United States District Court, N.D. West Virginia
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY, an Indiana corporation, Plaintiff,
CHICO GIRLS II, LLC, a Delaware limited liability company, and SAMUEL A. CHICO, III, Defendants.
MEMORANDUM OPINION AND ORDER GRANTING PLAINTIFF'S
MOTION FOR INTERPLEADER [DKT. NO. 15] AND DENYING
DEFENDANT'S MOTION TO DISMISS [DKT. NO. 26]
M. KEELEY UNITED STATES DISTRICT JUDGE.
before the Court are the motion for interpleader (dkt. no.
15) filed by the plaintiff, The Lincoln National Life
Insurance Company (“Lincoln National”), and the
motion to dismiss (dkt. no. 26) filed by defendant Chico
Girls II, LLC (“Chico Girls”). For the reasons
that follow, the Court GRANTS Lincoln's motion for
interpleader and DENIES Chico Girls' motion to dismiss.
September 28, 2005, Samuel A Chico, Jr. (“Mr.
Chico”) and Ida Chico (“Mrs. Chico”)
purchased a Jefferson-Pilot Life Insurance Company Flexible
Premium Adjustable Survivorship Life Insurance Policy, Policy
Number JF5525788 (the “Policy”), in the amount of
$550, 000.00. Jefferson-Pilot Insurance Company later merged
with Lincoln National, which became legally obligated under
the terms of the Policy. The stated owner and beneficiary of
the Policy is Chico Girls II, LLC (“Chico
Girls”). Premium bills were to be sent to Mr. Chico,
Mrs. Chico, and Chico Girls. Proceeds of the Policy
(“Proceeds”) were to become payable upon the
death of the second to die of Mr. Chico and Mrs. Chico. Mr.
Chico died on February 7, 2013, and Mrs. Chico died on June
20, 2016. Thus, upon the death of Mrs. Chico, the Proceeds
became due and payable.
29, 2016, John F. Hussell, IV (“Hussell”),
attorney for Sam A. Chico, III (“Sam III”), sent
a letter to Lincoln National claiming a portion of the
Proceeds and providing notice of a pending civil action
involving the defendants, among others, in the Circuit Court
of Monongalia County, West Virginia, Civil Action No.
15-C-108 (Judge Clawges). On July 5, 2016, Lincoln National sent
a letter to Chico Girls and an email to Julia Abbitt
(“Ms. Abbitt) requesting information to process a claim.
Following this request, on August 30, 2016, Chico Girls
submitted a Claimant's Statement that claimed entitlement
to the proceeds.
September 8, 2016, Lincoln National sent a letter to Chico
Girls and Hussell stating:
1. It had received a Claimant Statement from Abbitt,
completed on behalf of Chico Girls;
2. It had been notified by Hussell that Sam Jr. also was
claiming the Proceeds;
3. It was requesting additional information about the
litigation pending in Monongalia County, West Virginia;
4. It admitted the Proceeds are due and payable, but
“if we pay them to one party, we run the risk of being
sued by the other party[, ]” and provided notice that
the solution would be to file an action in Interpleader; and
5. If it became necessary for it to file an action in
interpleader, it would request the Court to order that the
defendants reimburse it for its legal fees and costs out of
September 29, 2016, Lincoln National sent a letter to Hussell
requesting additional information to support Sam III's
claim. Further, the letter notified Hussell that it would
delay payment for fourteen days, but, if it had not received
the necessary information by then, it would pay Proceeds to
the beneficiary of record. On October 13, 2016, Hussell
submitted documents in support of Sam III's claim,
including a Claimant's Statement dated September 15,
2016, stating that Sam III is “filing this claim as . .
. a beneficiary of an [Irrevocable Joint Life Insurance
Trust] which is the proper owner and beneficiary of the
policy.” (Dkt. No. 21 at 4).
National contends that it is now faced with competing claims
to the Proceeds and cannot safely determine the correct
recipient without being subject to multiple lawsuits and
multiple liability. To alleviate its risk, Lincoln National
has filed a complaint pursuant to Fed.R.Civ.P. 22 seeking
authorization to deposit the Proceeds with the Court and
requiring the defendants to interplead to determine the
rightful claimant. As relief, it seeks the following:
• An Order from the Court ordering it deposit the
Proceeds, plus applicable interest, with the Court;
• Reimbursement for legal costs and attorney's fees
from the Proceeds by submitting an invoice to this Court for
its approval within ten (10) business days of the entering of
the Order and then deducting ...