United States District Court, D. Kansas
MEMORANDUM AND ORDER
MURGUIA UNITED STATES DISTRICT JUDGE.
Primerica Life Insurance Company filed this rule interpleader
action to facilitate the proper distribution of a $150, 000
life insurance policy benefit to either of two claimants:
defendant Barbara Frantz, the insured's designated
primary beneficiary, or defendant Patrick C. Frantz, the
insured's designated contingent beneficiary. The matter
is presently before the court on plaintiff's Motion To
Deposit Policy Benefit Into The Court's Registry And For
Interpleader Relief. (Doc. 13). For the reasons discussed
below, the court grants plaintiff's motion.
Motion to Deposit Funds
motion first seeks to deposit the policy benefit into the
court's registry. In its discretion, a court may allow a
party to deposit a sum of money with the court,
“whether or not that party claims any of it, ” if
any part of the sought-after relief involves disposition of
the sum of money. Fed.R.Civ.P. 67(a); see also Garrick v.
Weaver, 888 F.2d 687, 694 (10th Cir. 1989). Here,
plaintiff disclaims any interest in the policy benefit but
requests the court's determination as to which
defendant's competing claims entitle them to the benefit.
Neither defendant objects to plaintiff's deposit request.
A filing construed to be an answer by defendant Barbara
Frantz, in fact, affirmatively requests the policy's
benefits “be held by the court as trustee.” (Doc.
12, at 1). Under the authority of Rule 67 of the Federal
Rules of Civil Procedure, therefore, the court grants
plaintiff leave to deposit the policy benefit and any
interest applicable under law with the court's registry.
See also 7 Charles Allen Wright et al., Federal
Practice and Procedure § 1716 (3d ed. 2001)
(stating that “the general equitable powers of the
court permit it to receive a deposit, ” which
“can be made in accordance with Rule 67”).
next requests interpleader relief under Rule 22 of the
Federal Rules of Civil Procedure. Granting that relief as
requested would involve: (1) discharging plaintiff from
further liability with respect to the at-issue policy; (2)
dismissing plaintiff from this action; and (3) enjoining
defendants (and those who may make claims by or through them)
from continuing or bringing any action against plaintiff (or
its representatives or agents) concerning the right to and
distribution of the policy benefit.
. . . under Rule 22 . . . affords a party who fears being
exposed to the vexation of defending multiple claims to a
limited fund or property that is under his control a
procedure to settle the controversy and satisfy his
obligation in a single proceeding.” 7 Wright et al.,
§ 1704 (3d ed. 2001); see also In re Millennium
Multiple Employer Welfare Ben. Plan, 772 F.3d 634, 639
(10th Cir. 2014) (quoting same in context of statutory
interpleader claim). Courts resolve an interpleader action
according to a two-step process. Eighth & Jackson
Inv. Group v. Kaw Valley Bank, No. 12-4075-RDR, 2013 WL
183753, at *2 (D. Kan. Jan. 17, 2013) (citation omitted).
Interpleader's first step requires the court to determine
whether the interpleader prerequisites are met and, if so,
“whether to discharge the stakeholder from further
liability to the claimants.” Id.; see
also 7 Wright et al., § 1714 (3d ed. 2001). If met,
interpleader's second step involves determining the
claimant's respective rights to the disputed fund.
Eighth & Jackson Inv. Group, 2013 WL 183753 at
*2; see also 7 Wright et al., § 1714 (3d ed.
2001). Plaintiff's present motion asks the court to take
only the first step.
party invoking rule interpleader, plaintiff bears the burden
to show that its concerns of defending multiple adverse
claims directed against a single fund are
legitimate. See Rhoades v. Casey, 196 F.3d
592, 600 (5th Cir. 1999) (“In the first state, the
district court decides whether the requirements for rule . .
. interpleader action have been met by determining if there
is a single fund at issue and whether there are adverse
claimants to that fund.”); 7 Wright et al.,
§§ 1704, 1714 (3d ed. 2001) (same; also stating
that the party seeking interpleader bears the burden to
satisfy the interpleader requirements).
plaintiff's concern is legitimate. This action concerns a
single fund-insured decedent Gary Patrick Frantz's life
insurance policy benefit. Defendant Barbara Frantz and
defendant Patrick C. Frantz adversely claim exclusive
entitlement to the policy benefit. Defendant Barbara Frantz
claims entitlement as the designated primary beneficiary. A
jury, however, has convicted defendant Barbara Frantz of
homicide in connection with the insured's death.
Defendant Barbara Frantz disputes the jury's verdict,
pursues an appeal to overturn her conviction, and insists
that defendant Patrick C. Frantz instead bears responsibility
for the insured's death. Defendant Patrick C. Frantz,
however, denies any responsibility for the insured's
death. He claims entitlement as the policy's designated
contingent beneficiary, alleging not only that that defendant
Barbara Frantz's homicide conviction bars her from
receiving the benefit but also that she renounced any right
to the benefit under the terms of a separation agreement she
and the decedent previously executed. Whatever the merit to
these claims, they are not so lacking in substance-or so
clear as to make proper distribution of the funds
sufficiently certain- that plaintiff's concern over
incorrect distribution or defending multiple claims is
unjustified. Plaintiff's invocation of interpleader is
appropriate. See Aetna U.S. Healthcare v. Higgs, 962
F.Supp. 1412, 1414 (D. Kan. 1997) (approving interpleader to
settle dispute concerning proceeds of a life insurance policy
where primary beneficiary was a suspect in the insured's
determined that plaintiff properly invoked rule interpleader,
the court further determines that granting plaintiff's
requested interpleader relief is appropriate.
Where an insurance company is a mere stakeholder and can
contribute nothing toward resolution of the issues between
the other parties, its interpleader action is properly filed,
and no genuine issue exists as to its rights and liabilities,
“it should be discharged from any and all liability
arising out of or based on the policies involved, except to
pay the proceeds of such policies to the party or parties
ultimately adjudged to be entitled thereto.”
Rosenberger v. Northwestern Mut. Life Ins. Co., 176
F.Supp. 379, 385 (D. Kan. 1959), modified 182
F.Supp. 633 (D. Kan. 1960). See Nationwide Mut. Ins. Co.
v. Eckman, 555 F.Supp. 775, 777 (D. Del. 1983);
Francis I. du Pont & Co. v. Sheen, 324 F.2d 3, 5
(3d Cir. 1963) (When a plaintiff in interpleader has paid the
amount of his admitted debt into court and, after notice and
opportunity to be heard, the claimants have been ordered to
interplead, the law normally regards the plaintiff as having
discharged his full responsibility in the premises and
“the court often enters an order finally relieving the
plaintiff of further responsibility and permanently enjoining
the claimants from harassing him.”).
Am. Home Life Ins. Co. v. Barber, No. 02-4168-SAC,
2003 WL 21289986, at *2 (D. Kan. May 16, 2003); see
also 7 Wright et al., § 1717 (3d ed. 2001)
(discussing, in part, a court's authority to issue
injunctions in rule interpleader cases). Plaintiff, as just
discussed, has properly filed this interpleader action.
Plaintiff has conceded its liability to pay the policy
benefit to the proper beneficiary, whoever the court
determines that to be. And to facilitate proper payment,
plaintiff has requested to deposit and the court has agreed
to accept the policy benefit into its registry. Plaintiff,
therefore, is a disinterested stakeholder entitled to
interpleader relief. Upon deposit of the policy benefit and,
as discussed more fully below, final resolution of
plaintiff's claim to attorneys' fees, the court will
issue an order: (1) discharging plaintiff from all further
liability to defendants concerning Gary Patrick Frantz's
life insurance policy; (2) dismissing plaintiff from this
action; and (3) enjoining defendants from taking any further
action against plaintiff regarding the policy.
also requests reasonable costs and attorneys' fees
associated with filing this interpleader action. Defendant
Patrick C. Frantz objects to assessing any costs or fees
against the benefit. Each party provides authority from this
district supporting its position. Plaintiff requests the
court award it fees under the general rule that
“[w]here the stakeholder is disinterested, i.e., does
not claim any right to the fund, concedes its liability in
full, deposits the fund in court, seeks discharge, and does
not appear to the court to be culpable, it is appropriate and
equitable to allow fees and costs from the fund.”
Irwin v. Principal Life Ins. Co., 404 F.Supp.2d
1271, 1278 (D. Kan. 2005) (citations omitted). Defendant
Patrick C. Frantz, in contrast, urges the court to deny
plaintiff's request on the basis that “‘[t]he
insurer may not transfer part of the ordinary costs of doing
business to the insured by bringing an interpleader
action.'” Higgs, 962 F.Supp. at 1414.