Minnesota Life Insurance Company v. Wilmington Trust Company et al (TV1)

Filing 46

MEMORANDUM, OPINION, AND ORDER granting 44 Motion for Default Judgment as to Defendant Genesis Merchant Partners, LP. Signed by Chief District Judge Thomas A Varlan on 3/04/2016. (copy mailed via regular mail and certified mail to Genesis Merchant Partners, LP c/o Stellar Corporation Services, LLC 3500 South Dupont Hwy, Dover, DE 19901) (KMK, ) Modified on 3/4/2016 (KMK): Certified Mail Tracking ID: 7008 3230 0002 7443 2249

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TENNESSEE
MINNESOTA LIFE INSURANCE COMPANY, )
)
Plaintiff,
)
)
v.
)
)
WILMINGTON TRUST COMPANY, as
)
Securities Intermediary; FUND HOUSE
)
FCP-SIF-INTERNATIONAL LIFE
)
SETTLEMENTS FUND; GENESIS
)
MERCHANT PARTNERS, LP;
)
SMARTBANK; and J. RANDALL HOOPER
)
AND RICHARD J. GETTELFINGER,
)
Co-Executors of the Estate of HERMAN
)
GETTELFINGER,
)
)
Defendants.
)

No.: 3:14-CV-443-TAV-CCS

MEMORANDUM OPINION & ORDER
This civil action is before the Court on Plaintiff Minnesota Life Insurance
Company’s Motion for Default Judgment as to Defendant Genesis Merchant Partners, LP
[Doc. 44], in which plaintiff moves for entry of a judgment by default against defendant
Genesis Merchant Partners, LP pursuant to Rule 55(b) of the Federal Rules of Civil
Procedure for failure to answer the complaint or otherwise defend this action. The Court
has carefully considered the record as well as the relevant law, and for the reasons
discussed herein, the Court will grant plaintiff’s motion.
I.

Background
This interpleader action involves entitlements to benefits under two Adjustable

Life Summit Policies that plaintiff issued on the life of Nancy H. Gettelfinger [Doc. 1 ¶

11]. As all of the defendants in this action have each claimed the proceeds of these
policies, plaintiff instituted this suit in order to determine who is entitled to be paid the
life insurance benefits under the policies [Id. ¶ 29].
Plaintiff served defendant’s registered agent for service of process with the
Complaint and Summons in this case by certified mail on September 29, 2014 [Doc. 8].
Plaintiff’s counsel received a return receipt from defendant on October 6, 2014 [Id.].
Defendant has yet to plead or otherwise defend against the Complaint, and more than
twenty-one days have passed since it was served with the Complaint and Summons.
Default was entered by the Clerk on December 1, 2015 [Doc. 43], followed by plaintiff’s
motion, which was filed on December 2, 2015 [Doc. 44].
In support of plaintiff’s motion, plaintiff alleges that defendant, a Delaware
limited partnership, is “not an infant or incompetent person and does not serve in the
military” [Doc. 45 p. 2]. Plaintiff requests that the Court permanently enjoin and restrain
defendant from instituting or prosecuting any proceeding in state or federal court that
affects the property, instruments, or allegations involved in this action; bar defendant
from interpleading in this action and asserting any claims or rights to the benefits at issue;
and discharge plaintiff from any further liability under the policies as to defendant [Doc.
44 p. 2].
II.

Analysis
Rule 55 of the Federal Rules of Civil Procedure contemplates a two-step process

in obtaining a default judgment against a defendant who has failed to plead or otherwise
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defend. First, pursuant to Rule 55(a), a plaintiff must request from the Clerk of Court an
entry of default, describing the particulars of the defendant’s failure to plead or otherwise
defend. Where, as here, default is entered by the Clerk, the plaintiff must then move the
Court for entry of default judgment pursuant to Rule 55(b).

The determination of

whether a motion for default judgment should be granted is committed to “the sound
discretion of the court.”

In re Irby, 337 B.R. 293, 294 (Bankr. N.D. Ohio 2005)

(applying Federal Rule of Bankruptcy Procedure 7055, which incorporates Federal Rule
of Civil Procedure 55).
Once default has been entered, “‘the complaint’s factual allegations regarding
liability are taken as true, while allegations regarding the amount of damages must be
proven.’” Bogard v. Nat’l Credit Consultants, No. 1:12 CV 02509, 2013 WL 2209154,
at *3 (N.D. Ohio May 20, 2013) (quoting Morisaki v. Davenport, Allen & Malone, Inc.,
No. 2:09-cv-0298, 2010 WL 3341566, at *1 (E.D. Cal. Aug. 23, 2010)); see also Nat’l
Satellite Sports, Inc. v. Mosley Entm’t, Inc., No. 01-CV-74510-DT, 2002 WL 1303039, at
*3 (E.D. Mich. May 21, 2002) (“For a default judgment, well-pleaded factual allegations
are sufficient to establish a defendant’s liability.”).
Taking the allegations as true, and in light of defendant’s failure to respond or
otherwise defend this action, the Court finds that plaintiff is entitled to default judgment
on its claims. By failing to plead or otherwise defend against the interpleader complaint,
defendant has forfeited any claim to entitlement that it could otherwise have asserted.
See Usable Life Co. v. Gann, No. 1:09-CV-77, 2009 WL 4348588, at *2 (E.D. Tenn.
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Nov. 24, 2009) (granting a motion for a default judgment when defendant failed to plead
or otherwise defend the interpleader claim); Skidmore v. Boilermaker-Blacksmith Nat’l
Pension Trust, No. 1:08-CV-45, 2009 WL 1362067, at *5 (E.D. Tenn. May 13, 2009)
(holding that defendant forfeited any claim she would otherwise have had as a surviving
child in the suit when she failed to respond to the interpleader complaint); SunLife Assur.
Co. of Canada (U.S.) v. Conroy, 431 F. Supp. 2d 220, 226 (D.R.I. 2006) (finding that the
defendants forfeited any claims to the proceeds of certain annuity contracts when they
failed to answer the interpleader complaint or assert a claim to the res).
In sum, the Court finds the complaint in interpleader filed by Minnesota Life
Insurance Company states a claim against defendant. As defendant has failed to answer
the complaint or otherwise defend this action, plaintiff is discharged from any further
liability to defendant under the policies at issue. Pursuant to 28 U.S.C. § 2361, defendant
is permanently enjoined and restrained from instituting or prosecuting any proceeding in
state or federal court that affects the property, instruments, or allegations involved in this
action, and from interpleading in this action or asserting any claims or rights to the
benefits at issue. See Lorillard Tobacco Co. v. Chester, Willcox & Saxbe, 589 F.3d 835,
844 (6th Cir. 2009) (citing 28 U.S.C. § 2361, which provides that “a district court may
issue its process for all claimants and enter its order restraining them from instituting or
prosecuting any proceeding in any State or United States court affecting the property,
instrument or obligation involved in the interpleader action until further order of the
court”).
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III.

Conclusion
For the reasons explained herein, the Court hereby GRANTS Plaintiff Minnesota

Life Insurance Company’s Motion for Default Judgment as to Defendant Genesis
Merchant Partners, LP [Doc. 44]. The Clerk is hereby DIRECTED to send a copy of
this Memorandum Opinion and Order to defendant via regular U.S. mail and certified
mail at its last known address.
IT IS SO ORDERED.

s/ Thomas A. Varlan
CHIEF UNITED STATES DISTRICT JUDGE

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