Hartford Life Ins. Co. v. Pottorff
| Decision Date | 09 April 2014 |
| Docket Number | 5:13-cv-77 (MAD/DEP) |
| Parties | HARTFORD LIFE INSURANCE COMPANY, Plaintiff, v. KEITH POTTORFF, BRANDI BEERS, SCOTT BEERS, and THE PENDING ESTATE OF JANET L. POTTORFF, Defendant. |
| Court | U.S. District Court — Northern District of New York |
APPEARANCES:
PEPPER HAMILTON LLP
Attorneys for Plaintiff
OF COUNSEL:
BRIAN P. DOWNEY, ESQ.
MEMORANDUM-DECISION AND ORDER
Plaintiff Hartford Life Insurance Company ("Hartford") brings this statutory interpleader action pursuant to 28 U.S.C. § 1335 against Defendants Keith Pottorff ("Pottorff"), Brandi Beers and Scott Beers (collectively, "Beers Defendants"), and the Pending Estate of Janet L. Pottorff ("Pottorff Estate"), seeking to resolve potentially competing claims for the proceeds of a life insurance policy issued to Janet L. Pottorff ("Decedent"). See Complaint, Dkt. No. 1. Defendant Pottorff, Decedent's husband and a named beneficiary of Decedent's life insurance proceeds, has been convicted of Decedent's intentional murder. Pursuant to New York's common law slayer rule, Defendant Pottorff is not entitled to receive such proceeds. Currently before the Court isHartford's renewed motion for default judgment. See Dkt. No. 22. Defendants have not opposed the motion, or otherwise appeared in this action.
The Court has taken the facts set forth below from Plaintiff's complaint and accompanying exhibits. Janet L. Pottorff was insured by Hartford under policy number GL-677777 ("Policy") for a basic life insurance benefit of $20,000 ("Life Insurance") and a basic accidental death and dismemberment benefit of $23,750 ("AD&D"). See Complaint ¶ 1 & Exh. A.
On April 17, 2004, Decedent completed a Beneficiary Designation Form in which she designated Defendants Keith Pottorff, Brandi Beers, and Scott Beers as primary beneficiaries of the Policy. The Beneficiary Designation Form provides that "[p]ayment will be made in equal shares or all to the survivor unless otherwise indicated." Decedent designated 50% of the total benefit amount to her husband Keith Pottorff, 25% of the total benefit amount to her daughter Brandi Beers, and 25% of the total benefit amount to her son Scott Beers. Decedent did not name a contingent beneficiary. See id. ¶ 11 & Exh. B.
On July 20, 2012, Decedent died of asphyxiation from strangulation and/or suffocation; the manner of death was determined to be homicide. See id. ¶ 12 & Exh. C. At the time of the filing of the instant complaint, Defendant Pottorff was awaiting trial for the murder of Decedent. See id. ¶¶ 13-15. On March 7, 2013, Defendant Pottorff was convicted of murder in the second degree. See Appendix (Certificate of Conviction & Disposition).
See Complaint ¶ 17 & Exh. A.
The Beers Defendants have separately signed and submitted claims for benefits under the Policy to Hartford. See id. ¶¶ 18-19 & Exhs. E, F. The Beers Defendants were subsequently paid their respective 25% shares of the benefits. See id. ¶ 20. Hartford believes that there is a question as to who should receive the remaining 50% share of the benefits. See id. ¶¶ 21-23. Hartford concedes that benefits are due and owing under the Policy, but is unable to determine to whom, and in what amounts, the benefits should be paid. See id. ¶ 25. The benefit at issue is in the amount of $21,875, plus accumulated interest. See id. ¶ 25.
Hartford filed this interpleader action on January 22, 2013, seeking to pay the proceeds of the Life Insurance and AD&D benefits into the court's registry, to enjoin the Defendants from pursuing any further claims concerning the Policy proceeds, and to discharge Hartford from any further liability based upon the Policy. On February 15, 2013, the Court granted Hartford's unopposed motion for leave to deposit funds into the court. See Dkt. No. 7. On February 26, 2013, the Clerk of the Court received two checks from Hartford totaling $21,945.64.
Following service of the Complaint on Defendant Pottorff and the Beers Defendants, and their respective failures to answer or otherwise respond, the Clerk entered default as to each. See Dkt. No. 10. Thereafter, on April 24, 2013, Hartford made a motion for default judgment pursuant to Fed. R. Civ. P. 55 as to Defendant Pottorff and the Beers Defendants. On October 2, 2013, the Court issued the following text notice: Dkt. No. 15. On the same day, Hartford filed a waiver of service executed by S. Frances Williams as attorney for the Pottorff Estate. See Dkt. No. 16. The Pottorff Estate failed to timely answer or otherwise respond to the Complaint, and the Clerk entered default accordingly. See Dkt. No. 18. On November 27, 2013, Hartford filed a motion for default judgment as to the Pottorff Estate which sought, inter alia, costs and attorneys' fees in the amount of $7,000. See Dkt. No. 19. In response to certain deficiencies in Hartford's initial motions for default judgment, the Court issued a text order instructing Hartford's counsel to re-file both motions for default judgment in compliance with Local Rule 55.2 and any application for costs and attorneys' fees in compliance with Fed. R. Civ. P. 54(d), including supporting affidavits and billing. See Dkt. No. 20.
Hartford has re-filed a consolidated motion for default judgment, requesting that a default judgment be entered against all Defendants enjoining Defendants from instituting or prosecuting any proceeding related to the Policy benefits at issue here, discharging Hartford with prejudice from any further liability with respect to the Policy, and granting any further relief the Court deems just and proper. See Dkt. No. 21. The instant motion also requests that the Court determine to whom the Life Insurance and AD&D benefits should be paid. See id.
An interpleader action may be commenced under either 28 U.S.C. § 1335 (statutory interpleader) or Fed R. Civ. P. 22 (rule interpleader). For the court to have subject matter jurisdiction over a statutory interpleader action, there must be two or more adverse claimants of diverse citizenship. 28. U.S.C. § 1335(a)(1). In contrast, for the court to have subject matter jurisdiction over a rule interpleader action, there must be either diversity of citizenship or a federal question. Hartford has pled the instant action as a statutory interpleader action.
Here, the requirements for a statutory interpleader action are satisfied. Two or more of the adverse claimants are diverse. Defendant Pottorff is a New York resident, see Complaint ¶ 5, Defendant Brandi Beers is a Maryland resident, see id. ¶ 5, and Defendant Scott Beers is a Pennsylvania resident, see id. ¶ 7. Moreover, as noted above, Hartford has deposited the funds at issue into the registry of the court, as required under 28. U.S.C. § 1335(a)(2). Accordingly, the Court may properly exercise jurisdiction over the instant matter.
"Generally, 'Federal Rule of Civil Procedure 55 provides a two-step process that the Court must follow before it may enter a default judgment against a defendant.'" United States v. Simmons, No. 5:10-CV-1272, 2012 WL 685498, *2 (N.D.N.Y. Mar. 2, 2012) (quoting Robertson v. Doe, No. 05-CV-7046, 2008 WL 2519894, *3 (S.D.N.Y. June 19, 2008)). "'First, under Rule 55(a), when a party fails to "plead or otherwise defend . . . the clerk must enter the party's default.Id.; see also Fed. R. Civ. P. 55(a). "'Second, pursuant to Rule 55(b)(2), the party seeking default is required to present its application for entry of judgment to the court.'" Id. "'Notice of the application must be sent to the defaulting party so that it has an opportunity to show cause why the court should not enter a default judgment.'" Id.; see also Fed. R. Civ. P. 55(b)(2).
"When a default is entered, the defendant is deemed to have admitted all of the well-pleaded factual allegations in the complaint pertaining to liability." Bravado Int'l Group Merch. Serv's, Inc. v. Ninna, Inc., 655 F. Supp. 2d 177, 188 (E.D.N.Y. 2009) (citing Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992)). "While a default judgment constitutes an admission of liability, the quantum of damages remains to be established by proof unless the amount is liquidated or susceptible of mathematical computation." Flaks v. Koegel, 504 F.2d 702, 707 (2d Cir. 1974) (citations omitted); see also Bravado Intern., 655 F. Supp. 2d at 189 (citation omitted). "[E]ven upon default, a court may not rubber-stamp the non-defaulting party's damages calculation, but rather must ensure that there is a basis for the damages that are sought." Overcash v. United Abstract Group, Inc., 549 F. Supp. 2d 193, 196 (N.D.N.Y. 2008) (citing Credit Lyonnais Sec. (USA), Inc. v. Alcantara, 183 F.3d 151, 155 (2d Cir. 1999)). "The burden is on the plaintiff to establish its entitlement to recovery." Bravado Intern., 655 F. Supp. 2d at 189 (citation omitted). "While 'the court must ensure that there is a basis for the damages specified in a default judgment, it may, but need not, make the...
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