JEFFREY U. BEAVERSTOCK, District Judge.
This matter is before the Court on Plaintiff, The Prudential Insurance Company of America's ("Prudential"), Motions for Default Judgment against Defendant Madison R. Brown, (Doc. 53), to Deposit Funds Pursuant to Fed. R. Civ. P. 67 (Doc. 54), and for Interpleader Relief. (Doc. 55). After due consideration, the Court finds that Prudential is entitled to the relief requested in each Motion as set forth herein.
Prudential instituted this action via Interpleader Complaint on December 11, 2018. (Doc. 1). In its Complaint, Prudential acknowledges the several claims to the insurance policy proceeds,
On December 4, 2001, Richard E. Brown ("Brown" or "the Insured") divorced his first wife (and the biological mother of the Brown children), Cynthia Brown. (Doc. 38-2, p. 92). Among the various provisions of the divorce decree, the Mobile County Circuit Court ordered the following regarding the Insured's life insurance policy:
(Doc. 38-2, p. 91) (emphasis removed). At the time of his divorce from Cynthia Brown, the Insured was retired from the United States Army and was working full time with the Veterans Administration. (Id.). As a consequence of his military service, Brown was insured by the Prudential Insurance Company of America through a Veteran's Group Life Insurance Policy ("VGLI Policy"). Brown's coverage under this policy began on June 1, 1995; the death benefit under this policy was $100,000. (Doc. 38-2, pp. 95-97). Accordingly, the policy referred to in the Mobile County Circuit Court's divorce decree was in effect at the time of the divorce and subsequent to it. (Doc. 1, p. 3).
As more fully set out in Prudential's and the Brown Children's filings, the Insured executed Beneficiary Designations naming the Brown Children as his primary beneficiaries on the above-referenced policy in 2013. (See Doc. 1-2, pp. 1-32; Doc. 38, p. 2). On March 31, 2016, Brown married Dianna Brown. (Doc. 38-2, p. 3). Approximately one year after his marriage, Brown again named the Brown children as the primary beneficiaries on his Prudential life insurance policy, providing each individual child with a twenty (20) percent interest in the policy's proceeds. (Doc. 1-2, pp. 1-12). On May 31, 2018, Brown purportedly altered his beneficiary designation on the Prudential life insurance policy, indicating that he wished the proceeds of the policy to be distributed "by law." (Doc. 1-2, p. 15). Brown passed away on August 17, 2018 (Doc. 38-2, p. 1).
In its first Motion before the Court, Prudential asks the Court to enter default judgment against Defendant Madison Brown ("Madison"). In support of its Motion, Prudential argues the following: (1) Madison was served the Complaint on January 18, 2019 (Doc. 22); (2) Madison failed to answer in the time required by Rule 12 of the Federal Rules of Civil Procedure; (3) that the Clerk entered Default against Madison on March 2, 2019 (Doc. 36); (4) Madison is not a member of the military and is not an incompetent person, thus making the entry of default against her proper; and (5) Rule 55 of the Federal Rules of Civil Procedure permits the Court to provide the relief Prudential seeks. (Doc. 53, pp. 4-6).
As a threshold issue, the Court notes that Prudential is correct to assert that Madison was served on the date identified and that she has failed to answer or otherwise appear in this action. (See Doc. 22). Likewise, the Clerk entered default against Madison on March 7, 2019. (Doc. 29). Further, there is no evidence to suggest that Madison is an infant or an incompetent person, and Prudential has shown that Madison is not a member of the military.
This Court has previously stated that,
GlobeNet Metals, LLC v. Fid. Oil Field Servs., LLC, No. CIV.A. 13-0282-WS-B, 2013 WL 5529607, at *1 (S.D. Ala. Oct. 7, 2013) (internal citations and quotations omitted). Prudential's Interpleader Complaint alleges, inter alia, that it will be "expos[ed] [ ] to double or multiple liability on account of the potential competing claims made by or available to defendants. Prudential has no means other than this Interpleader action of protecting itself against multiple conflicting or potentially conflicting claims and/or possible multiple litigation on the part of the defendants as to the Death Benefit." (Doc. 1, pp. 5-6).
Default judgment may be entered by the Court pursuant to Fed. R. Civ. P. 55(b). There is no rigid formula that can be applied to determine whether a party is entitled to default judgment. Instead, Rule 55(b) provides (in pertinent part pertaining to these proceedings),
Fed. R. Civ. P. 55(b)(2)(A)—(D). However, such hearings are not universally required. See GlobeNet Metals, LLC v. Fid. Oil Field Servs., LLC, No. CIV.A. 13-0282-WS-B, 2013 WL 5529607, at *2 (S.D. Ala. Oct. 7, 2013) (relying on Securities and Exchange Commission v. Smyth, 420 F.3d 1225, 1232 n. 13 (11th Cir.2005)). Prudential filed this action in order to fulfill its contractual obligations to pay life insurance on the death of the Insured, and Prudential does not request a hearing; Defendants were afforded the opportunity to contest this Motion and did not. Accordingly, no hearing will be held. For those reasons, Prudential's Motion for Default Judgment against Madison Brown is
In its second motion, Prudential asks this Court to order it to deposit with the Court the full amount of the death benefit of the Insured's life insurance policy, along with any accrued interest, pursuant to Fed. R. Civ. P. 67 and Civil L.R. 67.1.
Prudential is
In its final motion, Prudential requests that the Court: (1) restrain defendants from initiating or prosecuting any proceedings relating to or arising out of the Death Benefit and/or the Group policy at issue; (2) direct the Defendants to interplead their rights to such sum; (3) discharge Prudential from further liability; and (4) dismiss Prudential with prejudice from this action. In support of this Motion, Prudential provides the jurisdictional predicate by which the Court may entertain this action, demonstrates how Prudential has satisfied the requirements of statutory interpleader (Doc. 55, pp. 4-6), and cites several authorities that stand for the proposition that Prudential should be discharged from this action and not be held liable by Defendants from any claims arising from the policy at issue. (Id. pp. 6-8).
To begin, the Court notes that Prudential will satisfy the statutory interpleader standard once it deposits the policy's proceeds, along with any accrued interest, to the Clerk of the Court. (See n. 3). Generally, Rule interpleader plaintiffs are "entitled to be discharged from any and all liability to the claimants/defendants where there is no longer any material controversy concerning its obligations to those claimants." Am. Gen. Life Ins. Co. v. Jones, No. 08-0211-WS-B, 2008 U.S. Dist. LEXIS 92850, at *3 (S.D. Ala. Nov. 13, 2008); see also Chase Manhattan Bank v. Mandalay Shores Coop. Hous. Ass'n (In re Mandalay Shores Coop. Hous. Ass'n), 21 F.3d 380, 383 (11th Cir. 1994) ("A successful interpleader suit results in the entry of a discharge judgment on behalf of the stakeholder; once the stakeholder turns the asset over to the registry of the court, all legal obligations to the asset's claimants are satisfied.").
Section 2361 of Title 28 authorizes district courts to enter an order restraining all claimants from instituting a proceeding in any state or federal court affecting the property involved in an interpleader initiated pursuant to Section 1335. Podhurst Orseck, P.A. v. Servicios Legales De Mesoamerica S. De R.L., 699 F.Supp.2d 1344, 1350 (S.D. Fla. 2010). However, the statute does not articulate the precise standard for framing a § 2361 injunction. Instead, district courts have "extensive discretion under Section 2361 with regard to the issuance and the scope of the order." Id. Having considered the facts and circumstances of the instant case and the purpose of the federal interpleader injunction statute, the Court finds that a § 2361 injunction should issue following Prudential's deposit of the proceeds, along with any accrued interest, with the Clerk of the Court.
The Court
The Court notes that Prudential relies, not insignificantly, on authorities dealing with the Rule interpleader standard, as articulated in Rule 22 of the Federal rules of Civil Procedure, for dismissal in its Motion now before the Court. (see, e.g., Prudential's reliance on Wells Fargo Bank, Nat. Ass'n v. PACCAR Fin. Corp., 2009 WL 211386 (N.D. Cal. Sept. 22, 203), Doc. 55, p. 6). Despite this reliance, Prudential argues predominantly under the statutory interpleader umbrella. (See, e.g., p. 4, n. 1, p. 7).
However, a closer reading of Hauger reveals that the district court did not directly rely on Mandalay Shores for the proposition that an insurance company could never be an innocent, disinterested stakeholder in an interpleader action. Instead, the Hauger court relied on Campbell v. N. Am. Co. for Life & Health Ins., No. 3:04-cv-1118-J-TEM, 2007 U.S. Dist. LEXIS 54886 (M.D. Fla. July 30, 2007), for that proposition. In Campbell, the district court found that an insurance company was not an innocent, disinterested stakeholder because it filed its interpleader action in response to a breach of contract claim filed against it by the purported policy beneficiary and faced additional adverse claims from another purported beneficiary. The insurance company in Campbell was not interested merely by virtue of the type of business it conducted. Instead, the insurance company was interested because it faced the possibility of damages under the related breach of contract claim. Such facts are not present in this case.
Moreover, Mandalay Shores does not appear to stand for the proposition cited by the Hauger court. Instead, in Mandalay Shores, the Eleventh Circuit focused on whether banks were universally barred from receiving attorneys' fees and costs in interpleader suits arising from bankruptcy actions. See Chase Manhattan Bank v. Mandalay Shores Coop. Hous. Ass'n (In re Mandalay Shores Coop. Hous. Ass'n), 21 F.3d 380, 382-83 (11th Cir. 1994).
