Jackson National Life Insurance Company v. Baker et al

Filing 22

MEMORANDUM OPINION AND ORDER GRANTING PLAINTIFFS MOTION FOR INTERPLEADER DEPOSIT, DIRECTING PAYMENT OF FUNDS INTO THE COURT REGISTRY, DENYING PLAINTIFF'S REQUEST FOR ATTORNEYS' FEES, ENJOINING DEFENDANTS FROM INSTITUTING ANY FURTHER ACTIO N AGAINST PLAINTIFF IN THIS ACTION, AND DISMISSING PLAINTIFF WITH PREJUDICE: Granting in part and denying in part 16 Motion for Interpleader Deposit (28 U.S.C. Section 1335) Authorized deposit in the amount of $250,032.80 plus accrued interest ; Plaintiff to deposit funds into the court registry through the Clerk's Office; Attorney fees and costs are Denied; Plaintiff is Dismissed from this action with Prejudice and discharged and released from any liability in connection with the lif e insurance policy; Clerk directed to enter Judgment for the Plaintiff on its interpleader motion pursuant to FCP 54(b); status/scheduling conference to be set by separate order. (copy to Evelyn Howell, Financial Administrator) Signed by Senior Judge Frederick P. Stamp, Jr on 10/4/17. (soa)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
JACKSON NATIONAL LIFE INSURANCE COMPANY,
Plaintiff,
v.

Civil Action No. 5:17CV78
(STAMP)

PATRICIA A. BAKER and JESSICA E. BAKER,
Individually and as Administratrix of
the ESTATE OF FRANK J. BAKER, JR.,
Defendants.
MEMORANDUM OPINION AND ORDER
GRANTING PLAINTIFF’S MOTION FOR INTERPLEADER DEPOSIT,
DIRECTING PAYMENT OF FUNDS INTO THE COURT REGISTRY,
DENYING PLAINTIFF’S REQUEST FOR ATTORNEYS’ FEES,
ENJOINING DEFENDANTS FROM INSTITUTING ANY
FURTHER ACTION AGAINST PLAINTIFF IN THIS ACTION,
AND DISMISSING PLAINTIFF WITH PREJUDICE
I.

Background

This claim concerns the entitlement to life insurance policy
proceeds payable as a result of the death of Frank J. Baker, Jr.
The plaintiff, Jackson National Life Insurance Company (“Jackson”),
originally filed this complaint (ECF No. 1) for interpleader
pursuant to 28 U.S.C. § 1335 and Rule 22 of the Federal Rules of
Civil Procedure seeking to have defendants, through the appointed
Administratrix, Jessica E. Baker, interplead their claims to the
proceeds due under a certain life insurance policy held by Jackson
in the amount of $250,000.00 (and $32.80 in return of premium), and
under which the decedent, Frank J. Baker, Jr., was the insured.
Jackson then filed a motion for interpleader deposit. ECF No.
16.

Jackson states that it “is a disinterested stakeholder” and

“takes no position with regard to the viability of any potential

claimant’s right to the proceeds of the Policy, and has no interest
in the Insurance Proceeds other than for its attorneys’ fees, costs
and expenses.”

ECF No. 1 at 7.

Jackson “has not refused to pay

the Insurance Proceeds under the Policy but, rather, admits that
the Insurance Proceeds are payable under the Policy and that it has
not paid the Insurance Proceeds due to a reasonable, good faith
fear of exposure to multiple liability or multiple litigation over
the Insurance Proceeds.”

ECF No. 1 at 7.

Jackson requests that the Court: (1) require and direct
defendants Patricia A. Baker, Jessica E. Baker, individually, and
the Estate of Frank J. Baker, Jr., by and through its duly
appointed
resolve

Administratrix,

among

Jessica

themselves,

and

E.

Baker

without

to

further

interplead

and

involvement

by

Jackson, any claim or right which they may have or wish to assert
to recover the subject life insurance proceeds which are now due
and payable; (2) permit and direct Jackson to deposit with the
Registry of the Court such interpleader funds that are the subject
of this dispute; (3) award Jackson its reasonable costs and fees in
instituting and perfecting its interpleader claim; (4) dismiss
Jackson from this lawsuit with prejudice and discharging Jackson
from any and all liability in connection with, arising out of, or
relating to this lawsuit, the subject life insurance proceeds, or
the subject life insurance policy, upon Jackson’s deposit of the
interpleader

funds

into

the

Court’s

Registry;

and

(5)

enter

permanent injunctive relief enjoining the initiation or prosecution

2

of any further proceedings against Jackson regarding the insurance
proceeds or the life insurance policy that is the subject of this
action.

ECF No. 16 at 1-2.

Defendant Patricia A. Baker filed an answer (ECF No. 3) to the
plaintiff’s complaint and requested the Court find that defendant
Patricia A. Baker is solely entitled to the receive the insurance
proceeds from the plaintiff, and further asserted an affirmative
claim to the insurance proceeds which was docketed and construed as
a counterclaim for insurance proceeds against Jackson.
Jackson filed an answer (ECF No. 7) to defendant Patricia A.
Baker’s counterclaim and asserted several affirmative defenses.
Defendants Jessica E. Baker and the Estate of Frank J. Baker,
Jr., then filed an answer to plaintiff’s complaint, answer to
defendant Patricia A. Baker’s affirmative claim to the insurance
proceeds, and an affirmative claim to the insurance proceeds.
No. 8.

ECF

Defendants Jessica E. Baker and the Estate of Frank J.

Baker, Jr. request that the Court enter an order specifically
enforcing the terms of the Property Settlement Agreement and
ordering plaintiff Jackson National Life Insurance Company to pay
the policy proceeds to defendants Jessica E. Baker and the Estate
of Frank J. Baker, Jr. in equal parts.
further

request

defendants

and

that
against

judgment

be

defendant

ECF No. 8.

entered
Patricia

in
A.

Defendants

favor
Baker

of

said

and

that

defendants Jessica E. Baker and the Estate of Frank J. Baker, Jr.
be awarded their reasonable costs and attorneys’ fees, as well as

3

any other relief the Court deems just, equitable, and proper.

ECF

No. 8.
Defendant Patricia A. Baker then filed an answer and response
to the affirmative claim to the insurance proceeds of defendants
Jessica Baker and the Estate of Frank Baker Jr.

ECF No. 9.

Plaintiff Jackson filed an answer and affirmative defense to
the affirmative claim to the insurance proceeds of defendants
Jessica Baker and the Estate of Frank Baker Jr.

ECF No. 10.

Plaintiff Jackson then filed a motion for interpleader deposit
(ECF No. 16) with supporting memorandum of law (ECF No. 16-1)
pursuant to 28 U.S.C. § 1335(a)(2) and Rule 67 of the Federal Rules
of Civil Procedure, moving this Court as follows: (1) to require
and

directing

defendants

to

interplead

and

resolve

among

themselves, and without further involvement by Jackson, any claim
or right which they may have or wish to assert to recover the
subject life insurance proceeds which are now due and payable; (2)
to permit and direct Jackson to deposit with the Registry of the
Court such interpleader funds that are the subject of this dispute;
(3) to award Jackson its reasonable costs and fees in instituting
and perfecting its interpleader claim; (4) to dismiss Jackson from
this lawsuit with prejudice and discharge Jackson from any and all
liability in connection with, arising out of, or relating to the
funds discussed in this civil action, the subject life insurance
proceeds, or the subject life insurance policy, upon Jackson’s
deposit of the interpleader funds into the Court’s Registry; and

4

(5) to enter permanent injunctive relief enjoining the initiation
or prosecution of any further proceedings against Jackson regarding
the insurance proceeds or the life insurance policy that is the
subject of this action.
Defendant
opposition

(ECF

Patricia
No.

17)

A.

Baker

to

then

plaintiff’s

filed

a

motion

response
arguing

in

that

interpleader is available and can only be asserted in limited and
narrow circumstances as Federal Rule of Civil Procedure 22 requires
that the plaintiff is or may be exposed to double or multiple
liability. Defendant asserts that Jackson does not and cannot have
a good faith belief that it would have to pay two or more parties
for one claim.

ECF No. 17 at 4.

Defendant Jessica E. Baker, Individually and as Administratrix
of the Estate of Frank J. Baker, Jr., filed a memorandum of law in
opposition to plaintiff’s motion to deposit interpleader funds into
the registry of the court, for discharge, and for additional
interpleader relief.

ECF No. 18.

Defendant Jessica E. Baker

states that she “does not oppose the relief sought by Plaintiff
except to the extent that Plaintiff has not made a valid showing of
its reasonable attorneys’ fees.

Accordingly, defendant Jessica E.

Baker opposes Plaintiff’s entitlement to any attorneys’ fees until
it does so.”

ECF No. 18 at 1.

Plaintiff Jackson then filed its reply (ECF No. 19) to
defendant Patricia A. Baker’s response (ECF No. 17), stating that
“Defendant Patricia A. Baker is impermissibly seeking to have the

5

Court, at this preliminary stage, analyze the merits of the two
completing claims in order to determine whether interpleader was
proper in the first place.

An analysis and determination of the

merits of the underlying controversy is inappropriate at the first
stage of an interpleader action” (ECF No. 19 at 4).

Plaintiff

asserts that the merits of the competing claims should not be
considered
proceeds

until

with

after

the

Jackson

Court.

deposits

Jackson

the

further

insurance
states

policy

that

this

interpleader action is appropriate given the competing assertions
made by the defendants, and that Jackson is also entitled to
attorneys’ fees.

ECF No. 19 at 5.

Jackson states, “[a]s the

pleadings filed in this action conclusively establish, Jackson was
faced with the classic interpleader scenario in which multiple
parties asserted competing claims against policy proceeds. Jackson
had a real and reasonable fear of multiple liability and took the
only option available, which was to interplead the funds and ask
that the competing parties prove to the Court which is entitled to
the funds.
necessary.”

Jackson’s conduct was not only appropriate, but
ECF No. 19 at 8.

Plaintiff Jackson then filed its reply (ECF No. 20) to
defendant Jessica Baker’s response (ECF No. 18), stating that
“[d]efendant does not oppose Jackson’s request for interpleader
relief;

Jackson’s

request

for

permanent

injunctive

relief;

Jackson’s request to deposit the Insurance Proceeds (less Jackson’s
reasonable attorney’s fees and costs) into the Court Registry; or

6

Jackson’s discharge, with prejudice, from this lawsuit.”
20 at 1.

ECF No.

Additionally, defendant Jessica Baker “does not contest

Plaintiff’s entitlement to reasonable attorneys’ fees”. ECF No. 20
at 1.

Rather, defendant contests the amount sought to be charged.

ECF No. 20 at 1-2.
Defendant Patricia A. Baker then filed her reply (ECF No. 21)
responding to plaintiff’s request for attorneys’ fees.

Defendant

Patricia A. Baker cites an opinion by Judge Irene M. Keeley in
which she denied attorneys’ fees in a similar interpleader action.
Lincoln National Life Ins. Co. v. Chico Girls, II, LLC, 2017 U.S.
Dist. LEXIS 65119 (N.D. W. Va. 2017) (2017 WL 1591886 ).

ECF No.

21 at 2.
In her response in opposition to plaintiff’s motion to deposit
interpleader funds and for additional relief, defendant Patricia A.
Baker also objects to plaintiff’s motion to enjoin other litigation
against Jackson. Patricia A. Baker asserts only that she “may have
additional

claims

against

plaintiff,

Jackson

National

Life

Insurance Company, for its failure to abide by the insurance
contract, as contemplated by Hayseeds, Inc. v. State Farm Fire &
Casualty, 352 S.E.2d 73 (W. Va. 1986) (extra-contractual claims).”
ECF No. 17 at 9. However, this defendant presents no further
evidence as to the viability of such claims, only that such claims
are possible.

There is no evidence provided that any such claims

are pending in any other state or federal court.

Therefore, this

defendant’s possible claims cannot serve as a bar to any injunctive

7

relief sought by Jackson which deal with a specific fund, the
insurance

policy

proceeds,

being

deposited

in

this

Court’s

registry.
For the reasons set forth below, the plaintiff’s motion to
deposit interpleader funds into the registry of the Court, for
discharge, and for additional interpleader relief (ECF No. 16) is
granted in part.

The Court directs the plaintiff to deposit the

insurance proceeds and applicable interest into the court registry.
The Court denies plaintiff’s request for attorneys’ fees and
enjoins the above named defendants from instituting any further
action against above named plaintiff dealing with the insurance
policy fund deposited in the court’s registry.

Accordingly, the

Court dismisses the plaintiff from this action with prejudice. The
plaintiff is discharged and released from any liability regarding
the interpleader fund in this civil action, particularly from the
risk of double or multiple liability with regard to these insurance
policy proceeds.
II.
Federal

Rule

of

Applicable Law

Civil

Procedure

22(a)(1)

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.”

The core purpose of interpleader “is to prevent a

stakeholder from having to pay two or more parties for one claim.”
Republic of Philippines v. Pimentel, 553 U.S. 851, 872 (2008).

8

Title 28, United States Code, Section 1335 grants original
jurisdiction to the district courts over interpleader actions and
sets forth certain requirements to maintain interpleader actions.
Section 1335 provides:
(a) The district courts shall have original jurisdiction
of any civil action of interpleader or in the nature of
interpleader filed by any person, firm, or corporation,
associations, or society having in his or its custody or
possession money or property of value of $500 or more, or
having issued a note, bond, certification, policy of
insurance, or other instrument of value or amount of $500
or more, or providing for the delivery or payment or the
loan of money or property of such amount or value, or
being under any obligation written or unwritten to the
amount of $500 or more, if
(1) Two or more adverse claimants, of diverse
citizenship as defined in subsection (a) or
(d) of section 1332 of this title, are
claiming or may claim to be entitled to such
money or property, or to any one or more of
the benefits arising by virtue of any note,
bond, certificate, policy or other instrument,
or arising by virtue of any such obligation;
and if
(2) the plaintiff has deposited such money or
property or has paid the amount of or the loan
or other value of such instrument or the
amount due under such obligation into the
registry of the court, there to abide the
judgment of the court, or has given bond
payable to the clerk of the court in such
amount and with such surety as the court or
judge may deem proper, conditioned upon the
compliance by the plaintiff with the future
order or judgment of the court with respect to
the subject matter of the controversy.
28 U.S.C. § 1335(a).
“An action commenced under section 1335 typically involves two
steps: during the first, the district court determines whether the
requirements

of

the

statute

have
9

been

met

and

whether

the

stakeholder may be relieved from liability; during the second, it
actually

adjudicates

the

interpleaded fund.”

defendants’

adverse

claims

to

the

NYLife Distrib., Inc. v. Adherence Group,

Inc., 72 F.3d 371, 375 (3d Cir. 1995).
In any civil action of interpleader or in the nature of
interpleader under section 1335, 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.

28 U.S.C. § 2361.
III.

Discussion

The jurisdictional requirements for § 1335 interpleader have
been met in this case.

Furthermore, a plaintiff company need not

“wait until persons asserting claims against its insured have
reduced those claims to judgment before seeking to invoke the
benefits of federal interpleader.”

State Farm Fire & Cas. Co. v.

Tashire, 386 U.S. 523, 532 (1967).
This Court finds, after review of the pleadings in this
matter, that Jackson is entitled to interpleader here, and that the
defendants have asserted separate claims to the life insurance
policy proceeds. This is clearly a case of competing claims to the
same insurance policy proceeds held by Jackson as a disinterested
third

party.

The

defendants

in

this

action

have

asserted

independent, adverse claims to the life insurance policy proceeds,

10

thereby exposing Jackson to the possibility of multiple liability
and/or

multiple

interpleader
22(a)(1).

is

suits.

This

appropriate

Court

finds

this

case.

in

that

an

Fed.

order

R.

Civ.

for
P.

This Court finds that the defendants should interplead

and resolve any claims they wish to assert to the specific life
insurance policy proceeds or fund described in the interpleader
motion.
This Court finds that Jackson shall deposit the insurance
proceeds of the subject life insurance policy at issue, along with
accrued interest, into the court registry.

The payment into the

court discharges the insurance company of further liability as to
those proceeds.
1966).

Davis v. Mathews, 361 F.2d 899, 901 (4th Cir.

After depositing the funds into the registry, Jackson will

be dismissed from this civil action.
However, this Court finds that Jackson is not entitled to
“reasonable attorney’s fees for instituting its interpleader action
to resolve the potentially competing claims to the interpleaded
insurance policy funds in one, as opposed to multiple, litigations”
as requested.

ECF No. 16-1 at 7.

This Court finds that this

interpleader action is of the type that typically arises in the
ordinary course of business of a life insurance company.

See also

Lincoln Nat’l Life Ins. Co. v. Chico Girls II, LLC, No. 1:16CV214,
2017 WL 1591886 (N.D. W. Va. Apr. 28, 2017).

This Court finds no

factors which would give rise to the award of attorneys’ fees and
costs in the instant action.

As Jackson states, this is “the

11

classic interpleader scenario”.

ECF No. 19 at 8.

An award of

attorneys’ fees and costs would consequently reduce the amount of
policy proceeds which Jackson is already required to distribute.
ECF No. 16-1 at 3.

This Court finds that a reduction of the policy

amount by awarding attorneys’ fees and costs would not be fair and
equitable in this case.
limited.

The action at hand is straightforward and

See also Lincoln Nat. Life Ins. Co. v. Simpkins, No.

CIV.A.2:08-1188, 2009 WL 2996603 (S.D. W. Va. Sept. 11, 2009).
Consequently, the Court denies Jackson’s request for attorneys’
fees and costs.
IV.
For

the

above-stated

Conclusion
reasons,

the

plaintiff’s

motion

to

deposit interpleader funds into the registry of the Court, for
discharge, and for additional interpleader relief (ECF No. 16) is
GRANTED IN PART. The Court hereby DIRECTS and ORDERS the plaintiff
to deposit $250,000.00, the insurance proceeds of the subject
policy (No. V1P0010003), along with $32.80 in return of premium,
plus accrued interest through date of deposit, into the court
registry.

The plaintiff is DIRECTED to present the funds in the

form of a cashier’s or certified check made payable to “Clerk,
United States District Court.”

The Court DENIES plaintiff’s

request for attorneys’ fees and costs in this action.

The Court

ENJOINS the above named defendants from instituting any further
action against above named plaintiff in this action as to the funds
being deposited in the Court’s registry.

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Accordingly, the Court

DISMISSES the plaintiff from this action WITH PREJUDICE.
plaintiff

is

DISCHARGED

and

RELEASED

from

any

liability

The
in

connection with the life insurance policy at issue, particularly
from the risk of double or multiple liability with regard to these
insurance proceeds or any claim of entitlement to these proceeds
with the exception of the judgment granted to the Estate of Frank
J. Baker, Jr.
Pursuant to Federal Rule of Civil Procedure 67, the Clerk is
DIRECTED to deposit the funds into the Court’s Interest BearingRegistry Account and invested in the Court Registry Investment
System. The money deposited may be withdrawn upon further order of
this Court. The Clerk is DIRECTED to enter judgment for the
plaintiff

Jackson

National

Life

Insurance

Company

on

its

interpleader motion pursuant to Federal Rule of Civil Procedure
54(b), this Court determining that there is no just reason for
delay.

By separate order, this Court will set a date for a status

and scheduling conference to establish a briefing schedule for the
determination of the remaining issues in this civil action.
IT IS SO ORDERED.
The Clerk is DIRECTED to transmit a copy of this memorandum
opinion and order to counsel of record herein and to Evelyn Howell,
Financial Administrator.

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DATED:

October 4, 2017

/s/ Frederick P. Stamp, Jr.
FREDERICK P. STAMP, JR.
UNITED STATES DISTRICT JUDGE

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