The Northwestern Mutual Life Insurance Company v. Moore et al
MEMORANDUM OPINION. Signed by District Judge T. S. Ellis, III on 01/05/2021. (choy, )(copies sent on 01/06/2021)
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IN THE UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF VIRGINIA
THE NORTHWESTERN MUTUAL LIFE
DAVID YOHANNAN, as trustee for the benefit )
of EMMA YOHANNAN and ETHAN
DAVID YOHANNAN, individually and as
trustee for the benefit of EMMA YOHANNAN )
and ETHAN YOHANNAN
MARTIN MOORE, as executor of the Estate
of KRISTIN YOHANNAN MOORE
MARTIN MOORE, as trustee of The Moore
Family Joint Trust u/a January 19, 2007
Civil Action No. 1:19-cv-1312
Plaintiff Northwestern Mutual Life Insurance Company (“Northwestern”) filed this Rule
22, Fed. R. Civ. P. interpleader action following the death of Kristin Yohannan Moore
(“Decedent”), seeking a determination of the proper beneficiary or recipient of the funds payable
under Decedent’s $500,000 life insurance policy (the “Policy”). The two interpleaded claimants
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for the Policy funds are Decedent’s surviving spouse, Martin Moore (“Moore”) and Decedent’s
surviving former spouse, David Yohannan (“Yohannan”). At issue now on Yohannan’s motion
for summary judgment is a determination of the proper disposition of the Policy funds. 1 Both
Yohannan and Moore agree that the Policy funds must ultimately be disbursed for the benefit of
Emma Yohannan (“Emma”) and Ethan Yohannan (“Ethan”), children of Decedent’s marriage to
Yohannan and who are now 26 and 23 years old, respectively. However, Yohannan and Moore
disagree on whether the Policy funds must be held in a trust that withholds distribution of the
Policy funds until Emma and Ethan each turn 35 years old. The matter has been fully briefed and
argued, including a telephonic hearing that occurred on July 22, 2020. Accordingly, the matter is
now ripe for disposition. 2
The following undisputed facts are pertinent to the parties’ dispute over the proper
disposition of the Policy funds.
Northwestern is a Wisconsin insurance company. See Compl. ¶ 1.
Yohannan is Decedent’s first husband and is a citizen of Virginia. See id. ¶ 3; see also
JSF ¶ 1 (Dkt. 34).
Moore is Decedent’s second husband and is a citizen of Virginia. See Compl. ¶ 2; see
This Memorandum Opinion addresses summary judgment for each claimant. Although Moore has not himself filed
a cross-motion for summary judgment, Moore’s opposition brief seeks dismissal of Yohannan’s claims and also asserts
a claim with respect to the Policy funds. See Moore Opp’n at 8 (Dkt. 24). Yohannan has responded to each of Moore’s
arguments, and the parties have agreed to a Joint Statement of Facts (“JSF”). See JSF (Dkt. 34); Yohannan Reply at
2–9 (Dkt. 27). Accordingly, it is appropriate to dispose of all claims on summary judgment. See Velasquez v. Salsas
& Beer Rest., Inc., 735 F. App’x 807, 809 (4th Cir. 2018) (district court may sua sponte grant summary judgment for
the non-moving party where the non-moving party’s opposition brief provides the moving party “sufficient notice that
he need[s] to put forth all evidence in favor of his  claim[s]”).
The primary matter ripe for disposition is the Rule 22 interpleader action brought by Northwestern and naming
Moore and Yohannan as the two competing claimants for the Policy funds. See infra Part II. Although Yohannan has
filed (1) two cross claims against Moore and (2) three claims in a third-party complaint against Moore as Executor
and Trustee, these five claims must be dismissed. In this regard, three of these claims—Cross Claims 1 and 2, and
Third Party Claim 2—must be dismissed because they are necessarily decided by the disposition of the Rule 22
interpleader action. The other two claims—Third Party Claims 1 and 3—must be dismissed because it is appropriate
to decline supplemental jurisdiction pursuant to 28 U.S.C. § 1367(c)(3). See infra Part III.
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also JSF ¶ 12. 3
Emma and Ethan are children of Decedent’s marriage to Yohannan. See JSF ¶ 2.
Emma and Ethan, now 26 and 23 years old, respectively, are currently both pursuing
graduate degrees. 4
Decedent and Yohannan were married on September 12, 1992. See JSF ¶ 1.
On March 31, 2003, Decedent purchased the Policy, a $500,000 life insurance policy
with Northwestern. See id. ¶ 3; Policy (Dkt. 39-1).
The Policy named Yohannan as the primary beneficiary and Emma and Ethan as the
contingent beneficiaries. 5 See Policy at 16.
In August 2003, Decedent and Yohannan separated. See JSF ¶ 4.
On October 20, 2003, Decedent changed the beneficiary designations in the Policy.
Specifically, Decedent removed Yohannan as the primary beneficiary, naming her
father, Richard Woycik, as the new primary beneficiary, and renaming Emma and
Ethan as the contingent beneficiaries. See Policy at 22.
On January 14, 2004, Decedent and Yohannan executed a Property Settlement
Agreement (“PSA”). See JSF ¶ 7; see also PSA (Dkt. 22-1).
The PSA contains the following provisions.
o The PSA requires Decedent to maintain the Policy until Emma and Ethan each
turn 25 years old. See PSA ¶ 22.
o The PSA requires Decedent to maintain “Husband as Trustee for the benefit of
the children” as the sole beneficiary of the Policy. Id. The PSA also states that,
within 30 days of signing the PSA, Decedent must provide Yohannan “written
proof of this beneficiary designation.” Id. ¶ 23.
o The PSA states that “the welfare and best interests of the children, Emma and
Ethan, are the paramount consideration” of Decedent and Yohannan. Id. ¶ 6.
Subject matter jurisdiction exists over the Rule 22 interpleader action because “the diversity requirement is satisfied
in a Rule interpleader case when each stakeholder is diverse from each claimant. . . [and] the interests of the parties
are genuinely adverse.” Leimbach v. Allen, 976 F.2d 912, 916 (4th Cir. 1992). In other words, the competing claimants
in a Rule 22 interpleader action need not be diverse from each other. See id. Importantly, however, this interpretation
of the diversity requirement applies solely to the Rule 22 interpleader action and does not confer jurisdiction over
claims between claimants in a Rule interpleader action, such as cross claims and third-party claims. See infra Part III.
See Moore Decl. ¶¶ 17–18 (Dkt. 24-3); Yohannan Decl. ¶¶ 3–4 (Dkt. 22-4); Richard Woycik Decl. ¶ 2 (Dkt. 24-6).
The Policy defines “contingent beneficiary” as a beneficiary who takes if the primary beneficiary dies. Policy at 10.
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o The PSA states that Decedent and Yohannan are not responsible for paying
Emma and Ethan’s educational expenses once Emma and Ethan each turn 23
years old. See id. ¶ 24.
o The PSA, by its terms, is governed by Virginia law. See id. ¶ 43.
No party disputes that “Husband” in the PSA means Yohannan, that “Wife” in the PSA
means Decedent, that the “children” in the PSA are Emma and Ethan, and that the PSA
contemplates a trust for the benefit of Emma and Ethan. 6
Although the PSA does not state who must create and determine the provisions of the
referenced trust for Emma and Ethan, the PSA’s primary provisions about the Policy,
Paragraphs 22 and 23, direct each obligation with respect to the Policy at “Wife.” 7
As of February 14, 2004, thirty days after the PSA was signed, Decedent had not
changed the Policy beneficiary to “Husband as Trustee for the benefit of the children.”
Nor, as of this date, had Decedent or Yohannan created and determined the terms of a
trust for the benefit of Emma and Ethan, as required by the PSA.
On November 9, 2004, the Circuit Court of Fairfax County, Virginia, adopted
Decedent’s and Yohannan’s agreed-upon PSA into a Final Decree of Divorce. See JSF
See Yohannan Reply at 6 (“The PSA expresses each party’s intention to create a trust for the benefit of the children,
naming the surviving spouse as trustee.”); Yohannan Mot. for Summary Judgment at 14 (Dkt. 22) (same); Moore
Opp’n at 6, 8 (same).
In full, Paragraphs 22 and 23 read as follows:
22. Wife agrees to keep in full force and affect [sic] the currently existing life insurance policy on her life
and to maintain Husband as Trustee for the benefit of the children of the marriage. Wife agrees that said
amount of Life Insurance shall be Five Hundred Thousand Dollars ($500,000.00). Wife currently holds said
policy with Northwestern Mutual and the policy number is [REDACTED IN PSA]. Wife agrees to pay all
premiums thereon as they become due. Wife shall maintain this policy until said children have attained the
age of twenty-five (25) at which time she may cancel it.
23. Wife shall provide written proof of this beneficiary designation within thirty (30) days from the date of
this Agreement. Wife shall be permitted to designate a contingent beneficiary to said policy in the event of
Husband’s death prior to her own. Wife hereby warrants that said policy is free from loans, lien or
encumbrances and is neither owned by a trust nor held as an asset within any trust. Wife will provide
Husband with a copy of the entire policy, including the declaration page from said policy, and, on a semiannual basis, will provide Husband with proof of payment of all premiums on the policy. Wife will also
cause to be delivered to the insurer, within fifteen (15) days of the execution of this Agreement, written
instructions directing that it notify [sic] Husband in the event that Wife fails to make a timely premium
payment on said policy. A copy of this letter will be forwarded to Husband simultaneous [sic] with its
forwarding to the insurer. Should the life insurance policy lapse for any reason caused by Wife, or as a direct
result of a failure by Wife to make a required premium payment, Husband shall retain the right, upon Wife’s
death, to claim against Wife’s estate, personal representatives, agents, heirs, assigns, trustees, or against any
trust established by Wife for such failure. The terms of this paragraph shall remain in effect until the
obligations under the terms of this Agreement have been fulfilled.
Id. ¶¶ 22–23.
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On October 18, 2009, Decedent married Moore. See id. ¶ 12; see also Woycik Decl. ¶ 6.
On March 25, 2015, Decedent again changed the beneficiary designations in the Policy.
Specifically, Decedent removed Woycik as the primary beneficiary, naming Moore as
the new primary beneficiary, and renaming Emma and Ethan as the contingent
beneficiaries. See Policy at 24.
On January 19, 2017, Decedent and Moore created The Moore Family Revocable Joint
Trust, a trust requiring the trustees, Decedent and Moore, to pay the trust principal and
accumulated trust income to Emma, Ethan, and Moore’s four children of a previous
marriage. See Moore Family Trust at 1, 3 (Dkt. 22-6).
On May 1, 2019, Decedent died, and the Policy’s $500,000 benefit became due and
payable. See JSF ¶ 15. At this time, the Policy beneficiary designations on-file with
Northwestern were Moore as primary beneficiary and Emma and Ethan as contingent
beneficiaries. See Compl. ¶ 10.
On June 3, 2019, Yohannan filed a claim with Northwestern, requesting disbursement
of the Policy funds to a trust bank account created on an unknown date in June 2019.
See Yohannan Decl. ¶ 21.
On June 8, 2019, after Yohannan filed his initial claim, Yohannan created two separate
but identical irrevocable trusts, one for the benefit of Emma and one for the benefit of
Ethan (collectively, the “Yohannan Trusts”). See Yohannan Trust for Emma (Dkt 245); Yohannan Trust for Ethan (24-4).
The Yohannan Trusts, identical in all relevant respects, contain the following terms:
o Yohannan is trustee and as of June 8, 2019, each trust holds $1. See Yohannan
Trust for Emma at 1; Yohannan Trust for Ethan at 1. 8
o Until Emma and Ethan each turn 35 years old, Yohannan has sole discretion to
decide whether or not to distribute the trust funds to Emma and Ethan. If so,
Yohannan may distribute the trust funds as he “deems necessary for [Emma and
Ethan’s] health, support, maintenance, comfort, and education.” Yohannan
Trust for Emma ¶ 3; Yohannan Trust for Ethan ¶ 3.
o Until Emma and Ethan each turn 35 years old, Yohannan can use the trust funds
for a variety of purposes, including to acquire property “such as homes, art work
[sic], jewelry, furniture and vehicles.” Yohannan Trust for Emma ¶ 5;
Yohannan Trust for Ethan ¶ 5.
The record does not indicate whether Yohannan has ever placed any additional funds in the Yohannan Trusts.
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o Until Emma and Ethan each turn 35 years old, Yohannan has “absolute
discretion” to decide whether or not Emma and Ethan can make use of property
the Yohannan Trusts acquire. Yohannan Trust for Emma ¶ 5; Yohannan Trust
for Ethan ¶ 5.
o Once Ethan and Emma each turn 35 years old, the Yohannan Trusts terminate
and Yohannan must award “the remaining principal and the accumulated net
income of the trust” to Emma and Ethan. Yohannan Trust for Emma ¶ 4;
Yohannan Trust for Ethan ¶ 4.
On June 11, 2019, following the establishment of the Yohannan Trusts, Yohannan filed
another claim with Northwestern, requesting disbursement of the Policy funds to a trust
bank account. See Yohannan Decl. ¶ 21.
Around this time, Moore filed a claim with Northwestern, requesting disbursement of
the Policy funds. 9
On October 14, 2019, Northwestern filed this Rule 22 interpleader action, asking “[t]his
Court to determine to whom the Benefits should be paid under the Policy.” Id. ¶ 18.
On April 15, 2020, Northwestern deposited the $503,750.34 10 payable under the Policy
into the Clerk’s Registry. See Interpleader Deposit (Dkt. 20).
In support of summary judgment on the Rule 22 interpleader action, Yohannan, Decedent’s
first husband and former spouse, argues that the Policy funds must go to “Yohannan as Trustee for
the benefit of the children,” arguing that this beneficiary designation in the PSA takes priority over
any contrary beneficiary designation. Moore, Decedent’s second husband, opposes this outcome
but does not address the applicable Virginia law that Yohannan cites to support Yohannan’s claim.
Rather, Moore argues that the Policy funds should go directly to Emma and Ethan, children of
Decedent’s marriage to Yohannan, as neither Emma nor Ethan requires a trustee and since the
The record does not indicate whether Moore made a claim for the Policy funds in a personal capacity or on behalf
of Emma and Ethan. This lack of specificity is immaterial to disposition of the Rule 22 interpleader action.
Although the Policy funds originally totaled $503,750.34, the parties agreed to a consent motion to permit
Northwestern to claim $7,900.40, representing Northwestern’s costs and expenses incurred in this interpleader
litigation. See Consent Motion (Dkt. 13); see Order Adopting Consent Motion (Dkt. 15). Thus, the total amount at
issue on summary judgment is $495,849.94.
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Yohannan Trusts, created after Yohannan filed a claim for the Policy funds, do not satisfy the
PSA’s requirements on appropriate trust terms. Alternatively, Moore argues that if the Policy
funds must be distributed to a trust, then the funds should be distributed to the Moore Family Trust.
Analysis of Yohannan’s Motion for Summary Judgment on the Rule 22 interpleader action
properly begins with recognition and application of the settled Virginia rule that a property
settlement agreed to by the divorcing parties and adopted as part of a divorce decree takes
precedence over and replaces existing beneficiary designations in an insurance agreement. 11 This
settled Virginia rule, applied here, makes clear that the PSA’s beneficiary designation, “Husband
as Trustee for the benefit of the children,” replaces and supersedes all contrary beneficiary
designations. It therefore follows that Moore has no claim to the Policy funds, as Moore is not the
Husband referred to in the PSA, and the PSA supersedes the beneficiary designations in the Policy.
Accordingly, neither Moore nor the Moore Family Trust may (i) claim the Policy funds, (ii) assign
the Policy funds, or (iii) serve as trustee over the Policy funds. 12
Although Moore has no claim to the Policy funds, it does not follow that these funds must
be awarded to Yohannan as Trustee, for the Yohannan Trusts established by Yohannan as Trustee
to receive the funds are plainly inconsistent with, and contrary to, the PSA’s provisions concerning
an appropriate trust. In this respect, the parties agree that the PSA contemplates a trust “for the
benefit” of Emma and Ethan, and here, the record makes clear that the Yohannan Trusts do not
benefit Emma and Ethan. Quite clearly, the Yohannan Trusts violate four specific provisions of
See Wood v. Martin, 848 S.E.2d 809, 813–14 (Va. 2020) (awarding disputed life insurance proceeds to the party
listed in the property settlement agreement); Jones v. Harrison, 458 S.E.2d 766, 770 (Va. 1995) (same); Lincoln Nat.
Life Ins. Co. v. Johnson, 38 F. Supp. 2d 440, 451–52 (E.D. Va. 1999) (same).
Appropriately, Moore does not argue that the PSA’s beneficiary designation is defeated by Va. Code § 20-111.1,
Virginia’s revocation of benefits by divorce statute. Put simply, Va. Code § 20-111 does not govern where, as here,
the divorced parties finalize “a written agreement [that] provides for a contrary result as to specific death benefits.”
Va. Code § 20.111.1(C); Jones v. Jones, 206 F. Supp. 3d 1098, 1112 (E.D. Va. 2016) (same).
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The PSA Required Decedent to Create and Determine the Trust Terms: Paragraphs 22
and 23 of the PSA, the PSA’s primary provisions regarding the Policy, make clear that
Decedent, not Yohannan, must create and determine the terms of the trust to receive
the Policy funds. 13 The Yohannan Trusts, however, were created by Yohannan and
therefore do not comport with the PSA. 14
The PSA Required Timely Creation of a Trust: Paragraph 22 of the PSA required
creation of a trust reasonably contemporaneously with the adoption of the PSA. 15 Thus,
even assuming arguendo that the PSA permits Yohannan to create the trust, Yohannan
failed to do so in the requisite time period. Interestingly, Yohannan did not establish
the Yohannan Trusts until June 8, 2019, more than 15 years after the PSA and not until
after Yohannan filed a claim for the Policy funds.
The PSA Does Not Authorize Yohannan to Acquire Personal Property: Nothing in the
PSA provides support for a trust provision authorizing Yohannan to use the Policy funds
to acquire “art work [sic], jewelry, furniture and vehicles.” 16 Indeed, it is hard to see
how Yohannan’s acquisition of “art work [sic], jewelry, furniture and vehicles”
complies with the PSA’s requirement of a trust “for the benefit” of Emma and Ethan—
especially because this very provision authorizing Yohannan to acquire such property
also affords Yohannan “absolute discretion” to preclude Emma and Ethan from using
the “art work [sic], jewelry, furniture and vehicles.” 17
The PSA Does Not Authorize Yohannan to Withhold Distributions: Nothing in the PSA
This is evident because every obligation listed in Paragraphs 22 and 23 regarding the Policy is directed at “Wife.”
Id. ¶¶ 22–23. Nothing in Paragraphs 22 and 23 indicate that Yohannan, the contemplated trustee of the trust, had
authority to create the trust or to determine its terms. Indeed, Decedent necessarily had to create the trust, for at the
time the PSA was signed, only Decedent, the Policy owner, held the property (the Policy) to be conveyed in trust. See
Va. Code § 64.2-701 (defining “settlor” as the person “who creates or contributes property to a trust” and “trust
instrument” primarily as “a record executed by the settlor”); Gelber v. Glock, 293 Va. 497, 506 n.6 (2017) (applying
definition of settlor in Va. Code § 64.2-701); Va. Code § 64.2-720 (“A trust is created only if . . .  the settlor has
capacity to create the trust”); Restatement (Third) of Trusts § 11 (1996) (explaining that “an owner of property  has
capacity to create a trust”).
Although Decedent participated in the creation of the Moore Family Trust, this trust cannot receive the Policy funds
because, as discussed supra, Moore has no claim to the funds. Additionally, the Moore Trust cannot receive the Policy
funds because this trust benefits six children, including Moore’s four children of a previous marriage, who are not
beneficiaries under the PSA.
See PSA ¶¶ 22–23 (requiring “written proof” of the beneficiary designation “Husband as Trustee for the benefit of
the children” within 30 days of signing the PSA).
Yohannan Trust for Emma ¶ 5; Yohannan Trust for Ethan ¶ 5.
PSA ¶ 22; id. ¶ 6 (“the welfare and best interests of . . . Emma and Ethan, are the paramount consideration); Owens
v. Owens, 196 Va. 966, 973 (1955) (“[T]he trustee shall not be allowed . . . to serve himself under the pretense of
serving his cestui que trust.”); Va. Code § 64.2-764(A) (“A trustee shall administer the trust solely in the interests of
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provides support for a trust provision authorizing Yohannan to withhold distributions
from Emma and Ethan until each of them turn 35 years old.
In sum, the Policy funds cannot be awarded to the Yohannan Trusts because these trusts
do not comply with the PSA’s provisions requiring timely creation of a trust and appropriate trust
Because the Yohannan Trusts do not comply with the PSA’s provisions, Moore has sought
an Order directing the Clerk to disburse the Policy funds directly to Emma and Ethan. In support
of this claim, Moore argues that Emma and Ethan are the intended beneficiaries of the Policy and
that Emma and Ethan, now adults ages 26 and 23 years old, respectively, simply do not require a
trust or trustee to supervise and administer the distribution of the Policy funds. Yohannan, who
purports to represent Emma and Ethan in this lawsuit, opposes this outcome, arguing that direct
payment to Emma and Ethan is inappropriate because the PSA does not expressly provide for such
a solution. 18 Notably, Yohannan does not challenge Moore’s contention that Emma and Ethan are
now responsible adults capable of controlling their own finances.
Here, it is appropriate to award the Policy funds directly to Emma and Ethan without the
intervention or need for a trust or a trustee, given that direct payment to Emma and Ethan properly
construes the PSA in a manner that “effectuate[s] the real intent” of the words therein. 19 In this
respect, the PSA is unmistakably clear that the Policy funds must be disbursed “for the benefit of
Yohannan argues that direct payment of the Policy funds to Emma and Ethan violates the PSA’s anti-amendment
provision. This argument plainly fails. Nothing in this Memorandum Opinion amends the terms of the PSA. Rather,
as discussed infra, the result reached here merely interprets the PSA, as required by the PSA’s choice of law provision.
See id. ¶ 43 (“This Agreement shall be construed in accordance with the laws of Virginia”).
Pellegrin v. Pellegrin, 31 Va. App. 753, 759 (2000) (quoting Va. Ry. & Power Co. v. City of Richmond, 129 Va.
592, 611 (1921)) (explaining that courts construing a property settlement agreement may “‘give effect to that
construction which will effectuate the real intent and meaning of the parties’”); Reid v. Reid, No. 1862-16-1, 2017
WL 3707595, at *5 (Va. Ct. App. Aug. 29, 2017) (same); Smith v. Smith, 15 Va. App. 371, 374 (1992) (brackets
added) (internal citation omitted) (“‘In reviewing the [property settlement] agreement, we must gather the intent of
the parties and the meaning of the language, if we can, from an examination of the entire instrument, giving full effect
to the words the parties actually used.’”).
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the children” and that “the welfare and best interests of the children, Emma and Ethan, are the
paramount consideration.” PSA ¶¶ 6, 22. At this time, “the welfare and best interests of the
children” are best served by awarding the funds directly to Emma, who is now 26 years old, and
Ethan, who is now 23 years old. Both are now responsible adults pursuing graduate degrees and
may well need to use the Policy funds to pay graduate school tuition, room, and board, or to pursue
other aspirations or goals. Indeed, it appears that Emma and Ethan have set clear goals for
themselves: Emma will soon graduate from a Physician’s Assistant Program and Ethan intends to
become a medical doctor. Consequently, neither Emma nor Ethan requires the guidance or
supervision of a trustee or a trust and it is appropriate to award the Policy funds directly to Emma
and Ethan. 20
Importantly, this decision to award the Policy funds directly to Emma and Ethan is
consistent with the Supreme Court of Virginia’s decisions in Jones and Wood, mentioned supra
n.11. In both Jones and Wood, the Supreme Court of Virginia invoked an equitable remedy to
award the life insurance proceeds to the proper beneficiary. For example, in Jones, the Supreme
Court of Virginia imposed a “constructive trust” over the disputed life insurance proceeds in order
to award the funds to the children of the decedent’s first marriage. See Jones, 458 S.E.2d at 770.
Similarly, in Wood, the Supreme Court of Virginia invoked the remedy of “equitable assignment”
to award the policy funds to the party with the “superior” equitable claim. Wood, 848 S.E.2d at
814. Here, the equities favor distribution of the Policy funds to Emma and Ethan, as they are
clearly the intended recipients of the Policy funds. See PSA ¶¶ 6, 22–23. Thus, the decision to
Even if the PSA requires imposition of a trust and trustee past age 23, it is appropriate to eliminate the trust and
trustee position because Emma and Ethan are now adults and do not need the supervision or guidance of a trust or a
trustee. See PSA ¶¶ 10, 24; see also Ward v. NationsBank of Va., 256 Va. 427, 440 (1998) (“Removal of a trustee is
within the discretion of the trial court . . . [and] [t]he trial court must determine whether it is in the best interest of the
trust.”); see also In re A.H. Robins Co., Inc., 880 F.2d 779, 786 (4th Cir. 1989) (quoting Willson v. Kable, 177 Va.
668, 671 (1941)) (“‘In all cases the real guide is whether or not it is best for the trust estate that the trustee be
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award the funds directly to Emma and Ethan and without the need for a trust or trustee is in accord
with applicable Virginia law. Accordingly, the Rule 22 interpleader action regarding the proper
disposition of the Policy funds must resolved as follows: the proper recipients of the Policy funds
are Emma and Ethan, and both Emma and Ethan should each receive one-half of the interpleaded
Policy funds. 21
Although the parties have focused primarily on the now-resolved Rule 22 interpleader
action, Yohannan has filed and sought summary judgment on five additional claims, namely:
(1) a cross claim against Moore, seeking a declaratory judgment
pursuant to 28 U.S.C. § 2201 that the proper beneficiary of the
Policy funds is Yohannan as Trustee for the benefit of Emma and
Ethan (“Cross Claim 1”).
(2) a cross claim against Moore for creation of a state law
constructive trust over the Policy funds in the event Moore is named
the beneficiary (“Cross Claim 2”).
(3) a state law claim in a third-party complaint against Moore as
Executor of Decedent’s Estate, seeking payment of attorneys’ fees
pursuant to a provision in the PSA purportedly requiring Decedent’s
estate to indemnify Yohannan in the event of litigation (“ThirdParty Claim 1”).
(4) a state law claim in a third-party complaint against Moore as
Executor of Decedent’s Estate for breach of contract, alleging that
Decedent breached the PSA by modifying the Policy’s beneficiary
designation and that, in the event Moore is named the beneficiary of
the Policy, Decedent’s estate is liable for this breach (“Third-Party
(5) a state law claim in a third-party complaint against Moore as
Executor of Decedent’s Estate, alleging that Decedent defrauded
Yohannan in connection with the PSA and that Decedent’s estate is
There are no genuine issues of material fact that preclude this result on summary judgment. In this respect, the
parties have agreed to a Joint Statement of Facts and all facts necessary to disposition of the Rule 22 interpleader
action are in the record. Although the parties have submitted witness lists in preparation for trial, there is no indication
that the testimony of these witnesses would create a disputed issue of material fact on the Rule 22 interpleader action.
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liable for this alleged fraud (“Third-Party Claim 3”). 22
Summary judgment must be granted for Moore on Cross Claim 1, Cross Claim 2, and
Third-Party Claim 2 and these three claims must be dismissed, for disposition of the Rule 22
interpleader action necessarily decides these three claims. 23 See Velasquez, 735 F. App’x at 809
(holding that district courts may sua sponte grant summary judgment for the non-moving party).
The remaining two claims—Third-Party Claims 1 and 3—raise a threshold question of
subject matter jurisdiction, as both claims involve a dispute between citizens of Virginia. Although
a Rule 22 interpleader action requires diversity of citizenship only between the stakeholder and
the competing claimants, this requirement does not confer diversity jurisdiction over other claims
in a Rule 22 interpleader action. In this respect, claims other than the Rule 22 interpleader action
require an independent basis for jurisdiction or supplemental jurisdiction. See, e.g., Travelers Ins.
Co. v. First Nat. Bank of Shreveport, 675 F.2d 633, 637–38 (5th Cir. 1982) (determining that
district court lacked jurisdiction over cross claims between non-diverse claimants in Rule 22
interpleader action regarding the ownership of a life insurance policy). 24 Accordingly, it is
necessary to determine sua sponte whether subject matter jurisdiction exists over the two
Moore’s summary judgment brief also asserts a claim for reimbursement, alleging that if Emma and Ethan receive
the Policy funds, Emma and Ethan, citizens of Virginia, should pay Moore $111,324.67, representing educational,
health insurance, and other expenses Moore incurred for the benefit of Emma and Ethan after Decedent’s death in
May 2019. See Moore Opp’n at 8; see also Moore Decl. ¶ 16 (listing expenses for Emma and Ethan); Compl. ¶ 4.
However, Emma and Ethan are not parties to this lawsuit and supplemental jurisdiction is discretionarily declined
over this claim pursuant to 28 U.S.C. § 1367(c)(3), for the same reasons expressed infra.
Cross Claim 1 is duplicative of the Rule 22 interpleader action, and Cross Claim 2 and Third-Party Claim 2 are
conditioned on a result—a decision naming Moore the beneficiary of the Policy—which has not and will not occur
here. Yohannan’s claim under Third-Party Claim 2 to recover the $7,900.40 payable to Northwestern also must be
denied because the parties consented to this payment to Northwestern. See Consent Motion (Dkt. 13).
See also Brooks Run Coal Co. v. Waggy, 813 F.2d 400 (Table), 1986 WL 18586, at *1 n.3 (4th Cir. 1986) (citing
Travelers, 675 F.2d at 633); King Fisher Marine Serv., Inc. v. 21st Phoenix Corp., 893 F.2d 1155, 1158 (10th Cir.
1990) (discussing exercise of supplemental jurisdiction over claim in third-party complaint between non-diverse thirdparty plaintiff and third-party defendant). Similarly, Yohannan’s related contention that the statutory interpleader
provision confers jurisdiction is plainly wrong, for statutory interpleader expressly requires “two or more adverse
claimants, of diverse citizenship.” 28 U.S.C. § 1335(a)(1); Prudential Ins. Co. of Am. v. Coffman, 829 F.3d 1120
(Table), 1987 WL 38632, at *1 (4th Cir. 1987) (applying 28 U.S.C. § 1335).
Case 1:19-cv-01312-TSE-MSN Document 41 Filed 01/05/21 Page 13 of 14 PageID# 591
remaining claims. See Brickwood Contractors, Inc. v. Datanet Eng’g, Inc., 369 F.3d 385, 390 (4th
Cir. 2004) (holding that “questions of subject-matter jurisdiction . . . must be raised sua sponte”).
Here, there is no basis for subject matter jurisdiction over Third-Party Claims 1 and 3
independent of supplemental jurisdiction. 25 As for supplemental jurisdiction, it is appropriate to
decline supplemental jurisdiction over these claims pursuant to 28 U.S.C. § 1367(c). Although
these two claims may arise out of the same “common nucleus of operative fact” as the Rule 22
interpleader action, 26 the Rule 22 interpleader action has now been resolved on summary
judgment. See supra Part II. Accordingly, the sole claim for which original jurisdiction existed
has been extinguished and it is appropriate to decline supplemental jurisdiction over Third-Party
Claims 1 and 3 under 28 U.S.C. § 1367(c)(3). 27
For the reasons set forth above, Yohannan’s Motion for Summary Judgment must be
(1) Summary judgment on the Rule 22 interpleader action must be granted sua sponte for
Moore in so far as Emma and Ethan Yohannan must be declared the proper recipients of
the Policy funds but denied in all other respects. Accordingly, with respect to the Rule 22
Federal question jurisdiction does not exist with respect to Third-Party Claims 1 and 3 because these claims are
state law claims for indemnification and fraud. See 28 U.S.C. § 1331; Am. Well Works Co. v. Layne & Bowler Co.,
241 U.S. 257, 260 (1916) (“A suit arises under the law that creates the cause of action”). Diversity jurisdiction does
not exist for the simple reason that Yohannan and Moore, the adverse parties with respect to these claims, are both
citizens of Virginia and therefore not citizens of different states. See 28 U.S.C. § 1332; Compl. ¶¶ 2–3.
Shavitz v. Guilford Cty. Bd. of Educ., 100 F. App’x 146, 151–52 (4th Cir. 2004) (interpreting the threshold
relatedness requirement in 28 U.S.C. § 1367(a) to require a “common nucleus of operative fact” between the
jurisdictionally sufficient and jurisdictionally insufficient claims); Travelers, 675 F.2d at 638 (“It matters not if we
ask whether this claim is a proper cross claim under Rule 13(g) or whether this claim is supported by ancillary
jurisdiction. The analysis is substantially the same.”).
See Shanaghan v. Cahill, 58 F.3d 106, 110 (4th Cir. 1995) (“[T]rial courts enjoy wide latitude in determining
whether or not to retain jurisdiction over state claims when all federal claims have been extinguished.”); Archie v.
Nagle & Zaller, P.C., 790 F. App’x 502, 505–06 (4th Cir. 2019) (affirming district court’s decision to decline
supplemental jurisdiction under 28 U.S.C. § 1367(c)(3) after disposing federal claim); Tripp v. Charlie Falk’s Auto
Wholesale, Inc., 290 F. App’x 622, 632 (4th Cir. 2008) (same).
Case 1:19-cv-01312-TSE-MSN Document 41 Filed 01/05/21 Page 14 of 14 PageID# 592
• The Clerk will be directed to award, &om the interpleader deposit (Dkt. 20),
$247,924.97 to Emma Yohannan and $247,924.97 to Ethan Yohannan; and
• The Qerk will be directed to award half of any accrued interest on the interpleader
deposit to Emma Yohaonan and the other half of any accrued interest on the
intclp1eadcr deposit to Bthan Yobannan.
(2) Summary judgment on Cl'OS$ Claim 1, Cross Claim 2, and Third-Party Claim 2 must
be granted &JIil sponle for Moore and dismissed in light of the decision on the Rule 22
(3) Third-.Party Claims I and 3 and Moore•s claim for reimbursement must be dismissed
without prejudice because supplemental jurisdiction is discretionarily declined pursuant to
28 U.S.C. § 1367(c)(3).
An appropriate Order will issue separately.
The Clerk is directed to provide a COPY of this Memorandum Opinion to all counsel of
record, to Emma and Ethan Yohaman at the address to be provided by counsel, and to counsel for
Northwestern at the last known address of record.
January s. 2021
1: S. BlJis, JU
United States o· tr1ct J.udge
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