Am. Gen. Life Ins. Co. v. Henthorn

• Decision Date: 22 September 2015
• Docket Number: Civil Action No. 15-cv-00108-MSK-NYW
• Parties: AMERICAN GENERAL LIFE INSURANCE COMPANY, Plaintiff, v. HAROLD A. HENTHORN; ESTATE OF TONI B. HENTHORN, a/k/a Toni Bertolet; and GARY CLEXTON, as Special Administrator of the Estate of Toni B. Henthorn a/k/a Toni Bertolet, Defendants, and BARBARA CASHMAN, as Guardian ad litem of H. Henthorn, Proposed Intervenor.
• Court: U.S. District Court — District of Colorado

AMERICAN GENERAL LIFE INSURANCE COMPANY, Plaintiff, v. HAROLD A. HENTHORN; ESTATE OF TONI B. HENTHORN, a/k/a Toni Bertolet; andGARY CLEXTON, as Special Administrator of the Estate of Toni B. Henthorn a/k/a Toni Bertolet, Defendants, andBARBARA CASHMAN, as Guardian ad litem of H. Henthorn, Proposed Intervenor.

Civil Action No. 15-cv-00108-MSK-NYW

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

September 22, 2015

Chief Judge Marcia S. Krieger

OPINION AND ORDER DENYING MOTION TO INTERVENE AND SETTING ORAL ARGUMENT AS TO RECOMMENDATION AND OBJECTIONS

THIS MATTER is before the Court primarily on the Magistrate Judge's August 11, 2015 Recommendation (# 75) that, as pertinent here, recommends that the Court abstain from exercising jurisdiction over this matter and, accordingly, deny as moot Ms. Cashman's Motion to Intervene (# 12) (among other pending motions). Both Mr. Henthorn (# 77) and Plaintiff American General Life Insurance Company ("AGLI") (# 78) filed Objections to the portion of the Recommendation that this Court abstain from exercising jurisdiction. Ms. Cashman filed a sort of contingent Objection (# 76) to the Recommendation, agreeing that the Court should abstain from exercising jurisdiction but objecting to the possibility that the Court might order costs and fees payable to AGLI. In this Order, the Court addresses Ms. Cashman's Motion toIntervene, Mr. Henthorn's response (# 17), AGLI's response (#18), and Ms. Cashman's reply (#21), and sets AGLI and Mr. Henthorn's Objections to the Recommendation for oral argument.

FACTS

Given the limited scope of this Order, the Court supplies only a cursory and simplified factual recitation. In September 2012, Toni Henthorn fell to her death while hiking with her husband, Defendant Harold Henthorn. At the time, Ms. Henthorn was the insured on a $ 1.5 million life insurance policy issued by AGLI. Mr. Henthorn is the primary beneficiary named in that policy, and Ms. Henthorn's estate is the contingent beneficiary. In January 2013, a probate case was opened in the Colorado District Court for Douglas County to administer Ms. Henthorn's estate. In that proceeding, Defendant Gary Clexton was appointed as Personal Representative of Ms. Henthorn and Special Administrator of her estate; Ms. Cashman was appointed as guardian ad litem of H. Henthorn, the Henthorns' minor daughter. Mr. Henthorn and H. are the sole heirs to Ms. Henthorn's estate.

Mr. Henthorn made a claim on AGLI for benefits under the policy in September 2013. AGLI did not immediately pay over those benefits. Eventually, suspicion arose that Mr. Henthorn was responsible for Ms. Henthorn's death and in late 2014, a federal grand jury indicted Mr. Henthorn for the murder of his wife.¹ Relying on C.R.S. § 15-11-803, the "Slayer Statute" that prevents persons committing homicides from receiving life insurance proceeds or bequests from the victim, AGLI commenced this action in interpleader. It deposited the life insurance proceeds with the Court and now seeks an order discharging all potential claims against it arising out of that policy. Mr. Henthorn and Mr. Clexton have both asserted claims tothe proceeds. In addition, Mr. Henthorn has asserted a counterclaim against AGLI, alleging that AGLI's refusal to promptly pay over the benefits in September 2013 constituted a bad faith breach of the insurance policy.

Ms. Cashman has moved to intervene (# 12) in the interpleader action, arguing that: (i) as a potential beneficiary of Ms. Henthorn's estate, she² has an interest in the proceeds of the AGLI policy; and (ii) that her interest could be impaired if she is not permitted to intervene in these proceedings because the AGLI proceeds are not yet the subject of the ongoing probate proceedings; and (iii) Mr. Clexton, on behalf of the estate, cannot sufficiently represent that interest because Mr. Clexton is a "represents the estate alone and not the interests of any particular beneficiary."

On August 11, 2015, the Magistrate Judge issued a Recommendation (# 75) that this Court decline to exercise jurisdiction over AGLI's interpleader claim, instead deferring to the ongoing probate proceedings in state court. The Recommendation suggested that, as a consequence, Ms. Cashman's motion to intervene in these proceedings could be denied as moot. The Recommendation did not address Mr. Henthorn's counterclaim against AGLI.

ANALYSIS

A. Motion to intervene

Ms. Cashman seeks to intervene in the interpleader portion of the action pursuant to Fed. R. Civ. P. 24. That rule provides that, upon timely motion, the court must allow a person to intervene in the action if: (i) that person claims an interest in the property that is the subject of the action; (ii) the disposition of the action may impair or impede that person's ability to protectthat interest; and (iii) the person's interests are not adequately represented by existing parties. Tri-State Generation and Transmission Ass'n, Inc. v. New Mexico Public Regulation Com'n., 787 F.3d 1068, 1071 (10^th Cir. 2015). The Court concludes that Ms. Cashman's motion is timely, but it fails to establish the remaining requirements.

Turning first to whether Ms. Cashman asserts a sufficient interest, the inquiry into whether a movant has a sufficient interest in the litigation is driven entirely by practical concerns, although an inquiry into whether that interest is "direct, substantial, and legally-protectable" can be persuasive, albeit not controlling. See San Juan County v. U.S., 503 F.3d 1163, 119-97 (10^th Cir. 2007). Here, the action commenced by AGLI is in the form of interpleader, the purpose of which is to provide "a forum in which the holder of money admittedly owing to someone and claimed by several parties may have the question of entitlement to the fund settled in one proceeding and be himself discharged from all further liability as to the fund." Massachusetts Mut. Life Ins. Co. v. Central-Penn Nat'l Bank, 362 F.Supp. 1398, 1401 (E.D.Pa. 1973). The money in this case is the benefit payable under the AGLI policy, and there are two claimants asserting an entitlement to it: Mr. Henthorn, as the named primary beneficiary on the policy, and Mr. Clexton, on behalf of Ms. Henthorn's estate, as the contingent beneficiary.

Ms. Cashman does not claim that she has any direct interest in the policy benefits, which is to say, Ms. Cashman does not contend that she is named as an additional beneficiary under the policy. Rather, Ms. Cashman's interest in the insurance proceeds is entirely conditional and derivative: if the policy proceeds are found to be payable to Ms. Henthorn's estate instead of Mr. Henthorn, and if Ms. Cashman is found to be the sole heir to that estate, only then will the she obtain an actual interest in those...