Maxum Indemnity Company v. Curley et al

RESPONSE re MOTION to Dismiss Amended Petition for Interpleader

N.D. Ga.September 29, 2017

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION MAXUM INDEMNITY COMPANY, Plaintiff, vs. LARSHELL CURLEY, RODNEY McCRAE, THE ESTATE OF EBONY McCRAE-CURLEY, CEDRICK COOKS, LAFAYETTE GALBREATH, ERIC DWIGHT MURPHY, PATRICK PARTAIN, DAVID SHULA, III, ASHLEY PITTS- WILLIAMS, SHAWN DESHAY WILLIAMS, GRADY MEMORIAL HOSPITAL, and AICA ORTHO SPINE, P.C., Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Civil Action No.: 1:17-cv-02858-TCB MAXUM INDEMNITY COMPANY’S RESPONSE TO LARSHELL CURLEY’S AND THE ESTATE OF EBONY McCRAE-CURLEY’S MOTION TO DISMISS AMENDED PETITION FOR INTERPLEADER COMES NOW Plaintiff Maxum Indemnity Company (“Maxum”) and files this its Response to Larshell Curley’s and The Estate of Ebony McCrae-Curley’s (“Movants”) Motion to Dismiss Amended Petition for Interpleader as follows: Case 1:17-cv-02858-TCB Document 34 Filed 09/29/17 Page 1 of 17 2 OVERVIEW This is an interpleader action involving a $1,000,000 commercial general liability policy issued by Maxum, against which over $2,000,000 in settlement demands have been made. The claims arise from the alleged death and personal injuries to several of the Defendants in an automobile accident. Movants seek dismissal under three arguments: First, they contend that Rodney McCrae (“Rodney”), the decedent’s father and a Massachusetts resident, is not a “claimant” under 28 U.S.C. § 1335 so that he has been fraudulently joined to this suit. This argument fails because Rodney has a potential wrongful death claim against Maxum’s insured. The fact he has not yet asserted it is of no moment. His Massachusetts residency makes him diverse from the other Georgia claimants. Regardless, Larshell Curley (“Larshell”), the decedent’s mother, has made a demand against the Policy and is therefore clearly a “claimant.” Her Massachusetts residency establishes diversity as well. Second, Movants contend Rodney is not adverse to Larshell or the Estate of Ebony McCrae-Curley (the “Estate”). To the contrary, he is certainly adverse to the Estate because Rodney has a potential separate and distinct claim for his daughter’s wrongful death, whereas the Estate has a claim for her pain and suffering. The Estate has a Georgia residency so that diversity exists with respect Case 1:17-cv-02858-TCB Document 34 Filed 09/29/17 Page 2 of 17 3 to these two claimants. Regardless, Rodney is certainly adverse to the other Georgia defendants / claimants so that diversity exists. Third, Movants contend Larshell is not a “claimant” because she is an heir of the Estate and thus claims through the Estate. This is incorrect. Like Rodney, Larshell, as the decedent’s mother, has an individual claim for her daughter’s alleged wrongful death. As a Massachusetts resident, she is an adverse and diverse claimant. For these reasons, Movants’ Motion to Dismiss should be denied. STATEMENT OF FACTS This lawsuit arises from an automobile accident occurring on April 15, 2017, (the “Accident”). At the time, Sunshine Parking LLC (“Sunshine”) was operating a valet service. (Amended Complaint, ECF 12, ¶ 18). According to Movants, “the valet failed to put the parking brake on a car before getting out of the car, and when he jumped back into the car [he] negligently hit the gas instead of the brake, causing the car to speed backwards. The valet pinned Ms. McCrae-Curley between two cars, killing her.” [ECF 27, p. 2]. The Accident not only purportedly caused Ebony McCrae-Curley’s (“Ebony”) death, but also caused property damage to several vehicles, and alleged bodily injury to Cedrick Cooks (“Cedrick”), Lafayette Galbreath (“Lafayette”), Eric Dwight Murphy (“Eric”), Patrick Partain (“Patrick”), Case 1:17-cv-02858-TCB Document 34 Filed 09/29/17 Page 3 of 17 4 David Shula, III, (“David”), Ashley Pitts-Williams (“Ashley”), and Shawn Deshay Williams (“Shawn”) (Amended Complaint, ECF 12 ¶ ¶ 5-11 &18). At the time of the Accident, Sunshine was insured under a Maxum commercial general liability policy, Policy No. PRO-0091731-01, for policy year April 29, 2016, to April 29, 2017. [ECF 1-2]. The Policy provides coverage for sums Sunshine becomes legally obligated to pay because of “bodily injury” and “property damage” to which the Policy applies. [ECF 1-2, p. 18]. The Policy is subject to a $1 million per occurrence limit. [ECF 1-2, p. 16]. The Policy also grants Maxum “the right and duty to defend” Sunshine against any suit seeking damages. [ECF 1-2, p. 18]. Accordingly, Maxum appointed counsel to defend Sunshine (defense counsel) for all claims arising from the Accident. On or about July 14, 2017, defense counsel received a letter, commonly known as a “Holt demand” from Glenda A. Hatchett, counsel for Larshell and the Estate. [ECF 1-3]. That letter specifically states that, “Larshell Curley is seeking damages in the wrongful death of her daughter, decedent Ebony McCrae-Curley ….” (emphasis supplied). According to her Motion to Dismiss, Larshell is Ebony’s mother. [ECF 27, p. 2]. Rodney McCrae (“Rodney”) is Ebony’s father. Id. at p. 2. According to Larshell’s Petition for Letters of Administration, Larshell resides in Springfield, Massachusetts [ECF 5-2]. So does Rodney. Id. Larshell and Rodney Case 1:17-cv-02858-TCB Document 34 Filed 09/29/17 Page 4 of 17 5 are Ebony’s only heirs. Id. Larshell’s Letters of Administration qualifying her as the Administrator of the Estate was issued on June 5, 2017. [ECF 5-3]. In addition to Larshell’s and the Estate’s Holt demand, defense counsel also received a letter from Shawn’s counsel demanding $400,000 in settlement of Shawn’s alleged personal injuries arising from the Accident [ECF 1-4]. On or about July 31, 2017, defense counsel received a demand from Ashley’s counsel demanding $750,000 to settle her claim [ECF 12-1]. It received a similar demand from Eric’s counsel on or about July 26, 2017, demanding $25,000 in settlement [ECF 12-2]. Grady Memorial Hospital has also filed a hospital lien for $19,077 for Ebony’s treatment [ECF 1-5]. AICA Ortho Spine, PC issued its Notice of Intent to File a Lien arising from Shawn’s and Ashley’s treatment. [ECF 1-6; 1-7]. Thus, to date, Maxum, through defense counsel, has received demands in excess of $2,000,000 to resolve all claims arising from the Accident. Given Maxum’s Policy limits total only $1,000,000, Maxum filed the instant Interpleader Petition.1 1 To date, Maxum has paid $27,584.53 under the Policy to settle property damage claims as a result of the Accident (Amended Complaint, ECF 12, ¶ 29). Thus, the remaining Policy proceeds at issue in this Interpleader equal $972,415.47. This amount was tendered into the Court Registry on September 13, 2017 [ECF 20]. Case 1:17-cv-02858-TCB Document 34 Filed 09/29/17 Page 5 of 17 6 ARGUMENT AND CITATION OF AUTHORITIES When considering a Fed.R.Civ.P. 12(b)(6) motion to dismiss, a federal court is to accept as true all facts set forth in plaintiff’s complaint. Grant v. Countrywide Home Loans, Inc., No. 1:08-cv-1547-RWS, 2009 WL 1437566 at *2 (N.D.Ga. May 20, 2009) (citing Grossman v. Nation’s Bank, N.A., 225 F.3d 1228, 1231 (11th Cir. 2000). Additionally, courts must draw all reasonable inferences in the light most favorable to the plaintiff. Bryant v. Abado Brands, Inc., 187 F.3d 1271, 1273 n. 1 (11th Cir. 1999). These precepts apply to all civil actions, regardless of the cause of action alleged. Kivisto v. Miller, Canfield, Paddock & Stone PLC, 413 Fed. Appx. 136, 138 (11th Cir. 2011). This includes interpleader actions. Stevens v. AGC Life Ins. Co., No. 13-62276-civ-SCOLA, 2014 WL 11706424 at * 2 (S.D.Fla., March 11, 2014). This standard requires that Larshell’s and the Estate’s Motion to Dismiss be denied. I. THE JURISDICTIONAL REQUIREMENTS OF 28 U.S.C. § 1335 HAVE BEEN MET. This interpleader action is premised upon 28 U.S.C. § 1335. That statute grants district courts original jurisdiction over any civil action of interpleader filed by an entity such as Maxum which has in its custody money or property valued at $500 or more and where two or more of the adverse claimants are of diverse citizenship as defined by 28 U.S.C. § 1332(a) or (d). See 28 U.S.C. § 1335(a). The Case 1:17-cv-02858-TCB Document 34 Filed 09/29/17 Page 6 of 17 7 diversity requirement of § 1332 is met when the dispute is amongst citizens of different states. See 28 U.S.C. § 1332(a)(1). Here, there is no question but that the amount at issue exceeds $500 as the insurance proceeds at issue equal $972,415.47. Moreover, it is clear that there are two or more adverse claimants to these proceeds given that Rodney and Larshell are Massachusetts residents, and all the other claimants reside in Georgia. A. Rodney McCrae is a Potential Claimant to the Fund. On pages 6-8 of their Brief, Movants argue that Rodney is not a “claimant” under 28 U.S.C. § 1335.2 Movants concede that Rodney is Ebony’s father. [ECF 27, p. 2]. According to the Petition for Letters of Administration, Larshell, Ebony’s mother, and Rodney, her father, are Ebony’s only heirs. [ECF 5-2]. Thus, Rodney has a prima facie right to recover for Ebony’s wrongful death. See Uniroyal Goodrich Tire Co., et al. vs. Adams, 221 Ga. App. 705, 706, 472 S.E.2d 518, 519 (“the prima facie right to recover for the wrongful death of a child who leaves neither spouse nor child undoubtedly belongs to both parents even where those 2 On page 5 of their Brief, Movants assert that “one of the required elements” of statutory interpleader is that the stakeholder must allege each defendant is a “claimant.” The interpleader statute, 28 U.S.C. § 1335, contains no such pleading requirement. Nonetheless, Maxum’s Amended Interpleader Petition asserts all of the Defendants are “claimants” (See ECF 12, §§ 18, 20 & 21) Case 1:17-cv-02858-TCB Document 34 Filed 09/29/17 Page 7 of 17 8 parents are divorced”).3 Hulsey v. Hulsey, 212 Ga. App. 269, 441 S.E. 2d 477 (the legislative intent behind O.C.G.A. § 19-7-1 was to protect the right of both parents for a cause of action for the wrongful death of their child regardless of marital status. If the parents are divorced, the statute creates a single cause of action vested in both, which may be brought by both parents together or by one parent on behalf of both parents). As stated by the Georgia Court of Appeals: Statutory law sets out the order a person is entitled to bring in an action for wrongful death. If the decedent has no surviving spouse or children, such an action may be brought by a surviving parent. O.C.G.A. §§ 51-4-2; 51-4- 4. If there is no person entitled to file the lawsuit under these Code sections, an administrator or executor may bring the action. Autodoors, Inc. of Georgia vs. Zivoluba, 277 Ga. App. 288, 289, 626 S.E. 2d 256, 257 (Ga. App. 2006). Applied here, Rodney clearly has a potential claim against Sunshine, Maxum’s insured, for his daughter’s alleged wrongful death. His Massachusetts residency makes him “diverse” from the other Georgia claimants listed as interpleader Defendants so that the jurisdictional requirements of 28 U.S.C. § 1335 have been met. 3 Given that Larshell and Rodney have different addresses per their Letters of Administration, it is presumed they are divorced. Case 1:17-cv-02858-TCB Document 34 Filed 09/29/17 Page 8 of 17 9 The fact that Rodney has not yet asserted his potential claim is irrelevant to a “claimant” analysis under 28 U.S. C. § 1335. The statute applies to two or more adverse claimants [who] “… are claiming or may claim to be entitled to such money or property.” 28 U.S.C. § 1335(1) (emphasis applied). See also Stonebreaker v. Pruco Life Ins. Co., No. 11-cv-871-WQH (WDG) 2011 WL 5362067 at * 2 (S.D. Cal., Nov. 4, 2011) (noting the court’s jurisdiction under the interpleader statute extends to potential, as well as to actual, claims). Despite this clear tenet of law, Movants argue Rodney is not a “claimant” because he has not yet asserted his claim. In support, they cite General Accident Group v. Gagliardi, 593 F. Supp. 1080, 1089 (D.Ct. 1984) for the proposition that one is not a “claimant” until there has been a “timely and formal assertion of a claim against the proceeds on deposit.” [ECF 27, p. 6]. The Gagliardi court said no such thing. Instead, in the passage Movants cite, the Gagliardi court simply addressed when the obligation to pay interplead funds accrue, noting that when an insurer brings an interpleader action, the obligation to pay the proceeds accrues “only upon the adjudication of conflicting claims, and that adjudication cannot occur absent a timely and formal assertion of a claim against the proceeds on deposit.” Id. at 1089. Nowhere did the Gagliardi court state or even imply that one is not a “claimant” under § 1335 until there has been “a timely and formal assertion of a Case 1:17-cv-02858-TCB Document 34 Filed 09/29/17 Page 9 of 17 10 claim.” In fact, the Gagliardi court specifically noted that statutory interpleader is available to any stakeholder as against whom “two or more adverse claimants … are claiming or may claim to be entitled to the stake.” Id. at 1087 (emphasis in original). That court went on to hold: To secure a prompt and inclusive determination in a single action of the rights of all parties claiming an interest in the stake, the court should not hesitate to allow interpleader when some or all of the claims are prospective, even though not already asserted. Id. at 1087, (emphasis supplied) quoting 7 Wright & Miller §1707. Thus, Gagliardi supports Maxum’s position, not the Movants’, as Rodney’s prospective claim makes him a “claimant” under the interpleader statute.4 Movants have also misstated the holding of Boatmen’s First National Bank of Kansas City v. McCoy, 861 F. Supp. 846 (W.D. Mo. 1994). According to Movants, the McCoy court noted that one cannot be a “claimant” under § 1335 where he “has not made a claim to the disputed funds.” [ECF 27, p. 6]. The McCoy court did not discuss the requirements of a “claimant” under § 1335 whatsoever. Instead, it simply held that the presence of a non-diverse interpleader 4 Gagliardi also held, “Interpleader is permitted when, as here, the insurer of the liability of an alleged tortfeasor is or may be faced with claims aggregating more than its liability on the policy face.” Id. at 1086. That is certainly the case here, as the claims under the Policy exceed $2,000,000 and there is only a $1,000,000 limit. Case 1:17-cv-02858-TCB Document 34 Filed 09/29/17 Page 10 of 17 11 plaintiff (i.e., the stakeholder such as Maxum) could not establish diversity under §1335 because it had no claim to the disputed funds. Id. at 848. In other words, the citizenship of the stakeholder/plaintiff in the interpleader action is not considered in a diversity analysis. McCoy therefore does not support Movants’ position that one who has not made a formal claim to the fund cannot be considered a “claimant.” Clearly, the fact that Rodney has not yet asserted a formal claim against Sunshine does not mean his citizenship cannot be considered in determining diversity under 28 U.S.C. §1335. Movants’ Motion should be denied. B. Larshell’s Threatened Claim Establishes Diversity Under 28 U.S.C. § 1335. Rodney’s claim aside, Larshell has most definitely asserted a “formal claim” against the Policy, demanding that the entire Policy proceeds be paid to her. [ECF 1-3]. As Ebony’s mother, Larshell has a prima facie right to recover for her daughter’s alleged wrongful death. Adams, 221 Ga. App. at 705, 706, 472 S.E. 2d 518, 519; Hulsey, 212 Ga. App. at 269-70, 441 S.E. 2d at 478.5 Larshell is a 5 Whereas the parents have a cause of action for their daughter’s wrongful death, the Estate has a separate and distinct cause of action for Ebony’s alleged pain and suffering. Metropolitan Atlanta Rapid Transit Authority v. Maloof, 304 Ga. App. 824, 826, 698 S.E. 2d 1, 3 (Ga. App. 2010). Case 1:17-cv-02858-TCB Document 34 Filed 09/29/17 Page 11 of 17 12 Massachusetts resident. [ECF 5-2]. She is therefore diverse from the other interpleader Defendants who are Georgia residents. Jurisdiction under 28 U.S.C. §1335 is therefore afforded so that Movants’ Motion should be denied. II. RODNEY NEED NOT BE ADVERSE TO LARSHELL OR THE ESTATE TO CONFER JURISDICTION UNDER 28 U.S.C. § 1335. On page 7 of their Brief, Movants contend that jurisdiction is lacking under 28 U.S.C. § 1335 because Rodney is not adverse to Larshell or the Estate. This argument misses the mark. The interpleader statute only requires diversity amongst “two or more adverse claimants.” Rodney, a Massachusetts resident, is certainly adverse to Ashley Pitts-Williams, who has made a $750,000 claim against the Policy. [ECF 12, ¶26]. Likewise, he is adverse to Eric Murphy, who has submitted a $25,000 claim. [ECF 12, ¶ 27]. Eric and Ashley are both Georgia residents. [ECF 12, ¶¶ 7& 10]. Thus, there are “two or more adverse claimants of diverse citizenship” which creates jurisdiction under 28 U.S.C. §1335.6 Additionally, Movants are incorrect that Rodney cannot be adverse to the Estate. As her father, Rodney’s claim is only for Ebony’s purported wrongful death. The Estate, however, has a separate and distinct claim for pain and 6 Rodney is also adverse to Cedrick, Lafayette, Eric, Patrick, David, Ashley, Shawn, Grady and AICA, all of whom are potential claimants and Georgia residents. Case 1:17-cv-02858-TCB Document 34 Filed 09/29/17 Page 12 of 17 13 suffering. Maloof, 304 Ga. App. at 826, 698 S.E. 2d at 3; Blackstone v. Blackstone, 282 Ga. App. 515, 518, n. 5, 639 S.E.2d 369 (2006) (“A wrongful death action … is separate and distinct from a survival action for pain and suffering”). As Rodney and the Estate possess separate and distinct claims, they are adverse. They are diverse as well. For the purposes of 28 U.S.C. § 1335, the Estate’s residence is the same as the decedent’s. Geler v. Nat'l Westminster Bank USA, 763 F.Supp. 722, 726 (S.D.N.Y.1991) (“For the purposes of both the interpleader statute and the general diversity jurisdiction statute, [the decedent's] administrator is treated as having the same citizenship as the decedent”). Ebony was a Georgia resident when she died [ECF 5-2] so that the Estate has a Georgia residency. Her father is a Massachusetts resident. III. LARSHELL’S POTENTIAL CLAIM ESTABLISHES DIVERSITY UNDER 28 U.S.C. § 1335. On pages 7 and 8 of their Brief, Movants contend that Larshell is not a “claimant” under 28 U.S.C. § 1335 because she “is an heir of the Estate, and claims an interest through the Estate” [ECF 27, p. 7-8]. To the contrary, Larshell, as Ebony’s mother, has a claim for Ebony’s alleged wrongful death. Adams, 221 Ga. App. at 705, 706, 472 S.E. 2d 518, 519; Hulsey, 212 Ga. App. at 269-70, 441 S.E. 2d at 478. The Estate has a separate claim for Ebony’s alleged pain and Case 1:17-cv-02858-TCB Document 34 Filed 09/29/17 Page 13 of 17 14 suffering. Maloof, 304 Ga. App. at 826, 698 S.E. 2d at 3; Blackstone, 282 Ga. App. at 518, n. 5, 639 S.E.2d at 369. As Larshell is a potential claimant, naming her as a defendant in this interpleader action was appropriate. Stonebreaker, 2011 WL 5362067 at * 2. Her diverse citizenship from the other Georgia claimants creates diversity jurisdiction. CONCLUSION For the reasons stated herein, Maxum respectfully requests that Larshell Curley’s and The Estate of Ebony McCrae-Curley’s Motion to Dismiss be denied. This 29th day of September, 2017. /s/ Kenan G. Loomis Kenan G. Loomis Georgia Bar No. 457865 COZEN O’CONNOR The Promenade, Suite 400 1230 Peachtree Street, N.E. Atlanta, GA 30309 Telephone: 404-572-2028 Facsimile: 866-591-9127 Email: kloomis@cozen.com Attorney for Plaintiff Maxum Indemnity Company Case 1:17-cv-02858-TCB Document 34 Filed 09/29/17 Page 14 of 17 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION MAXUM INDEMNITY COMPANY, Plaintiff, vs. LARSHELL CURLEY, RODNEY McCRAE, THE ESTATE OF EBONY McCRAE-CURLEY, CEDRICK COOKS, LAFAYETTE GALBREATH, ERIC DWIGHT MURPHY, PATRICK PARTAIN, DAVID SHULA, III, ASHLEY PITTS- WILLIAMS, SHAWN DESHAY WILLIAMS, GRADY MEMORIAL HOSPITAL, and AICA ORTHO SPINE, P.C., Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Civil Action No.: 1:17-cv-02858-TCB CERTIFICATE OF SERVICE I hereby certify that on September 29, 2017, I electronically filed MAXUM INDEMNITY COMPANY’S RESPONSE TO LARSHELL CURLEY’S AND THE ESTATE OF EBONY McCRAE-CURLEY’S MOTION TO DISMISS AMENDED PETITION FOR INTERPLEADER with the Clerk of Court using the CM/ECF system which will automatically send e-mail notification of such filing to the following parties of record: Case 1:17-cv-02858-TCB Document 34 Filed 09/29/17 Page 15 of 17 2 Glenda A. Hatchett, Esq. The Hatchett Firm, P.C. 191 Peachtree Street, N.E., Suite 2600 Atlanta, GA 30303 Attorney for Larshell Curley and The Estate of Ebony McCrae-Curley Karsten Bicknese, Esq. Robert H. Betts, Esq. Tate & Bicknese, LLP 56 Perimeter Center East, Suite 450 Atlanta, GA 30346 Attorney for AICA Ortho Spine, P.C. Willie J. Walker, Esq. The Walker Law Offices, P.A. 625 West Union Street, Suite 3 Jacksonville, FL 32202 Attorney for Ashley Pitts-Williams, Shawn Deshay Williams, and Cedric Cooks A copy of MAXUM INDEMNITY COMPANY’S RESPONSE TO LARSHELL CURLEY’S AND THE ESTATE OF EBONY McCRAE- CURLEY’S MOTION TO DISMISS AMENDED PETITION FOR INTERPLEADER will be mailed by U.S. Mail to the following parties: Rodney McCrae 65 Blunt Road Springfield, MA 01109-2411 Lafayette Galbreath Legacy Ridge Apartments 5750 Buffington Road, Unit 9304 Atlanta, GA 30349 Eric Dwight Murphy Legacy Ridge Apartments 5750 Buffington Road, Unit 9304 Atlanta, GA 30349 Patrick Partain 434 McInnes Circle Marietta, GA 30060 Case 1:17-cv-02858-TCB Document 34 Filed 09/29/17 Page 16 of 17 3 David Shula, III 12105 St. James Drive Conyers, GA 30094 Grady Memorial Hospital c/o Timothy Jefferson, as Registered Agent 80 Jesse Hill Jr. Drive, S.E. Atlanta, GA 30303 Larshell Curley, individually and as Administrator of The Estate of Ebony McCrae-Curley 40 Hawthorne Street Springfield, MA 01105 This 29th day of September, 2017. /s/ Kenan G. Loomis Kenan G. Loomis Georgia Bar No. 457865 Case 1:17-cv-02858-TCB Document 34 Filed 09/29/17 Page 17 of 17