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Jackson National Life Insurance Co. v. Baker

United States District Court, N.D. West Virginia

October 4, 2017

JACKSON NATIONAL LIFE INSURANCE COMPANY, Plaintiff,
v.
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.

          FREDERICK P. STAMP, JR. UNITED STATES DISTRICT JUDGE

         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 Administratrix, Jessica E. Baker 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) 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 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. ECF No. 8. 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. ECF No. 8. Defendants further request that judgment be entered in favor of said defendants and against defendant Patricia A. Baker 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 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 (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 Patricia A. Baker then filed a response in opposition (ECF No. 17) to plaintiff's motion arguing 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 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 until after Jackson deposits the insurance policy proceeds with the Court. Jackson further states 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 ...


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