United States District Court, E.D. Virginia, Norfolk Division
MEMORANDUM OPINION AND ORDER
L. WRIGHT ALLEN, UNITED STATES DISTRICT JUDGE.
matter comes before the Court on a Motion to Dismiss (ECF No.
4) filed by Defendants Crofton Diving Corporation and Camille
Gobrecht (hereinafter referred to singularly as "Crofton
Diving"). The Motion is granted, and this suit is
dismissed with prejudice. Another case is now the sole
vehicle for determining entitlement to the funds sought by
Plaintiff Ann Bremus.
the Court are two related cases: this action, Bremus v.
Crofton Diving Corp., No. 2:16-cv-700 (E.D. Va. Dec. 7,
2016), and Crofton Diving Corp. v. Bremus, No.
2:16-cv-734 (E.D. Va. Dec. 21, 2016). Both cases concern an
employee retirement fund (a 401K) worth approximately $417,
000, established by now-deceased Crofton Diving employee
Michael Bremus. After Michael Bremus's death, his second
wife, Ann Bremus, and his daughter, Jordan Bremus (Ann
Bremus' stepdaughter) each claimed entitlement to his
retirement fund. Jordan Bremus anchors her claim in a 2003
beneficiary designation form, which names her as beneficiary
of the fund. However, Ann Bremus contends that the terms of
the retirement plan favor spousal beneficiaries, and that her
2011 marriage to Michael Bremus superseded the beneficiary
designation made in 2003.
November 15, 2016, Ann Bremus filed this suit in Portsmouth
Circuit Court, alleging that Crofton Diving breached a
fiduciary duty and violated the Employee Retirement Employee
Retirement Income Security Act of 1974 ("ERISA"),
by failing to promptly release the disputed funds to her.
See Compl. ¶¶ 13-16 (ECF No. 1-1). Crofton
Diving removed the action to this Court. See Notice
of Removal (ECF No. 1).
December 21, 2016, Crofton Diving brought a separate
interpleader action in this Court, naming both Ann Bremus and
Jordan Bremus as defendants. See Compl., Crofton
Diving, No. 2:16-cv-734 (E.D. Va. Dec. 21, 2016). In the
interpleader action, Crofton Diving moved to deposit the
disputed funds with the Court, be dismissed from the
proceedings, and be relieved of any liability. See
Mot. for J. on the Pleadings, Crofton Diving, No.
2:16-cv-734 (E.D. Va. Mar. 2, 2017). The Court granted that
Motion and advised that Crofton Diving would be dismissed
from the suit after depositing the funds. See Crofton
Diving, No. 2:16-cv-734, slip op. at 1-3 (E.D. Va. May
17, 2017). On June 6, 2017, Crofton Diving deposited $446,
844.77 with the Court, which includes the retirement-fund
principal plus interest. See Deposit Receipt,
Crofton Diving, No. 2:16-cv-734 (E.D. Va. June 6,
dismissing a complaint, federal district courts must decide
whether to dismiss with or without prejudice. A dismissal
with prejudice "is a complete adjudication of the issues
presented by the pleadings and is a bar to a further action
between the parties." Harrison v. Edison Bros.
Apparel Stores, Inc., 924 F.2d 530, 534 (4th Cir. 1991).
Conversely, a dismissal without prejudice "operates to
leave the parties as if no action had been brought at
all." Dove v. CODESCO, 569 F.2d 807, 809 n.3
(4th Cir. 1978). Despite this distinction, both types of
dismissal share one important characteristic: the termination
of the specific action (or claim). See Taylor v.
Sturgell, 553 U.S. 880, 892 (2008); see also United
States v. California, 507 U.S. 746, 756 (1993) ("A
dismissal without prejudice terminates the action and
concludes the rights of the parties in that particular
to dismiss a claim with or without prejudice generally lies
within the discretion of the district court. See Carter
v. Norfolk Comm. Hosp. Ass'n, 761 F.2d 970, 974 (4th
Cir. 1985); see also Payne v. Brake, 439 F.3d 198,
204 (4th Cir. 2006). When a complaint is incurable through
amendment, dismissal with prejudice is proper. See
Cozzarelli v. Inspire Pharms., Inc., 549 F.3d 618, 630
(4th Cir. 2008); see also Gadda v. State Bar of Cal,
511 F.3d 933, 939 (9th Cir. 2007).
case at hand, Ann Bremus alleges that Crofton Diving breached
a fiduciary duty by failing to promptly release the disputed
funds to her. See Compl. ¶¶ 1-2. When
faced with Ann Bremus's pre-suit demands to remit the
funds, Crofton Diving demurred out of concern over legal
propriety. See Surreply at 1 (ECF No. 9). The
company observed that a recent Supreme Court ruling raised
the possibility that Jordan may be entitled to some of the
disputed funds. See Id. at 1-2 (citing Hillman
v. Maretta, 133 S.Ct. 1943, 1945 (2013) (holding that a
federal statute preempts a Virginia statute governing when an
employee's marital status changes but he or she fails to
update his or her life insurance beneficiary designation
prior to death)). Consequently, Crofton Diving filed the
interpleader action to resolve the dispute. See
Compl., Crofton Diving, No. 2:16-cv-734 (E.D. Va.
Dec. 21, 2016).
is a form of joinder open to one who does not know to which
of several claimants he or she is liable .... It permits the
person to bring the claimants into a single action, and to
require them to litigate among themselves to determine which,
if any, has a valid claim." Charles A. Wright & Mary
Kay Kane, Federal Procedure Deskbook § 79 (2017). The
interpleader action was developed in common law to be
"an equitable rather than a legal procedure."
Id. In keeping with its equitable purpose, Federal
Rule of Civil Procedure 22 permits an interpleader action
"whenever there are multiple claimants whose claims are
such that the plaintiff-called the stakeholder-is or may be
exposed to double or multiple liability. . . ."
Id. "[T]he purpose is to protect against double
vexation in respect to a single liability, rather than to
prevent a double liability ...." Id.
Diving inpled the disputed funds so that the parties claiming
entitlement-Ann and Jordan Bremus-could litigate the issue
without Crofton Diving's involvement. Crofton
Diving, slip op. at 1-3. After depositing the funds,
Crofton was "discharged from all liability . ..
regarding the disposition of the deposited funds."
Id. at 1. The Court enjoined Ann and Jordan Bremus
preliminarily and permanently from the "institution or
prosecution" of "any other proceedings in any other
court against [Crofton Diving] with regard to the deposited
funds or their distribution." Id. The parties
agree that this Court's injunction requires dismissal of
the instant suit. However, contrary to Ann Bremus's
assertions, it also precludes her from reasserting a future
breach of fiduciary duty claim. Therefore, her suit must be
dismissed with prejudice.
disinterested third party interpleads funds, courts will
ordinarily bar a subsequent suit for breach of fiduciary duty
that is premised on failure to remit the disputed funds. In
Prudential Ins. Co. of America v. Hovis, an insurer
filed an interpleader complaint and one of the potential
beneficiaries counterclaimed, alleging the insurer acted
negligently and in bad faith in its handling of policy
changes. 553 F.3d 258, 259 (3rd Cir. 2009). The district
court below had ruled that the insurer had properly brought
an interpleader action against the defendants, and was
therefore shielded from further liability. The Third Circuit
affirmed, holding that when "the stakeholder bears no