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Allstate Life Insurance Co. v. Ellett

United States District Court, E.D. Virginia, Norfolk Division

February 4, 2015



MARK S. DAVIS, District Judge.

This matter is before the Court on a motion for summary judgment filed by defendant Ryan Lee Martinez ("Martinez"). The instant case is an "interpleader" action in which plaintiff, Allstate Life Insurance Company ("Allstate"), as issuer of a life insurance policy for decedent Cindy Jensen-Ellett ("the Insured"), seeks to deposit death benefit funds with the Court to allow defendants to litigate their competing claims to such funds. As discussed below, because Martinez fails to demonstrate that summary judgment should be entered in his favor at this time, the pending motion is DENIED.

I. Factual and Procedural History

On or about July 25, 2013, the Insured died in her home from a knife wound to the neck, and her death certificate lists the cause of death as "homicide." Compl. ¶¶ 11-12, ECF No. 1. The Insured's husband died on the same day from a gunshot wound to the head, with his cause of death likewise identified as "homicide." Id . ¶ 13. At the time of her death, the Insured had a life insurance policy issued by Allstate in the amount of $202, 882.20 (the "Death Benefits"). Id. at ¶¶ 10, 19; ECF No. 7, at 2.

The Insured's life insurance policy identifies two beneficiaries: defendant Christopher Ellett ("Ellett") (50%); and defendant Martinez (50%). Compl. ¶ 10. After the Insured's death, both Ellett and Martinez filed claims with Allstate asserting the right to policy proceeds. Id . ¶¶ 14-15. Ellett has already received his 50% share in the amount of $101, 441.10, but as executor of the Insured's estate, Ellett seeks to prevent Martinez from obtaining the other 50% based on Martinez's alleged involvement in the death of the Insured. Id . ¶¶ 18-19. Allstate, having concerns about Martinez's apparent involvement in the Insured's death, filed this interpleader action after learning from the City of Chesapeake Police Department that Martinez was a suspect. Id . ¶¶ 16-17.

Allstate's complaint seeks permission to deposit the disputed portion of the Death Benefits into the registry of the Court in order to permit Martinez and Ellett to litigate their competing claims, and further seeks dismissal from this suit with an award of attorneys' fees and costs. ECF No. 1. Although Allstate has not yet filed a motion seeking to deposit the disputed portion of the Death Benefits with the Court, and discovery has not yet commenced in this case, [1] Martinez filed the instant summary judgment motion arguing that he is legally entitled to 50% of the Death Benefits. Both Ellett and Allstate subsequently filed briefs in opposition to summary judgment, and Martinez later filed a reply brief. The pending summary judgment motion is therefore ripe for review.

II. Standard of Review

"Interpleader is a procedural device that allows a disinterested stakeholder to bring a single action joining two or more adverse claimants to a single fund." Security Ins. Co. of Hartford v. Arcade Textiles, Inc., 40 F.App'x 767, 769 (4th Cir. 2002). It is designed "to protect the stakeholder from multiple, inconsistent judgments and to relieve it of the obligation of determining which claimant is entitled to the fund." Id.

An interpleader action typically involves two stages. In re Paysage Bords De Seine, 1879 Unsigned Oil Painting on Linen by Pierre-Auguste Renoir, 991 F.Supp.2d 740, 743 (E.D. Va. 2014) (citing United States v. High Tech. Prods., Inc., 497 F.3d 637, 641 (6th Cir. 2007)). First, the court must determine whether the plaintiff "has properly invoked interpleader, including whether the court has jurisdiction over the suit, whether the stakeholder is actually threatened with double or multiple liability, and whether any equitable concerns prevent the use of interpleader."[2] High Tech. Prods., Inc., 497 F.3d at 641. Once a court determines that interpleader is appropriate, the court "may discharge the plaintiff from further liability, " and may enter an injunction restraining the claimants from litigating related actions in state or federal court. 28 U.S.C. § 2361; High Tech. Prods., 497 F.3d at 641; see City Nat. Bank of Fairmont v. Fidelity Mut. Life Ins. Co., 206 F.2d 531, 534 (4th Cir. 1953) (dismissing the interpleader plaintiff from suit after the "cash value" of the insurance policy was deposited with the court). In the second stage, "a scheduling order is issued and the case continues between the claimants to determine their respective rights." Metro. Life Ins. Co. v. Vines, No. WDQ-10-2809, 2011 WL 2133340, at *2 (D. Md. May 25, 2011); see High Tech. Prods., 497 F.3d at 641 (indicating that the second stage proceeds "via normal litigation processes, including pleading, discovery, motions, and trial").

Federal procedure provides two distinct methods of invoking interpleader-"statutory" interpleader and "rule" interpleader-and their jurisdictional requirements vary. Under statutory interpleader, district courts have original jurisdiction over actions if: (1) the amount in dispute exceeds $500; (2) there are two or more adverse claimants of diverse citizenship; and (3) the plaintiff deposits the money or property in dispute into the registry of the court or posts an adequate bond. 28 U.S.C. § 1335. Section 1335 has been "uniformly construed to require only minimal diversity, ' that is, diversity of citizenship between two or more claimants, without regard to the circumstance that other rival claimants may be co-citizens." State Farm Fire & Cas. Co. v. Tashire, 386 U.S. 523, 530 (1967). By contrast, rule interpleader pursuant to Federal Rule of Civil Procedure 22 is a procedural device only, and jurisdiction must therefore be proper under 28 U.S.C. § 1331 (federal question jurisdiction) or § 1332 (diversity jurisdiction).

Because Martinez has filed a summary judgment motion appearing to argue that the record demonstrates that interpleader is not appropriate, or that even if it is appropriate, Martinez should prevail on the merits through summary disposition, the Court must apply the familiar summary judgment standard. Such standard provides, in short, that "summary judgment should be granted if *there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law, ' based on the materials in the record, '" which must be viewed "in the light most favorable to the nonmoving party." Sansotta v. Town of Nags Head, 724 F.3d 533, 539 (4th Cir. 2013) (quoting Fed.R.Civ.P. 56). On summary judgment, "[t]he movant initially bears the burden of showing the absence of any genuine issue of material fact, " and it is only when such burden is effectively carried that the nonmovant is required "to present facts sufficient to create a triable issue." Wilson Works, Inc. v. Great American Ins. Group, 495 F.App'x 378, 380 (4th Cir. 2012) (citing Temkin v. Frederick Cnty. Comm'rs., 945 F.2d 716, 718 (4th Cir. 1991)).

III. Discussion

Prior to filing an answer or other responsive pleading, Martinez filed the instant summary judgment motion requesting a final ruling on the merits finding that Martinez is entitled to the portion of the Death Benefits for which he is a designated beneficiary. Although Martinez's summary judgment motion does not expressly allege that this Court lacks jurisdiction over this case, it appears ...

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