Opinion
No. 02-1479, Section "T"(4)
October 23, 2002
CIVIL ACTION
Before the Court is the Motion for Summary Judgment, pursuant to Rule 56 of the Federal Rules of Civil Procedure, filed on behalf of the Defendants, Deivory N. N. Foley and Littlejohn's Funeral Home. Also before the Court is a Motion for Summary Judgment, pursuant to Rule 56 of the Federal Rules of Civil Procedure, filed on behalf of the Plaintiff, Metropolitan Life Insurance Company. The Court, having considered the memoranda of counsel, the Court record, the applicable law and jurisprudence, is fully advised in the premises and ready to rule.
ORDER AND REASONS
I. BACKGROUND:
The matter in question involves a policy issued by the Plaintiff, ("MetLife"), under the Federal Employees Life Insurance program ("FEGLI"), and the corresponding liability thereunder as a result of the death of the "Insured", Samuel Compton. The Plaintiffs seek Summary Judgment as they argue that they are a disinterested party, and that they have fulfilled their obligations under the policy, as they have deposited ONE HUNDRED TWO THOUSAND FOUR HUNDRED FOURTEEN AND 07/100 DOLLARS ($102,414.07) in to the registry of the Court. Additionally, the Plaintiffs pray for attorney fees and costs incurred in instituting the action, making permanent the injunction previously' issued, and dismissing the Plaintiff from the action. In turn, the Defendants, Deivory N. Foley and Littlejohn's Funeral Home, pray for Summary Judgment decreeing; (1) Littlejohn's Funeral Home is entitled to the release of $6,129.05 in recognition of its funeral home bill and burial of Samuel Compton; (2) Further decreeing Virginia Roddy attorney's fees and costs in the amount of $6,092.35 from the proceeds on deposit in the registry of this Court and, (3) disbursement of funds in the registry of the Court to Deivory N. Foley as the proper party to collect under the FEGLI Policy.
Federal Employees' Group Life Insurance Policy No. 17000-G.
On April 13, 2001, the Insured died, and under the terms of the Policy, MetLife became obligated to pay the sum of NINETY-EIGHT THOUSAND 00/100 DOLLARS ($98,000) to the person who is, or the persons who are, rightfully entitled to the same. See Report of March 14, 2002 reflecting the amount of total insurance as $98,000, Bates No. 000031, T. 2, Ex. A. The Office of Federal Employees Group Life Insurance ("OFEGLI") received a claim for life insurance benefits from Toni Foley, a "friend" of the Insured and mother of Deivory Foley. Subsequent to receipt of Foley's claim, OFEGLI was advised that it was the Insured's recognized natural child, Deivory, who was claiming life insurance benefits under the Policy. OFEGLI also received a claim from Littlejohn's Funeral Home, as assignee of Toni Foley in the amount of $6,129.05 under the FEGLI Policy, in a letter dated May 25, 2001, OFEGLI wrote to Toni Foley advising Foley that proof in accordance with Federal law would have to be submitted in order for payment of the FEGLI benefits to be made. OFEGLI received, from Deivory's attorney, a Notice of Award from the Social Security Administration stating that Deivory was entitled to benefits based on the death of the Insured. On or about August 16, 2001, OFEGLI was informed that the Insured's mother was not waiving her right to the proceeds. Due to the conflicting claims of the Defendants regarding entitlement to the life insurance proceeds. Plaintiffs were unable to determine the proper party entitled to the proceeds.
Plaintiffs filed a complaint for interpleader under the Federal Rules of Civil Procedure, Rule 22, so that the Court might determine the person or persons entitled to the life insurance proceeds under the FEGLI Policy. Named defendants in the case were Toni Foley, mother of Deivory N. Foley, Deivory N. Foley, Littlejohn's Funeral Home, and Ruby Compton, mother of Samuel Compton. This Court issued an Order on June 2, 2002, after which Plaintiff deposited into the registry of the Court, $102,414.07, the amount of the life insurance payable under the FEGLI Policy as a result of the death of the Insured plus accrued interest. Subsequently, Plaintiffs did not receive an answer from defendant, Ruby Compton; on August 14, 2002, this Court entered a default against Ruby Compton for failure to answer.
II. LAW ON SUMMARY JUDGMENT:
The Federal Rules of Civil Procedure provide that summary judgment should be granted only "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FED. R. CIV. P. 56(c). The party moving for summary judgment bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the record which it believes demonstrate the absence of a genuine issue of material fact. Stults v. Conoco, Inc., 76 F.3d 651, 655-56 (5th Cir. 1996) (citing Skotak v. Tenneco Resins, Inc., 953 F.2d 909, 912-13 (5th Cir.) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)), cert. denied, 506 U.S. 832 (1992)). When the moving party has carried its burden under Rule 56(c), its opponent must do more than simply show that there is some metaphysical doubt as to the material facts. The nonmoving party must come forward with "specific facts showing that there is a genuine issue for trial." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (emphasis supplied); Tubacex, Inc. v. M/V RISAN, 45 F.3d 951, 954 (5th Cir. 1995).
Thus, where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no "genuine issue for trial." Matsushita Elec. Indus. Co., 475 U.S. at 588. Finally, the Court notes that substantive law determines the materiality of facts and only "facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute about a material fact is "genuine" . . . if the evidence is such that a reasonable jury could return a verdict for the non-moving party. Skotak, 953 F.2d at 913, citing Anderson, 477 U.S. at 248.
III. ARGUMENTS OF THE RESPECTIVE PARTIES AND ANALYSIS:
A. Arguments of the Plaintiff in Support of its Motion for Summary Judgment:
Plaintiff asserts that it is entitled to summary judgment because they have fulfilled their obligations. As a disinterested stakeholder, Plaintiff claims that once an amount is deposited into the registry of the Court, the role of the stakeholder is finished and should thereafter be dismissed. See Aliuga v. Perera Co., 494 F. Supp. 18, 20 (S.D.N.Y. 1979). In reference to the fact that Plaintiff has deposited the Proceeds plus interest into the registry, it is entitled to be discharged from further liability under the FEGLI policy as a result of the death of Samuel Compton. Murphy v. Travelers Ins. Co., 534 F.2d 1155 (5th Cir. 1976). Plaintiffs also demand that the temporary injunction put in to place by this Court be made permanent.
In addition, Plaintiff asserts that it is entitled to the costs and attorney's fees incurred in prosecuting the interpleader action. Therefore, it requests the Court to award it SIX THOUSAND NINETY-TWO DOLLARS 35/100 ($6,092.35). MetLife makes claim to its fees to be taken from the money to be awarded from the fund on hand in the registry of the Court.
B. Arguments of the Defendants in Support of its Motion for Summary Judgment:
The Defendants offer no opposition to the Motion for Summary Judgment submitted by the Plaintiffs. In fact, they adopt the Plaintiffs Motion for Summary Judgment, and re-submit the Statement of Uncontested Facts submitted in the Plaintiffs Motion for Summary Judgment as true. They also submit several other facts as uncontested material facts.
At the time that Toni Foley filed the claim against the life insurance policy involved in this litigation, her daughter Deivory N. N. Foley was a minor who has since been emancipated by judgment rendered in the Civil District Court, Parish of Orleans, State of Louisiana, proceeding No. 2001-15427 "D", October 1, 2001. Deivory N. N. Foley is currently 18 years of age.
Deivory N. N. Foley has been recognized as the child of the deceased by judicial decree. Civil District Court for the Parish of Orleans, State of Louisiana, proceeding No. 2001-18369, January 28, 2002. Furthermore, Deivory N. N. Foley has been recognized, in a succession proceeding by judgment of possession, as the child and sole heir to the succession of Samuel Compton by Judgment rendered in the Civil District Court for the Parish of Orleans, State of Louisiana, proceeding No. 2002-6848 M, April 30, 2002.
The United States Social Security Administration has recognized "Deivory N. Foley is entitled to monthly child's benefits beginning April, 2001. She is also entitled to a social security payment of $255.00 because of the death of Samuel Compton." See Social Security Administration, Retirement, Survivors, and Disability Insurance, Notice of Award; June 23, 2001 Additionally, Ruby Compton submitted a form to the Social Security Administration dated May 18, 2001 confirming that "Deivory Foley is my granddaughter and the daughter of my deceased son, Sam Compton." Melvin Compton, the Insured's brother, also submitted a similar form, on May 15, 2001, to the Social Security Administration identifying Deivory N. N. Foley as the daughter of Samuel Compton.
Form SSA-795. May 18, 2001.
C. The Court's Analysis
a. MetLife's Role as a Disinterested Stakeholder
Since an interpleading party does not automatically waive its interest in the deposited money, this Court must make its own determination whether the stakeholder still retains an interest, and the Court may also make the injunction permanent. If this Court determines that the stakeholder is not interested — that he is a disinterested stakeholder — the plaintiff may be dismissed from the action. 28 U.S.C. § 2361 (2001).
In Nationwide Mut. Ins. Co. v. Eckman, 555 F. Supp. 775 (D.C.Del. 1983), the court dealt with two consolidated interpleaders. Nationwide, and through its "piggyback" position American Casualty, stated on the record that it did not have any interest in the deposited $300,000 per se, which had been deposited into the Court registry, i.e., the insurance companies were not disputing liability. The insurance company's only claim in the money at that time was an interest in attorneys' fees. The critical issue was whether either of the insurance companies maintained an interest in the money deposited with the Court. If an interpleading plaintiff has no interest in the stake he should be dismissed. The Court determined, however, that the plaintiffs' interest in attorneys' fees did not make the interpleading plaintiff interested in the deposited stake. Thereafter, it dismissed Nationwide. Additionally, the Court denied Nationwide's request for attorney's fees. The Court cited the efforts of Nationwide to "impose its presence" in every facet of the negotiation, its long delays in filing the original claim, and its action resulting in the substantial delay in the distribution of funds.
Such a claims is grounds for denying attorney's fees. New York Life Ins. Co. v. Bidoggia, 15 F.2d 126, 127 (D.Idaho 1926); John Hancock Mutual Life Ins. Co. v. Doran, 138 F. Supp. 47, 49-50 (S.D.N.Y. 1956).
In Melton v. White, 848 F. Supp. 1513 (W.D.Okla. 1994), the Court found that the Insurer was entitled to permanent injunction restraining other parties from instituting further proceedings involving disputed life insurance policy were no other parties to the litigation would be able to relitigate the right to dispute policy proceeds at the conclusion of the action and absent any question that the court had jurisdiction over all parties and over the funds deposited into the registry by the Insurer. See also, New York Life Ins. Co. v. Deshotel, 142 F.3d 873 (5th Cir. 1998).
This Court believes that MetLife has deposited the funds into the court registry in good faith, thereby fulfilling its duties and obligations under the FEGLI policy. MetLife does not contest its liability to the parties involved and only entered in to this interpleader action for the purpose of determining the proper party to receive the life insurance funds under the policy, thereby avoiding future claims against this policy. Therefore, MetLife has met its burden as a disinterested stakeholder.
b. MetLife's claim for attorney's fees and costs
In interpleader actions when the disinterested stakeholder concedes liability in full and seeks discharge, the Court may appropriately tax attorney fees. United Bank of Denver, Nat'l Assoc. v. Oxford Properties, Inc., 683 F. Supp. 755 (D.Colo. 1988); Fed. Rule of Civil Proc. Rule 22; 28 U.S.C. § 1335, 1397, 2361. Therein, the defendant prayed for the Court to discharge the plaintiff as a stakeholder, to declare that the plaintiff had no liability to the defendant, and to award attorney's fees. In those facts, the defendant opposed awarding attorney's fees and costs out of the fund. The Court decided that "the prevailing principle in interpleader actions brought in federal courts, whether under the interpleader statute or Rule 22, is that it is within the discretion of the court to award the stakeholder costs, including reasonable costs, including attorney's fees, out of the deposited fund." Id. at 756, citing 3A Moore's Federal Practice, ¶ 22-16[2] at 22-169. Furthermore, the court went on to state that normally, by no means as a matter of right, the court taxes such fees in favor of a stakeholder who: (1) is disinterested (i.e. does not claim entitlement to any of the interpleader fund); (2) concedes liability in full; (3) deposits the disputed fund in court; and (4) seeks discharge. Id. at 22-169, 22-171.
"It is thought appropriate to award counsel fees to [a disinterested] stakeholder because the retention of counsel has in all likelihood been necessitated not because of the stakeholder's wrongdoing, but rather because he is the mutual target in a dispute which is not of his own making. Moreover, the stakeholder is often viewed as having performed a service to the claimants by initiating a proceeding which will expeditiously resolve their claims and by safeguarding the disputed fund by deposit in court, which at the same time guarantees the prevailing claimant immediate satisfaction without the need for execution proceedings." Moore's, at 22-171, 22-173.
It is evident to this Court that the Plaintiff-in-intervention, MetLife has met all of the aforementioned criteria for awarding of attorney's fees and costs. In addition, the Defendants do not oppose the awarding of attorney's fees to MetLife's counsel. It appears as if both parties have in good faith stipulated to the amount of attorney's fees to be awarded.
c. Defendant's claim for disbursement of deposited funds
The FEGLI policy held by Samuel Compton provided that the group life insurance benefits were to be paid in a mutually exclusive order of benefits: (1) to the beneficiary designated by the employee; (2) if none, to the widow or widower of the employee; (3) if none, to the child or children of the employee and descendants of deceased children by representation; (4) if none, to the parents of the employee or the survivor of them; (5) if none, to the duly appointed executor or administrator of the estate of the employee, and (6) if none, to the other next of kin of the employee entitled under the laws of the domicile of the employee at the date of his death.
See FEGLI Policy No. 17000-G, Section 11; FEGLIA statute, 5 U.S.C. § 8705.
Samuel Compton did not designate a beneficiary, nor was he survived by a widow. Therefore, under order of preference, group life insurance would have been payable to his child or children, as to the mutually exclusive classes of beneficiaries. Under 5 U.S.C. § 8705 and 5 U.S.C. § 870,101(a)(1), "child" is defined as a "legitimate child, an adopted child, or a recognized natural child." Deivory meets neither the criteria to be a legitimate child nor an adopted child. However, in order to be a "recognized natural child", it is sufficient that the father takes the following steps as set forth in regulation 5 C.F.R. § 870.101 as follows:
See Agency Certification of Insurance Status, Bates No. 000038, T. 2, Ex. A; see Death Certificate, Bates No. 000039, T. 2, Ex. A.
(1)(I) Has acknowledged paternity in writing;
(ii) Was ordered by a court to provide support;
(iii) Before his death, was pronounced by a court to be the father;
(iv) Was established as the father by a certified copy of the public record of birth or church record of baptism, if he was the informant and named himself as the father of the child; or
(v) Established paternity on public records, such as evidence of schools or social welfare agencies, which show that with his knowledge he was named the father of the child.
(vi) Secondary evidence to support the alleged paternity, such as evidence of the child's eligibility as a recognized natural child under other state or federal programs or proof that the insured included the child as a dependent on his income tax returns, may also be considered in the determination process.
Prior to his death, the Insured did not provide any written acknowledgment that he was the father of Deivory N. N. Foley, nor is there any evidence that he was ordered by the Court to provide support to her. Furthermore, there was no judicial pronouncement PRIOR to his death that acknowledges that she is the "recognized natural daughter" of the Insured. However, AFTER the death of the Insured, Deivory N. N. Foley was acknowledged by the Social Security Administration to be entitled to monthly child benefits. Deivory N. N. Foley has also been deemed the daughter of the deceased in a judicial decree from the Civil District Court for the Parish of Orleans, State of Louisiana. See supra. This secondary evidence is provided for in 5 C.F.R. § 870.101, and it may be used in the determination process. This court is satisfied, given the judicial decree of paternity in the Civil District Court for the Parish of Orleans, State of Louisiana, in addition to the judgment of possession of the Succession of the deceased rendered in the same court and the determination by the Social Security Administration, that Deivory N. N. Foley is the proper beneficiary to the proceeds under the policy in accordance with the third provision of the FEGLI policy (at Section 11) and the FEGLIA statute (at 5 U.S.C. § 8705).
Accordingly,
IT IS ORDERED that the Motion for Summary Judgment filed on behalf of the Plaintiff, Metropolitan Life Insurance Company, be and the same is hereby GRANTED.
IT IS FURTHER ORDERED that the Motion for Summary Judgment filed on behalf of the Defendants, Deivory N. N. Foley and Littlejohn's Funeral Home, be and the same is hereby GRANTED.
IT IS FURTHER ORDERED that the temporary injunction issued previously by this Court is hereby made PERMANENT.
IT IS FURTHER ORDERED that attorney's fees and costs, in the amount of SIX THOUSAND NINETY-TWO DOLLARS 35/100 ($6,092.35) be awarded to counsel for MetLife from the funds deposited into the registry of the Court.
IT IS FURTHER ORDERED that costs in the amount of SIX THOUSAND ONE HUNDRED TWENTY-NINE DOLLARS 05/100 ($6,129.05) be awarded to defendant, Littlejohn's Funeral Home from the funds deposited into the registry of the Court.
IT IS FURTHER ORDERED that Deivory N. N. Foley is the proper party claimant to whom the balance of the proceeds in the Court registry shall be paid.