United States District Court, D. New Mexico
ORDER ENTERING INTERPLEADER AND GRANTING SUMMARY
GREGORY B. WORMUTH UNITED STATES MAGISTRATE JUDGE.
MATTER is before the Court on Plaintiff American Fidelity
Assurance Company's Motion to Interplead Funds, for an
Award of Attorney's Fees and Costs and for Dismissal
(doc. 38) and Defendant Richard Humphreys'
Motion for Summary Judgment (doc. 35).
Defendant Richard Humphreys initially indicated his
opposition to Plaintiff's Motion, see doc. 38 at
5, neither defendant ultimately elected to file a written
response. However, Plaintiff and Defendant Humphreys
subsequently reached an agreement regarding both the granting
of the Motion and the award of attorney's fees. As for
Defendant Humphreys' Motion for Summary Judgment,
Plaintiff expresses no opinion regarding the ultimate
disposition of the case and asks only to interplead the
funds. See doc. 37. For the reasons that follow,
both Motions are GRANTED.
relevant facts are not in dispute. Underlying this action is
the life insurance policy of George Bernard Humphreys, who
died on February 20, 2017. Doc. 38 at 3. George
Humphreys carried a life insurance policy with Plaintiff
American Fidelity for a total benefit of $100, 858.44.
Id. at 5. At the time of Mr. Humphreys' death,
the listed beneficiaries of the policy were Helen Humphreys
(primary) and Brenda Evans (contingent). Id. at 1.
Helen Humphreys, Mr. George Humphreys' wife, predeceased
him on November 20, 2014. This initially led American
Fidelity to identify Brenda Evans as the recipient of the
policy benefit. See doc. 1-6.
American Fidelity was soon alerted to the possibility of
competing claims to the proceeds. Richard Humphreys, Mr.
George Humphreys' biological son, alleges that his father
completed and mailed a beneficiary change form in the spring
of 2015, following Ms. Humphreys' death. He further
alleges that this completed beneficiary change form listed
the Estate, not Brenda Evans, as the primary beneficiary.
Doc. 38 at 2. American Fidelity initiated the
current suit on September 26, 2017, with the stated intention
of protecting itself from double or multiple liability.
Doc. 1 at 2.
subsequently come to light that Ms. Evans died on February 1,
2018 (see doc. 16), and that her only surviving heir
appears to be her brother, Floyd Michael Ison (doc.
38 at 2). Accordingly, Plaintiff amended its Complaint
to name Mr. Ison as a defendant. Mr. Ison has disclaimed and
assigned all interest in the proceeds. Doc. 32.
Because Ms. Evans' will was never probated, Plaintiff
also named John/Jane Does 1-5, the other possible unknown
claimants to Brenda Evans' estate, as defendants.
Plaintiff served them by publication in both Artesia, New
Mexico and Lubbock, Texas, Ms. Evans' former places of
residence. Docs. 33, 34. Publication
garnered no response.
now moves to interplead the funds into the Court registry,
minus its attorney's fees and costs. It also requests
dismissal from the case with prejudice and an injunction
prohibiting further related claims against American Fidelity
by any of the claimants.
filed the operative First Amended Complaint in Interpleader
on August 1, 2018, invoking interpleader under Federal Rule
of Civil Procedure 22. Doc. 28. Interpleader allows a
disinterested plaintiff to settle disputes about property
ownership by joining possible claimants as defendants to a
lawsuit. See Aviva Life & Annuity Co. v. White,
772 F.3d 634, 639-40 (10th Cir. 2014). Rule 22 states that
“[p]ersons with claims that may expose a plaintiff to
double or multiple liability may be joined as defendants and
required to interplead.” Fed.R.Civ.P. 22(a)(1).
actions are typically resolved in two stages. Primerica
Life Ins. Co. v. Montoya, 2018 WL 3068059, at *3 (D.N.M.
June 21, 2018) (unpublished) (citing United States v.
High Tech. Prods., 497 F.3d 637, 641 (6th Cir. 2007)).
First, the court determines whether interpleader has been
properly invoked. Interpleader is properly invoked when the
court has jurisdiction and the stakeholder is “actually
threatened with double or multiple liability.” High
Tech. Prods., 497 F.3d at 641 (citing 7 Charles Alan
Wright, Arthur R. Miller, & Mary Kay Kane, Federal
Practice and Procedure § 1714 (3d ed. 2001)). “If
a court determines that the plaintiff-stakeholder properly
invoked interpleader and has no interest in the stake, then
it may dismiss the stakeholder from the proceedings before
moving to the second stage.” Primerica, 2018
WL 3068059, at *3 (citing Commercial Nat'l Bank v.
Demos, 18 F.3d 485, 487 (7th Cir. 1994); In re
Millennium Multiple Employer Welfare Ben. Plan, 772 F.3d
634, 639 (10th Cir. 2014)). The court may also “issue
an order…enjoining the parties from prosecuting any
other proceeding related to the same subject matter.”
High Tech. Prods., 497 F.3d at 641 (quoting 7
Wright, Miller, & Kane, supra, at § 1714).
At the second stage, “the court determines the
respective rights of the claimants to the fund or property at
stake via normal litigation processes.”
Primerica, 2018 WL 3068059, at *3 (internal
quotation marks omitted) (quoting High Tech. Prods.,
497 F.3d at 641).
first stage of the interpleader process, the Court finds that
Plaintiff is a disinterested stakeholder and has properly
interpleaded all parties with a possible claim to the policy
benefit. The Court is also satisfied, given the confusion
over the proper beneficiary, that Plaintiff was threatened
with double or multiple liability sufficient to justify Rule
22 interpleader. The Court will therefore dismiss Plaintiff
from the action, allow Plaintiff to interplead the funds, and
issue an injunction preventing participating parties from
bringing further actions against Plaintiff related to this
Motion to Interplead, Plaintiff also requested an award of
its attorney's fees and costs in the amount of $22,
734.09. Doc. 38 at 5. “The award of fees and
costs to an interpleader plaintiff, or
‘stakeholder,' is an equitable matter that lies
within the discretion of the trial court.”
Transamerica Premier Ins. Co. v. Growney, 70 F.3d
123, at *1 (10th Cir. 1995) (unpublished table opinion).
Defendant Humphreys filed no response, which the Court would
ordinarily construe as consent to grant the Motion.
See D.N.M.LR-Civ. 7.1(b). However, subsequent to the
filing of Plaintiff's Motion, the parties contacted the
Court having reached an agreement as to attorney's fees
and costs. Plaintiff agreed to accept, and Defendant
Humphreys agreed to surrender, an award in the amount of $15,
000. The Court in its discretion sees no reason not to honor
the parties' mutual agreement, given its finding,
see Section III, infra, that Defendant
Humphreys is the proper owner of the policy benefit.
Entitlement to the ...