Great Lakes Ins. SE v. Dunklin
| Decision Date | 31 December 2020 |
| Docket Number | CIVIL ACTION 20-0467-WS-N |
| Citation | 510 F.Supp.3d 1091 |
| Parties | GREAT LAKES INSURANCE SE, Plaintiff, v. James DUNKLIN, et al., Defendants. |
| Court | U.S. District Court — Southern District of Alabama |
Lawrence Matthew Quinlivan, Deutsch, Kerrigan & Stiles, L.L.P., Gulfport, MS, for Plaintiff.
D. Gregory Dunagan, Carr Allison, Daphne, AL, for Defendant James Dunklin.
Powell Dean Waite, Jr., Dean Waite & Associates, Mobile, AL, for Defendant Shonda M. Brennan.
Francois Michel Blaudeau, MD, Southern Institute for Medical and Legal Affairs, Birmingham, AL, for Defendant Estate of John Lee Bratton, Jr.
This matter comes before the Court on the Motion to Dismiss (doc. 15) filed by defendant Estate of John Lee Bratton, Jr. ("Estate of Bratton"). The Motion has been briefed and is now ripe for disposition.1
This is an interpleader action brought by plaintiff, Great Lakes Insurance SE ("Great Lakes"), arising from a tragic boating accident that occurred on Mobile Bay on April 24, 2020. According to the well-pleaded factual allegations of the Second Amended Complaint in Interpleader and for Declaratory Judgment, Great Lakes issued a homeowner's insurance policy to defendant James Dunklin (the "Dunklin Policy"), with policy limits of $300,500 for property damages or bodily injuries caused by an occurrence for which Dunklin was personally liable. (Doc. 13, ¶¶ 10, 14.) On the date in question, Dunklin is alleged to have operated his boat too closely behind a vessel in which decedent John Lee Bratton, Jr. and defendant Shonda M. Brennan were traveling. (Id. , ¶ 11.) Dunklin's vessel allided with the Bratton/Brennan vessel, causing property damage, injuring Brennan, and killing Bratton. (Id. ) Great Lakes indicates that the Estate of Bratton has made demand against Great Lakes for the policy limits on the Dunklin Policy for the wrongful death of John Lee Bratton, Jr. (Id. , ¶ 12.) Great Lakes further alleges that Dunklin has notified it that Brennan also intends to make a claim against the Dunklin Policy for personal injuries and property damage accrued in the subject accident. (Id. , ¶ 13.)2 According to the Second Amended Complaint, Great Lakes "is ready and willing to pay the Policy's $300,500.00 limits to the persons entitled to them, but [Great Lakes] cannot do so without exposing itself to potential multiple liabilities or litigation." (Id. , ¶ 14.)
Faced with these circumstances, Great Lakes did what insurance companies often do, to-wit: It filed an interpleader action in federal court. In that action, Great Lakes expresses willingness to tender the requisite $300,500 to the Clerk of Court for deposit into the court registry, requests that this Court determine to whom the money should be paid (as between defendants/claimants Estate of Bratton and Brennan, as well as the insured, Dunklin), and represents that it has commenced this action "of its own free will and to avoid being vexed and harassed by conflicting and multiple claims to the $300,500.00." (Id. , ¶ 20.) In addition to the interpleader claim, Great Lakes brings a cause of action for declaratory judgment asking this Court to declare that, pursuant to the Dunklin Policy, "aside from paying out the amounts it is bound to cover under the Policy's limits, [Great Lakes] has no further duty to defend or indemnify [Dunklin] against the claims asserted by any Defendant." (Id. , ¶ 26.)
The Second Amended Complaint predicates federal jurisdiction on both the diversity provisions of 28 U.S.C. § 1332 () and the statutory interpleader provisions of 28 U.S.C. § 1335. With respect to the latter jurisdictional foothold, Great Lakes reasons that § 1335 jurisdiction attaches in this matter because Great Lakes "has in its possession money with a value greater than $500 and ... two or more adverse claimants are making a claim to be entitled to such money." (Id. , ¶ 6.)
In response, Estate of Bratton filed a "Rule 12(b) Motion to Dismiss," wherein it argues that Great Lakes is engaged in improper "jurisdictional manipulation" and that dismissal of this action is warranted under principles of Wilton / Brillhart abstention. (Doc. 15-1, PageID.186.) Estate of Bratton further posits that this case involves solely matters of Alabama insurance law and that "[t]here is a more appropriate parallel state court action with the same parties" brought by the Estate and currently pending in state court "that will fully resolve all the factual and legal disputes raised in this case." (Id. , PageID.186-87.)3 Great Lakes opposes the Rule 12(b) Motion, arguing that federal jurisdiction is proper, that Wilton / Brillhart abstention is inapplicable, and that this Court should exercise jurisdiction over this matter in any event.
The appropriate starting point of the analysis is to focus on the threshold question of whether federal subject-matter jurisdiction is present in this action at all. The Court answers this question in the affirmative.
As noted, Great Lakes has pleaded, among other things, that federal jurisdiction is conferred by 28 U.S.C. § 1335, which provides that district courts have original jurisdiction of interpleader actions involving money or property valued at $500 or more, where there are two adverse claimants of diverse citizenship. It is well settled that statutory interpleader actions require only minimal diversity, not complete diversity; however, minimal diversity is a jurisdictional prerequisite under § 1335, meaning that at least two of the adverse claimants to the interpleaded funds must be of diverse citizenship. See, e.g., Lindenberg v. Jackson Nat'l Life Ins. Co. , 912 F.3d 348, 356 (6th Cir. 2018) (); Lee v. West Coast Life Ins. Co. , 688 F.3d 1004, 1007 n.1 (9th Cir. 2012) () (citation omitted); Allstate Ins. Co. v. Young , 923 F. Supp. 1559, 1561 (S.D. Ga. 1996) () (emphasis in original). No such minimal diversity exists here. Indeed, the Second Amended Complaint expressly pleads that the only two claimants, defendants Brennan and Estate of Bratton, are both citizens of Alabama for jurisdictional purposes. (Doc. 13, PageID.128, ¶¶ 3-4.) In the absence of any showing of minimal diversity among the adverse claimants to the subject insurance proceeds, statutory interpleader is unavailable as a jurisdictional basis for Great Lakes here.
That being said, in the alternative to statutory interpleader, the Second Amended Complaint invokes diversity jurisdiction pursuant to 28 U.S.C. § 1332. In that context, this case would take the form of a so-called "rule interpleader" action pursuant to Rule 22, Fed.R.Civ.P. That rule provides that "[p]ersons with claims that may expose a plaintiff to double or multiple liability may be joined as defendants and required to interplead." Rule 22(a)(1), Fed.R.Civ.P. "For Rule 22 interpleader, diversity requires the stakeholder – the party seeking adjudication of multiple claims against it – to be diverse from the claimants." Weaver v. Metropolitan Life Ins. Co. , 939 F.3d 618, 623 (5th Cir. 2019) (footnote omitted); see also Federated Mut. Ins. Co. v. Moody Station and Grocery , 821 F.3d 973, 976-77 (8th Cir. 2016) () (citations and internal quotation marks omitted). The § 1332 jurisdictional requirements are plainly satisfied here, inasmuch as Great Lakes has pleaded (and no defendants have denied) that it is a German citizen for diversity purposes, whereas all defendants are citizens of Alabama, and the $300,500 amount in controversy greatly exceeds the $75,000 jurisdictional minimum. The Court therefore readily concludes that federal subject-matter jurisdiction properly lies here. All arguments to the contrary in Estate of Bratton's Rule 12(b) Motion briefing are rejected.4
Estate of Bratton's briefs are laden with inflammatory language accusing Great Lakes of impropriety in initiating these federal proceedings. According to Estate of Bratton, Great Lakes is engaged in "forum shopping" and "jurisdictional manipulation." (Doc. 15-1, PageID.186.) The Estate of Bratton says Great Lakes is attempting to "pass[ ] the buck to federal courts," that it "seeks to usurp the true plaintiff's ... choice of forum," and that "it raced to the courthouse and clearly sought to handcuff us to a federal forum." (Id. , PageID.188-89.) In Estate of Bratton's view, Great Lakes’ conduct amounts to "procedural fencing" and "improper maneuvering." (Id. , PageID.199.) But the facts before the Court do not support these harsh characterizations of Great Lakes’ course of conduct.
From Great Lakes’ standpoint, the dilemma created by the underlying circumstances is clear and intractable. Its insured, Dunklin, was involved in a catastrophic boating accident that claimed the life of Bratton and inflicted personal injuries on Brennan. The Alabama Boating Accident Report prepared by the investigating law enforcement agency – and appended to the Second Amended Complaint as an exhibit – lists as contributing factors to the accident Dunklin's "improper lookout," "operator inattention," and "operation too close to other vessel/person in the water." (Doc. 13-2, PageID.176.)...
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