Minnesota Life Insurance Company v. Rives et al

Filing 32

MEMORANDUM OPINION re: 17 MOTION for Default Judgment as to Defendants Jennifer J. Olin, Jessica J. Jardine and Jerrod J. Olin by Minnesota Life Insurance Company, 20 MOTION To Be Reimbursed by Minnesota Life Insurance Company. (See Memorandum Opinion For Details). Signed by Magistrate Judge Thomas Rawles Jones, Jr on 3/18/11. (nhall)

IN THE UNITED STATES DISTRICT COURT FOR
THE EASTERN DISTRICT OF VIRGINIA
Alexandria Division

Minnesota Life Insurance Company,
Plaintiff,
v.
John J. Rives, III
et al.,
Defendants.

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Civil Action No. 1:10cv1099 (AJT/TRJ)

MEMORANDUM OPINION
This matter is before the court on plaintiff’s motions for default judgment (no. 17) and for
reimbursement (no. 20). For the reasons stated below, the magistrate judge finds that (1) the
entries of default as to defendants Jennifer J. Olin and Jessica J. Jardine should be set aside; (2)
default judgment should be entered against defendant Jerrod J. Olin; and (3) plaintiff Minnesota
Life Insurance Company is entitled to reimbursement of its costs from the insurance proceeds
that it has deposited with the court.
I.
This interpleader action concerns the proceeds of a life insurance policy payable as a
result of the death of Patricia A. Olin and the interest thereon. Pl.’s Compl. ¶ 7. This court has
jurisdiction pursuant to 28 U.S.C. § 1335, and venue is proper pursuant to 28 U.S.C. § 1397.
Defendants Jennifer J. Olin, Jessica J. Jardine, Jeffrey J. Olin, and Jerrod J. Olin, who are
Patricia A. Olin’s children, were originally named as the beneficiaries of the life insurance policy
at issue. Pl.’s Compl. ¶¶ 14-15. Approximately a year and a half before her death, Patricia A.

Olin changed the beneficiary to defendant John J. Rives, III (“Rives”). Pl.’s Compl. ¶ 16. After
Patricia A. Olin’s death, Rives requested payment of the benefits of the insurance policy. Pl.’s
Compl. ¶ 19. After receiving a notice of dispute from the attorney for Patricia A. Olin’s estate
and attempting to resolve the matter among the parties, plaintiff initiated this action. Pl.’s
Compl. ¶¶ 20-21.
Plaintiff filed its complaint on October 1, 2010. On October 7, 2010, the court entered an
order (no. 7) accepting plaintiff’s deposit of the funds at issue in this case. All defendants
executed and returned waivers of service (nos. 8, 9, 11, 12, 13), and their responses to the
complaint were due on December 6, 2010. Defendants Jeffrey J. Olin (no. 10) and Rives (no. 14)
timely filed responses on October 28, 2010 and November 17, 2010, respectively. The Clerk
received no response from defendants Jennifer J. Olin, Jessica J. Jardine, and Jerrod J. Olin by
December 6, 2010, and upon plaintiff’s request (no. 15) entered default as to those defendants on
December 22, 2010 (no. 16). Plaintiff filed the instant motions on February 4, 2011.
On February 3, 2011, the Clerk received a letter from defendant Jennifer J. Olin (no. 26),
in which Ms. Olin stated that she had originally sent it on October 8, 2010. On March 7, 2011,
the Clerk received a letter from defendant Jessica J. Jardine (no. 31), in which Ms. Jardine stated
that she had originally sent an attached letter in early November 2010 and that she had not
received copies of the instant motions until February 24, 2011. The correspondence from Ms.
Olin and Ms. Jardine indicates that they believe their mother made the change of beneficiary
during a period of substance dependency and that Rives may have induced the change by taking
advantage of their mother’s infirm condition. Their position is substantially similar to that
advanced by defendant Jeffrey J. Olin in his timely response.

II.
In substance, if not in form, the letters of Jennifer J. Olin and Jessica J. Jardine are
motions to set aside entry of default on one of two grounds: (1) they timely responded and
default never should have been entered against them; or (2) they timely responded when they
realized they were in default and they have a meritorious defense. Though there at least appears
to be some dispute regarding the first ground as to Jennifer J. Olin,1 the magistrate judge finds
that the entries of default should be set aside on the second ground.
Courts should consider six factors when deciding whether to set aside an entry of default:
“[(1)] whether the moving party has a meritorious defense, [(2)] whether it acts with reasonable
promptness, [(3)] the personal responsibility of the defaulting party, [(4)] the prejudice to the
party, [(5)] whether there is a history of dilatory action, and [(6)] the availability of sanctions less
drastic.” Colleton Preparatory Acad., Inc. v. Hoover Universal, Inc., 616 F.3d 413, 417 (4th Cir.
2010) (quoting Payne ex rel. Estate of Calzada v. Brake, 439 F.3d 198, 204-05 (4th Cir. 2006)).
It appears that defendants Jennifer J. Olin and Jessica J. Jardine have a meritorious
defense. The pleadings of pro se litigants are to be construed liberally. See Miller v. Barnhardt,
64 F.App’x 858, 859 (4th Cir. 2003) (citing Haines v. Kerner, 404 U.S. 519, 520-21, 92 S.Ct.
594, 30 L.Ed. 2d 652 (1972)). Defendants’ letters are sufficient for the court to infer that their
position is that the change of beneficiary was invalid due to incapacity or undue influence, and it
is hornbook law that such allegations, if proven, can invalidate a change of beneficiary.
Defendants Jennifer J. Olin and Jessica J. Jardine have acted with reasonable promptness.

1

In his response (no. 27) to the motion for default, Rives argues that Jennifer J. Olin
could not have sent her letter on October 8, as it states that she agrees with Jeffrey J. Olin’s
timely responsive letter and copies a portion of it verbatim, despite the fact that Jeffrey J. Olin’s
letter was filed on October 28.

The record reflects that the first either would have learned of the entry of default against her was
upon service of plaintiff’s motion for default judgment. The Clerk received Ms. Olin’s letter on
February 3, 2011, a day before plaintiff filed the motion for default judgment. The Clerk
received Ms. Jardine’s letter on March 7, 2011, but her letter indicates that she did not receive
copies of plaintiff’s motions until February 24, 2011. Under the circumstances, both defendants
acted promptly when they learned of their default status. See Colleton, 616 F.3d at 418 (motion
prompt when filed within nine days of counsel learning of case).
The positions advanced by defendants Jennifer J. Olin and Jessica J. Jardine are
substantially similar to that of defendant Jeffrey J. Olin’s timely response. There is thus no
prejudice to any party, as the material facts in issue and any attendant discovery are the same
whether or not the court sets aside the entries of default. There is no history of dilatory action on
the part of defendants Jennifer J. Olin and Jessica J. Jardine, and there clearly exist lesser
sanctions than default.
Though there can be some dispute whether defendants Jennifer J. Olin and Jessica J.
Jardine are responsible for their default status,2 all other factors weigh in favor of setting aside
default. Even if personal responsibility is assumed, the entries of default should be set aside
based on the other factors. See Colleton, 616 F.3d at 419-20 (trial court abused discretion in
refusing to set aside default where it relied on personal responsibility of defendant).
Accordingly, the magistrate judge finds that the entries of default against defendants
Jennifer J. Olin and Jessica J. Jardine should be set aside.
III.
In contrast to his sisters, defendant Jerrod J. Olin has filed no response to the complaint in
2

See supra note 1.

this case and there exist no grounds on which to set aside the entry of default against him.
Federal Rule of Civil Procedure 55 permits the court to grant a motion for default judgment
where the well-pled allegations of the complaint establish plaintiff’s entitlement to relief, and
where a defendant has failed to plead or defend as provided by and within the time frames
contained in the rules. Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780 (4th Cir. 2001)
(internal citations omitted); Fed. R. Civ. P. 55. By defaulting, a defendant is deemed to have
admitted all of the plaintiff’s well-pled allegations of fact, which then form the basis for
judgment against the defendant. Plaintiff has provided an appropriate basis for judgment against
defendant Jerrod J. Olin through its well-pled allegations of a dispute over the funds at issue.
As detailed in Part I., supra, plaintiff’s complaint alleges a dispute over the proceeds of
and interest on a life insurance policy, and that plaintiff filed this interpleader action to avoid
multiple liability. Defendant Jerrod J. Olin has failed to respond to the complaint, and the Clerk
entered default against him. Plaintiff is therefore entitled to default judgment against defendant
Jerrod J. Olin.
Pursuant to 28 U.S.C. § 2361, a court may restrain all claimants to the subject of an
interpleader action from instituting or prosecuting any proceeding in a state or United States
court affecting the interpleader property, and may make that injunction permanent and discharge
the plaintiff from further liability after hearing the case. Accordingly, the magistrate judge finds
that plaintiff is entitled to an order (1) permanently enjoining defendant Jerrod J. Olin from
instituting or prosecuting any proceeding in a state or United States court affecting the funds at
issue in this case; and (2) discharging plaintiff from further liability to defendant Jerrod J. Olin in
connection with the funds at issue in this case.

IV.
Finally, plaintiff has moved for reimbursement of its costs. A district court has discretion
to reimburse a plaintiff’s reasonable fees and costs in an interpleader action. Trs. of Plumbers
and Pipefitters Nat’l Pension Fund v. Sprague, 251 F. App’x 155, 156 (4th Cir. 2007) (per
curiam); Sun Life Assurance Co. of Can. v. Bew, 530 F. Supp. 2d 773, 776 (E.D. Va. 2007).
Plaintiff’s counsel avers under oath that the attorneys’ fees incurred in this proceeding amount to
$11,560.50, based on 36.7 hours of work at a rate of $315.00 per hour, and that the costs incurred
in this proceeding amount to $435.00. The magistrate judge has examined the record and finds
that this amount is reasonable compensation for work necessarily expended to resolve multiple
claims to the funds at issue in this case. Plaintiff is accordingly entitled to be reimbursed its
attorneys’ fees and costs in an amount totaling $11,995.50 from the funds deposited with the
court.
V.
The magistrate judge will enter appropriate orders and a report and recommendation
consistent with this memorandum opinion.

/s/
Thomas Rawles Jones, Jr.
United States Magistrate Judge
Alexandria, Virginia
March 18, 2011