Transamerica Annuity Serv. Corp. v. Symetra Life Ins. Co.

• Decision Date: 09 August 2017
• Docket Number: Civ. A. H-16-1426
• Parties: TRANSAMERICA ANNUITY SERVICE CORPORATION, Plaintiff, v. SYMETRA LIFE INSURANCE COMPANY, A.M.Y. PROPERTY & CASUALTY INSURANCE COMPANY, FINSERV CASUALTY CORP., AND LIQUIDATING MARKETING, LTD. F/K/A RAPID SETTLEMENTS, LTD., Defendants.
• Court: U.S. District Court — Southern District of Texas

TRANSAMERICA ANNUITY SERVICE CORPORATION, Plaintiff, v. SYMETRA LIFE INSURANCE COMPANY, A.M.Y. PROPERTY & CASUALTYINSURANCE COMPANY, FINSERV CASUALTY CORP., AND LIQUIDATINGMARKETING, LTD. F/K/A RAPID SETTLEMENTS, LTD., Defendants.

Civ. A. H-16-1426

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION

ENTERED: August 10, 2017

August 9, 2017

OPINION AND ORDER

Pending before the Court in the above referenced, complex, statutory interpleader action¹ under 28 U.S.C. §§ 1335 and 2361, to interplead annuity payments originally payable to non-party Harrison Chung ("Chung Annuity Payments"),² are, inter alia, the following motions: (1) discharged, disinterested stakeholder Plaintiff Transamerica Annuity Service Corporations's ("Transamerica's") application for attorneys' fees and costs (instrument #21) for services rendered in prosecuting this interpleader; and (2) Transamerica's motion to correct (#22) clerical error in Opinion and Order of February 3, 2017 (#20), to which no responses have been filed.

The Court hereby incorporates by reference its previous Opinion and Order (#20), providing background facts and applying relevant law.

I. Transamerica's Motion to Correct Clerical Error (#22)

The Court first addresses Transamerica's Federal Rule of Civil Procedure 60(a) motion to correct clerical error in its February 2, 2017 Opinion and Order (#20) granting Transamerica's motion for partial summary judgment. Transmerica identifies the error in that document as the inconsistency between the statement on page 25, "The Court agrees with Transamerica that, as a disinterested stakeholder, making no claim to the Chung Annuity Payments, it is entitled to a permanent injunction with prejudice [emphasis added]," and the statement on page 26, "Accordingly the Court concludes that Transamerica's motion for partial summary judgment should be granted, i.e., Transamerica should recover reasonable fees and costs and should be dismissed without prejudice."

A. Standard of Review--Rule 60(a)

Rule 60(a) ("Corrections Based on Clerical Mistakes; Oversights and Omissions"), provides,

The court may correct a clerical mistake or a mistake arising from oversight or omission whenever one is found in a judgment, order, or other part of the record. The court may do so on motion or on its own, with or without notice. But after an appeal has been docketed in the appellate court and while it is pending, such a mistake may be corrected only with the appellate court's leave.

Rule 60(a) is restricted to "fixing clerical errors 'of the sort that a clerk or amanuensis might commit, mechanical in nature."

Campbell Harrison & Dagley, Civ. A. No. 3:12-CV-4599-L, 2015 WL 4587567, at *5 (N.D. Tex. July 30, 2015), citing In re Transtexas Gas Corp., 303 F.3d 571, 581 (5^th Cir. 2002). "'A Rule 60(a) motion 'can only be used to make the judgment or record speak the truth and cannot be used to make it say something other than what originally was pronounced.'" Rivera v. PNS Stores, Inc., 647 F.3d 188, 194 & n.15 (5^th Cir. 2011)(citing In re Galiardi, 745 F. 2d 335, 337 (5^th Cir. 1984), quoting 11 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 2854 (2d ed. 1977)), cert. denied, 565 U.S. 1259 (2012). For example, Rule 60(a) would allow the court to correct a judgment to modify a jury's damages award when the jury made a mathematic error in computing damages, but not to change the judgment, for instance to award specific performance along with monetary relief. Id. at 194.

In Rivera the Fifth Circuit concluded that "[i]nadvertently designating a dismissal as being 'without prejudice' instead of 'with prejudice' is the type of rote, typographical error of transcript that could be committed by a law clerk or a judicial assistant." Rivera, 647 F.3d at 193-94 It is not an error of judgment or legal reasoning . . . ." Id. at 194. It opined, "Our precedent lends strong support to the conclusion that Rule 60(a) allows a judgment's 'with prejudice' or 'without prejudice' denomination to be changed when the change comports with the intent conveyed by the substance of the district court's adjudication." Id. In Rivera, the court specifically determined that the dismissal was a clerical mistake, and without evidence to the contrary, there was no basis to discredit the court'sstatement. Id. at 196-97. "A district court's authority under Rule 60(a) is also limited to making corrections that are consistent with the court's intent at the time it entered the [order]. . . . We ascertain the district court's intent . . . by reviewing other relevant documents that were produced contemporaneously with the [order], such as a memorandum opinion or order, findings of act and conclusions of law, the transcript of a hearing, or a signed stipulation of the parties." Id. at 195. When "[t]he reasoning of the memorandum order indicates that a correction is substantive, not clerical," the modification is not authorized by Rule 60(a). Id.

B. Application of the Law

In its previous Opinion and Order (#20) this Court intended to dismiss the stakeholder with prejudice and finds that the contradiction in the two statements raised by Transamerica was a clerical error. In its previous Opinion and Order, the Court found that the interpleader action was appropriate, given the conflicting claims to the res and that the stakeholder was disinterested (i.e., it had no interest in the annuity funds). A dismissal with prejudice is logically consistent with the Court's rationale in discharging the stakeholder here. The whole point of a interpleader is "to protect a stakeholder from the burden of dealing with multiple claims against the same fund and to relieve the stakeholder from the necessity (and the risk) of identifying which claims are meritorious." Metropolitan Life Ins. Co. v. Bell, No. 6:14-cv-473-Orl-22TBS, 2014 WL 8021562, at *3 (M.D. Fla. Oct. 9, 2014)(citing Perlman v. Fidelity Brokerage Services, LLC,932 F. Supp. 2d 397, 415 2013).³ Moreover the dismissal of the stakeholder from liability and, in a statutory interpleader, the entry of a permanent injunction under 28 U.S.C. § 2361, enjoining the claimants in this action "from instituting or prosecuting any proceeding in any State or United States court affecting the property . . . involved in the interpleader action" against the stakeholder, are to protect the stakeholder from the burden of unnecessary current and future litigation and/or risk of loss, once the stakeholder has established the interpleader and deposited the disputed funds in the registry of the Court, from further suit brought by the same competing claimants to the fund based on thesame facts that are in this interpleader action.⁴ Here, as the Court has noted previously, the situation here is much more complicated and much riskier for the stakeholder because the interpleader serves to protect Transamerica from contradictory decisions from other courts and from having to fight multiple claimants on multiple fronts. Furthermore "[i]mposing a temporary injunction merely for the 'duration of the interpleader action is inconsistent with the interpleader's purpose of 'enabling the plaintiff-stakeholder to avoid the burden of unnecessary litigation or the risk of loss by the establishment of multiple liability," while the interpleader action determines the claimant(s) who actually is (are) entitled to the Chung Annuity Payments in dispute here. The same inconsistency would be true if the Court had discharged the stakeholder without prejudice. A dismissal with prejudice protects Transamerica permanently.

Thus the Court, pursuant to Rule 60(a), grants Transamerica's motion to correct clerical error in order (#22) and clarifies that its decision to discharge stakeholder Transamerica was intended to be and was and is with prejudice.

II. Transamerica's Application for Fees and Costs (#21)

On February 3, 2017, the Court, in granting Transamerica's motion for partial summary judgment, found that Transamerica was a disinterested stakeholder entitled to recover reasonable fees and costs, and ordered Transamerica to file an appropriate application with supporting evidence.

A. Applicable Law

In a successful⁵ interpleader the district court has the authority to and may, in its sound discretion, award reasonable costs, including attorney's fees, to a disinterested stakeholder that is not in substantial controversy with one of the claimants, whenever it is fair and equitable to do so. Rhoades v. Casey, 196 F.3d 592, 603 (5^th Cir. 1999), citing Corrigan Dispatch Co., 696 F.2d 359, 364 (5^th Cir. 1983). In interpleader actions, the only requirement for such an award is that it be reasonable. James Talcott, Inc. v. Allahabad Bank, Ltd., 444 F.2d 451, 468 (5^th Cir. 1971); Noeller v. Metropolitan Life Ins. Co., 190 F.R.D. 202, 207 (E.D. Tex. 1999). Therefore commentators, including Wright and Miller and James Wm. Moore, have identified five factors to consider in making such an award: "(1) Whether the case is simple or involved; (2) Whether the stakeholder performed any unique services for the claimants or the court; (3) Whether the stakeholder acted in good faith and with diligence; (4) Whether the services rendered benefitted the stakeholder; and (5) Whether the claimants improperly protracted the proceedings." See, e.g., id.; Noeller, 190 F.R.D. at 207; 7 Charles Alan Wright, Arthur R. Miller, & Mary Kay Kane, Federal Practice and Procedure § 1719 (2d ed. 1986); 4 James Wm. Moore, et al., Moore's Federal Practice §22.96 (3d ed. 1990).⁶ Because all that is required is preparation of a petition, the deposit of the fund in the court or the posting of a bond, service on potential claimants, and preparation of an order discharging the stakeholder, the amount of the fee is usually moderate. Charles Alan Wright, Arthur R. Miller, & Mary Kay Kane, Federal Practice and Procedure § 1719 (3d ed. 2001).

Courts in this Circuit have also applied the lodestar method used in...