State Farm Life Ins. Co. v. Ablaza
| Decision Date | 21 July 2021 |
| Docket Number | 20-cv-06519-SVK |
| Court | U.S. District Court — Northern District of California |
| Parties | STATE FARM LIFE INSURANCE COMPANY, Plaintiff, v. MICHAEL R. ABLAZA, Defendant. |
The Clerk of Court entered default against Defendant Michael R Ablaza (“Defendant Ablaza”) after Defendant failed to respond to the Summons and Complaint within the time prescribed by the Federal Rules of Civil Procedure. Dkts. 12, 14. Before the Court is Plaintiff State Farm Life Insurance Company's (“Plaintiff”) request to deposit interpleader funds and be dismissed and motion for default judgment. Dkt. 19. Defendant Ablaza has not opposed the motion. Pursuant to Civil Local Rule 7-1(b), the Court finds this matter suitable for resolution without oral argument.
Although Plaintiff has consented to the jurisdiction of the undersigned magistrate judge, Defendant Ablaza has not consented. Dkt. 9. Accordingly, this Court directs the Clerk of the Court to REASSIGN this action to a district judge, with the following REPORT AND RECOMMENDATION that Plaintiff's request to deposit interpleader funds and dismiss Plaintiff and motion for default judgment be GRANTED. If all Defendants later consent to magistrate jurisdiction, the case may be reassigned to the undersigned magistrate judge.
Plaintiff had issued an individual life insurance policy, policy number LF-3554-3706, to Maribeth Garca Ablaza (the “Insured”). Dkt. 1 ¶ 7; Dkt. 19 at 7. At the time of her application dated March 2, 2016, the Insured designated her only child, Defendant Ablaza, as the primary beneficiary to the policy death benefits and did not designate a secondary beneficiary. Dkt. 1 ¶ 8; Dkt. 1-1 Ex. A; Dkt. 19 at 7. The Insured died on or about January 9, 2019, and her death was ruled a homicide. Dkt. 1 ¶ 9; Dkt. 19 at 7. Defendant Ablaza was arrested a few days later for the Insured's murder, and a criminal proceeding has commenced against him in Santa Clara County. Dkt. 1 ¶ 12; Dkt. 19 at 8; Dkt. 19-2 Ex. A. Plaintiff acknowledges that as a result of the Insured's death, policy death benefits became due to a beneficiary or beneficiaries in the amount of $145, 841.00. Dkt. 1 ¶ 10; Dkt. 19 at 7. Plaintiff alleges that if Defendant Ablaza is later determined to have feloniously and intentionally killed the Insured, pursuant to Probate Code Section 252, “it would be as if he predeceased the Insured [] and the Death Benefit would be payable to his heirs per stirpes.” Dkt. 1 ¶¶ 13, 14. Plaintiff further alleges that it believes that Defendant Ablaza does not have any children, so the policy death benefits would be payable to the Insured's estate according to the policy terms. Id. ¶ 14.
On September 17, 2020, Plaintiff filed this interpleader action to resolve which claimants are entitled to the policy death benefits of the life insurance policy issued to the Insured, naming both Defendant Ablaza and Defendant Jane Doe[1] (“Defendant Doe”) (collectively, “Defendants”), the Administrator of the Estate of the Insured. Dkt. 1. Defendant Ablaza is currently incarcerated. Dkt. 19-1 (Declaration of John E. Walker) ¶ 3. Accordingly, on October 20, 2020, Plaintiff served Defendant Ablaza by substituted service and filed a proof of service of the Summons and Complaint. Dkt. 11; Dkt. 19-1 ¶ 3. Defendant Ablaza has failed to answer the Complaint or to otherwise appear in this matter. Dkt. 19-1 ¶ 4. At Plaintiff's request, the Clerk entered default against Defendant Ablaza on January 6, 2021. Dkt. 12; Dkt. 14; Dkt. 19-1 ¶¶ 6-7. Plaintiff now moves for default judgment against Defendant Ablaza. Dkt. 19. Plaintiff filed a proof of service of the motion on Defendant Ablaza. Dkt. 19-4. Defendant Ablaza has not filed a response to the motion for default judgment.
Included in Plaintiff's motion for default judgment is a request that the Court take judicial notice of the court docket in the criminal matter The People of the State of California v. Michael Ablaza, Case No. C1900805 (Santa Clara County). Dkt. 19-2 Ex. A. The Court “may take judicial notice of court filings and other matters of public record.” Reyn's Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 746 n.6 (9th Cir. 2006). Accordingly, the Court GRANTS Plaintiff's request for judicial notice of the court docket in the matter The People of the State of California v. Michael Ablaza, Case No. C1900805 (Santa Clara County).
“In an interpleader action, the ‘stakeholder' of a sum of money sues all those who might have claim to the money, deposits the money with the district court, and lets the claimants litigate who is entitled to the money.” Cripps v. Life Ins. Co. of N. Am., 980 F.2d 1261, 1265 (9th Cir. 1992) (citation omitted). A rule interpleader may be brought pursuant to Federal Rule of Civil Procedure 22. “Rule 22 interpleader is only a procedural device, however-the rule does not convey jurisdiction on the courts.” Aetna Life Ins. Co. v. Bayona, 223 F.3d 1030, 1033 (9th Cir. 2000). “[W]here subject matter jurisdiction exists under the general subject matter and diversity jurisdiction provisions, 28 U.S.C. §§ 1331, 1332, as is the case here, an interpleader action may be brought under Rule 22.” Trustees of IL WU-PMA Pension Plan v. Peters, 660 F.Supp.2d 1118, 1132-33 (N.D. Cal. 2009). Alternatively, a statutory interpleader may be established pursuant to 28 U.S.C. § 1335.
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). “Interpleader is proper when a stakeholder has at least a good faith belief that there are conflicting colorable claims.” Michelman v. Lincoln Nat'l Life Ins. Co., 685 F.3d 887, 889 (9th Cir. 2012). However, this requirement “is not an onerous requirement” and the “threshold to establish good faith is necessarily low so as not to conflict with interpleader's pragmatic purpose, which is ‘for the stakeholder to protect itself against the problems posed by multiple claimants to a single fund.'” Id. at 894 (quoting Mack v. Kuckenmeister, 619 F.3d 1010, 1024 (9th Cir. 2010)).
Here, State Farm has been willing to pay the policy death benefits but has been unable to do so because of Defendant Ablaza and Defendant Doe's conflicting claims. State Farm brought this interpleader action pursuant to Rule 22 naming both Defendants. The Court has jurisdiction over Plaintiff's interpleader action pursuant to 28 U.S.C. § 1332. Plaintiff alleges that Defendant Ablaza is a citizen of California and State Farm's principal place of business is in Bloomington County, Illinois. Dkt. 1 ¶¶ 2-3, 5. In the Complaint, Plaintiff also named “Jane Doe, ” the future Administrator of the Estate of the Insured, indicating that an administrator has not yet been appointed for the Estate of the Insured. Id. ¶ 4. The amount in controversy in this matter exceeds $75, 000. Accordingly, the Court has jurisdiction over this action.[2]
Further, this interpleader is proper because Plaintiff has a good faith belief that Defendants have claims that may expose Plaintiff to double or multiple liability. Fed.R.Civ.P. 22(a)(1). Although Defendant Ablaza is the listed beneficiary, Plaintiff has alleged that it faces double liability due to Defendant Ablaza's potential disqualification under California's “slayer statute” pursuant to California Probate Code Section 252. Dkt. 1 ¶ 13; Dkt. 19 at 12. Because Plaintiff has a good faith belief that there are conflicting colorable claims of the death policy defendants, this interpleader is proper.
Plaintiff requests that the Court allow Plaintiff to deposit the policy death benefits, plus interest if any, with the Court. The Court finds that Plaintiff is a disinterested stakeholder that has no interest in the controversy between the Defendants. This Court RECOMMENDS granting Plaintiff's request to deposit the policy death benefits with the Court and discharging Plaintiff from this action. See Sun Life Assur. Co. of Canada v. Chan's Estate, No. C-03-2205 SC, 2003 WL 22227881, *2 (N.D. Cal. Sept. 22, 2003) () (citation omitted).
Interpleader under Rule 22 does not explicitly authorize courts to enjoin litigants from pursuing further claims in state or federal court regarding the funds at issue pursuant to 28 U.S.C. § 2361. Pruco Life Ins. Co. v. Tan, No. 19-cv-00335-JCS, 2020 WL 2574662, at *5 (N.D. Cal. May 4, 2020), report and recommendation adopted, No. 19-cv-00335-WHO, 2020 WL 2572804 (N.D. Cal. May 21, 2020). “However, courts have used the All Writs Statute, 28 U.S.C. § 1651, to enjoin defendants in an interpleader action from bringing future proceedings regarding the same claim.” Id. (citations omitted). The party seeking the injunction must prove that it would otherwise suffer irreparable harm. Trustees of IL WU-PMA Pension Plan, 660 F.Supp.2d at 1144-45. The Court will grant such an injunction “where there is a likelihood of costly and judicially wasteful relitigation of claims and issues that were already adjudicated in federal court.” Id. at 1145 (citations omitted).
Plaintiff argues that this Court should enjoin Defendant Ablaza from initiating any action against State Farm regarding the life insurance policy and/or the policy death...
To continue reading
Request your trial