AppendixCal. Super. - 6th Dist.January 22, 20191 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DM2\9896994.1 CASE NO. 19CV341451 APPENDIX OF OUT-OF-STATE AND FEDERAL AUTHORITIES IN SUPPORT OF MOTION TO STAY RELATED ACTION, OR IN THE ALTERNATIVE, TO CONSOLIDATE THE ACTION Terrance J. Evans (SBN 227671) C. Todd Norris (SBN 181337) Seth K. Kugler (SBN 304668) DUANE MORRIS LLP Spear Tower One Market Plaza, Suite 2200 San Francisco, CA 94105-1127 Telephone: 415.957.3000 Facsimile: 415.957.3001 E-mail: tjevans@duanemorris.com ctnorris@duanemorris.com skkugler@duanemorris.com Attorneys for Plaintiff-In-Interpleader CALVANO DEVELOPMENT INC. SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF SANTA CLARA CALVANO DEVELOPMENT INC., Plaintiff-In-Interpleader, v. CRP MOUNTAIN VIEW OWNER, L.L.C.; 1001 SHORELINE LLC; and DOES 1-100, Defendants-In-Interpleader. Case No. 19CV341451 APPENDIX OF OUT-OF-STATE AND FEDERAL AUTHORITIES IN SUPPORT OF MOTION TO STAY RELATED ACTIONS, OR IN THE ALTERNATIVE, TO CONSOLIDATE THE ACTIONS Date: May 7, 2019 Time: 9:00 a.m. Dept.: 8 Judge: Hon. Sunil Kulkarni Complaint Filed: January 22, 2019 FAC Filed: April 24, 2019 Electronically Filed by Superior Court of CA, County of Santa Clara, on 4/30/2019 3:47 PM Reviewed By: A. Floresca Case #19CV341451 Envelope: 2826609 19CV341451 Santa Clara - Civil A. Floresca 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DM2\9896994.1 1 CASE NO. 19CV341451 APPENDIX OF OUT-OF-STATE AND FEDERAL AUTHORITIES IN SUPPORT OF MOTION TO STAY RELATED ACTION, OR IN THE ALTERNATIVE, TO CONSOLIDATE THE ACTION Pursuant to California Rules of Court, Rule 3.1113, Plaintiff-in-Interpleader Calvano Development Inc. submits the following appendix of authorities, providing the federal and out-of- state case law cited in support of its Reply in Support of Motion to Stay Related Actions, or in the alternative, to Consolidate the Actions: 1. Attached hereto as “Exhibit 1” is a true and correct copy of Cheiker v. Prudential Ins. Co. of America (9th Cir. 1987) 820 F.2d 334. 2. Attached hereto as “Exhibit 2” is a true and correct copy of In re Financial Oversight and Management Board for Puerto Rico (D.P.R. 2017) 301 F.Supp.3d 274. 3. Attached hereto as “Exhibit 3” is a true and correct copy of New Jersey Sports Productions, Inc. v. Don King Productions, Inc. (D.N.J. 1998) 15 F.Supp.2d 534. 4. Attached hereto as “Exhibit 4” is a true and correct copy of New York Life Ins. Co. v. Apostolidis (E.D.N.Y. 2012) 841 F.Supp.2d 711. 5. Attached hereto as “Exhibit 5” is a true and correct copy of Zellen v. Second New Haven Bank (D. Conn. 1978) 454 F.Supp. 1359. Dated: April 30, 2019 DUANE MORRIS LLP By: /s/ Terrance J. Evans Terrance J. Evans C. Todd Norris Seth K. Kugler Attorneys for Plaintiff-in-Interpleader CALVANO DEVELOPMENT INC. EXHIBIT 1 334 820 FEDERAL REPORTER, 2d SERIES ministerial service) subject to summary contempt. [51 We are reluctant to find that Judge Maynard's contempt order was squarely authorized by§ 7-601(3) because we do not believe Holmes falls within the category of "appointed or elected" persons. However, Title 7, chapter 6 of the Idaho Code does not circumscribe the judicial contempt pow- er; it merely provides statutory guidance. Marks v. Veklow, 105 Idaho 560, 566, 671 P.2d 473, 479 (1983). Idaho judges have an inherent common law contempt power, and Idaho Code § 1-1603 recognizes this broad power. Id. In Idaho Code§§ 7-601(3) and (5) the legislature has demonstrated its con- cern for giving courts power to enforce their lawful orders and to control behavior by court personnel who play an integral role in the judicial process. The statutory framework strongly suggests that Judge Maynard did not act in clear absence of all jurisdiction. The Idaho Supreme Court has "recog- nize[d] that the function of the court may be jeopardized should a clerk hire or ap- point an incompetent, unqualified, irrespon- sible or untrusty person as a deputy to perform court-related duties." Crooks, 112 Idaho at 318, 732 P.2d at 287. An adminis- trative judge must have the power to en- force his decisions with respect to court- related personnel to prevent severe impairment of "the smooth, efficient and proper operation of the court system itself." Id. Thus the administrative and judicial roles of the administrative district judge in Idaho are inextricably intertwined. A judge using his judicial contempt power as a means of enforcing an administrative order aimed at ensuring effectiveness in the oper- ation of the district court, while perhaps not acting wisely, is not acting in the clear ab- sence of all jurisdiction. We recognize that some courts have held that a judge is not immune from liability in connection with the hiring and firing of court personnel. See McMillan v. Sveta- noff, 793 F.2d 149 (7th Cir.), cert. denied, - U.S.-, 107 S.Ct. 574, 93 L.Ed.2d 577 (1986); Laskowski v. Mears, 600 F.Supp. 1568 (N.D.Ind.1985). Courts have stated that the "[h]iring and firing of employees is typically an administrative task," McMil- lan, 793 F.2d at 155, and that these "per- sonnel decisions are separate from the jur- isdiction, power and authority of the court," Laskowski, 600 F.Supp. at 1573. Our reservations with respect to the ap- proach of these cases have already been stated. In any event, the issuance of a contempt order is an inherent judicial func- tion, and is expressly authorized by the Idaho legislature as a means of addressing violations of court orders and misbehavior by court personnel. In violating the lawful administrative order the plaintiffs here were dealing with Judge Maynard in his judicial capacity, and he was not acting "in clear absence of all jurisdiction." AFFIRMED. Elizabeth CHEIKER, a/k/a Elizabeth Rebeaud, Plaintiff-Appellant, v. The PRUDENTIAL INSURANCE COMPANY OF AMERICA, Defendant-Appellee. No. 86-6499. United States Court of Appeals, Ninth Circuit. Argued and Submitted April 9, 1987. Decided June 24, 1987. Beneficiary on life insurance policy filed complaint against insurer, alleging various contract and tort causes of action based on contention that insurer wrongful- ly interpled disputed proceeds of policy rather than paying proceeds to beneficiary. The United States District Court, Central District of California, Terry J. Hatter, Jr., J., granted summary judgment for insurer. Beneficiary appealed. The Court of Ap- peals, J. Blaine Anderson, Circuit Judge, CHEIKER v. PRUDENTIAL INS. CO. OF AMERICA 335 ctteaa820 F.2cl 334 (9thClr, 1987) held that final judgment in California int.er- claim to Prudential for the benefits of the pleader action barred beneficiary's claims. Policy. Affirmed. Judgment *=>828(3.10, 3.37) Final judgment in California int.er- pleader action, involving entitlement to life insurance proceeds, barred beneficiary's subsequent federal action asserting various contract and tort claims against insurer based on cont.ention that insurer wrongful- ly int.erpled disput.ed proceeds; California's compulsory cross complaint statute applied to the int.erpleader action, and there was no doubt that beneficiary's federal causes of action arose out of the same transactions as the int.erpleader action, and thus, benefi- ciary's claims should have been raised in the int.erpleader action. West's Ann.Cal.C. C.P. §§ 386(b), 426.10, 426.30. Samuel N. Rubino, Los Angeles, Cal., for plaintiff-appellant. James S. Cline and Philip G. Grant, Los Angeles, Cal., for defendant-appellee. Appeal from the Unit.ed Stat.es District Court for the Central District of California. Before ANDERSON, SKOPIL and REINHARDT, Circuit Judges. J. BLAINE ANDERSON, Circuit Judge: Elizabeth Cheiker appeals from the dis- trict court's grant of summary judgment in favor of Prudential Insurance Company ("Prudential"). We affirm. FACTS On September 1, 1981, appellant Cheiker and her father applied for an "Estate Co- Life" insurance policy with Prudential. A writt.en Joint Co-Life policy ("the Policy") was issued on October 1, 1981 for $50,- 000.00 on the lives of appellant and her father. Appellant's father died on January 13, 1982, leaving appellant as the sole bene- ,ficiary under the Policy. Appellant made a Because of the proximity of the date of death to the contract date and in accord- ance with Prudential's usual procedure, Prudential conduct.ed an investigation to confirm the information given it at the time of the application and to ascertain the cir- cumstances of the death. Prior to comple- tion of the· claim, Prudential received a formal writt.en demand and adverse claim for the proceeds of the Policy. Prudential then sent appellant a Jett.er in which it informed her that the benefits had been approved, but that it was unable to dis- burse the benefits because of the adverse claim for the proceeds. Because of the adverse claim, Prudential referred the mat- t.er to its Law Department. On June 21, 1982, Prudential was served with a copy of the Summons and First Amended Complaint in a lawsuit naming Prudential and appellant as defendants and alleging a constructive trust against Pru- dential with regard to the proceeds of the Policy. The lawsuit was titled Asuncion R. Gomez, et al v. Edward A. Rebeaud, et al ("the state court action"). On July 23, 1982, Prudential filed a veri- fied Cross-Complaint in Int.erpleader ("the Int.erpleader'') in the state court action naming appellant and each of the plaintiffs in the state court action as cross-defend- ants. Prudential also deposit.ed the dis- put.ed proceeds, plus int.erest, with the state court at the time it filed its Int.er- pleader. In its Int.erpleader, Prudential al- leged that it was "unable to det.ermine, with safety to itself and in the absence of possible exposure to double or multiple lia- bility, the proper payment of the insurance proceeds in question." Exerpt of Record ("ER") p. 71. Appellant answered Prudential's Inter- pleader on August 23, 1985, more than three years aft.er the Interpleader was filed. In her answer, appellant alleged two affirmative defenses: first, that she was "the only rightful beneficiary to the life insurance proceeds," and that "all other claimants to the proceeds . . . do not have 336 820 FEDERAL REPORTER, 2d SERIES valid claims as against the proceeds," and second, that Prudential allegedly had "neg- ligently, willfully and wrongfully inter- ple[ d] the life insurance proceeds of the insurance policy .... " ER 10, pp. 76-77. Prudential filed a motion t.o be dismissed from the Interpleader on August 27, 1985. Appellant filed an opposition t.o Pruden- tial's motion on September 11, 1985, in which she opposed only Prudential's re- quest for attorney's fees and costs. The hearing on Prudential's motion was held on September 18, 1985. The court granted the motion as t.o discharge and dismissal and scheduled a second hearing on the request for fees and costs. The court's Minute Order was entered on September 18, 1985. On November 7, 1985, the court granted Prudential's request for fees and costs; the Minute Order was entered on that same date. On January 13, 1986, the plaintiffs in the state court action filed a Stipulation and Order Re Release of Interpled Funds. The stipulation was part of a settlement reached between the plaintiffs and def end- ants, including appellant Cheiker, in the state court action. Pursuant t.o the stipula- tion, the court disbursed the entire amount of the interpled funds, $52,190.65, t.o appel- lant. On February 3, 1986, appellant filed her first amended complaint in the instant ac- tion, alleging various contract and t.ort causes of action against Prudential based on the contention that Prudential wrongful- ly interpled the disputed proceeds of the Policy rather than paying them t.o her. The case was removed t.o district court and on September 15, 1986, the district court granted Prudential's motion for summary judgment holding that each of appellant's causes of action was barred by the final judgment in the state court action. Appel- lant timely appealed. STANDARD OF REVIEW A grant of summary judgment is re- viewed de novo. Darring ti. Kincheloe, 783 F.2d 874, 876 (9th Cir.1986). The ap- pellate court must determine, viewing the evidence in the light most favorable t.o the nonmoving party, whether there are any genuine issues of material fact and wheth- er the district court correctly applied the relevant substantive law. Ashton ti. Cory, 780 F.2d 816, 818 (9th Cir.1986). In review- ing decisions of the district court, the ap- pellate court may affirm on any ground finding support in the record. Smith ti. Block, 784 F.2d 993, 996 n. 4 (9th Cir.1986). DISCUSSION We view California's compulsory cross- complaint statute as applying t.o the inter- pleader action. Accordingly, we hold that appellant's federal claims are barred be- cause they should have been raised in that action. California's interpleader statute reads in pertinent part as follows: (b) . . . When the person, firm, corpora- tion, association or other entity against whom such [double or multiple] claims are made . . . is a defendant in an action brought upon one or more of such claims, it may either file a verified cross- complaint in interpleader, admitting that it has no interest in the money or proper- ty claimed, . . . and apply t.o the court upon notice t.o such parties for an order t.o deliver such money or property . . . t.o such person as the court shall direct .... Cal.Civ.Proc.Code § 386(b) (West 1987). Prudential, being faced with the possibility of double liability for the claimed proceeds, followed the procedure set forth above. Prudential deposited the proceeds plus in- terest with. the court and was subsequently released from the state court action. According t.o California's cross-complaint statute, when Prudential filed its verified cross-complaint, appellant was obligated t.o plead any related causes of action: (a) Except as otherwise provided by stat- ute, if a party against whom a complaint has been filed and served fails t.o allege in a cross-complaint any related cause of action which . . . he has against the plain- tiff, such party may not thereafter in any CHEIKER v. PRUDENTIAL INS. CO. OF AMERICA 337 Cite aa 820 F.2d 334 (9th Cir. 1987) other action assert against the plaintiff brought in the form of a cross-complaint the relat.ed cause of action not pleaded. and since appellant's causes of action here Cal.Civ.Proc.Code § 426.30 (West 1973). are relat.ed to the Int.erpleader action, we A "related cause of action" is defined as hold that appellant cannot now litigat.e a "cause of action which arises out of the same transaction, occurrence, or series of transactions or occurrences as the cause of action which the plaintiff alleges in his complaint." Cal.Civ.Proc.Code § 426.10 (West 1973). In Saunders v. New Capital for Small Busin688es, Inc., 231 Cal.App.2d 324, 41 Cal.Rptr. 703 (1964), the court stat- ed: It appears to us, therefore, that in the light of the decisions construing it, the term "transaction" found in section 439 [now superceded by §§ 426.10 and 426.- 30--436.60] is not confined to a single, isolated act or occurrence . . . but may embrace a series of acts or occurrences logically interrelated.... It is notewor- thy that this int.erpretation of the term parallels the interpretation of the same t.erm found in the comparable Federal Rules of Civil Procedure on compulsory counter-claims. It is significant, we think, that in each instance the critical term has been construed so as to effectu- ate the purpose of avoiding multiplicity of actions. Id. at 336 (citations and footnot.es omitted). There is no doubt that appellant's federal causes of action arose out of the same transaction or series of transactions as the int.erpleader action. The gravamen of the federal complaint is that Prudential wrong- fully retained the proceeds since, as benefi- ciary to the Policy, appellant had a right to receive the proceeds from that Policy. That and any other related issue should have been pleaded in the form of a com- plaint against Prudential in the Int.erplead- er action. Cal.Civ.Proc.Code § 426.30. Al- though appellant, in her answer to the In- terpleader complaint, assert.ed as an af- firmative defense that Prudential had neg- ligently, willfully and wrongfully interpled the life insurance proceeds, she did not file a cross-complaint against Prudential as re- quired by § 426.30. Because § 426.30 re- quires that all related causes of action be those related causes of action. Otherwise, piecemeal litigation will occur and defeat the purpose of the compulsory cross-claim statut.e. See Saunders, 231 Cal.App.2d at 336, 41 Cal.Rptr. 703. Appellant cont.ends that the compulsory cross-claim statut.e was not int.ended to ap- ply in int.erpleader actions. We disagree. Section 426.30 has two exceptions: (b) This section does not apply if either of the following are established: (1) The court in which the action is pending does not have jurisdiction to render a personal judgment against the person who failed to plead the relat.ed cause of action. (2) The person who failed to plead the relat- ed cause of action did not file an answer to the complaint against him. Cal.Civ.Proc.Code § 426.30. Neither ex- ception applies here. In addition, under the well-known maxim expressio unius est e:c- clusis alterius, the expression of one thing is the exclusion of another. 2A N. Singer, Sutherland Stat. Comt. § 47.23 (4th ed. 1984). Since the compulsory cross-claim statute specifically states when it is not to be applied and interpleader cases are not within the two exceptions, California's cross-complaint statute applies to int.er- pleader actions. Appellant, therefore, should have raised the relat.ed causes of actions against Prudential in the Int.er- pleader action. AFFIRMED. EXHIBIT 2 274 301 FEDERAL SUPPLEMENT, 3d SERIES sive intervention pursuant to Rule 24(b), because the UCC has not identified with particularity any common question of law or fact that it shares with this adversary proceeding. Additionally, permitting inter- vention by the UCC would unduly preju- dice the existing parties by substantially expanding the scope of the litigation. Ac- cordingly, the Court declines to grant per- missive intervention. [4, 5] Finally, the UCC proposed, in its reply submission and at the Omnibus Hearing, a form of limited participation in the adversary proceeding, which would al- low the UCC to appear and participate in certain aspects of the proceedings. This proposal is also foreclosed by the First Circuit’s opinion in In re Thompson, which holds that ‘‘nonparty participation in an adversary proceeding is dependent on in- tervention.’’ 965 F.2d at 1141. Thus, absent a proper basis to intervene under Rule 24, the UCC is not entitled to participate in the adversary proceeding in even the limit- ed formal fashion it has proposed. The Motion is therefore denied it its entirety. This Memorandum Opinion and Order resolves docket entry nos. 124 in 17 AP 151 and 166 in 17 AP 152. SO ORDERED. , IN RE: The FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO RICO, as Representative of Puerto Rico Sales Tax Financing Cor- poration (COFINA), Debtor. The Bank of New York Mellon, Plaintiff, v. Puerto Rico Sales Tax Financing Corporation (COFINA), et al., Defendants. No. 17 BK 3284-LTS (Joint Administration Requested) Adv. Proc. No. 17-133-LTS United States District Court, D. Puerto Rico. Signed 06/01/2017 Background: In adversary proceeding arising within Commonwealth of Puerto Rico’s debt adjustment case under Puerto Rico Oversight, Management, and Eco- nomic Stability Act (PROMESA), trustee appointed pursuant to Restated Sales Tax Revenue Bond Resolution of Puerto Rico Sales Tax Financing Corporation (COFI- NA), as Commonwealth’s statutory instru- mentality, moved for interpleader of funds due to be paid by trustee to holders of COFINA bonds. Holdings: The District Court, Laura Tay- lor Swain, J., held that: (1) competing ownership claims justified interpleader; (2) trustee would be released from liability for instituting interpleader; and (3) stay of related proceedings was war- ranted. Motion granted. ment is procedurally improper and will there- fore not be considered by the Court. 275IN RE FINANCIAL OVERSIGHT & MANAGEMENT BD. FOR PR Cite as 301 F.Supp.3d 274 (D.Puerto Rico 2017) 1. Interpleader O11 Competing claims of entitlement exist- ed for $16,297,863.78 that trustee, appoint- ed under Restated Sales Tax Revenue Bond Resolution, was scheduled to pay holders of bonds issued by Puerto Rico Sales Tax Financing Corporation (COFI- NA), and thus, interpleader would be granted, with disputed funds to be held in trust pending resolution of claims, where COFINA claimed that all money held by trustee in COFINA trust account re- mained COFINA’s property, holders of bonds issued by COFINA claimed right to principal and accrued interest on bonds, and holders of bonds issued by Common- wealth of Puerto Rico also claimed entitle- ment to payment from COFINA trust ac- counts. 28 U.S.C.A. § 1335(a)(1). 2. Interpleader O21 Trustee appointed under Restated Sales Tax Revenue Bond Resolution would be released from liability for instituting interpleader proceedings regarding $16,297,863.78 that trustee was scheduled to pay holders of bonds issued by Puerto Rico Sales Tax Financing Corporation (COFINA) and would be released from liability for compliance with further court orders, after interpleader was granted due to competing claims of entitlement to funds. 28 U.S.C.A. §§ 1335(a)(1), 2361. 3. Interpleader O22 After interpleader was granted due to competing claims of entitlement to funds due to be paid by trustee, appointed under Restated Sales Tax Revenue Bond Resolu- tion, to holders of bonds issued by Puerto Rico Sales Tax Financing Corporation (COFINA), stay of related proceedings and restraining order on all parties affect- ed by interpleader would be granted, un- der district court’s inherent powers, in or- der to prevent prosecution of claims against trustee outside of interpleader pro- ceeding, since stay of all actions affecting and related to disputed funds would allow for orderly and efficient litigation of dis- puted issues in one proceeding in order to prevent possibility of overlapping or incon- sistent decisions. 28 U.S.C.A. §§ 1335(a)(1), 2361. Ann M. Ashton, Ralph C. Ferrara, Pros- kauer Rose LLP, Washington, DC, Her- mann D. Bauer Alvarez, O’Neill & Borges, San Juan, PR, Martin J. Bienenstock, Chantel L. Febus, Jonathan E. Richman, Proskauer Rose LLP, New York, NY, Kurt F. Gwynne, Reed Smith LLP, Wil- mington, DE, Paul V. Possinger, Pros- kauer Rose LLP, Chicago, IL, Eric A. Schaffer, Luke A. Sizemore, Reed Smith LLP, Pittsburgh, PA, Steven O. Weise, Proskauer Rose LLP, Los Angeles, CA, for Debtor. PROMESA Title III MEMORANDUM OPINION LAURA TAYLOR SWAIN, United States District Judge On May 19, 2017, the Bank of New York Mellon (‘‘BNYM’’), in its capacity as the Trustee under the July 13, 2007, Amended and Restated Sales Tax Revenue Bond Resolution (the ‘‘Resolution’’) of the Puerto Rico Sales Tax Financing Corporation (‘‘COFINA’’), moved, by application for an order to show cause, for interpleader of certain funds due to be paid by BNYM to holders of COFINA bonds on June 1, 2017 (the ‘‘June 1 Payment’’) and thereafter (to- gether with the June 1 Payment, the ‘‘Dis- puted Funds’’). (Adv. Proc. No. 17-133, docket entry nos. 10 & 11.) The Court has 276 301 FEDERAL SUPPLEMENT, 3d SERIES jurisdiction of this adversary proceeding pursuant to 48 U.S.C. § 2166(c). On May 19, 2017, the Court issued the order to show cause, oppositions to the interpleader were filed, and a hearing was held on May 30, 2017 (the ‘‘Hearing’’), at which the Court delivered an oral decision granting the interpleader and certain re- lated relief. The Court entered an order providing for the relief on May 30, 2017 (the ‘‘Order’’). (Docket entry no. 110.) This Memorandum Opinion memorializes the Court’s decision. BACKGROUND The following undisputed background facts are set forth in BNYM’s adversary proceeding complaint. (Docket entry no. 1, Adversary Complaint (‘‘Compl.’’).) COFINA is a statutory instrumentality of the Commonwealth of Puerto Rico (the ‘‘Commonwealth’’) that was created to is- sue bonds secured by the assignment of certain sales tax revenues. (Compl. ¶ 27.) COFINA has issued four types of bonds under the Resolution. (Id. ¶ 31.) COFINA also agreed to certain covenants in the resolution. Failure to pay the principal or interest due under a bond would constitute an ‘‘Event of Default’’ under the resolu- tion. (Id. ¶ 37.) Failure to comply with the terms of the Resolution would also, after written notice and a 30-day cure period, also constitute an Event of Default. (Id. ¶ 38.) After an Event of Default, if BNYM has so declared, the principal and accrued interest of accelerated bonds becomes due and payable immediately. (Id. ¶ 39.) The Resolution contains a waterfall of pay- ments to be made by BNYM after an Event of Default, and also provides for payment priority to the senior outstanding bonds. (Id. ¶¶ 40-41.) On April 29, 2017, the Governor of the Commonwealth signed into law the Fiscal Plan Compliance Law (the ‘‘Compliance Law’’), which BNYM asserts ‘‘interferes with COFINA’s rights’’ and, accordingly, led BNYM to send COFINA a notice on May 4, 2017, that Events of Default would occur as a result of the Compliance Law if not cured by COFINA within 30 days. (Compl. ¶¶ 56-58.) Various intervenors in this adversary proceeding have also assert- ed that Events of Default have occurred, or will occur upon the expiration of a cure period. (See, e.g., id. ¶¶ 61-79.) COFINA itself, as represented in this proceeding by the Puerto Rico Fiscal Agency & Financial Advisory Authority (‘‘AAFAF’’), asserts that no Event of Default has yet occurred, as the period for COFINA to cure any potential Event of Default has not yet expired. (Id. ¶ 83.) Two COFINA bondholders, who have appeared in this adversary proceeding, also commenced litigation against BNYM over the alleged Events of Default: the ‘‘Whitebox Funds,’’ who are Plaintiffs in Whitebox Multi-Strategy Partners, L.P. v. Bank of New York Mellon Corp., Adv. Proc. No. 17-143 (D.P.R.), and Ambac As- surance Corp. (‘‘Ambac’’), which is the Plaintiff in Ambac Assurance Corp. v. The Bank of New York Mellon, No. 17 CV 3804 (S.D.N.Y.). (Compl. ¶¶ 84-87.) DISCUSSION Title 28, Section 1335(a)(1) of the United States Code permits the Court to grant interpleader when two or more adverse, diverse claimants claim to be entitled to money or property valued in excess of $500. There is no dispute regarding diver- sity and the June 7 Payment alone clearly exceeds $500. In deciding whether inter- pleader is appropriate, the Court thus need only determine whether the requisite competing claims of entitlement exist. [1] The record before the Court, in- cluding the submissions in response to the Order to Show Cause and statements by the parties at the Hearing, makes plain 277IN RE FINANCIAL OVERSIGHT & MANAGEMENT BD. FOR PR Cite as 301 F.Supp.3d 274 (D.Puerto Rico 2017) that the June 1 Payment, which totals $16,297,863.78, is the subject of competing claims of ownership, and that the argu- ments of the parties disputing the owner- ship of the June 1 Payment will apply substantially to all future payments BNYM would make as the trustee under the Resolution. COFINA, by AAFAF, as- serts that no Event of Default has yet occurred, and that all of the money held by BNYM in trust remains COFINA’s prop- erty. Six other parties appearing in the interpleader proceeding, including BNYM, dispute COFINA’s claim of ownership. Certain COFINA bondholders assert that an incurable Event of Default has oc- curred; some also assert that the principal and accrued interest on their bonds have been accelerated and are immediately due and payable. Additionally, some holders of bonds issued by the Commonwealth, who have moved to intervene in this adversary proceeding, assert that monies in the CO- FINA trust accounts are assets from which they are entitled to receive pay- ment. In sum, a significant dispute has arisen among a number of competing par- ties who each claim ‘‘to be entitled to’’ the Disputed Funds. 28 U.S.C. § 1335(a)(1). This dispute is sufficient, at this stage in the proceedings, for the Court to conclude that the requirements of Section 1335(a)(1) are met.1 COFINA, through AAFAF,2 asserted at the hearing that the Court should not grant interpleader because to do so would result in an Event of Default caused by COFINA’s failure to make payments re- quired under the Resolution. To alleviate this concern, the Court’s order granting interpleader will state that the Disputed Funds are to be held in trust on behalf of the party or parties to whom the Court ultimately determines the Disputed Funds rightfully belong. The Court therefore concludes that the requirements of Title 28, Section 1335(a) are met in this case. The Court also con- cludes that the requirements of Title 28, Section 1335(b) may be met by the deposit of an unsecured $1,000 bond by BNYM with the Clerk of Court, conditioned on BNYM’s compliance with the future orders and judgment of the Court with respect to the Disputed Funds. [2, 3] Ancillary to its request for inter- pleader, BNYM requests that the Court: (1) grant it a release from liability, and (2) stay related proceedings. The Court has the authority to discharge an interpleader plaintiff ‘‘from further liability’’ relating to the disputed funds pursuant to Title 28, Section 2361 of the United States Code. Here, a release of BNYM from liability for instituting this interpleader proceeding and for compliance with further orders of the Court is appropriate, and was granted as provided in the Order. Further, a stay of related proceedings and a restraining 1. The COFINA Senior Bondholders’ Coalition (whose constituent members are defined in the May 19, 2017, Order to Show Cause) argues that the Court should partially deny the interpleader request and require BNYM to disburse the payments due in the ordinary course to the holders of certain senior COFI- NA bonds. All of the Disputed Funds are, however, subject to competing claims of own- ership, including claims of entitlement to the entirety of the Disputed Funds by COFINA and holders of the Commonwealth’s General Obligation (or ‘‘GO’’) bonds. Accordingly, the disbursement of any of the Disputed Funds would be premature and improper at this time. 2. In its pre-hearing opposition papers, AAFAF argued that granting interpleader would vio- late Section 305 of PROMESA. See 48 U.S.C. § 2165. At oral argument, AAFAF conceded that the consent of the Oversight Board to interpleader meets the requirements of Sec- tion 305 and that therefore PROMESA does not bar the relief sought by BNYM. (Tran- script of May 30, 2017, Hearing at 28:20-23.) 278 301 FEDERAL SUPPLEMENT, 3d SERIES order on all parties affected by the inter- pleader from prosecuting claims against BNYM outside of the interpleader pro- ceeding is both authorized by Title 28, Section 2361, and appropriate pursuant to the Court’s inherent powers. The Court concludes that a stay of all actions affect- ing and related to the disposition of the Disputed Funds is appropriate to allow for the orderly and efficient litigation of dis- puted issues in one proceeding, which will prevent the possibility of overlapping or inconsistent decisions. Accordingly, the Court has stayed the Whitebox and Ambac litigations, as well as all other claims and proceedings in any court or tribunal, which relate to or would have an effect upon the interpleader action, as provided in the Or- der. CONCLUSION This Memorandum Opinion and the May 30, 2017, Order resolve docket entry nos. 10, 19, and 27 in Adversary Proceeding No. 17-133. , IN RE: The FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO RICO, as representative of Puerto Rico Electric Power Authority (PREPA), Debtor.1 No. 17 BK 4780-LTS United States District Court, D. Puerto Rico. Signed 09/14/2017 Background: In debt adjustment case of the Puerto Rico Electric Power Authority (PREPA), a public corporation and gov- ernment instrumentality of the Common- wealth of Puerto Rico, under Title III of the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA), holders and/or issuers of $5.3 billion of the $8.3 billion of bonds issued by PREPA moved for stay relief to commence litiga- tion against PREPA for the appointment of a receiver to manage the utility and seek electricity rate increases to protect bondholders’ economic rights. PREPA and the Financial Oversight and Management Board for Puerto Rico opposed motion. Holding: The District Court, Laura Tay- lor Swain, J., held that PROMESA prohib- ited the court, as a Title III court, from transferring control of PREPA’s manage- ment and property to a receiver without the Oversight Board’s consent. Motion denied. 1. Bankruptcy O2422.5(1) Factors set forth in Second Circuit’s Sonnax decision, 907 F.2d 1280, guide court’s determination of whether there is cause to lift the bankruptcy stay: (1) whether relief would result in partial or complete resolution of issues, (2) lack of any connection or interference with the bankruptcy case, (3) whether the other proceeding involves debtor as a fiduciary, (4) whether a specialized tribunal with nec- essary expertise has been established to hear the cause of action, (5) whether debt- or’s insurer has assumed full responsibility for defending it, (6) whether the action involves primarily third parties, (7) wheth- er litigation in another forum would preju- dice the interests of other creditors, (8) whether judgment claim arising from the other action is subject to equitable subor- dination, (9) whether movant’s success in 1. The last four (4) digits of PREPA’s federal tax identification number are 3747. EXHIBIT 3 534 15 FEDERAL SUPPLEMENT, 2d SERIES NEW JERSEY SPORTS PRODUCTIONS, INC., d/b/a Main Events, Plaintiff, v. DON KING PRODUCTIONS, INC., Oliver McCall, Jimmy Adams, Time Warner Entertainment Co, L.P., Nevada Athletic Commission, a division of the Nevada Department of Labor and Industry, and John Does 1-5, Defendants. No. 97-Civ-1175 (WGB). United States District Court, D. New Jersey. July 21, 1998. Boxing promoter who had withheld pro- fessional boxer’s purse, based on boxer’s con- duct during fight, moved to bring interplead- er action to resolve disputed claims to purse. The District Court, Bassler, J., held that: (1) plaintiff who asserts claim on stake at issue is ‘‘claimant’’ for purposes of statutory inter- pleader, so that district where plaintiff re- sides is proper venue; (2) court was appro- priate venue under either rule or statutory interpleader; (3) promoter had bona fide fear of adverse claims, allowing maintenance of interpleader action; (4) proceedings before Nevada Athletic Commission (NAC) would not provide adequate remedy; (5) court has personal jurisdiction over boxer; and (6) court would grant injunction to restrain oth- er actions involving purse. Motion granted. 1. Interpleader O1 ‘‘Interpleader’’ is an equitable device that enables party holding a fund to compel persons asserting conflicting claims to that fund to adjudicate their rights to fund in single action. 28 U.S.C.A. § 1335; Fed. Rules Civ.Proc.Rule 22, 28 U.S.C.A. See publication Words and Phrases for other judicial constructions and def- initions. 2. Interpleader O6 Key prerequisite to maintaining an ac- tion in interpleader is that there be two or more claimants to fund who are ‘‘adverse’’ to each other. 28 U.S.C.A. § 1335; Fed.Rules Civ.Proc.Rule 22, 28 U.S.C.A. 3. Interpleader O6, 8(2) Prerequisite to maintenance of inter- pleader action that there be two or more claimants to disputed fund who are ‘‘adverse’’ to each other is not met where one of claims clearly is devoid of substance, one of claim- ants is under control of stakeholder or has dropped his claim and fear of multiple litiga- tion or liability is groundless, claims are not asserted against same fund, or stakeholder may be liable to both claimants. 28 U.S.C.A. § 1335; Fed.Rules Civ.Proc.Rule 22, 28 U.S.C.A. 4. Interpleader O6 To properly invoke interpleader jurisdic- tion of court, there must exist a limited fund or some specific, identifiable property as to which claimants and stakeholder need the protection of one lawsuit. 28 U.S.C.A. § 1335; Fed.Rules Civ.Proc.Rule 22, 28 U.S.C.A. 5. Interpleader O17 Subject matter jurisdiction under statu- tory and rule interpleader differs: under stat- utory interpleader, value of stake need only be $500 and diversity of citizenship need exist only between any two of the adverse claimants, but in rule interpleader, jurisdic- tion must arise under general statutes creat- ing federal court jurisdiction where there is either a federal question or diversity of citi- zenship. 28 U.S.C.A. §§ 1331, 1332, 1335; Fed.Rules Civ.Proc.Rule 22, 28 U.S.C.A. 6. Interpleader O17 Venue rules differ as between rule and statutory interpleader: statutory interpleader restricts venue to any district in which one or more of claimants resides, while under rule interpleader, venue is proper in district where plaintiff resides, where all claimants reside, or where claim arose. 28 U.S.C.A. 535NEW JERSEY SPORTS PROD. v. DON KING PROD., INC. Cite as 15 F.Supp.2d 534 (D.N.J. 1998) §§ 1335, 1397; Fed.Rules Civ.Proc.Rule 22, 28 U.S.C.A. 7. Interpleader O17 Judicial district in which promoter of boxing match resided was proper venue, un- der either statutory or rule interpleader, for interpleader action in which promoter sought determination of claims on boxer’s purse for fight, which was in dispute, and asserted its own claim of right to purse; promoter’s resi- dence in district made venue proper under rule interpleader, and because promoter as- serted its own claim to purse, it was ‘‘claim- ant’’ for purposes of statute governing venue for statutory interpleader. 28 U.S.C.A. §§ 1335, 1397; Fed.Rules Civ.Proc.Rule 22, 28 U.S.C.A. See publication Words and Phrases for other judicial constructions and def- initions. 8. Interpleader O17 ‘‘Claimant’’, for purposes of statute un- der which statutory interpleader action may be venued in judicial district in which one or more of claimants resides, includes plaintiff- stakeholders who assert a claim on stake at issue. 28 U.S.C.A. § 1397. 9. Interpleader O29 Promoter of boxing match made ade- quate showing that it had bona fide fear of adverse claims relating to purse of one of boxers to allow maintenance of interpleader action to resolve claims to purse; sufficient evidence established possibility of double lia- bility stemming from promoter’s obligations to boxer, from whom purse had been with- held due to his conduct during fight, and to company which had broadcast fight. 28 U.S.C.A. § 1335; Fed.Rules Civ.Proc.Rule 22, 28 U.S.C.A. 10. Federal Courts O47.1 When court determines that state action commenced earlier provides an adequate remedy, proper course is to deny motion to interplead. 28 U.S.C.A. § 1335; Fed.Rules Civ.Proc.Rule 22, 28 U.S.C.A. 11. Federal Courts O47.1 Proceedings being held by Nevada Ath- letic Commission (NAC) regarding boxer who was sanctioned after he simply quit fighting during boxing match would not pro- vide adequate remedy to resolve issue of entitlement to boxer’s purse, which had been withheld by promoter based on his actions in fight, and thus, court would not abstain from allowing promoter to maintain interpleader action; while NAC would likely consider who owned funds at stake, it was not clear that NAC had jurisdiction to resolve disputed claims, and some of claimants to purse were not parties to NAC proceeding. 28 U.S.C.A. § 1335; Fed.Rules Civ.Proc.Rule 22, 28 U.S.C.A. 12. Federal Courts O76.5, 76.35 District court in New Jersey could exer- cise personal jurisdiction over professional boxer with respect to interpleader action re- lating to claims for his purse for fight held in Nevada, which had been withheld based on boxer’s actions during fight, regardless of whether action was brought based on statu- tory or rule interpleader; with respect to statutory interpleader claim, nationwide ser- vice of process was permissible, and with respect to rule interpleader, boxer had suffi- cient minimum contacts with New Jersey to allow exercise of jurisdiction. U.S.C.A. Const.Amend. 14; 28 U.S.C.A. §§ 1335, 2361; Fed.Rules Civ.Proc.Rules 4, 22, 28 U.S.C.A. 13. Federal Courts O76.5, 76.35 Professional boxer whose purse had been withheld following fight held in Nevada, based on his conduct during fight, had suffi- cient minimum contacts with New Jersey to allow federal district court in New Jersey, in which promoter had brought rule interplead- er action to resolve claims to purse, to exer- cise personal jurisdiction over boxer; letter of credit issued to boxer, which had been estab- lished at New Jersey bank, required boxer to be physically present to draw on letter, and thus contemplated his physical presence there to consummate agreement. U.S.C.A. Const.Amend. 14; Fed.Rules Civ.Proc.Rules 4, 22, 28 U.S.C.A. 14. Interpleader O22 Court in which boxing promoter had brought interpleader action to resolve disput- ed claims to boxer’s purse, which had been withheld based on his actions during fight, 536 15 FEDERAL SUPPLEMENT, 2d SERIES would grant promoter’s motion to restrain other actions affecting funds involved in in- terpleader. 28 U.S.C.A. § 2361; Fed.Rules Civ.Proc.Rule 22, 28 U.S.C.A. 15. Courts O508(2.1) Interpleader O22 Statute governing process and proce- dure in interpleader actions acts as statutory exception to Anti-Injunction Act, and autho- rizes district court to enter order restraining all claimants from instituting a proceeding in any state or federal court affecting the inter- pleaded res. 28 U.S.C.A. § 2361. 16. Interpleader O22 Because statutory interpleader allows for nationwide service of process, injunction issued under statute governing process and procedure in interpleader actions halts any proceedings deemed to be inconsistent with statutory interpleader proceeding. 28 U.S.C.A. § 2361. 17. Interpleader O22 While court may enjoin parallel proceed- ings in connection with rule interpleader, scope of injunction is narrower than that of injunction issued under statutory interplead- er; under rule interpleader, court retains dis- cretion to restrain litigants before court from litigating claims in derogation of court’s exer- cise of jurisdiction. 28 U.S.C.A. § 2361; Fed.Rules Civ.Proc.Rule 22, 28 U.S.C.A. 18. Theaters and Shows O1 Nevada Athletic Commission (NAC) was not exclusive forum for resolution of dispute regarding professional boxer’s purse from fight, which had been withheld based on his actions during fight; while form paragraph in contract executed on day of fight indicated that contest was to be conducted under rules of NAC, and that NAC had authority to make disposition of purse if it deemed appro- priate, separate contract between parties in- dicated desire to have disputes resolved in New Jersey court. Patrick C. English, Dines & English, Clif- ton, NJ, for Plaintiff New Jersey Sports Productions, Inc. Pamela Labaj, Curtis, Mallet-Prevost, Colt & Mosle, Newark, NJ, for Defendant Don King Productions, Inc. Andrew Muscato, Whitman Breed Abbott & Morgan, Newark, NJ, Eckley M. Keach, Goodman, Chesnoff & Keach, Las Vegas, NV, for Defendant Oliver McCall. OPINION BASSLER, District Judge. Plaintiff, New Jersey Sports Productions, Inc, d/b/a Main Events (‘‘Main Events’’) moves for an Order: (1) permitting Main Events to pay into the Court registry the sum of $3,003,923.04 together with accrued interest, in connection with an interpleader action brought by Main Events; (2) restrain- ing any other actions affecting the funds involved in this interpleader (except a disci- plinary action brought by the Nevada Ath- letic Commission (‘‘NAC’’) against the De- fendant, Oliver McCall (‘‘McCall’’)); and (3) directing that claims on the alleged fund be filed. Main Events asserts jurisdiction pur- suant to 28 U.S.C. § 1332 (diversity of citi- zenship). For the reasons set forth below, the Court grants Main Events’ motions seeking an Order: (1) permitting Main Events to pay into the Court registry the sum of $3,003,923.04 together with accrued interest, in connection with an interpleader action brought by Main Events; (2) direct- ing that claims on the alleged fund be filed; and (3) restraining any other actions affect- ing the funds involved in this interpleader (except a disciplinary action brought by the NAC against McCall). I. BACKGROUND The central events of this lawsuit concern a heavyweight title bout between McCall and Lennox Lewis that took place on February 7, 1997. McCall’s purse for the fight was agreed to be $3,075,500.00. (Complaint Ex. B ¶ 2).1 1. The fight only took place after protracted litiga- tion in the New Jersey Superior Court, Chancery Division. See Complaint ¶¶ 15 et seq. 537NEW JERSEY SPORTS PROD. v. DON KING PROD., INC. Cite as 15 F.Supp.2d 534 (D.N.J. 1998) Main Events, the promoter of the bout, entered into two contracts with McCall and his manager, Defendant Jimmy Adams (‘‘Adams’’). Under the first of these con- tracts, the World Boxing Council Official Championship Bout Contract (‘‘WBC Con- tract’’), McCall agreed to, among other things, refrain from the use of drugs. (Com- plaint Ex. A ¶ 7).2 According to Main Events’ Complaint, McCall thereafter was arrested on drug charges. (Complaint ¶ 44). Furthermore, McCall agreed to cooperate and assist Main Events in promoting the bout. (WBC Contract, attached as Ex. A to Complaint, ¶ 11). According to the Com- plaint, McCall breached this obligation by refusing to cooperate with Main Events in promoting the bout.3 McCall and Main Events 4 entered into a second contract titled, ‘‘Official Boxing Con- tract, Nevada Athletic Commission’’ (the ‘‘NAC Contract’’), which provided that McCall would not be entitled to the purse if the NAC determined that McCall did not engage in honest competition or give an hon- est exhibition of his skills. (Complaint Ex. B ¶ 3). Paragraph 3 of the NAC Contract pro- vides, in part: [The parties agree] [t]hat the contest TTT shall be conducted in all respects in con- formity with the laws of the State of Neva- da, and the rules and regulations adopted by the Nevada Athletic Commission, which are hereby made a part of this agree- mentTTTTIf the referee or the Nevada Ath- letic Commission shall decide that the Box- er and Manager, or either of them, did not enter into the contract in good faith; or the Boxer and Manager, or either of them, had any collusive understanding or agree- ment regarding the termination of the match other that the same should be an honest exhibition of skill on the part of the contestants, or that the Boxer is not hon- estly competing or did not give an honest exhibition of his skill, or is guilty of an act detrimental to the interest of boxing; it is agreed in any of such events that the Boxer shall not be entitled to the compen- sation above named, or any part thereof, unless so ordered by the Nevada Athletic Commission. It is further agreed that the Promoter [Main Events] shall pay said compensation to the said Commission in the event the Commission shall so order upon any of the above-mentioned grounds. The Commis- sion shall thereupon, in its discretion, make such disposition of said purse as it deems to the best interest of legitimate sport and may forfeit to the Nevada Ath- letic Commission all or any part of the compensation or order the same or any portion thereof paid to the Boxer. All parties hereto agree to accept and be bound by the decision of the said Commis- sion and such decision shall be final and conclusive of the rights of the parties here- to. According to the Complaint, DKP, pur- portedly on behalf of McCall, demanded that a letter of credit be provided to DKP in McCall’s name. (Complaint ¶ 30). The Com- plaint further alleges that Main Events pro- cured a letter of credit in the amount of $2,983,997, which was provided to DKP in McCall’s name. (Id.).5 The letter of credit expired, by its terms, on March 7, 1997. (Complaint ¶ 31). No parties have drawn against the letter of credit; the funds repre- senting McCall’s disputed purse are kept in a segregated, interest-bearing account in Ber- 2. Although it is not entirely clear from either the WBC contract itself or Main Events’ pleadings in this case, it appears that the WBC Contract is dated November 26, 1994. 3. It appears from the allegations in the Com- plaint that McCall viewed Don King Productions, Inc. (‘‘DKP’’) as McCall’s exclusive promoter, (Complaint ¶ 35), and requested that all inquiries from Main Events regarding promotional activi- ties in connection with the bout be directed through DKP. (Id. ¶ 36). 4. Although the NAC contract refers to Mr. Adams, the copy appended to the Complaint at Exhibit B does not contain Mr. Adams’s signa- ture. 5. According to the Complaint, the difference be- tween the amount of the letter of credit and the full purse of $3,075,550 represents sanction fees owed by McCall and paid to the WBC by Main Events on McCall’s behalf. (Complaint ¶ 30). 538 15 FEDERAL SUPPLEMENT, 2d SERIES gen Commercial Bank under Main Events’s control. (Complaint ¶ 51). According to the Complaint, McCall simply stopped fighting after the third round of the bout. (Complaint ¶ 48). As a result, the referee stopped the bout fifty-five seconds into the fifth round. (Id.). Main Events alleges that McCall’s actions breached both the NAC Contract and WBC Contract. (Complaint Count II).6 On February 7, 1997, shortly after the bout was stopped, the Nevada Athletic Com- mission notified Main Events that McCall breached the terms of his agreements and that he should not be paid the approximately $3 million provided for in the contracts be- tween the parties. On February 18, 1997, the Nevada Attorney General’s Office initi- ated a disciplinary action before the Nevada Athletic Commission seeking the imposition of fines totaling ten percent of McCall’s purse and the revocation of McCall’s Nevada boxing license. (Plaintiff’s Moving Brief Ex. B ¶¶ 15-18). On April 1, 1997, approximately 20 days after the Complaint in this action had been filed, McCall and the Nevada Attorney Gen- eral’s Office entered into a settlement agree- ment (the ‘‘Settlement’’), a copy of which is attached to the Certification of Eckley M. Keach at Exhibit 3. According to the terms of the Settlement, McCall admitted that the manner and method in which he conducted himself was detrimental to boxing. (Settle- ment ¶ 1). McCall further agreed to pay a $250,000 fine to the State of Nevada and to suffer a one-year suspension from boxing in Nevada to commence nunc pro tunc Febru- ary 7, 1997. (Settlement ¶¶ 3-4). The Settlement must be approved by the NAC before it becomes final. (Settlement ¶ 9). The Settlement provides that the par- ties’ agreement will be placed on the agenda of the next scheduled meeting of the NAC, which had been scheduled for April 26, 1997. (Settlement ¶ 10; Keach Cert. ¶ 5). (The parties, at oral argument, revealed that at the April 26, 1997 meeting, the NAC post- poned consideration of the McCall Settle- ment). The Attorney General agreed to recommend that the NAC approve the Set- tlement. (Settlement ¶ 10). The Attorney General also agreed to recommend that the NAC order that McCall receive the remain- ing monies due him, less and except the $250,000 fine, as per the WBC and NAC contracts. (Id.).7 Main Events indicates, in its reply brief, that, while it was aware of the pendency of the NAC hearings, Main Events was not a party to the settlement negotiations and in no way participated in them. (English Aff. ¶ 8). Nor, it would appear, were any parties other than McCall and the NAC privy to the proposed settlement terms. According to the Complaint, possible claimants to the disputed purse include: (A) McCall, who allegedly claims that he is due the entire purse; (B) DKP, which has also raised a claim to part of McCall’s purse; 8 (C) Time Warner Entertainment, Co., L.P. (‘‘Time Warner’’), which, through its broadcast division, Home Box Office, Inc., broadcast the bout; 9 6. Main Events’ Complaint contains four counts. Count One seeks to invoke the interpleader juris- diction of this Court. Count Two alleges breach of contract by McCall. Count Three alleges tor- tious interference by DKP. Count Four alleges that DKP intentionally misrepresented McCall’s physical condition prior to the February 7, 1997 bout. 7. Adding another twist to the already convoluted plot, Main Events questions the authenticity of McCall’s signature on the settlement agreement. The settlement purports to have been signed by McCall on April 1, 1997. According to news reports, however, McCall had been involuntarily committed to a mental institution from March 28, 1997 until approximately April 4, 1997, rais- ing obvious concerns as to his competence to enter into the settlement in question. (See En- glish Aff. ¶ 15 and Ex. D). 8. Neither the Complaint nor Main Events’s mov- ing papers elaborate on the nature of the possible actions DKP might pursue against the res. 9. Time Warner filed its Counterclaim and Cross- claim in Interpleader on April 22, 1997 alleging that Time Warner advanced the funds at issue to Main Events through a letter of credit in favor of Main Events issued by Societe Generale, a New York bank. (Time Warner Pleading at 13 ¶ 1). Time Warner alleges that, pursuant to a contract entered into between Time Warner and Main Events, Main Events promised to provide a com- 539NEW JERSEY SPORTS PROD. v. DON KING PROD., INC. Cite as 15 F.Supp.2d 534 (D.N.J. 1998) (D) Adams, McCall’s manager; (E) The NAC, which has the power to fine McCall; 10 and (F) Main Events, which claims that the amount on deposit is not due because of various contract breaches. (Complaint ¶ 53). Both DKP and McCall oppose Main Events’s application to place the funds on deposit with the Court, to enjoin any other actions affecting the funds (except the pend- ing disciplinary action), and to direct that claims against the fund be filed. They ar- gue: (1) that this Court lacks subject matter jurisdiction over Main Events’s interpleader claim; (2) that the interpleader claim is im- properly venued in this district; (3) that this Court should abstain from exercising its in- terpleader jurisdiction in favor of the action pending before the NAC; (4) that the Court lacks personal jurisdiction over McCall; and (5) that the NAC Contract, by its terms, designates the NAC as the exclusive forum to hear these claims. II. DISCUSSION [1] Interpleader is an equitable device that enables a party holding a fund to compel persons asserting conflicting claims to that fund to adjudicate their rights to the fund in a single action. American Family Mut. Ins. Co. v. Roche, 830 F.Supp. 1241 (E.D.Wis. 1993). The classic interpleader scenario in- volves a neutral stakeholder, such as an in- surance company, faced with completing claims over the rights of the res-e.g., the proceeds of a life insurance policy where the beneficiaries dispute their relative distribu- tions. 7 Charles A. Wright & Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 1701 at 486 (1986 & 1996 supp.). Thus, as originally conceived, inter- pleader actions were limited to a relatively narrow range of cases. 7 Charles A. Wright & Arthur R. Miller & Mary Kay Kane, Fed- eral Practice and Procedure § 1701 at 485 (1986 & 1996 supp.). [2, 3] Subsequent revisions to the United States Code and the Federal Rules of Civil Procedure have liberalized use of the inter- pleader device. See generally Bradley v. Kochenash, 44 F.3d 166, 168 (2d Cir.1995)(discussing history and evolution of interpleader practice). The key prerequisite to maintaining an action in interpleader pres- ently is that there be two or more claimants to the fund who are ‘‘adverse’’ to each other. 7 Charles A. Wright & Arthur R. Miller & Mary Kay Kane, Federal Practice and Pro- cedure § 1705 at 507-509 (1986 & 1996 supp.). ‘‘This requirement is not met where one of the claims clearly is devoid of sub- stance, or one of the claimants is under the control of the stakeholder or has dropped his claim and the fear of multiple litigation or liability is groundless, or the claims are not asserted against the same fund, or the stake- holder may be liable to both claimants.’’ Id. at 508-509; see also CNA Ins. Companies v. Waters, 926 F.2d 247, 251 (3d Cir.1991)(only if stakeholder has a ‘‘bona fide’’ fear of ad- verse claims arising with respect to the res does a claim for interpleader arise). [4] Similarly, to properly invoke the in- terpleader jurisdiction of the Court, there must exist a limited fund or some specific, identifiable property as to which the claim- ants and stakeholder need the protection of one lawsuit. 7 Charles A. Wright & Arthur R. Miller & Mary Kay Kane, Federal Prac- tice and Procedure § 1704 at 506-507 (1986 & 1996 supp.). An interpleader action may be brought in federal court pursuant to two different, yet overlapping, procedural devices. ‘‘Rule in- terpleader’’ is governed by Fed.R.Civ.P. 22, which states, in pertinent part: (1) Persons having claims against the plaintiff may be joined as defendants and required to interplead when their claims are such that the plaintiff is or may be petitive bout between Lennox Lewis and Oliver McCall. (Id. ¶ 2). Time Warner further alleges that McCall’s alleged breach of his obligations to Main Events to give an honest demonstration of his skills excused Time Warner from satisfying the letter of credit it had previously obtained in favor of Main Events. (Id. ¶ 4). Time Warner further alleges that the Societe Generale letter of credit was cashed over Time Warner’s objection. Time Warner thus claims a superior right to the funds at issue. (Id. ¶¶ 6-8). 10. The Nevada Athletic Commission was dropped from the case on April 2, 1997 appar- ently on the understanding that the NAC did not intend to make a claim on McCall’s purse. 540 15 FEDERAL SUPPLEMENT, 2d SERIES exposed to double or multiple liability. It is not ground for objection to the joinder that the claims of the several claimants or the titles on which their claims depend do not have a common origin or are not iden- tical but are adverse to and independent of one another, or that the plaintiff avers that the plaintiff is not liable in whole or in part to any or all of the claimants TTTT (2) The remedy herein provided is in addi- tion to and in no way supersedes or limits the remedy provided by Title 28, U.S.C. §§ 1335, 1397 and 2361 TTTT [5] ‘‘Statutory interpleader’’ is governed by 28 U.S.C. §§ 1335, 1397 and 2361. 28 U.S.C. § 1335 provides, in pertinent part: (a) The district courts shall have original jurisdiction of any civil action of inter- pleader or in the nature of interpleader filed by any person, firm, or corporation, association, or society having in his or its custody or possession money or property of the value of $500 or more TTT if (1) Two or more adverse claimants, of diverse citizenship as defined in section 1332 of this title, are claiming or may claim to be entitled to such money or property TTTT Subject matter jurisdiction under statutory and rule interpleader differs. Under statuto- ry interpleader, the value of the stake need only be $500 and diversity of citizenship need exist only between any two of the adverse claimants. 7 Wright & Miller, Federal Prac- tice and Procedure § 1703 at 498. In rule interpleader, on the other hand, jurisdiction must be based on the general statutes gov- erning federal court jurisdiction-i.e., federal question (28 U.S.C. § 1331) or diversity of citizenship (28 U.S.C. § 1332). Thus, if a rule interpleader claimant asserts jurisdic- tion pursuant to 28 U.S.C. § 1332, complete diversity must exist between the plaintiff stakeholder and the defendant claimants, and the amount in controversy must exceed $75,- 000.11 Id. [6] Similarly, the venue rules differ as between rule and statutory interpleader. Statutory interpleader restricts venue to any district in which one or more of the claimants resides. Under rule interpleader, on the oth- er hand, venue is proper in the district where the plaintiff resides, where all the claimants reside, or where the claim arose. Id. at 498- 99; 28 U.S.C. § 1397; see also American Family Mut. Ins. Co. v. Roche, 830 F.Supp. 1241, 1244 n. 2 (E.D.Wis.1993). A. DKP’s 12 Argument That Venue is Im- proper in This District DKP argues that venue is improper in this district. This argument is misplaced. DKP points out that none of the named defendant-claimants in to the interpleader action reside in this district. DKP argues, therefore, that venue is not proper in this district. [7] The Court concludes that under ei- ther statutory or rule interpleader, the Dis- trict of New Jersey is a proper venue for Main Events’s interpleader action. Under rule interpleader, venue is proper in the district where the stakeholder resides. See Roche, 830 F.Supp. at 1244 n. 2. Here, Main Events, according to the Complaint, resides in New Jersey. Therefore, the action is properly venued in this district under rule interpleader. Venue for statutory interpleader claims is governed by 28 U.S.C. § 1397, which pro- vides that ‘‘[a]ny civil action of interpleader or in the nature of interpleader under section 1335 of this title may be brought in the judicial district in which one or more of the claimants reside.’’ Because none of the defendant-claimants reside in New Jersey, the question arises whether a plaintiff-stakeholder-claimant qualifies as a ‘‘claimant’’ within the meaning of Section 1397. Neither the parties’ nor the Court’s research has located a case discuss- ing this issue. 11. The Complaint improperly pleads the requi- site jurisdictional amount as $50,000. The Court notes, however, that the amount in controversy here clearly exceeds the $75,000 threshold. 12. In this Opinion, the Court will refer to DKP and McCall collectively as DKP when discussing their opposition to Main Events’s motion. 541NEW JERSEY SPORTS PROD. v. DON KING PROD., INC. Cite as 15 F.Supp.2d 534 (D.N.J. 1998) [8] The Court concludes that ‘‘claimant’’ as used in Section 1397 includes plaintiff- stakeholders who assert a claim on the stake. The Court’s conclusion is based on a plain textual reading of the statute, which provides for venue in the district where any ‘‘claim- ant’’ resides. 28 U.S.C. § 1397. This con- clusion follows from the fact that plaintiff- stakeholders may, under section 1335, assert a claim on the stake. State Farm Fire and Casualty Co. v. Tashire, 386 U.S. 523, 87 S.Ct. 1199, 18 L.Ed.2d 270 (1967). A natural reading of Section 1397 compels the conclu- sion that where, as here, a plaintiff-stake- holder asserts a claim against the fund, its residence is relevant for determining wheth- er venue is proper under Section 1397. B. DKP’s Argument That Interpleader is Improper Because There Exist No Adverse Claims to the Fund As stated above, the existence of two or more adverse claims to the fund at issue is a prerequisite to the maintenance of an inter- pleader action. See CNA Ins. Companies v. Waters, 926 F.2d 247, 251 (3d Cir.1991)(only if stakeholder has a ‘‘bona fide’’ fear of ad- verse claims arising with respect to the res does a claim for interpleader arise). [9] Main Events has made an adequate showing on this motion that it has a ‘‘bona fide’’ fear of adverse claims relating to McCall’s purse. The Complaint in this action does not spec- ify any theory pursuant to which DKP, who does not appear to be a party to either the WBC or the NAC contracts, could legitimate- ly claim any part of the purse. See Gaines v. Sunray Oil Co., 539 F.2d 1136, 1141-42 (8th Cir.1976)(denying interpleader; ‘‘Here, Am- tel has not interpleaded a sum represented to be a reasonable commission owing to only one of several competing brokers, or to be divided among them. Rather, it has inter- pleaded a specific sum arising under a partic- ular agreement to which only Amtel and Sunray were parties.’’). Furthermore, there does not appear to be the requisite adversity between the possible claims of McCall and Adams. From a pre- liminary examination of the contracts at is- sue, it would appear that Adams’s recovery from the purse, if any, would be dependent on McCall’s recovery. (WBC Contract ¶ 4) (‘‘Promoter [Main Events] shall pay the Man- ager [Adams] of the Boxer [McCall] his share of Boxer’s compensation, by separate check, in the amount agreed to by Boxer and his manager’’). While both McCall and Adams would appear to be adverse to Main Events’s position, on the record before the Court it is a stretch to conclude that they have the requisite adversity between themselves for the maintenance of an interpleader action. Main Events, however, has submitted suf- ficient evidence that it has a legitimate fear of double liability stemming from dual obli- gations owing to McCall and Time Warner. Time Warner has asserted a claim against the res by way of counterclaim and cross- claim in interpleader. The Counterclaim and Crossclaim alleges that Time Warner ad- vanced the funds at issue to Main Events through a letter of credit in favor of Main Events issued by Societe Generale, a New York bank. (Time Warner Pleading at 13 ¶ 1).13 Time Warner alleges that, pursuant to a contract entered into between Time Warner and Main Events, that Main Events promised to provide a competitive bout be- tween Lennox Lewis and Oliver McCall. (Id. ¶ 2).14 Time Warner further alleges that McCall’s breaches of his obligation to Main Events to give an honest demonstration of his skills excused Time Warner from satisfy- ing the letter of credit it had previously obtained in favor of Main Events. (Id. ¶ 4). Time Warner further alleges that the Societe Generale letter of credit was cashed over Time Warner’s objection. Time Warner thus claims a superior right to the funds at issue. (Id. ¶¶ 6-8). This claim, together with McCall’s, satis- fies the adversity requirement. Significant- ly, should McCall be found to be entitled to all or part of the purse, as McCall’s counsel 13. The parties have not supplied the Court with a copy of this letter of credit on this motion. 14. The contract between Time Warner and Main Events, similarly, has not been made available to the Court on this motion. 542 15 FEDERAL SUPPLEMENT, 2d SERIES alleges is the likely outcome of the NAC proceeding, and this or another court deter- mines that Main Events is liable to Time Warner, Main Events could face double lia- bility arising from the same transaction. Under these circumstances, Main Events has a bona fide fear of adverse claims arising with regard to the contract amounts in dis- pute. See CNA Ins. Companies v. Waters, 926 F.2d 247, 251 (3d Cir.1991)(only if stake- holder has a ‘‘bona fide’’ fear of adverse claims arising with respect to the res does a claim for interpleader arise).15 Interpleader, therefore, is the appropriate remedy to allay those fears. C. DKP’s Argument That This Court Should Abstain in Favor of the Neva- da Action DKP also argues that this Court should abstain in favor of ongoing proceedings be- fore the NAC. [10] When a court determines that a state action commenced earlier provides an adequate remedy, the proper course is to deny the motion to interplead. 7 Charles A. Wright & Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 1709 at 534 n. 9 (1986 & 1996 supp.)(‘‘[A] court may dismiss or stay an interpleader proceeding if an action already pending be- fore another court might obviate the need for employing the interpleader remedy or elimi- nate the threat of multiple vexation. This certainly would be the case if the disputed issues are likely to be resolved in the other proceeding.’’); Truck-A-Tune, Inc. v. Re, 856 F.Supp. 77, 82 (D.Conn.1993). [11] Here, however, the disputed issues are not likely to be resolved by proceedings before the NAC. It appears that the issue of who owns the funds at stake is under consid- eration by the NAC, as per the NAC con- tract. (See Keach Cert. ¶ 6 (‘‘[T]he Nevada Athletic Commission will be ordering, among other things, that Main Events pay forthwith the entire amount of the undistributed por- tion of the purse of Oliver McCall to the Nevada Athletic Commission for disposition that the Nevada Athletic Commission shall, in its discretion, deem [ ] to be in the best interests of legitimate sport.’’)). It is unclear, however, that the NAC has jurisdiction to resolve disputed claims to the funds at issue. The disciplinary action be- fore the NAC was brought pursuant to Chap- ter 467 of the Nevada Revised Statutes. The relevant provisions give the NAC the author- ity to revoke or suspend boxing licenses and to impose fines. For example, Nev. R. Stat. § 467.158, titled ‘‘Reinstatement of revoked license; penalty in lieu of revocation; recov- ery of costs and fees,’’ provides: 1. Except as otherwise provided in sub- section 3, upon receipt of an application and the payment of a penalty prescribed by the commission, not to exceed $250,000, the commission may reinstate a revoked license. 2. Except as otherwise provided in sub- section 3, in lieu of revoking a license, as provided for in this chapter, the commis- sion may prescribe a penalty not to exceed $250,000. 3. If the revocation or proposed revoca- tion relates to: 15. DKP argues that Main Events’s obligation to McCall is wholly separate and apart from its obligation to Time Warner and therefore that interpleader is inappropriate. DKP’s position has conceptual appeal: there are separate con- tracts at issue and the ‘‘stake’’ in this case is a fungible good-money. Hence, DKP’s oft-re- peated assertion during oral argument that McCall does not care whether his purse money comes from the account maintained in the Ber- gen Commercial Bank or from Main Events’s general accounts. DKP’s argument, in the Court’s view, proves too much. Because money is a fungible commodity, no claimant on a money stake cares about the origin of the money. What really matters is whether a party fears double liability on what amounts to one obligation. Here, though there are, as DKP points out, two contractual relationships (one between Main Events and McCall, and the other between Time Warner and Main Events), both contractual rela- tionships involve the same transactional set of facts. That is, Time Warner’s claim against Main Events is based on the same set of operative facts-whether McCall engaged in an honest ex- hibition-as is Main Events’s claim against McCall. Based on this crucial circumstance, the Court concludes that Main Events has a bona fide fear of double liability and inconsistent ver- dicts justifying the invocation of this Court’s in- terpleader jurisdiction. 543NEW JERSEY SPORTS PROD. v. DON KING PROD., INC. Cite as 15 F.Supp.2d 534 (D.N.J. 1998) (a) The preparation for a contest or an exhibition of unarmed combat; (b) The occurrence of a contest or an exhibition of unarmed combat; or (c) Any other action taken in conjunc- tion with a contest or an exhibition of unarmed combat, the commission may prescribe a penalty not to exceed $250,000 or 10 percent of the purse for that contest or exhibition, which- ever amount is greater. 4. If a penalty is imposed pursuant to this section, the costs of the proceeding, including investigative costs and attorney’s fees, may be recovered by the commission. Chapter 467 does not appear to give the NAC authority to resolve conflicting claims over the funds at issue.16 Further, even if the NAC has jurisdiction to resolve the dis- puted claims to the fund, it seems manifestly unfair to other interested parties to resolve their competing claims over this substantial sum when they are not parties to the action and have not been afforded the opportunity to participate in settlement negotiations be- tween the NAC and McCall. The pending NAC proceedings, therefore, cannot be said to provide an ‘‘adequate reme- dy’’ for all the parties for the simple reason that all the parties before this Court are not before the NAC. Main Events has not sought, on this mo- tion, an Order enjoining the Nevada disci- plinary action from proceeding. Rather, it takes the position that, should the NAC Or- der the funds be transferred to it pursuant to the NAC contract, that the NAC will become another ‘‘claimant’’ on the res. It does not appear likely that the Nevada action will dispose of the claims relating to the disputed purse. Because the NAC pro- ceedings do not provide an adequate alter- nate forum for Main Events’s interpleader action, the Court will not abstain in favor of the NAC proceeding. D. DKP’s Argument That This Court Lacks Personal Jurisdiction Over McCall McCall argues that this Court lacks juris- diction over his person. The Court dis- agrees. [12] Main Events first argues that per- sonal jurisdiction over McCall is proper pur- suant to 28 U.S.C. § 2361 which provides for nationwide service of process in actions brought pursuant to 28 U.S.C. § 1335. See NYLife Distributors, Inc. v. Adherence Group, Inc., 72 F.3d 371, 375 (3d Cir.1995). The Court agrees that it may exercise per- sonal jurisdiction over McCall pursuant to Section 2361, at least with respect to Main Events’s statutory interpleader claim. It is unclear from Main Events’s pleading, however, whether it is proceeding pursuant to Rule 22, in which case the action cannot be maintained unless the claimants can be served with process as in any other civil action within the territorial limits prescribed by Fed.R.Civ.P. 4, or 28 U.S.C. § 1335, in which case Section 2361 would permit nation- wide service of process. See 7 Charles A. Wright & Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 1703 at 499 (1986 & 1996 supp.)(discussing differences between statutory and rule inter- pleader).17 The Court concludes, at least preliminarily, that the Court has personal jurisdiction over McCall with respect to Main Events’s rule interpleader claim under the line of cases initiated by International Shoe. Thus, even if the proposed interpleader action is pursuant to Fed.R.Civ.P. 22, the Court has personal jurisdiction over McCall. A federal court can exercise jurisdiction over a nonresident defendant to the extent authorized by the law of the forum in which that court sits. Fed.R.Civ.P. 4(e); Carteret Sav. Bank, FA v. Shushan, 954 F.2d 141, 145 16. At oral argument, the parties disputed wheth- er, under Nevada law, a non-party has the right to judicial review of the NAC decision. 17. Main Events attempts to create a hybrid ver- sion of interpleader by picking and choosing elements from rule and statutory interpleader that it deems favorable to its position. Main Events’s efforts to proceed under ‘‘rule-atory’’ interpleader, while creative, must fail. As made clear in the text of Rule 22, its remedy ‘‘in no way supersedes or limits the remedy provided by Title 28, U.S.C. §§ 1335, 1397 and 2361.’’ 544 15 FEDERAL SUPPLEMENT, 2d SERIES (3d Cir.1992). Therefore, this Court must apply New Jersey’s long arm rule, which extends to the full limits of the Fourteenth Amendment of the U.S. Constitution. N.J. Ct. R. 4:4-4, Starline Optical Corp. v. Cald- well, 598 F.Supp. 1023, 1025 (D.N.J.1984). Under the Fourteenth Amendment’s Due Process Clause, personal jurisdiction exists where the plaintiff shows that the defendant has sufficient ‘‘minimum contacts’’ with the forum state. Asahi Metal Ind. Co. v. Supe- rior Court, 480 U.S. 102, 108-09, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985)). ‘‘Jur- isdiction is proper TTT where the contacts proximately result from actions by the defen- dant himself that create a ‘substantial con- nection’ with the forum State.’’ Burger King, 471 U.S. at 475, 105 S.Ct. 2174 (quot- ing McGee v. International Life Ins. Co., 355 U.S. 220, 223, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957)) (emphasis in original). Applying these constitutional standards, the Supreme Court has drawn a distinction between two types of personal jurisdiction: general and specific. Helicopteros Nacio- nales de Colombia v. Hall, 466 U.S. 408, 414, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984), accord Starline Optical, 598 F.Supp. at 1025. General jurisdiction exists where a defen- dant’s contacts with the jurisdiction are so ‘‘continuous and systematic’’, Helicopteros, 466 U.S. at 416, 104 S.Ct. 1868, that the defendant can ‘‘reasonably anticipate being haled into court there’’ for any purpose. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297-98, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980). The level of contacts required for exercising general jurisdiction is significantly higher than for the other type, specific jurisdiction. Provident Nat’l Bank v. California Fed. Sav. & Loan Ass’n, 819 F.2d 434, 437 (3d Cir.1987). Alternately, a court may exercise specific jurisdiction where the cause of action arises from or is related to a defendant’s contacts with the forum. Id.; Starline Optical, 598 F.Supp. at 1025. ‘‘When a controversy is related to or ‘arises out of’ a defendant’s contacts with the forum TTT a ‘relationship among the defendant, the forum, and the litigation’ is the essential foundation of in personam jurisdiction.’’ Helicopteros, 466 U.S. at 414, 104 S.Ct. 1868 (quoting Shaffer v. Heitner, 433 U.S. 186, 204, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977)). [13] Once the issue of personal jurisdic- tion has been raised, it becomes the burden of the party asserting a claim to prove, by a preponderance of the evidence, facts suffi- cient to establish personal jurisdiction. Car- teret, 954 F.2d at 146, McNutt v. General Motors Acceptance Corporation, 298 U.S. 178, 181-83, 56 S.Ct. 780, 80 L.Ed. 1135 (1936). Moreover, a claimant is required to sustain its burden through sworn affidavits or other competent evidence; a plaintiff can- not rely, at any stage, solely upon the plead- ings in order to withstand an in personam jurisdictional attack. Stranahan Gear Co., Inc. v. NL Indus., 800 F.2d 53, 58 (3d Cir. 1986), Time Share Vacation Club v. Atlantic Resorts, Ltd., 735 F.2d 61, 67 n. 9 (3d Cir. 1984). First, the letter of credit issued to McCall was established in New Jersey with the Ber- gen Commercial Bank. (See English Aff. Ex. A). By its very terms the letter of credit would have required McCall, had he desired to draw on the letter of credit, to be physical- ly present at the New Jersey bank, and to provide the following documents: (1) a signed statement that payment had not been received from New Jersey Sports Productions, Inc.; (2) a sight draft signed by Oliver McCall; (3) a copy of an article from a major news- paper reporting that the Lewis-McCall bout took place; (4) a copy of the contract between New Jersey Sports Productions, Inc. and Oliver McCall and an affidavit signed by McCall that the contract has not been breached; (5) an affidavit signed by McCall that the scheduled bout took place; and (6) the original of the letter of credit. (English Aff. Ex. A). It is clear that this Court may exercise personal jurisdiction over McCall on these facts. That the letter of credit contemplated McCall’s physical presence in New Jersey to 545NEW JERSEY SPORTS PROD. v. DON KING PROD., INC. Cite as 15 F.Supp.2d 534 (D.N.J. 1998) consummate the terms of the parties’ con- tractual agreement suffices to establish spe- cific personal jurisdiction over McCall. See Govan v. Trade Bank & Trust Co., 109 N.J.Super. 271, 275, 263 A.2d 146 (App.Div. 1970)(‘‘TTT it is readily apparent to us that the facts in this case support jurisdiction of our courts over defendant. This action, al- though involving two nonresidents, is based upon a promissory note, negotiated, executed and payable at a bank within this jurisdic- tion.’’); cf. Lebel v. Everglades Marina, Inc., 115 N.J. 317, 558 A.2d 1252 (1989)(de- fendant, who sold a boat to a New Jersey resident, subject to suit in New Jersey; sell- er telephoned buyer in New Jersey, mailed contract to buyer in New Jersey for signing in New Jersey, knew that boat would be shipped to New Jersey, and accepted pay- ment from buyer, a New Jersey resident); see also Tichenor v. Roman Catholic Church of Archdiocese of New Orleans, 32 F.3d 953, 958-59 (5th Cir.1994)(consistent with due process to exercise personal jurisdiction over non-resident defendant who makes contract with resident to be performed at least in part within the state). Accordingly, the Court rejects McCall’s ar- gument that the Court lacks personal juris- diction over him.18 E. Main Events’s Application to Enjoin Other State Proceedings [14] Main Events also seeks an injunc- tion restraining any other actions affecting the funds involved in this interpleader. Un- der either rule or statutory interpleader, an injunction is appropriate. Accordingly, the Court grants Main Events’s motion seeking to restrain other actions affecting the funds involved in this interpleader. [15, 16] 28 U.S.C. § 2361 acts as a stat- utory exception to the Anti-Injunction Act. Section 2361 authorizes a district court to enter an order restraining all claimants from instituting a proceeding in any state or feder- al court affecting the interpleaded res. Provident Mut. Life Ins. Co. of Philadelphia v. Ehrlich, 508 F.2d 129 (3d Cir.1975). Be- cause statutory interpleader allows for na- tionwide service of process, 28 U.S.C. § 2361, an injunction issued under Section 2361 halts any proceedings deemed to be inconsistent with the statutory interpleader proceeding. [17] The Court may also enjoin parallel proceedings when the action is pursuant to Rule 22; the scope of the injunction, howev- er, is narrower than under statutory inter- pleader. Under rule interpleader, the Court retains the discretion to restrain the litigants before the Court from litigating claims in derogation of the Court’s exercise of jurisdic- tion. 7 Charles A. Wright & Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 1717 at 615 (‘‘TTT the mere fact that a nationwide injunction under Sec- tion 2361 is not available in a rule interplead- er case does not mean that the court does not have discretion in the latter context to issue an order against those claimants that have been subjected to the court’s jurisdiction in accordance with the more traditional rules of process applicable in cases under Rule 22. Certainly if the court can assert personal jurisdiction over a claimant it has the power to issue an order designed to effectuate the exercise of jurisdiction.’’). The Court, accordingly, grants Main Events’s motion to restrain any other actions affecting the funds involved in this inter- pleader. Moreover, because the Court has determined that the case may proceed as a statutory interpleader, the injunction applies to any proceeding nationwide that the Court deems inconsistent with this interpleader proceeding. F. DKP’s Argument That the NAC is the Designated Forum for Resolving this Dispute [18] Finally, DKP argues that the NAC is the exclusive forum for resolution of the parties’ dispute. The Court disagrees. 18. McCall dedicates only one page of his opposi- tion brief to his argument that this Court lacks personal jurisdiction over McCall. For the rea- sons set forth above, the Court preliminarily de- termines, on the facts before it, that the Court may, consistent with ‘‘traditional notions of fair play and substantial justice,’’ International Shoe v. State of Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), exercise personal juris- diction over McCall. If McCall wishes to contest this Court’s personal jurisdiction further, he may do so, but must fully brief the issue. 546 15 FEDERAL SUPPLEMENT, 2d SERIES DKP bases its argument on one paragraph of a form contract, the NAC contract, en- tered into on the day of the scheduled bout, and which was not even signed by Mr. Adams, one of the parties to it. (See Com- plaint Ex. C). The pertinent language of the NAC contract is contained in Paragraph 3 and states: [The parties agree] [t]hat the contest TTT shall be conducted in all respects in con- formity with the laws of the State of Neva- da, and the rules and regulations adopted by the Nevada Athletic Commission, which are hereby made a part of this agree- mentTTTTIf the referee or the Nevada Ath- letic Commission shall decide that the Box- er and Manager, or either of them, did not enter into the contract in good faith; or the Boxer and Manager, or either of them, had any collusive understanding or agree- ment regarding the termination of the match other that the same should be an honest exhibition of skill on the part of the contestants, or that the Boxer is not hon- estly competing or did not give an honest exhibition of his skill, or is guilty of an act detrimental to the interest of boxing; it is agreed in any of such events that the Boxer shall not be entitled to the compen- sation above named, or any part thereof, unless so ordered by the Nevada Athletic Commission. It is further agreed that the Promoter [Main Events] shall pay said compensation to the said Commission in the event the Commission shall so order upon any of the above-mentioned grounds. The Commis- sion shall thereupon, in its discretion, make such disposition of said purse as it deems to the best interest of legitimate sport and may forfeit to the Nevada Ath- letic Commission all or any part of the compensation or order the same or any portion thereof paid to the Boxer. All parties hereto agree to accept and be bound by the decision of the said Commis- sion and such decision shall be final and conclusive of the rights of the parties here- to. The NAC Contract must be read in pari materia with the other contracts entered into by the parties. In particular, the WBC Con- tract indicates a desire on the part of the parties to have their disputes resolved by the New Jersey Superior Court. (See Complaint Ex. B at 6). Especially in light of the limited jurisdiction of the NAC, the Court doubts that the parties intended to be bound to submit all their contractual disputes to the NAC. Accordingly, the Court concludes that the NAC is not the exclusive forum for liti- gating the rights of the parties emanating from the contracts at issue. III. CONCLUSION For the foregoing reasons, Main Events’s motion for an Order: (1) permitting Main Events to pay into the Court registry the sum of $3,003,923.04 together with accrued interest, in connection with an interpleader action brought by Main Events; (2) directing that claims on the alleged fund be filed; and (3) restraining any other actions affecting the funds involved in this interpleader (except a disciplinary action brought by the Nevada Athletic Commission against the Defendant, Oliver McCall) is granted. , NEW JERSEY SPORTS PRODUCTIONS, INC., d/b/a Main Events, Plaintiff, v. DON KING PRODUCTIONS, INC., Oliver McCall, Jimmy Adams, Time Warner Entertainment Co, L.P., Nevada Athletic Commission, a division of The Nevada Department of Labor and Industry, and John Does 1-5, Defendants. No. 97-CIV-1175 (WGB). United States District Court, D. New Jersey. July 21, 1998. After injunction had been issued prohib- iting claimants under breached boxing con- EXHIBIT 4 711NEW YORK LIFE INS. CO. v. APOSTOLIDIS Cite as 841 F.Supp.2d 711 (E.D.N.Y. 2012) and made all the more reasonable Fresh- water’s ‘‘split-second judgment’’ that Tra- cy’s sudden movement constituted non- compliant and threatening behavior.’’). Thus, the Plaintiff’s motion for a new trial on the ground that, even crediting Brown’s account, the weight of the evidence did not justify his use of deadly force, is denied. III. CONCLUSION There were two eyewitnesses to what occurred in Rasanen’s room on the morn- ing of May 17, 2002, both of whom changed aspects of their account several times in the nine years between the day of the incident and the trial. The Plaintiff’s theo- ry based on the trajectory of the bullet, was not supported by the eyewitness testi- mony and was premised on a number of disputed assumptions, which themselves turned on credibility assessments. With reasonable certainty, the jury could have believed it was equally likely that Rasanen attacked Brown and tried to use his gun against him; that Rasanen lunged at Brown; that Rasanen was simply pacing when Brown entered the room; or that Rasanen jumped out of bed startling Brown. It was the Plaintiff’s burden to prove that is was more probable than not that what really happened in that room resulted in an unreasonable use of deadly force. The jury found that the Plaintiff failed to meet that burden. For the foregoing reasons, it is hereby: ORDERED, that the Plaintiff’s motion for a new trial pursuant to Fed.R.Civ.P. 59(a) based on juror confusion is denied, and it is further ORDERED, that the Plaintiff’s motion to obtain juror affidavits or for the Court to conduct juror interviews is denied, and it is further ORDERED, that the Plaintiff’s motion for a new trial pursuant to Fed.R.Civ.P. 59(a) on the ground that the verdict is against the weight of the evidence, serious- ly erroneous, or a miscarriage of justice is denied, and it is further ORDERED, that the Clerk of the Court is directed to close this case. SO ORDERED. , NEW YORK LIFE INSURANCE COMPANY, Plaintiff, v. Maria APOSTOLIDIS, Penelope Apos- tolidis, Helen Apostolidis, and Lisa Apostolidis, Defendants. No. 10-cv-5672 (ADS)(WDW). United States District Court, E.D. New York. Jan. 24, 2012. Background: Insurer brought action for interpleader with respect to life insurance proceeds that were the subject of conflict- ing claims. Insurer moved for permission to deposit interpleader funds, for dis- charge from action, for permanent injunc- tion prohibiting any of the claimants from commencing any other actions for payment of interpleader funds, and for attorney’s fees and costs. Holdings: The District Court, Spatt, J., held that: (1) it had jurisdiction over interpleader ac- tion; (2) merits of claim of insured’s child did not preclude insurer’s motion for per- mission to deposit proceeds; 712 841 FEDERAL SUPPLEMENT, 2d SERIES (3) contested state surrogate’s court pro- ceeding relating to insured’s estate did not require district court to transfer interpleader action to surrogate’s court; (4) insurer was entitled to relief in the form of permission to deposit proceeds with court registry, and, following de- posit, to an order discharging insurer from further liability; (5) insurer was entitled to permanent in- junction; and (6) insurer was not entitled to attorney’s fees. Motions granted in part and denied in part. 1. Interpleader O1 Interpleader is designed to protect stakeholders from undue harassment in the face of multiple claims against the same fund, and to relieve the stakeholder from assessing which claim among many has merit. 28 U.S.C.A. § 1335. 2. Interpleader O3, 8(1), 21 A plaintiff alleging an interpleader ac- tion in federal court must allege: (1) that they are in possession of a single fund of value greater than $500; (2) a real and reasonable fear of double liability or vexa- tious, conflicting claims against the single fund, regardless of the merits of the com- peting claims; (3) that they have or are depositing the fund with the court. 28 U.S.C.A. § 1335. 3. Federal Courts O288 Federal interpleader action requires only minimal diversity, that is, diversity of citizenship between two or more claimants without regard to the circumstance that other rival claimants may be co-citizens. 28 U.S.C.A. § 1335. 4. Interpleader O31 In the first step of a federal inter- pleader action, the district court deter- mines whether the jurisdictional require- ments have been met and, if it finds they have been, the court discharges the plain- tiff from liability; in the second step, the court adjudicates the claims among the remaining adverse parties. 28 U.S.C.A. §§ 1335, 2361. 5. Federal Courts O288, 342 District court had jurisdiction over in- surer’s action for interpleader with respect to life insurance proceeds that were the subject of conflicting claims by insured’s wife and children; proceeds at issue of $129,038.72 exceeded jurisdictional thresh- old of $500, insurer was neutral party tak- ing no position as to proper disbursement of funds against multiple and conflicting claims of insured’s wife and children, in- surer requested permission from court to deposit relevant funds, and there was mini- mal diversity because insurer alleged one child was Georgian citizen while other de- fendants were New York citizens. 28 U.S.C.A. § 1335. 6. Interpleader O21 Merits of claim of insured’s child to proceeds of life insurance policies did not preclude insurer’s motion for permission to deposit proceeds with court, in interplead- er action to resolve conflicting claims of insured’s wife and children; fact that multi- ple claims had been asserted for life insur- ance proceeds was the very reason that an interpleader action was appropriate, not- withstanding the supposed strength of the evidence regarding claim of child who was named beneficiary on one of policies. 28 U.S.C.A. § 2361. 7. Federal Courts O9 Contested state surrogate’s court pro- ceeding relating to insured’s estate did not require federal district court to remand to 713NEW YORK LIFE INS. CO. v. APOSTOLIDIS Cite as 841 F.Supp.2d 711 (E.D.N.Y. 2012) surrogate’s court the insurer’s interpleader action with respect to life insurance pro- ceeds that were the subject of conflicting claims by insured’s wife and children; dis- trict court might be required to make de- termination as to insured’s mental state, which was typically decided in surrogate’s court, but interpleader action’s sole pur- pose was to determine proper beneficiary of policies, not to probate will or adminis- ter estate, and there was no danger of inconsistent rulings because surrogate’s court would be bound by district court’s judgment. 28 U.S.C.A. §§ 1335, 2361. 8. Federal Courts O41 Ordinarily, federal courts have a virtu- ally unflagging obligation to exercise their jurisdiction, which should only be abdicat- ed in favor of the state courts in exception- al circumstances. 9. Federal Courts O9 A federal court has no jurisdiction to probate a will or administer an estate. 10. Interpleader O21 Insurer that brought federal inter- pleader action with respect to life insur- ance proceeds, which were the subject of conflicting claims by insured’s wife and children, was entitled to relief in the form of permission to deposit proceeds, with interest, with court registry, and, following deposit, to an order discharging insurer from further liability to wife and children or arising out of proceeds; insurer satisfied all statutory jurisdictional requirements, and there was no indication that insurer, as a neutral stakeholder, was independent- ly liable to any claimant. 28 U.S.C.A. §§ 1335, 2361; Fed.Rules Civ.Proc.Rule 67, 28 U.S.C.A. 11. Interpleader O21 Generally, once an interpleader plain- tiff has satisfied the jurisdictional require- ments of an interpleader claim, federal district court should readily grant dis- charge of the stakeholder, unless it finds that the stakeholder may be independently liable to a claimant or has failed to satisfy the various requirements of interpleader, including, when required, deposit of the stake. 28 U.S.C.A. §§ 1335, 2361. 12. Interpleader O22 Party meeting the requirements for federal interpleader jurisdiction may ob- tain a restraining order against over- lapping actions without following the procedures which normally govern the issuance of injunctive relief. 28 U.S.C.A. §§ 1335, 2361. 13. Interpleader O22 Insurer that brought federal inter- pleader action with respect to life insur- ance proceeds, which were the subject of conflicting claims by insured’s wife and children, was entitled to permanent injunc- tion prohibiting wife and children from commencing any other actions or proceed- ings seeking payment of proceeds; injunc- tion was necessary to protect insurer from overlapping lawsuits and to ensure the ef- fectiveness of the interpleader remedy. 28 U.S.C.A. § 2361. 14. Interpleader O35 In general, a reasonable award of at- torney’s fees and costs to a plaintiff in an interpleader case is appropriate where the federal district court finds that the plaintiff is: (1) a disinterested stakeholder; (2) who had conceded liability; (3) has deposited the disputed funds into court; and (4) has sought a discharge from liability. 15. Interpleader O35 Insurer that brought federal inter- pleader action with respect to life insur- ance proceeds, which were the subject of conflicting claims by insured’s wife and children, was not entitled to award of at- torney’s fees; insurer was disinterested 714 841 FEDERAL SUPPLEMENT, 2d SERIES stakeholder faced with competing claims to proceeds and properly filed interpleader action with intent to deposit disputed funds into court, but conflicting claims to insurance proceeds were inevitable and normal risks of insurance business, and thus insurer did not incur any unique ex- penses that exceeded the ordinary cost of doing business. 28 U.S.C.A. § 2361. d’Arcambal Levine & Ousley, by: Kim- berly A. O’Toole, Esq., of Counsel, New York, NY, for the Plaintiff. Leavitt, Kerson & Duane, by: Paul E. Kerson, Esq., of Counsel, Forest Hills, NY, for the Defendant Penelope Apostoli- dis. Maria Apostolidis, Bohemia, NY, Defen- dant Pro Se. Helen Apostolidis, Bohemia, NY, Defen- dant Pro Se. Lisa Apostolidis, Atlanta, GA, Defendant Pro Se. MEMORANDUM OF DECISION AND ORDER SPATT, District Judge. The Plaintiff New York Life Insurance Company (‘‘NY Life’’) has filed the pres- ent motion, requesting the Court to permit the company to interplead life insurance proceeds that have been the subject of conflicting claims by the Defendants. In addition, N.Y. Life has moved for (1) a dis- charge from the present action, (2) a per- manent injunction enjoining any of the parties to this action from commencing any other actions or proceedings seeking payment of the interpleader funds, and (3) attorneys’ fees and costs. I. BACKGROUND A. Factual Background There are two relevant life insurance policies at issue: Policy 34 575 081 (‘‘Policy 081’’) and Policy 37 310 131 (‘‘Policy 131’’) (collectively, the ‘‘Policies’’). The Plain- tiff’s submissions to the Court do not indi- cate the face amount of either policy, but only state that the amounts due and pay- able are $10,847.52 for Policy 081 and $118,191.20 for Policy 131. Both of the Policies were issued by N.Y. Life, the Plaintiff, to insure the life of Konstantinos Apostolidis (‘‘the Insured’’). On December 16, 1974, the Insured designated his wife, Defendant Maria Apostolidis, as the first beneficiary of Policy 081, and ‘‘Children’’ as secondary beneficiaries. On May 6, 1980, the Insured again designated his wife, Defendant Maria Apostolidis, as the first beneficiary of Policy 131, and ‘‘Chil- dren’’ as secondary beneficiaries. On November 25, 2005, the Insured filed a Change of Beneficiary Request Form for both Policies and designated his wife, De- fendant Maria Apostolidis, as the first ben- eficiary, and his children, Defendants Pe- nelope Apostolidis, Helen Apostolidis, and Lisa Apostolidis, as secondary beneficia- ries. On February 10, 2010, the Insured filed another Change of Beneficiary Re- quest Form only for Policy 131, designat- ing Penelope Apostolidis as the beneficia- ry. The Insured died on July 30, 2010. As a result of his death, proceeds in the amounts of $10,847.52 for Policy 081 and $118,191.20 for Policy 131 (the ‘‘Death Benefits’’) became due and payable to a beneficiary or beneficiaries, as the Plaintiff N.Y. Life concedes. On August 5, 2010, the Defendant Pene- lope Apostolidis advised the Plaintiff that, among other things, she was the named beneficiary of the Policies. In response, 715NEW YORK LIFE INS. CO. v. APOSTOLIDIS Cite as 841 F.Supp.2d 711 (E.D.N.Y. 2012) the Company informed Penelope Apostoli- dis that she was the named beneficiary of Policy 131, but that she was not the named beneficiary of Policy 081. On August 10, 2010, the Insured’s wife Defendant Maria Apostolidis asked the Plaintiff by letter not to pay the Death Benefits to Penelope Apostolidis. Thereafter, on September 3, 2010, the Defendant Helen Apostolidis also made a claim for the Death Benefits and ques- tioned the validity of the beneficiary change to her sister, Defendant Penelope Apostolidis, because the Insured had been ill for the last one and one-half years of his life. In addition, also on September 3, 2010, the Defendant Lisa Apostolidis made a claim for the Death Benefits, similarly questioning any beneficiary change made in the last two years before the Insured’s death because he had been ill. On Sep- tember 6, 2010, the Defendant Penelope Apostolidis made a claim for the proceeds of Policy 131. On September 8, 2010, N.Y. Life re- quested both Helen Apostolidis and Lisa Apostolidis to provide a statement from the Insured’s physician regarding his men- tal competency. (See Pl. Ex. I) (‘‘Due to the circumstances of this claim, it will be necessary to secure a Statement of Com- petency from the insured’s Attending Phy- sician, indicating the insured’s state of mind during that time period.’’). Howev- er, the Plaintiff states that it never re- ceived such a medical statement. Finally, on October 6, 2010, Maria Apos- tolidis also made a claim for the Death Benefits of both policies. B. Procedural History and the Present Motion On December 8, 2010, the Plaintiff N.Y. Life filed this Complaint in Interpleader, seeking to deposit the Death Benefits with the Court. Counsel for the Plaintiff subse- quently secured consent to interplead and deposit the proceeds of both policies from the pro se Defendants Maria Apostolidis, Helen Apostolidis, and Lisa Apostolidis. However, counsel for Penelope Apostolidis refused to consent. On April 6, 2011, the Plaintiff filed the instant motion to deposit the insurance proceeds and for a dismissal of N.Y. Life from this action. Only the Defendant Penelope Apostolidis has filed an objection in response to this motion. NY Life states that it is ready, willing, and able to pay the Death Benefits, plus interest, if any, in accordance with the terms of the Policy. However, under the circumstances, the Plaintiff states that it cannot determine factually or legally who is entitled to the Death Benefits, and thus the Company may be exposed to multiple liability. On the other hand, Penelope Apostolidis argues first, that she is entitled to the benefits of Policy 131 and thus the Court should simply direct the Plaintiff to pay her the Death Benefits. Second, she con- tends in the alternative that this case should be transferred to Suffolk County Surrogate’s Court, where the Insured’s es- tate is currently being probated. II. DISCUSSION A. As to Statutory Interpleader in Gen- eral [1] NY Life has filed a statutory inter- pleader suit pursuant to 28 U.S.C. § 1335. ‘‘[I]nterpleader is designed to protect stakeholders from undue harassment in the face of multiple claims against the same fund, and to relieve the stakeholder from assessing which claim among many has merit.’’ Fidelity Brokerage Servs., LLC v. Bank of China, 192 F.Supp.2d 173, 177 (S.D.N.Y.2002) (citing Washington Elec. Coop. v. Paterson, Walke & Pratt, 716 841 FEDERAL SUPPLEMENT, 2d SERIES P.C., 985 F.2d 677, 679 (2d Cir.1993)). Section 1335 provides in pertinent part: (a) The district courts shall have origi- nal jurisdiction of any civil action of interpleader or in the nature of inter- pleader filed by any person, firm, or corporation, association, or society hav- ing in his or its custody or possession money or property of the value of $500 or more TTT if (1) Two or more adverse claimants, of diverse citizenship as defined in subsec- tion (a) or (d) of section 1332 of this title, are claiming or may claim to be entitled to such money or property TTT and if (2) the plaintiff has deposited such money TTT into the registry of the court, there to abide the judgment of the court, or has given bond payable to the clerk of the court in such amount and with such surety as the court or judge may deem proper, conditioned upon the compliance by the plaintiff with the future order or judgment of the court with respect to the subject matter of the controversy. [2] Section 1335 provides the federal district courts with jurisdiction to hear an interpleader case, and has also been inter- preted to provide the elements of an inter- pleader claim. First, a plaintiff alleging an interpleader action must allege that it is in possession of a single fund of value greater than $500. Bankers Trust Co. v. Manufacturers Nat. Bank of Detroit, 139 F.R.D. 302 (S.D.N.Y.1991) (citing to State Farm Fire & Casualty Co. v. Tashire, 386 U.S. 523, 87 S.Ct. 1199, 18 L.Ed.2d 270 (1967)). Second, the plaintiff must allege ‘‘a real and reasonable fear of double liabil- ity or vexatious, conflicting claims’’ Wash- ington Electric Coop., Inc., 985 F.2d at 679, against the single fund, ‘‘regardless of the merits of the competing claims.’’ Fi- delity Brokerage, 192 F.Supp.2d at 177; see also Locals 40, 361 & 417 Pension Fund v. McInerney, No. 06 Civ. 5224, 2007 WL 80868, *3 (S.D.N.Y. Jan. 9, 2007). Fi- nally, pursuant to the plain language of Section 1335, a plaintiff must state that it has or is depositing the fund with the court. [3] In addition, a federal district court may only take jurisdiction over an inter- pleader action where there are ‘‘[t]wo or more adverse claimants, of diverse citizen- ship.’’ 28 U.S.C. § 1335. See Hudson Pak Establishment v. Shelter for Home- less, Inc., 224 Fed.Appx. 26, 29 (2d Cir. 2007). [Section 1335] has been uniformly con- strued to require only ‘‘minimal diversi- ty,’’ that is, diversity of citizenship be- tween two or more claimants without regard to the circumstance that other rival claimants may be co-citizens. The language of the statute, the legislative purpose broadly to remedy the problems posed by multiple claimants to a single fund, and the consistent judicial inter- pretation tacitly accepted by Congress, persuade us that the statute requires no more. Id. (quoting State Farm Fire & Cas. Co., 386 U.S. at 530, 87 S.Ct. 1199). [4] 28 U.S.C. § 2361 provides the pro- cedure for determination of an interplead- er claim, and states in pertinent part: Such district court shall hear and deter- mine the [interpleader] case, and may discharge the plaintiff from further lia- bility, make the injunction permanent, and make all appropriate orders to en- force its judgment. The Second Circuit has interpreted this statute to generally require a two-step procedure to decide an interpleader action. In the first step, the Court determines whether the jurisdictional requirements of Section 1335 have been met and, if it finds they have been, the Court discharges the plaintiff from liability. See New York Life 717NEW YORK LIFE INS. CO. v. APOSTOLIDIS Cite as 841 F.Supp.2d 711 (E.D.N.Y. 2012) Ins. Co. v. Connecticut Development Au- thority, 700 F.2d 91, 95 (2d Cir.1983); Lo- cals 40, 361 & 417 Pension Fund, 2007 WL 80868 at *3. In the second step, the Court adjudicates the claims among the remaining adverse parties. Id. B. As to Whether the Jurisdictional Requirements of Section 1335 Have Been Met [5] As stated above, a plaintiff that commences an interpleader action must al- lege: (1) that it is in possession of a single fund of value greater than $500; (2) a real and reasonable fear of double liability or vexatious, conflicting claims; and (3) that it has deposited or is depositing the fund with the court. Here, the Court finds that the Plaintiff N.Y. Life has satisfied all of these require- ments. A fund of $129,038.72 is being held by N.Y. Life, and thus the proceeds of the policy exceed $500. Second, N.Y. Life is a neutral party taking no position as to the proper disbursement of those funds against multiple and conflicting claims to the Death Benefits. Third, the Plaintiff has requested this Court to permit it to deposit the relevant funds with the Court. Finally, according to the allegations of the complaint, the Defendant Lisa Aposto- lidis is a citizen of the State of Georgia while the remaining Defendants are citi- zens of the State of New York. Thus, the claimants to the fund satisfy the minimal diversity requirement of the interpleader statute. 28 U.S.C. § 1335 (requiring ‘‘Two or more adverse claimants, of diverse citi- zenship’’); see also N.Y. Life Ins. Co. v. Conn. Dev. Auth., 700 F.2d 91, 95 n. 5 (2d Cir.1983). Therefore, all of the jurisdic- tional requirements of Section 1335 have been met. C. As to the Defendant Penelope Apos- tolidis’ Objections Only one of the Interpleader Defen- dants, Penelope Apostolidis, has objected to the Plaintiff’s motion. The Court will address both grounds for the Defendant’s objection. 1. Whether the Merits of the Defen- dant’s Claim is Relevant [6] First, the Defendant Penelope Apostolidis opposes N.Y. Life’s interplead- er motion because she argues that based upon the strength of the evidence, the Court should simply direct the Plaintiff to pay Penelope Apostolidis the sum of $118,191.20 with interest. She points to both the change of beneficiary request form signed by the Insured, as well as the Plaintiff’s letter dated August 6, 2010, which states that ‘‘our records indicate that you are the named beneficiary 37- 310-131.’’ Essentially, she argues that she is the proper beneficiary of one of the insurance policies referenced in the Com- plaint and therefore the Plaintiff’s motion to interplead is improper. As an initial matter, even if this Court were to agree with this contention, there is nevertheless a dispute over the proper beneficiaries of Policy 081, because the Defendant cannot point to any change of beneficiary request with regard to that policy. More importantly, the fact that Defen- dant Penelope Apostolidis believes that she is entitled to the Death Benefits does not prevent this Court from granting the Plaintiff’s present motion to interplead. Both Penelope Apostolidis’ sisters and mother have filed claims to the Death Ben- efits and have questioned whether the In- sured was competent to execute the Change of Beneficiary Form naming Pene- lope Apostolidis as the sole beneficiary. This is precisely the situation for an inter- pleader action, which requires a plaintiff to allege ‘‘a real and reasonable fear of dou- 718 841 FEDERAL SUPPLEMENT, 2d SERIES ble liability or vexatious, conflicting claims’’ Washington Electric Coop., Inc., 985 F.2d at 679, against the single fund, ‘‘regardless of the merits of the competing claims.’’ Fidelity Brokerage Servs., 192 F.Supp.2d at 177. Thus, the fact that multiple claims have been asserted for the Death Benefits is the very reason that an interpleader action is appropriate, notwith- standing the supposed strength of the evi- dence of the Defendant Penelope Apostoli- dis. Accordingly, due to these competing and adverse claims asserted by the Defen- dants, the Company is unable to determine the proper beneficiary or beneficiaries of the Death Benefits and it is entirely prop- er for the company to seek the Court’s assistance in determining to whom the Death Benefits should be paid. 2. Whether This Matter Should be Transferred to Suffolk County Surrogate’s Court [7] Second, the Defendant Penelope Apostolidis opposes the Plaintiff’s motion on the ground that this matter should be transferred to the contested Estate of Konstantinos Apostolidis, File No.2010- 3311, which is now pending in Suffolk County Surrogate’s Court, in order to con- serve judicial resources. According to the Defendant, ‘‘[i]f this matter is not remand- ed to the Suffolk County Surrogate’s Court, this Court will be burdened with a full scale litigation over one item in a contested estate that concerns numerous other items. This would not be a wise use of the resources of the Court system, of the parties, or of their attorneys.’’ (Def. Opp. at 2.) While the Court agrees with the Defen- dant that judicial resources should be con- served wherever possible, the Court never- theless has proper jurisdiction over this interpleader action pursuant to 28 U.S.C. § 1335. [8] Ordinarily, federal courts have a ‘‘virtually unflagging obligation’’ to exer- cise their jurisdiction, which should only be abdicated in favor of the state courts in ‘‘exceptional circumstances.’’ Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 813, 817, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976). In the pres- ent case, it is entirely proper for this Court to have jurisdiction over an inter- pleader action commenced to determine the rightful beneficiaries of life insurance policies, regardless of a pending action in Surrogate’s Court relating to the Insured. See, e.g., Hartford Life Insur. Co. v. Ein- horn, 497 F.Supp.2d 398, 399 (E.D.N.Y. 2007) (Spatt, J.) (‘‘In the probate proceed- ing in the Surrogate’s Court of Suffolk County, a dispute arose between the Es- tate and the pro se defendants regarding the proper distribution of the life insur- ance funds from HartfordTTTT On June 30, 2004, Hartford commenced this action, seeking to deposit the proceeds of the Policy with the Court and to be excused from further involvement in the defen- dants’ resolution of their competing claims.’’); Sun Life Assur. Co. of Canada v. Gruber, No. 05 Civ. 10194, 2006 WL 1520524, 2006 U.S. Dist. Lexis 35932 (S.D.N.Y. June 1, 2006) (finding that the exercise of federal jurisdiction over an in- terpleader action was proper and did not require transferring of the case to the Surrogate’s Court.) The Court is aware that it may be re- quired in the course of this litigation to make a determination as to the Insured’s mental state prior to his death, which is an issue that is typically decided in Surro- gate’s Court. However, this Court does not believe that resolution of this case will interfere with probating the Insured’s es- tate. See Giardina v. Fontana, 733 F.2d 1047, 1051 (2d Cir.1984) (noting that ‘‘the Surrogates’ Courts commonly handle such 719NEW YORK LIFE INS. CO. v. APOSTOLIDIS Cite as 841 F.Supp.2d 711 (E.D.N.Y. 2012) questions TTT but so do the federal courts’’) (quoting Beach v. Rome Trust Co., 269 F.2d 367, 374 (2d Cir.1959)); Sun Life, 2006 WL 1520524, at *4, 2006 U.S. Dist. Lexis 35932, at *11; Gardner v. Weisman, No. 06 Civ. 6003, 2007 WL 30068, at *4, 2007 U.S. Dist. LEXIS 280, at *11 (S.D.N.Y. Jan. 5, 2007). [9] A probate exception to this Court’s jurisdiction does exist, which provides that ‘‘a federal court has no jurisdiction to pro- bate a will or administer an estate.’’ Dul- ce v. Dulce, 233 F.3d 143 (2d Cir.2000). However, ‘‘the probate exception to federal jurisdiction is inapplicable here, as this Court is not being called on to probate the decedent’s will or administer his estate. Instead, this action was filed for the sole purpose of determining the proper benefi- ciary of a life insurance policy, a fact which minimizes any inconvenience argument as- serted by [the Defendant].’’ Sun Life, 2006 WL 1520524, at *4, 2006 U.S. Dist. Lexis 35932, at *11. In addition, the Court’s inquiry into any duress or undue influence will be circum- scribed by the ultimate issue; namely, who is entitled to the Death Benefits. More- over, there is no danger of inconsistent rulings because the Surrogate’s Court is bound by any judgment rendered here. See Ashton v. The Josephine Bay Paul & C. Michael Paul Found., 918 F.2d 1065, 1072 (2d Cir.1990). This conclusion is fur- ther buttressed by the Plaintiff’s affidavit, which states that Counsel for the Execu- trix of the Insured’s estate was of the understanding that the insurance Policies are not part of the Insured’s estate but rather ‘‘contracts that are payable pursu- ant to the terms of the Policies to the beneficiaries of the Policies as determined by this Court.’’ (See O’Toole Aff. ¶ 5.) Finally, the case cited by the Defendant Penelope Apostolidis in support of her ar- gument, In re Thomas an Agnes Carvel Foundation, 36 F.Supp.2d 144 (S.D.N.Y. 1999), is inapplicable. The Carvel case concerned several issues regarding the de- cedent’s estate, in a case that was original- ly filed in Surrogate’s Court but removed to federal district court. The case of Dannhardt v. Donnelly, 604 F.Supp. 796 (E.D.N.Y.1985), also cited by the Defen- dant, arose in a similar context. Neither of these actions concerned an interpleader action. See id. (concerning an action seek- ing declaration of entitlement to the entire estate, the distribution of proceeds of the estate, and the payment of any executor’s fees already disbursed). Therefore, this Court will continue to exercise its proper jurisdiction over the present interpleader action. This case will not be transferred to the Suffolk County Surrogate’s Court. D. As to the Plaintiff’s Requested Re- lief NY Life has requested several forms of relief in its present motion. [10] First, it has requested this Court to permit the Company to deposit the Death Benefits with the Court registry. As the Court has found that all of the jurisdictional requirements of Section 1335 have been met, N.Y. Life is directed to deposit the total sum of $129,038.72, con- stituting the proceeds of both life insur- ance policies, in addition to interest to date, with the Court registry in an interest bearing account within twenty days of the date of this Memorandum of Decision and Order. [11] Second, N.Y. Life has moved to be dismissed from this action with prejudice following the deposit of the Death Benefits with the Court. ‘‘[28 U.S.C. § ] 2361 au- thorizes a district court to discharge the stakeholder in any civil interpleader action from further liability to claimants.’’ Men- 720 841 FEDERAL SUPPLEMENT, 2d SERIES dez v. Teachers Ins. and Annuity Ass’n and College Ret. Equities Fund, 982 F.2d 783, 787 (2d Cir.1992). Generally, once an interpleader plaintiff has satisfied the Sec- tion 1335 jurisdictional requirements of an interpleader claim, ‘‘[t]he court should readily grant discharge of the stakeholder, unless it finds that the stakeholder may be independently liable to a claimant or has failed to satisfy the various requirements of interpleader, including, when required, deposit of the stake.’’ 4 James Wm. Moore et al., Moore’s Federal Practice § 23.03[2][a] (3d ed.2005). See New York Life Ins. Co. v. Connecticut Development Authority, 700 F.2d 91, 95 (2d Cir.1983); Locals 40, 361 & 417 Pension Fund, 2007 WL 80868 at *3. Here, the Court finds that N.Y. Life has satisfied all of the jurisdictional require- ments under 28 U.S.C. § 1335, and there is no indication, that as a neutral stake- holder, N.Y. Life is independently liable to any claimant. Thus, once the interpleader funds are deposited, the Plaintiff is direct- ed to notify the Court with a proposed order. At that time, the Plaintiff will be released and discharged from any further liability to any party in this action or aris- ing out of the life insurance policies issued to Konstantinos Apostolidis, identified by policy numbers 34 575 081 and 37 310 131. See 28 U.S.C. §§ 1335, 2361; Fed.R.Civ.P. 67. [12, 13] Finally, the Plaintiff has re- quested this Court to permanently enjoin any of the parties to this action from com- mencing any other actions or proceedings seeking payment of the Death Benefits. ‘‘In addition to allowing a district court to discharge an interpleader plaintiff, section 2361 allows a district court to ‘enter its order restraining them from instituting or prosecuting any proceeding in any State or United States court affecting the prop- erty, instrument or obligation involved in the interpleader action until further order of the court’ and to ‘make the injunction permanent.’ ’’ Bank of America, N.A. v. Morgan Stanley & Co., Inc., No. 10 Civ. 6322, 2011 WL 2581765, at *4 (S.D.N.Y. June 24, 2011) (quoting 28 U.S.C. § 2361). ‘‘Section 2361 enables a party meeting the requirements of Section 1335 to obtain a restraining order without following the procedures set forth in Rule 65, Fed. R.Civ.P., which normally governs the issu- ance of injunctive relief.’’ Sotheby’s, Inc. v. Garcia, 802 F.Supp. 1058, 1066 (S.D.N.Y.1992). ‘‘An injunction against overlapping lawsuits obviously is desirable to ensure the effectiveness of the inter- pleader remedy.’’ 7 Wright et al., supra, § 1717; accord Sotheby’s, Inc., 802 F.Supp. at 1066 (‘‘An injunction against overlapping lawsuits is desirable to insure the effectiveness of the interpleader reme- dy. It prevents the multiplicity of actions and reduces the possibility of inconsistent determinations.’’); 4 Moore et al., supra, § 22.04[5][a] (‘‘Absent self-restraint of the parties, the only way to ensure that there will not be overlapping litigation is to have the interpleader court issue an injunction against other proceedings.’’). Here, a permanent injunction restrain- ing the four Defendant from continuing or bringing any suits against N.Y. Life with regard to the Death Benefits at issue is necessary to protect N.Y. Life from over- lapping lawsuits and to ensure the effec- tiveness of the interpleader remedy. Therefore, N.Y. Life’s request for a per- manent injunction is granted. E. As to Attorneys’ Fees [14, 15] As a final matter, the Plaintiff seeks an award of attorneys’ fees and costs associated with this case. In general, a reasonable award of fees and costs to a plaintiff in an interpleader case is appro- priate where the Court finds that the 721NEW YORK LIFE INS. CO. v. APOSTOLIDIS Cite as 841 F.Supp.2d 711 (E.D.N.Y. 2012) plaintiff is ‘‘(1) a disinterested stakeholder, (2) who had conceded liability, (3) has de- posited the disputed funds into court, and (4) has sought a discharge from liability.’’ Septembertide Pub., B.V. v. Stein and Day, Inc., 884 F.2d 675, 683 (2d Cir.1989). ‘‘A disinterested and innocent stakeholder, who has been required to expend time and money to participate in a dispute not of his own making and the outcome of which has no impact on him, is entitled to costs and attorneys’ fees.’’ Sparta Florida Music Group v. Chrysalis Records, 566 F.Supp. 321, 322 (S.D.N.Y.1983). Nevertheless, ‘‘courts need not award attorneys’ fees in interpleader actions where the fees are expenses incurred in the ordinary course of business.’’ Travel- ers Ins. Co. v. Estate of Garcia, No. 00 Civ. 2130, 2003 WL 1193535, at *4, 2003 U.S. Dist. LEXIS 2828, at *13 (E.D.N.Y. Feb. 4, 2003); see Correspondent Servs. Corp. v. J.V.W. Investments Ltd., 204 F.R.D. 47, 49 (S.D.N.Y.2001). ‘‘This is particularly true in the case of insurance companies, where minor problems that arise in the payment of insurance policies must be expected and the expenses in- curred are part of the ordinary course of business.’’ Travelers Ins. Co., 2003 WL 1193535, at *4, 2003 U.S. Dist. LEXIS 2828, at *13; see Travelers Indem. Co. v. Israel, 354 F.2d 488, 490 (2d Cir.1965) (‘‘We are not impressed with the notion that whenever a minor problem arises in the payment of insurance policies, insurers may, as a matter of course, transfer a part of their ordinary cost of doing business of their insureds by bringing an action for interpleader.’’). Here, there is no question that N.Y. Life, a disinterested stakeholder faced with competing claims to the Death Bene- fits, properly filed this action with the intent to deposit the disputed funds into court. Nevertheless, the Court adopts the view that ‘‘[c]onflicting claims to the pro- ceeds of a policy are inevitable and normal risks of the insurance business. Inter- pleader relieves the insurance company of multiple suits and eventuates in its dis- charge. Accordingly [such actions are] brought primarily in the company’s own self-interest.’’ Companion Life Ins. Co. v. Schaffer, 442 F.Supp. 826, 830 (S.D.N.Y. 1977). NY Life did not incur any unique expenses in filing the present interpleader action that would exceed the ordinary cost of doing business as an insurance compa- ny. Therefore, the Plaintiff’s request for at- torneys’ fees and costs is denied. III. CONCLUSION For the foregoing reasons, it is hereby ORDERED that the Plaintiff is directed to deposit the sum of $129,038.72, plus claim interest, with the Court registry in an interest bearing account within twenty days of the date of this Memorandum of Decision and Order. Upon payment of the funds with the Clerk of the Court, the Plaintiff shall be released and discharged from any further liability to any party in this action arising out of the life insurance policies issued to Konstantinos Apostolidis, identified by policy numbers 34 575 081 and 37 310 131; and it is further ORDERED that pursuant to 28 U.S.C. § 2361 and 28 U.S.C. § 1335, the Defen- dants are enjoined from instituting any action or other proceeding in any state or United States court affecting the subject matters involved in this interpleader ac- tion, and it is further ORDERED that the Plaintiff’s motion for attorneys’ fees and costs is denied. SO ORDERED. , EXHIBIT 5 ZELLEN v. SECOND NEW HAVEN BANK Cite as 454 F.Supp. 1359 (1978) 1359 checked with the attendants at the air- port and learned• that. the plane had ar- riyed at Bermtid~ Dunes in the early morning houl'.S. of July 24, 1975; he fur- ther learned that the operator of the air- . plane purchased a tie-down space and gave the name Stephen Fischer. "On August 13, 1975, Customs agents received information from a confidential informant that the defendant aircraft had departed from Palm Springs Airport oti August 12, 1975, and had been flown by Mr. Fischer. The informant indicated that he suspected that Mr. Fischer was : engaged in smuggling activities based upon the fact that he had purchased fuel on two occasions, 40 gallons and 20 gal- lons, and the payment w~s made in cash; further, Mr. Fischer, while at Palm Springs Airport, was very evasive when asked questions with respect to. the air- craft andtor its destination. Based upon years of experience dealing with smug- glers and smuggling operations, these foregoing observations, in the eyes of the government agents, fit the profile of a smuggler. "On August 29, 1975, government agents received a telephone call from the owner of the defendant aircraft, Mr. Ed- win C. Remund. Mr. Remund stated that on the date he had received a telephone call from an individual identifying him- . self as Stephen Fischer who advised him that he had previously rented the aircraft and that he was interested in purchasing it." Plaintiff's Reply Memorandum of Law Re: Certain Issues, at 6--8. This information fails to rise to the level of probable cause. The court is not given the basis for Customs' suspicion "as early as September 23, 1974," and thus cannot eval- uate it. The July 22, 1975, phone call was anonymous and unverified. While the court considers this as a factor in establish- ing probable cause, its impact is lessened because the outcome of the July 24, 1975, arrest is not revealed to the court and the arrest was for being "under the influence" and not for smuggling. The July 25, 1975, information from a confidential informant is the strongest information received by Customs. However, neither informant's past reliability, if any,· nor whether the informant was an innocent citizen or one engaged in criminal activity is stated. Also, how the informant received this infor- mation is not divulged. While certain of the information was verified, such verifica- tion (as well as the informant's reliability) does not rise to the level found in Draper v. United States, 358 U.S. 307, 79 S.Ct. 329, 3 L.Ed.2d 327 (1959). As to the August 13, 1975, information, again the court is left adrift as to the reliability of the informant. The informa- tion was not verified. The content of Fischer's "evasive" answers is not divulged. Additionally, since the informant's relation to Fischer is not divulged, there is no . way to determine if the so-called "evasive" an- swers would be natural or not. While it is stated that Fischer's alleged action~ "fit the profile of a smuggler," it is difficult, with- out more, to find the purchase for cash of relatively small amounts of fuel and un- specified "evasive" answers as being the "profile of a smuggler" sufficient to meet a standard of probable cause. It is noted that this is the first tie-in to defendant aircraft. Even taking all of the above together and viewing it in its entirety, probable cause just is not present. Suspicion, yes,. but probable cause, no. The. data provided are too soft, the holes too large. More is re- quired . Claimant's Motion to Dismiss is granted. Larry P. ZELLEN et al. v. SECOND NEW HA VEN BANK. Civ. No. N-78-107. United States District Court, D. Connecticut. Aug. 7, 1978. Motions were filed seeking stay of pro- ceedings or dismissal of action for damages 1360 454 FEDERAL SUPPLEMENT for bank's aHegedly wilful refusal to honor plaintiff's common-law rights to certain dis- puted property in light of pending inter- pleader suit initiated by bank in Connecti- cut state court for purpose of finally adju- dicating any right, title, or interest concern- ing the disputed property. The District Court, Burns, J., held that: (1) the state court interpleader action was a proceeding in rem; (2) there was a sufficient identity of the subject matter of the two actions to require a stay of the federal action as a matter of wise judicial administration, but (3) such stay would not extinguish plain- tiff's federal action but merely place it to one side pending the outcome of the state court interpleader action. Motions granted in part; denied in part. 1. Courts e11=>489(1), 490 When unwanted conflicts of jurisdic- tional competition arise between federal court and state court, they must be resolved according to applicable statutes, if any, rules developed by courts themselves, and general principles of comity, in order that harmonious relationship may be main- tained. 2. Action e11=> 16 General rule is that whether proceed- ing is in rem or in personam is determined by its nature and purpose, and by these only. 3. lnterpleader e11=> 15 Interpleader sued in Connecticut state court may be reasonably construed to be proceeding in rem. C.G.S.A. § 52--484. 4. Action e11=> 16 Object of in personam action is to ob- tain judgment against person rather than to obtain judgment determining status and disposition of property. 5. Interpleader e11=> 15 Interpleader action instituted by bank in Connecticut State court for express pur- pose of avoiding judgment against its cor- porate person and to insure that any right, title, or interest concerning disputed prop- erty would be finally adjudicated, could not be construed to be in personam. 6. Action e11=>69(3) Federal Civil Procedure e11=> 17 41 Instances when federal court may stay or dismiss federal action pending determi- nation of state court proceeding are: in order to avoid unnecessary determination of federal co_nstitutional question; in order to avoid interference with state criminal pros- ecution; in cases where there is predomi- nant state interest, and in order to foster interests of sound judicial administration. 7. Courts e11=>497 When federal and state court have ac- tions whose subject is same res which each court must control and dispose of in order to make its relief effective, court first as- suming jurisdiction over property may maintain and exercise that jurisdiction to exclusion of other. 8. Federal Civil Procedure e11=>1741 Federal suit filed after state court ac- tion should be dismissed when federal and state proceedings involve identical issues and causes of action. 9. Federal Civil Procedure e11=>1741 Although it would not be proper for federal district court to deprive party of federal forum merely because another liti- gant reached state courthouse first, when federal plaintiff is also defendant in pend- ing state case, federal action can properly be dismissed as long as federal plaintiff's interests will be adequately protected in state proceedings. 10. Courts e11=>497 Where court must have control of prop- erty which is subject of litigation in order to proceed with cause and grant relief sought, jurisdiction of second court must yield to that of other which first assumed jurisdiction; this principle applies not only to cases where property has actually been seized under judicial process before second action is brought, but applies as well to actions where, to give effect to its jurisdic- tion, court must control property, e. g., ac- ZELLEN v. SECOND NEW HAVEN BANK 1361 Cite as 454 F.Supp. 1359 (1978) tion~ to marshall assets, administer trusts, John B. Nolan, Day, Berry & Howard, liquidate estates. Dean M. Cordiano, Hartford, Conn., for 11. Action <1=69(5) Where bank instituted interpleader ac- ~ion in Connecticut . State court for express purpose of avoiding judgment against itself a.nd to assure that any right, title, or inter- est concerning disputed property would be finally adjudicated, and where one party to interpleader action subsequently filed case in federal district court seeking damages ,for bank's . alleged wilful refusal to honor their claimed rights to property, there was sufficient identity of subject matter of two actions to require stay of federal action as matter of wise judicial administration, giv- en fact that federal plaintiff's interests in res would be adequately protected in state proceedings. 12. lnterpleader <1= 1 Because express purpose of interplead- er actions is to avoid duplicative litigation by resolving aU possible questions of liabili- ty between all possible parties in one pro- ceeding, interpleader actions are especially designed to advance interests of wise judi- cial administration and should be furthered whenever possible. 13. Action <1=69(5) Federal Civil Procedure <1=1741 Although wise judicial administration required that federal district court stay pro- ceedings on action brought against bank seeking damages for bank's alleged wilful refusal to honor plaintiffs' common-law right to certain disputed property pending outcome of Connecticut state court inter- pleader action previously initiated by bank to insure that any right, title; or interest concerning disputed property would be fi- nally adjudicated, stay would not extin- guish federal action, nor would federal ac- tion be dismissed, and after conclusion of state court interpleader proceeding, should federal plaintiffs feel their rights still have not been fully adjudicated, they would be fre(l to return to federal court and seek to revive action for determination of any ques- tions which might remain. plaintiffs. Robert P. Burns, Marcus & Burns, New Haven, Conn., for defendant. MEMORANDUM OF DECISION BURNS, District Judge. This case stems from the def a ult of a $900,000 promissory note. The note was executed on October 19, 1977, by the Saw- mill Brook Racing Association, Inc., Ronald Mooney, and Everett B. Zellen, and was made payable to the defendant Second New Haven Bank. As collateral security for the repayment of the debt, Zellen delivered to the Bank 26,250 shares of preferred stock in Monogram Industries, Inc., and Sawmill Brook delivered to the Bank a mortgage deed to certain real -property in Middle- town, Connecticut. The note became due and payable on December 28, 1977, and was not paid. An extension of time for pay- ment was granted until January 5, 1978, and again the note was not paid. On Janu- ary 24, 1978, the Bank sold sufficient shares of Zellen's Monogram stock to satisfy its debt of $940,500 (consisting of principal, interest, late charges, expenses, and attor- ney's fees). Everett B. Zellen died after the execution of the note, and the plaintiffs were appoint- ed administrators c.t.a. of his estate on Jan- uary 18, 1978. Claiming a common law right of subrogation, the plaintiffs request- ed the Bank to return the 1,655 remaining shares of Monogram stock, assign the mort- gage over to them, and endorse the note. However, in November, 1977, a group of four parties had notified the Bank that, in the event of default, they laid claim to whatever shares of the Monogram stock remained after the Bank had satisfied its debt. These parties had granted the Bank approval to sell the stock in January, 1978, only upon the condition that the Bank re- lease the mortgage on the Middletown property. Faced with conflicting claims to the stock, mortgage, and note in its hands, 1362 454 FEDERAL SUPPLEMENT the Bank, on March 8, 1978, filed an inter- pleader action in the Connecticut Superior Court seeking a full disposition of the dis- puted property and discharge of its liability to all parties claiming rights thereto. On April 6, 1978, the Connecticut Superi- or Court, Grillo, J., issued a temporary in- junction restraining Sawmill Brook, Ronald H. Mooney, and the other parties referred to above from taking any proceedings against the Bank in relation to the disputed property. Sylvia B. Zellen was not a party to the interpleader action at that time, but she has since been joined as a party. Such injunction did not apply to Larry P. Zellen because he had filed a Motion to Erase in the Superior Court on March 31, 1978; how- ever, that Motion was denied by the Superi- or Court, Aspell, J. on April 26, 1978. On May 1, 1978, Larry P. Zellen filed a Plea in Abatement in the interpleader action claim- ing the Superior Court lacked jurisdiction over him. The Bank responded on May 16, 1978, by filing a Motion to Expunge the Plea in Abatement. Argument and deci- sion on those motions are still pending in the Superior Court. On May 1, 1978, the plaintiffs filed the present case in this District Court seeking one million dollars in damages for the Bank's allegedly wilful refusal to honor their common law rights of subrogation. The plaintiffs also allege the Bank collected $10,000 in excessive attorney's fees, and thus request $1,010,000 in damages, plus the return of the remaining ·Monogram stock, an assignment of the mortgage, an endorse- ment of the note without recourse, and an accounting of the collateral held by the Bank. On May 22, 1978, the Bank filed the instant Motion to Dismiss, arguing that this Court must decline jurisdiction in light of the interpleader suit pending in the Superi- or Court, and on ·June 2, 1978, the Bank filed the instant Motion for Stay of Pro- ceedings, asking this Court to refrain from any further proceedings pending the out- come of the interpleader action currently before the Superior Court. The Bank's argument in support of these motions is founded on the general rule of necessity that, when a state court acquires jurisdiction of the res in an action in rem or quasi-in-rem, a federal court is thereafter precluded from exercising jurisdiction over the same res so as to defeat or impair the state court's jurisdiction. This is especially true, the Bank maintains, when the state court suit is aJ\ interpleader action designed to determine every right, title, or interest to the disputed res. The plaintiffs argue that their federal suit should not be dis- missed because its cause of action and is- sues are different from the state inter- pleader action. The plaintiffs claim that the gravamen of their complaint is the Bank's breach of duty to them, and thus any ruling in the federal suit would not interfere with the state court's control over the res. [l] The circumstances of this case have progressed to the point where this federal court and the state court are now poised in a position of jurisdictional competition. When such unwanted conflicts arise, the rule is that they "must be resolved accord- ing to the applicable statutes, if any, the rules developed by the courts themselves and the general principles of comity, in. order that a harmonious relationship may be maintained." lA J. Moore, Federal Practice ,r 0.201 at 2024 (1977). Since there are no statutes applicable here, this conflict must be resolved by reference to extant court rulings and the general principles of comity. In the light of these criteria, and keeping in mind the maintenance of a har- monious relationship between federal and state courts as the overriding consideration, the Bank's Motion to Dismiss must be de- nied and its Motion for Stay of Further Proceedings granted. [2, 3] Initially, it is necessary to resolve the threshold question of whether the state interpleader action is a proceeding in rem, quasi-in-rem, or in personam. No Connecti- cut court has expressly ruled on this ques- tion. The general rule is that "[ w ]hether a proceeding is in rem or in personam is de- termined by its nature and purpose, and by these only." 1 Am.Jur.2d, Actions§ 39 at 573 (Rev. to 1977). The Connecticut Su- ZELLEN v. SECOND NEW HAVEN BANK 1363 Cite as 454 F.Supp. 1359 (1978) preme Court specifically construed the pur- constitutional question, Railroad Commis- pose of the Connecticut Interpleader Stat- sion of Texas v. Pullman Co., 312 U.S. 496, ute, now C.G.S. § 52-484, in Union Trust 61 S.Ct. 643, 85 L.E~. 971 (1941), and lA J. Co. v. Stamford Trust Co., et al., 72 Conn. Moore, Federal Practice ,r 0.203[1] (1977); 86, 43 A. 555 (1899) as follows: in order to avoid interference with a state It requires the court to which any com- criminal prosecution, Younger v. Harris, 401 plaint founded upon it may be brought to U.S. 87, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971); "hear and dispose of all questions which in cases where there is a predominant state m&.y arise in such case," and by the provi- interest, Louisiana Power & Light v. Thibo- sion for making not only all who claim to daux, 860 U.S. 25, 79 S.Ct. 1070, 8 L.Ed.2d be "entitled to," but all who claim to be 1058 (1959), Burford v. Sun Oil Co., 319 U.S. "interested in," the property in question, 815, 68 S.Ct. 1098, 87 L.Ed. 1424 (1943), and parties defendant, shows that its purpose lA J. Moore, Federal Practice ,r 0.208[2] is to secure a determination of every (1977); and in order to foster the interests right, title, or interest that can by possi- of sound judicial administration, lA J. bility be set up. Moore, Federal Practice ,r 0.208[4] (1977). Union Trust at 98, 43 A. at 558 [emphasis added]. Since the generally accepted defi- nition of a proceeding in rem is "a proceed- ing to determine the right in specific prop- erty, againsL all the world, equally binding on everyone," 1 Am.Jur.2d, Actions§ 40, it follows that an interpleader suit in a Con- necticut state court may be reasonably con- strued to be a proceeding in rem. [4, 5] This conclusion is strengthened by a comparison of the purpose of an in per- sonam action with the purpose of an inter- pleader action. The object of an in person- am action is to obtain a judgment against a person rather than to obtain a judgment determining the status and disposition of property. 1 Am.Jur.2d, Actions§ 89 (Rev. to 1977). Here, the Bank has instituted the interpleader action for the express purpose of avoiding a judgment against its corpo- rate person and to insure that any right, title, or interest concerning the disputed property will be finally adjudicated. The effect of the state court interpleader action, then, will not be to render a judgment against the Bank but to render a judgment disposing of all questions concerning the rights of the various parties to the disputed property. As such, the interpleader action cannot be construed to be in personam. [6] There are four recognized instances when a federal court may stay or dismiss a federal action pending the determination of a state court proceeding: in order to avoid an unnecessary determination of a federal [7, 8] It is the latter instance that is relevant here. In the words of Prof. Moore, "In a number of tightly drawn situations, federal courts may stay or dismiss federal actions in order to foster the interests of judicial administration: comprehensive dis- position of litigation; conservation of judi- cial resources; and fairness to the parties." lA J. Moore, Federal Practice ,r 0.208[ 4] at 2185 (1977). The influence of this strong policy in favor of efficient judicial adminis- tration is reflected in the well-established rule that when a federal and a state court have actions whose subject is the same res which each court must control and dispose of in order to make its relief effective, "the court first assuming jurisdiction over the property may maintain and exercise that jurisdiction to the exclusion of the other." Penn. General Casualty Co. v. Pennsylvania, 294 U.S. 189, 195, 55 S.Ct. 386,389, 79 L.Ed. 850 (1985). Furthermore, the effect of this policy is apparent in the general rule that a federal suit filed after a state court action should be dismissed when the federal and state proceedings involve identical issues and causes of action. lA J. Moore, Federal Practice ,r 0.208[4] at 2186 (1977). The Second Circuit has specifically held that district courts have the inherent power to stay federal actions when a similar action is pending in a state court. Mottolese v. Kaufman, 176 F.2d 801 (2nd Cir. 1949). And see Will v. Calvert Fire Insurance Co. et al., - U.S. --, --, 98 S.Ct. 2552, 1364 454 FEDERAL SUPPLEMENT 57 L.Ed.2d 504 (1978), where the Supreme Court recently reaffirmed the holding of Brillhart v. Excess Ins. Co., 316 U.S. 491, 494, 62 S.Ct. 1173, 86 L.Ed. 1620 (1942), that the decision whether to defer to the concur- rent jurisdiction of a state court is commit- ted entirely to the District Court's discre- tion. [9, 10] Although the policy in favor of furthering efficient judicial administration has made its mark in a number of cases, the case law concerning the question of when a federal court can properly invoke the policy to dismiss a case is still uncertain and un- formed. bi Colorado River Water Conser- vation District v. United States, 424 U.S. 800, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976), the Supreme Court held that the district courts do have the authority to stay or dismiss a federal action because of the pendency of a state court proceeding. However, in the course of its opinion the Court stated that: Given this obligation [to exercise juris- diction], and the absence of weightier considerations of constitutional adjudica- tion and state-federal relations, the cir- cumstances permitting dismissal of a fed- eral suit due to the presence of a concur- rent state proceeding for reasons of wise judicial administration are considerably more limited than the circumstances ap- propriate for abstention. The former cir- cumstances, though exceptional, do nevertheless exist. Colorado River at 818, 96 S.Ct. at 1246. The Court went on to discuss several cir- cumstances permitting the dismissal of a federal suit due to a pending state court proceeding: whether the state court first assumed jurisdiction over the property; the inconvenience of the federal forum; and the desirability of avoiding piecemeal litiga- tion. The Court concluded with the obser- vation that, "No one factor is necessarily determinative; a carefully considered judg- men~ taking into account both the obliga- tion to exercise jurisdiction and the combi- nation of factors counselling against that exercise is required." Colorado River at 818-19, 96 S.Ct. at 1247. And in Will, su- pra, - U.S. at--, 98 S.Ct. at 2558, the Court specifically stated that Colorado Riv- er "in no way undermines the conclusion of Brillhart that the decision whether to defer to the concurrent jurisdiction of a state court is, in the last analysis, a matter com- mitted to the District Court's discretion." It is apparent that the Court intended the language in Colorado River to lay down a broad standard which the lower courts could wield at their discretion. After Colo- rado River, for instance, it would seem clear that it would not be proper for a federal district court to deprive a party of a federal forum merely because another litigant reached the state court house first. On the other hand, it would seem to be just as clear that, when a federal plaintiff is also a de- fendant in a pending state case, the federal action can properly be dismissed as long as the federal plaintiff's interests will be ade- quately protected in the state proceedings. IA J. Moore, Federal Practice ,i 0.203[4] at 2142 (1977). And where the court must have control of the property which is the subject of the litigation in order to proceed with the cause and grant the relief sought, the jurisdiction ·of the second court must yield to that of the other which first as- sumed jurisdiction. Princess Lida v. Thompson, 305 U.S. 456, 466, 59 S.Ct. 275, 83 L.Ed. 285 (1939). This principle applies not only to cases where property has actual- ly been seized under judicial process before the second action is brought but applies as well to actions where, to give effect to its jurisdiction, the court must control the property, e. g., actions to marshall assets, administer trusts, liquidate estates. Id. However the plaintiffs claim that the cause of action and issues of the instant case are different than those of the state action in that here they are asking this Court to adjudicate an alleged breach of duty by the Bank rather than to actually exert control over the res (i. e., the stock, mortgage, and note) and that this question will not be resolved in the state court. They lean heavily on Wood v. Citronelle- Mobile Gathering System Co., 362 F .2d 354 (5th Cir. 1966), to support their proposition that a federal suit based on a pending state ZELLEN v. SECOND N~W HA VEN BANK Cite as 454 F.Supp. 1359 (1978) 1365 court interpleader action should not be dis- missed where the federl:!,l suit i'lvolves dif- ferent issues and causes of action. When , the facts of Wood are distinguished from those of the i'lstant case, however, it is evident that the precedential value of Wood is minimal. Wood involved the attempt of the plaintiff to recover the value of oil taken from his land and sold by the defend- ant. Before the filing of the federal suit or the state interpleader action, the plaintiff successfully sued the defendant for conver- sion and recovered a payment on that judg- ment'. But instead of paying similar sums to the plaintiff which routinely accrued over time, the defendant chose to pay a lump sum amount into the' state court with a prayer that it be disposed of through an interpleader action. The plaintiff thereup- on filed the federal suit, claiming conver- sion and the malicious refusal of the de- fendant to pay the sums flowing from the earlier judgment. So in Wood, the plain- tiff's right to the res had already been adjudicated by the time the federal suit was filed, and the primary issue became wheth- er the defendant had· maliciously withheld the payments due to the plaintiff. The Circuit Court found that that issue could not be adjudicated in the state interpleader action, and thus held the district court erred in dismissing the federal action. In the present case, by contrast, there has been no previous adjudication of the plain- tiffs' right · to the res. In fact, that is precisely what the state interpleader action is seeking to do. The dismissal in Wood was overruled because there was a substan- tive issue before the federal court that would not be resolved by the state court proceedings. But here the so-called differ- ent issue of the Bank's allegedly wilful breach of duty by failure to recognize the platntiffs' claimed· right of subrogation can . only be resolved after a determination of whether the plaintiff was indeed entitled to , the res, and that is the fundamental issue- who is entitled to what parts of the res- that will be settled by the state court inter- plea50 Because purpose of Truth in Lending Act is to permit informed credit shopping by consumer, disclosures required should be
