Humana Insurance Company of Kentucky v. O'Neal, 032718 FED6, 17-5811

Docket Nº:17-5811
Opinion Judge:MERRITT, CIRCUIT JUDGE.
Party Name:HUMANA INSURANCE COMPANY OF KENTUCKY, Plaintiff-Appellee, v. WHITNEY O'NEAL, Defendant-Appellant, TESSA M. PERKINS, Individually and as Administrator of the Estate of Ted Wesley Hamilton, Defendant-Appellee.
Judge Panel:Before: MERRITT and SUTTON, Circuit Judges; CLELAND, District Judge.
Case Date:March 27, 2018
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit
 
FREE EXCERPT

HUMANA INSURANCE COMPANY OF KENTUCKY, Plaintiff-Appellee,

v.

WHITNEY O'NEAL, Defendant-Appellant,

TESSA M. PERKINS, Individually and as Administrator of the Estate of Ted Wesley Hamilton, Defendant-Appellee.

No. 17-5811

United States Court of Appeals, Sixth Circuit

March 27, 2018

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION

ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF KENTUCKY

Before: MERRITT and SUTTON, Circuit Judges; CLELAND, District Judge. [*]

MERRITT, CIRCUIT JUDGE.

This is an appeal from an interpleader action by plaintiff Humana Insurance Company of Kentucky to determine the beneficiary of the life insurance proceeds between two competing claims for the benefit made by defendant Whitney O'Neal, the ex-girlfriend of the decedent, and defendant Tessa Perkins, sister of the decedent and the administrator of his estate. Humana's life insurance plan is regulated by the Employee Retirement Income Security Act of 1974, and this action arises under 29 U.S.C. § 1132(a)(3)(B)(ii).

I.

The decedent, Ted Hamilton, was a participant in the Humana Basic Life Insurance Plan, an ERISA-regulated employee welfare benefit plan sponsored, self-funded and administered by Humana. A basic life insurance benefit was provided to all employees. The decedent's life insurance benefit was $94, 000 based on a number of factors, including decedent's age and salary at the time of his death. The Plan provided that the employee could name a beneficiary or, if a beneficiary was not named, Humana would pay the benefit at its option to either the surviving spouse or the estate. Hamilton died on August 5, 2015. At the time of his death, Hamilton was not married and had no dependents. According to Humana, Hamilton had used its online enrollment platform and named defendant O'Neal as the primary beneficiary in 2014. The next year, during the reenrollment period in 2015 several months prior to his death, Hamilton did not name a beneficiary.

Humana received claims from both the administrator of Hamilton's estate, defendant Tessa M. Perkins, and O'Neal, the named beneficiary of the policy in 2014. Humana contacted O'Neal and Perkins informing them that their claims were adverse to each other and requesting that the competing claimants attempt to settle the matter so as to preserve the benefit from litigation fees and costs. Interpleader Complaint at ¶ 26; Letters dated March 25, 2016. Humana informed Perkins and O'Neal that it had not yet denied the claim or distributed the benefit, and advised them that it would be forced to file an interpleader action if they could not resolve the dispute between themselves.

A year after Hamilton's death, Perkins and O'Neal still had not resolved their dispute over entitlement to the life insurance benefit. Because Humana believed that it likely faced exposure to a suit and possible double liability if it awarded the benefit, it filed an interpleader action pursuant to Federal Rule of Civil Procedure 22 naming O'Neal and Perkins as defendants.1 In response, O'Neal filed a crossclaim against Perkins and a counterclaim against Humana. O'Neal later voluntarily dismissed her crossclaim against Perkins. At the conclusion of discovery, the matter culminated in a Motion for Judgment on the Record by O'Neal, Humana's Motion to Dismiss O'Neal's Counterclaim, Humana's Motion for Attorney Fees, a Motion for Summary Judgment by Perkins, and a Motion for Judgment on the Pleadings by O'Neal. The district court granted Humana's motion to dismiss and denied its motion for attorney fees, granted Perkins' motion for summary judgment, and denied O'Neal's motion for judgment on the pleadings and motion for judgment on the record. Humana Ins. Co. of Ky. v. O'Neal, No. 16-cv-173, 2017 WL 3015173 (E.D. Ky. July 14, 2017). This appeal followed.

II.

Although O'Neal's brief on appeal does not outline her issues on appeal with precision, it appears that she challenges the district court's opinion and order on the following grounds: (1) Humana should not have been allowed to bring an interpleader action; (2) Humana failed to exhaust administrative remedies before bringing the interpleader action; (3) the district court should not have allowed any discovery; (4) the district court erred in granting Humana's motion to dismiss the counterclaim; (5) the district court erred in granting Perkins' motion for summary judgment and awarding the life insurance benefit to the decedent's estate; and (6) the district court erred in denying O'Neal's motion for judgment on the pleadings and motion for judgment on the record.2

A. O'Neal's Procedural Challenges to the Proceedings Below

Humana brought this interpleader action pursuant to Federal Rule of Civil Procedure 22. Rule 22(a) interpleader allows a party to join all other claimants as adverse parties when its claims are such that it may be exposed to multiple liability. This permits the insurance company, here Humana, as the stakeholder who has no claim to the money and is willing to release it to the rightful claimant, "to put the money . . . in dispute into court, withdraw from the proceeding, and leave the claimants to litigate between themselves the ownership of the fund in court." Metro. Life Ins. Co. v. Marsh, 119 F.3d 415, 418 (6th Cir. 1997) (quoting Zechariah Chafee, Jr., The Federal Interpleader Act of 1936: I, 45 Yale L.J. 963, 963 (1936)).

O'Neal continually litigated the proceeding below as if it were an ERISA action challenging the denial of benefits, and she continues to persist with this approach on appeal. Humana did not deny O'Neal's...

To continue reading

FREE SIGN UP