Unum Life Ins. Co. of Am. v. Sides, CIVIL ACTION NO. 1:12-CV-4400-RWS
| Decision Date | 18 July 2013 |
| Docket Number | CIVIL ACTION NO. 1:12-CV-4400-RWS |
| Parties | UNUM LIFE INSURANCE COMPANY OF AMERICA Plaintiff, v. BROOK BEDARD SIDES, CASEY R. SIDES, MICHELLE T. SMITH as Guardian Ad Litem for COLLIN QUIN SIDES, and TAYLOR BROOKE SIDES, and JANE DOE as Administrator of the ESTATE OF CHRISTOPHER N. SIDES, Deceased Defendants. |
| Court | U.S. District Court — Northern District of Georgia |
This interpleader action comes before the Court for resolution of Defendant Brooke Sides Motion to Dismiss the Complaint [10]and Motion to Dismiss Cross-Claim of Casey R. Sides [13]. After reviewing the record and the parties' briefs, the Court enters the following Order.
Unum Life Insurance Company of America ("Unum") initiated this interpleader action seeking judicial determination of the proper disposition of life insurance proceeds accruing in connection with the death of Christopher Neil Sides (the "Insured"). It identified as potential claimants to such sums Brooke Sides, as the Insured's then current wife, Casey Sides, as the parent of the Taylor and Collin Sides, the minor children of the Insured and Casey Sides, and the decedent's estate, represented here by Jane Doe. In its Complaint, Unum seeks an order to place the life insurance benefits at issue into the registry of the Court, and require the claimant beneficiaries to assert any claim to the insurance proceeds. (See Complaint [1].)
The facts underlying the claimants' competing assertions of entitlement to the life insurance proceeds are largely undisputed. The Insured purchased a life insurance policy (the "Policy") from United Distributors, Inc. in 1998. He named his then wife, Casey Sides, as the primary beneficiary. In 2007, the Insured and Casey Sides separated. As part of the divorce Settlement Agreement, the Insured agreed to maintain $250,000 of life insurance naming his minor children as beneficiaries with Casey Sides as trustee. In 2010, theInsured executed a change of beneficiary form, and named his current wife, Brooke Sides, as the primary beneficiary under the Policy. There were no further changes made to the Policy. The Insured died of cardiac arrest in August 2012. Since the Insured's death, Brooke Sides, Casey Sides, and Michelle Smith, as the Guardian Ad Litem of the minor children, have asserted their entitlement to the life insurance proceeds.
Unum Life Insurance filed this interpleader action on December 20, 2012, as a disinterested stakeholder given the potentially conflicting claims to the Insured's benefits. Unum asserts that it is in great doubt as to which defendant(s) is/are entitled to be paid the plan benefits payable as a result of the death of the Insured. (Complaint at ¶ 22.) As such, Unum seeks to place into the Court's registry the total amount payable under the Insured's policy, as well as, request an order from the Court requiring the competing parties to assert any claims to the proceeds. Defendant Brooke Beard subsequently filed a Motion to Dismiss the Complaint [10] and a Motion to Dismiss Defendant Casey Sides' Cross-Claim [13]. For the reasons discussed herein, both Motions to Dismiss are denied.
Interpleader is an equitable remedy designed to protect disinterested stakeholders from being exposed to multiple suits over a single liability and to bring all the adverse claimants into one court so that the court can equitably adjudicate the claims of all adverse claimants. Libby, McNeil, & Libby v. City Nat'l Bank, 592 F.2d 504, 509 (9th Cir. 1978); United States v. Sentinel Fire Ins. Co., 178 F.2d 217, 225 (5th Cir. 1950);1 Espat v. Espat, 56 F. Supp. 2d 1377, 1383 (M.D. Fla. 1999). Federal courts may discharge interpleader plaintiffs from further liability. 28 U.S.C. § 2361 (2003). However, interpleader plaintiffs seeking dismissal must show that they have satisfied the requirements of 28 U.S.C. § 1335. Mendez v. Teachers Ins. & Annuity Ass'n & Coll. Ret. Equities Fund, 982 F.2d 783, 788 (2d Cir. 1992). Thus, "[t]here must be a fund greater than $500; adverse claimants of diverse citizenship; a deposit of the fund in court; and a disinterested stakeholder" before an interpleader plaintiff may be discharged from the action. Id. Even if an interpleaderplaintiff meets the § 1335 requirements, however, a court has the discretion not to discharge a plaintiff "if there are serious accusations that the stakeholder commenced the action in bad faith." Id. (internal quotations omitted)(ancillary jurisdiction over "cross-claim" of ex-wife respecting payment of benefits from insured's employer-sponsored personal savings plan).
When considering a Rule 12(b)(6) motion to dismiss, a federal court is to accept as true "all facts set forth in the plaintiff's complaint." Grossman v. Nationsbank, N.A., 225 F.3d 1228, 1231 (11th Cir. 2000) (citation omitted). Further, the court must draw all reasonable inferences in the light most favorable to the plaintiff. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 (2007) (internal citations omitted); Bryant, 187 F.3d at 1273 n.1. However, "[a] pleading that offers 'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action will not do.'" Ashcroft v. Iqbal, 556 U.S 662, 129 S. Ct. 1937, 1949 (2009) (quoting Twombly, 550 U.S. at 555). "Nor does a complaint suffice if it tenders 'naked assertion[s]' devoid of 'further factual enhancement.'" Id.
The United States Supreme Court has dispensed with the rule that a complaint may only be dismissed under Rule 12(b)(6) when "'it appears beyonddoubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.'" Twombly, 127 U.S. at 561 (quoting Conley v. Gibson, 355 U.S. 41, 45-46 (1957)). The Supreme Court has replaced that rule with the "plausibility standard," which requires that factual allegations "raise the right to relief above the speculative level." Id. at 556. The plausibility standard "does not[, however,] impose a probability requirement at the pleading stage; it simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence [supporting the claim]." Id.
Defendant Brooke Sides has moved to dismiss Unum's Complaint for failure to state a claim. (ECF No. [10].) In support of the requested dismissal, Brooke Sides contends that there is no legitimate basis for uncertainty as to the distribution of the Insured's life insurance benefits. Brooke Sides argues that Unum has failed to state an interpleader claim because the facts and applicable law demonstrate clearly that Brooke Sides is entitled to the life insurance proceeds. Brooke Sides states that the Insured had a valid properly executed beneficiary designation form on file with Unum which unequivocally names Brooke Sides as the beneficiary. (ECF No. [11] at 9.) According to BrookeSides, such facts make it clear that neither Casey Sides nor the minor children can assert a claim for constructive trust or otherwise against Unum. Citing ERISA's pre-exemption statute, Brook Sides argues that the Insured's 2010 modified plan creates certainty by specifying payments under the policy and her designation as the beneficiary. Any competing claims to the insurance proceeds lack foundation in law and therefore are not colorable. As such, Brooke Sides contends that the Court should dismiss Unum's interpleader Complaint.
Plaintiff Unum and Defendant Casey Sides each filed timely responses to Defendant Brooke Sides' Motion to Dismiss [15 and 16]. In their responses, the parties argue that the interpleader action is proper since the facts of the case give rise to competing claims for the life insurance proceeds. Further, the parties contend that there is no evidence that Unum has acted with bad faith in initiating the interpleader action.
The essential requirement for rule interpleader is that the stakeholder "is or may be exposed to double or multiple liability." Fed.R.Civ.P. 22. An interpleader action is appropriate where the plaintiff has demonstrated that it has or may be subject to adverse claims on the same fund. An action in interpleader proceeds in two stages. At the first stage, the Court determineswhether interpleader is proper. Fidelity Brokerage Servs. v. Bank of China, 192 F.Supp.2d 173, 178 (S.D.N.Y.2002). Plaintiff need not demonstrate formal adverse claims or the merits of the claims. The merits are not evaluated until the second stage. Id; Ohio Nat. Life Assur. Corp. v. Langkau, 2006 WL 3162354, *2 (M.D.Fla. Nov. 2, 2006). This matter is currently before this Court at the first stage. "In an interpleader action, the burden is on the party seeking interpleader to demonstrate that he is entitled to it." Dunbar v.. United States, 502 F.2d 506, 511 (5th Cir.1974).
Upon review, the Court finds the interpleader action is proper in that Unum has demonstrated potential exposure to competing claims to the Insured's life insurance proceeds. The undisputed facts demonstrate that the Insured entered into a 2007 divorce settlement agreement which included an obligation to provide a $250,000 life insurance benefit for his children. Subsequently, the Insured modified and maintained plan life insurance documents naming Brooke Sides as the beneficiary to the proceeds. The facts of this case closely parallel the facts found in Reeves v. Reeves, 223 S.E.2d 112 (Ga. 1976). In Reeves, the Georgia Supreme Court was called upon to determine the proper disposition of life insurance proceeds deposited into the court's registry by an insurancecompany. The insured had entered into a settlement agreement with his former spouse, incorporated in the divorce decree dissolving their marriage, pursuant to which he agreed to name his minor children as beneficiaries under certain life insurance policies. 223 S.E.2d 113-14. The insured, however, neglected to make the required change. Id. at 114. Rather, sometime after his divorce from his...
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