makes only a recommendation to the Court. The recommendation has
no presumptive weight, and the responsibility to make a final determination remains with the Court.
Mathews v. Weber, 423 U.S. 261, 270-71 (1976). The Court must conduct a de novo review of those
portions of the R & R to which specific objections are made, and it may accept, reject, or modify, in

2

The Court stated in its order that “Unum shall be AW ARDED attorney’s fees in the amount of $2,464.13,
which is to be deducted from the Stake and paid to Unum when the final judgment in this case is entered.” ECF No.
91 at 4.

3

The R & R sets forth in detail the relevant facts and legal standards for this case.

2

whole or in part, the recommendation of the Magistrate Judge or recommit the matter with instructions.
28 U.S.C. § 636(b)(1).
As noted above, no party has objected to the R & R. In the absence of objections to the R & R,
the Court is not required to give any explanation for adopting the Magistrate Judge’s recommendations.
See Camby v. Davis, 718 F.2d 198, 199 (4th Cir. 1983). The Court reviews only for clear error in the
absence of an objection. See Diamond v. Colonial Life & Acc. Ins. Co., 416 F.3d 310, 315 (4th Cir.
2005) (stating that “in the absence of a timely filed objection, a district court need not conduct de novo
review, but instead must ‘only satisfy itself that there is no clear error on the face of the record in order
to accept the recommendation’” (quoting Fed. R. Civ. P. 72 advisory committee’s note)).
After a thorough review of the record in this case, the Court finds no clear error and therefore
adopts and incorporates by reference the Magistrate Judge’s R & R. See ECF No. 104. However, the
Court modifies the R & R to reflect that the distribution of the Policy proceeds is subject to the Court’s
previous order awarding Unum attorney’s fees in the amount of $2,464.13. See ECF No. 91.
Accordingly, pursuant to Federal Rule of Civil Procedure 56(f), the Court sua sponte GRANTS
summary judgment in favor of Cross-Defendant Donna Brookshire, Cross-Defendant Bryant Weaver,
and Cross-Claimant S.W. The Court hereby ORDERS the following:
(1)

The Court finds a special needs trust is appropriate for S.W. and therefore ORDERS the
Guardian ad Litem (Candy Kern-Fuller) to assist Cross-Defendant Jennifer Weaver
(S.W.’s mother) in the establishment of a special needs trust that names S.W. as the sole
beneficiary and uses S.W.’s share of the Policy proceeds to fund the trust. Ms. KernFuller shall contact an attorney experienced with creating special needs trusts and file
a report with the Court within thirty days of the date of filing of this Order, at
3

which time she shall also provide the Court a statement of the fees and/or costs
associated with her own time in this case and a statement of the fees and/or costs
associated with the establishment of a special needs trust for S.W.4 Ms. Kern-Fuller
shall further advise the Court as to any particular procedure that may be necessary to
establish such a trust, such as whether the Policy proceeds should be disbursed to her
trust account or whether they should be directly disbursed to S.W.’s special needs trust.
(2)

Once the Court receives adequate proof that Ms. Weaver and the Guardian ad Litem can
establish a special needs trust for S.W., the Clerk shall first PAY Unum attorney’s fees
in the amount of $2,464.13 and then DISTRIBUTE the remaining Policy proceeds (and
accrued interest) as follows: 50% to Cross-Defendant Donna Brookshire, 25% to CrossDefendant Bryant Weaver, and 25% to Cross-Claimant S.W. S.W.’s portion of the
Policy proceeds is subject to the fees and/or costs incurred by the Guardian ad Litem and
the fees and/or costs associated with the establishment of the special needs trust.

IT IS SO ORDERED.

Florence, South Carolina
May 20, 2016

s/ R. Bryan Harwell
R. Bryan Harwell
United States District Judge

4

See Local Civ. Rule 17.03 (D.S.C.) (“In its order of approval, the court shall approve or fix the amount of
the fee to be paid to counsel for the minor or incompetent parties and make appropriate provision for the payment
thereof. The order of approval shall also provide the manner in which judgments, if any, are to be paid and may make
specific provisions for the payment of medical, hospital, and similar expenses when allowed by applicable law.”).

4