Western Life Insurance Company v. Nanney

• Decision Date: 15 August 1968
• Docket Number: Civ. A. No. 2229.
• Citation: 290 F. Supp. 687
• Parties: WESTERN LIFE INSURANCE COMPANY, Plaintiff, v. Dan NANNEY, Administrator, etc., et al., Defendants.
• Court: U.S. District Court — Eastern District of Tennessee

290 F. Supp. 687

WESTERN LIFE INSURANCE COMPANY, Plaintiff, v. Dan NANNEY, Administrator, etc., et al., Defendants.

Civ. A. No. 2229.

United States District Court E. D. Tennessee, Northeastern Division.

August 15, 1968.

Roy C. Nelson, Elizabethton, Tenn., for plaintiff.

Lewis B. Merryman, Robert E. Banks, Elizabethton, Tenn., S. J. Milligan, Greeneville, Tenn., for defendants.

MEMORANDUM OPINION

NEESE, District Judge.

The Court is asked to approve as to the minor defendants a settlement of conflicting claims to the proceeds of a policy of life insurance interpleaded in this Court by the plaintiff. A full hearing was held by the Court on August 7, 1968, and the matter has been under advisement since.

The interpleaded fund amounts to $45,642.21. The proposed settlement is on the basis of deduction from the fund of the costs of this action, a contribution to the plaintiff's attorney fees herein, and a division of the remainder so that the defendant Mrs. Toni Nanney will receive $3,000 more than her children, the minor defendants Donald Eugene Nanney, Joseph Charles Nanney, and Johnny Nanney.

Whether the Court should impress this fund to defray the interpleading plaintiff's costs and attorney's fees involves judicial discretion; rarely are they allowed as a matter of course. Paul Revere Life Insurance Company v. Riddle, D.C.Tenn. (1963), 222 F.Supp. 867, 868 1 and 2, and cases therein cited. It is true that the plaintiff as interpleader has no interest in which of the contesting defendants obtains the fund which it has given bond to pay on order of this Court and, by giving the bond, it has in a sense preserved the fund for the benefit of the party or parties who shall eventually receive it. Cf. Terry v. Supreme Forest, Woodmen Circle, D.C. Tenn. (1926), 21 F.2d 158. But, this plaintiff had a more self-serving interest here, viz.: it is required to pay the proceeds of the life insurance policy to either the initial beneficiary or the secondary beneficiaries. If it paid such proceeds to the wrong beneficiary, it could conceivably be compelled to pay the sum twice. By obtaining a court adjudication, it negates this risk. By paying the actual fund into the registry of the Court, it could have stopped the running of interest thereon, but in no event could it simultaneously receive the cost of the premium on its bond and stop the running of interest on the fund. Great Lakes Transit Corp. v. Marceau, C.C.A. 2d (1946), 154 F.2d 623. As the plaintiff had a substantial controversy with the defendant Mrs. Nanney and her children,¹ the allowance of its costs and attorney's fees² will be refused. Century Insurance Company v. First National Bank, C.C.A.5th (1939), 102 F.2d 726, 729 10, certiorari denied (1939), 308 U.S. 570, 60 S.Ct. 84, 84 L.Ed. 478. The plaintiff and its attorney will be left to settle the matter of his proper fee herein.

The Court is of the further opinion that it is improper to deduct from the fund in which the minor defendants will share the amount of $66.95 to reimburse counsel for the defendant Mrs. Nanney for his necessary expenses. While, very commendably, she has agreed to the proposed settlement because the part of the fund which will not be paid to her will be paid to her children, they ought not to be required to pay any part of her attorney's fee and expenses. She is receiving $3,000 more than they in the settlement, and the aforementioned expense reimbursement represents only a nominal amount of money.

The Court is dealing here with a Florida contract. For the minor defendants to recover all the interpleaded fund, it will be necessary for them to prove by a preponderance of the evidence that their claim their father was killed by the intentional and wrongful act of their mother, who is the primary beneficiary under the insurance policy the plaintiff issued on the life of their father. See Carter v. Carter (1956), Fla. 88 So.2d 153, 158 5. She has heretofore been acquitted under an indictment charging her with conspiring to murder her husband, in a case in which her codefendant and former lover pleaded guilty.

The attorneys for the minor defendants did an excellent job of preparing to establish such proof. One of them was in attendance continuously at the aforementioned murder trial, which lasted for eight days, and another was there nearly all the time. One of these attorneys is of the professional opinion that there is only a 50-50 chance that his clients can prove by a preponderance of the evidence that Mrs. Nanney wrongfully and intentionally killed...