Transamerica Annuity Serv. Corp. v. Symetra Life Ins. Co., Civ. A. H-16-1426

• Decision Date: 03 February 2017
• Docket Number: Civ. A. H-16-1426
• Court: U.S. District Court — Southern District of Texas
• Parties: TRANSAMERICA ANNUITY SERVICE CORPORATION, Plaintiff, v. SYMETRA LIFE INSURANCE CO., A.M.Y. PROPERTY & CASUALTY INSURANCE COMPANY, FINSERV CASUALTY CORP., and LIQUIDATING MARKETING, LTD. f/k/a RAPID SETTLEMENTS, LTD., Defendants.

TRANSAMERICA ANNUITY SERVICE CORPORATION, Plaintiff, v. SYMETRA LIFE INSURANCE CO.,A.M.Y. PROPERTY & CASUALTY INSURANCE COMPANY,FINSERV CASUALTY CORP., and LIQUIDATING MARKETING,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

February 3, 2017

OPINION AND ORDER

Pending before the Court, in the above referenced, complex, statutory interpleader under 28 U.S.C. § 1335, is Plaintiff and allegedly disinterested stakeholder Transamerica Annuity Service Corporations's ("Transamerica's") motion for partial summary judgment (instruments #9 and 10). Specifically, Transamerica seeks (1) an order granting it leave to deposit the current and future payments of structured settlement funds in the Court's registry to be held in an interest-bearing account for future disbursement according to the judgment of this Court, (2) an order enjoining the Claimants and anyone acting directly or indirectly on their behalf from commencing or prosecuting any proceeding in any State or federal court affecting the property, instrument or obligation involved in this interpleader action until further order of the Court, (3) a dismissal with prejudice and the discharge of Transamerica as a disinterested stakeholder, and (4) an award of fees and costs for its services rendered in prosecuting this interpleader.

Standard of Review

Summary judgment under Federal Rule of Civil Procedure 56(c) is appropriate when, viewing the evidence in the light most favorable to the nonmovant, the court determines that "the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." A dispute of material fact is "genuine" if the evidence would allow a reasonable jury to find in favor of the nonmovant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

Where the nonmovant bears the burden of proof at trial, the movant must offer evidence that undermines the nonmovant's claim or point out the absence of evidence supporting essential elements of the nonmovant's claim; the movant may, but does not have to, negate the elements of the nonmovant's case to prevail on summary judgment." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); Lujan v. National Wildlife Federation, 497 U.S. 871, 885 (1990); Edwards v. Your Credit, Inc., 148 F.3d 427, 431 (5^th Cir. 1998). "A complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial." Celotex, 477 U.S. at 323.

If the movant meets its burden and points out an absence of evidence to prove an essential element of the nonmovant's case on which the nonmovant bears the burden of proof at trial, the nonmovant must then present competent summary judgment evidence to support the essential elements of its claim and to demonstratethat there is a genuine issue of material fact for trial. National Ass'n of Gov't Employees v. City Pub. Serv. Board, 40 F.3d 698, 712 (5^th Cir. 1994). "[A] complete failure of proof concerning an essential element of the nonmoving party's case renders all other facts immaterial." Celotex, 477 U.S. at 323. The nonmovant may not rely merely on allegations, denials in a pleading or unsubstantiated assertions that a fact issue exists, but must set forth specific facts showing the existence of a genuine issue of material fact concerning every element of its cause(s) of action. Morris v. Covan World Wide Moving, Inc., 144 F.3d 377, 380 (5^th Cir. 1998).

Conclusory allegations unsupported by evidence will not preclude summary judgment. National Ass'n of Gov't Employees v. City Pub. Serv. Board, 40 F.3d at 713; Eason v. Thaler, 73 F.3d 1322, 1325 (5^th Cir. 1996). "'[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment . . . .'" State Farm Life Ins. Co. v. Gutterman, 896 F.2d 116, 118 (5^th Cir. 1990), quoting Anderson v. Liberty Lobby, Inc.. 477 U.S. 242, 247-48 (1986). "Nor is the 'mere scintilla of evidence' sufficient; 'there must be evidence on which the jury could reasonably find for the plaintiff.'" Id., quoting Liberty Lobby, 477 U.S. at 252. The Fifth Circuit requires the nonmovant to submit "'significant probative evidence.'" Id., quoting In re Municipal Bond Reporting Antitrust Litig., 672 F.2d 436, 440 (5^th Cir. 1978), and citing Fischbach & Moore, Inc. v. Cajun Electric Power Co-Op., 799 F.2d 194, 197 (5^th Cir. 1986). "If the evidence is merely colorable,or is not significantly probative, summary judgment may be granted." Thomas v. Barton Lodge II, Ltd., 174 F.3d 636, 644 (5^th Cir. 1999), citing Celotex, 477 U.S. at 322, and Liberty Lobby, 477 U.S. at 249-50.

Allegations in a plaintiff's complaint are not evidence. Wallace v. Texas Tech Univ., 80 F.3d 1042, 1047 (5^th Cir. 1996)("[P]leadings are not summary judgment evidence."); Johnston v. City of Houston, Tex., 14 F.3d 1056, 1060 (5^th Cir. 1995)(for the party opposing the motion for summary judgment, "only evidence--not argument, not facts in the complaint--will satisfy' the burden."), citing Solo Serve Corp. v. Westown Assoc., 929 F.2d 160, 164 (5^th Cir. 1991). The nonmovant must "go beyond the pleadings and by [his] own affidavits, or by depositions, answers to interrogatories and admissions on file, designate specific facts showing that there is a genuine issue of material fact for trial." Giles v. General Elec. Co., 245 F.3d 474, 493 (5^th Cir. 2001), citing Celotex, 477 U.S. at 324.

The court must consider all evidence and draw all inferences from the factual record in the light most favorable to the nonmovant. Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587 (1986); National Ass'n of Gov't Employees v. City Pub. Serv. Board, 40 F.3d at 712-13. The Court may not make credibility determinations. Deville v. Marcantel, 567 F.3d 156, 164 (5^th Cir. 2009), citing Turner v. Baylor Richardson Medical Center, 476 F.3d 337, 343 (5^th Cir. 2007).

In an interpleader action, "'[a]lthough a factual dispute may exist to the rightful ownership of the fund, thatdispute does not preclude the granting of summary judgment in favor of the interpleader. It is the very nature of an interpleader action that two or more parties claim rights to certain money or property.'" Underwriters Group, Inc. v. Clear Creek Independent School Dist., Civ. A. No. G-050334, 2006 WL 1852254, at *5 (S.D. Tex. June 30, 2006), quoting Commerce Funding Corp. v. Southern Financial Bank, 80 F. Supp. 2d 582, 285 (E.D. Va. 1999); Allstate Assignment Co. v. Cevera, Civ. A. No. 2:13-CV-096-AM-CW. 2014 WL 12496902, at *4 (W.D. Tex. Dec. 8, 2014), report and recommendation adopted, Civ. A. No. DR-13-cv-096-AM/CW 2015 WL 1170561 (W.D. Tex. Mar. 23, 2015).

Statutory Interpleader

Title 28 U.S.C. § 1335 provides a district court with jurisdiction over an action in interpleader if (1) the plaintiff-stakeholder files an action regarding a single, identifiable fund in an amount of at least $500, (2) the plaintiff-stakeholder deposits the money in the district court's registry, (3) two or more parties claim entitlement to the funds, and (4) the claimants are minimally diverse, i.e., "diversity of citizenship between two or more claimants without regard to the circumstance that other rival claimants may be co-citizens." Auto Parts Mfg. Mississippi, Inc. v. King Const, of Houston, LLC, 782 F.3d 186, 192-93 (5^th Cir. 2015), cert. denied sub nom. Noatex Corp. v. Auto Parts Mfg. Mississippi, Inc., 136 S. Ct. 330 (2015); Rhoades v. Casey, 193 F.3d 592, 194 (5^th Cir. 1999). The claims of the adverse claimants need not have a common origin nor be identical, but may be adverse to, and independent of, each other. Auto Parts, 782F.3d at 193, citing 28 U.S.C. § 1334(b). Venue for a statutory interpleader is in any district where any claimant resides, and nationwide service of process is provided under 28 U.S.C. §§ 1335, 1397, 2361. Id. at 683.

In the first stage of the interpleader, the court determines whether these requirements have been met. If so, the litigation continues to determine the respective rights of the claimants to the fund. Id. "'[I]nterpleader jurisdiction is determined at the time suit is filed and subsequent events will not divest the court of jurisdiction.'" Id. at 194, quoting Walker v. Pritzker, 705 F.2d 942, 944 (7^th Cir. 1983). "The first stage of interpleader only is concerned with whether multiple claims have been asserted, or may be asserted, against a disinterested stakeholder, not whether those claims have merit." Id. at 194.

As for the second stage of the interpleader, "'in the usual case at least one of the claims will be quite tenuous. . . . [N]othing more is implied than the claims alleged must meet a minimal threshold level of substantiality." Id., citing 7 Charles Alan Wright, et al., Federal Practice & Proc. § 1704 (3d ed. 2016 update). "'[E]ven the mere 'threat of multiple vexation by future litigation provides a sufficient basis for interpleader.''" Id., quoting Tittle v. Enron, 463 F.3d 410, 424 n.10 (5^th Cir. 2006), quoting Corrigan Dispatch Co. v. Casa Guzman, S.A., 696 F.2d 359, 364 (5^th Cir. 1983). The court must then determine the respective rights of the claimants and the priority of claims as of the time the interpleader action was commenced,i.e., the date when the interpleader fund is deposited with the Court. Avant Petroleum, Inc. v. Banque Paribas, 853 F.2d 140, 143, 144 (2d Cir. 1988). If there is no genuine issue of material fact in the second stage, the interpleader may be resolved by summary judgment. Rhoades, 193 F.3d at 600. Otherwise, if the facts are disputed, each claimant must prove its entitlement to the funds by a preponderance of the evidence. Id.

Once the court determines that interpleader is available,...