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The Prudential Insurance Company of America v. Bacon

United States District Court, S.D. Georgia, Statesboro Division

May 25, 2018

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, Plaintiff,
v.
NICHOLAS S. BACON and ERIC C. SMITH, Defendants.

          ORDER

          J. RANDAL HALL, CHIEF JUDGE UNITED STATES DISTRICT COURT

         Plaintiff, the Prudential Insurance Company of America ("Prudential"), seeks relief from multiple liabilities it could face from Defendants Eric Smith and Nicholas Bacon related to the distribution of insurance proceeds. Before the Court are several motions: (1) Prudential's request for interpleader (doc. 1); (2) Defendant Smith's Motion for Entry of Default (doc. 9); and (3) Prudential and Defendant Smith's request to deposit funds and dismiss Prudential (doc. 10). The Court GRANTS Prudential's request for interpleader; ORDERS the Clerk of Court to enter default against Defendant Bacon; GRANTS Prudential's request to deposit funds; DISMISSES Prudential from this case; and DENIES Prudential's request for attorneys' fees.

         I. BACKGROUND

         Prudential provided a life insurance policy (the "Policy") worth $100, 000 (the "Death Benefit77) to Montez Bacon (the "Insured"). Defendants Bacon and Smith are the children of the Insured. The sole primary beneficiary of the Policy is Defendant Bacon. On March 3, 2017, the Insured died from a gunshot wound to the back. That same day, police arrested Defendant Bacon on charges of aggravated assault and murder related to the Insured's death.

         On October 18, 2017, Prudential filed a complaint in this Court against Defendants. According to Prudential, Georgia law prohibits Defendant Bacon from collecting the Death Benefit if he "feloniously and intentionally" killed the Insured. (Doc. 1, at 4.) If Defendant Bacon did "feloniously and intentionally" kill the Insured, "then it would be as if [Defendant Bacon] had predeceased the Insured and the Death Benefit would be payable to the Insured's surviving child, [Defendant Smith]." (Id.) Prudential claims that it "cannot determine factually or legally who is entitled to the Death Benefit" but that it is "ready willing and able to pay the Death Benefit, plus applicable interest, if any, in accordance with the terms of the [Policy]." (Id. at 5.) Prudential's complaint requests that this Court allow it to deposit the Death Benefit into the Court's Registry, grant its request for interpleader between Defendants Bacon and Smith, discharge it from the action, and award it attorneys' fees. (Id. at 6.)

         Defendant Smith filed an answer to Prudential's complaint on November 15, 2017, which objected to Prudential's request to be dismissed on the grounds that "the Insured may have selected a plan option that obligated [Prudential] to pay as much as $200, 000 in Death Benefits." (Doc. 7, at 2.) Defendant Bacon, however, failed to file any response to Prudential's complaint. Thus, on November 28, 2017, Defendant Smith filed a motion for entry of default against Defendant Bacon. (Doc. 9.)

         On March 30, 2018, Prudential and Defendant Smith filed a "Joint Motion for Permission to Deposit Funds and For Dismissal of [Prudential]." (Doc. 10.) In this motion, the parties seek permission for Prudential to deposit funds into the Court's Registry and ask the Court to "discharg[e] Prudential of all liability with respect to the [Policy] and the Death Benefit and dismiss[] with prejudice all claims against Prudential relating to the [Policy] and/or Death Benefit." (Id. at 2-3.)

         II. DISCUSSION

         A. Interpleader

         Interpleader is a "remedial joinder device" which "allows a stakeholder who is uncertain if and to whom he is liable for money or property held by him to join those who are or might assert claims against him." 22 Charles A. Wright, Arthur R. Miller & Mary K. Kane, Federal Practice and Procedure § 1702, p. 533 (3d ed. 2001) (hereinafter "Federal Practice") . It is authorized by Federal Rule of Civil Procedure 22, which states, "persons with claims that may expose a plaintiff to double or multiple liability may be joined as defendants and required to interplead." Fed.R.Civ.P. 22(a)(1).

         Courts apply the interpleader remedy in two stages. 22 Federal Practice, § 1714 at 624. In the first stage, courts must determine whether the requesting party has the right "to compel the claimants to litigate their claims to the stake in one proceeding." Id. at 624-25. If a court allows interpleader, it must then join the proposed defendants to the litigation and instruct them to interplead. Id. After the parties interplead, the Court may proceed to the second stage and determine "the respective rights of the claimants to the stake." Id. at 628. At this point, each claimant is adverse to the others and must prove its right to the disputed stake. Id.

         The Court is currently in the first stage, where Prudential must prove that it is entitled to join Defendants Bacon and Smith as defendants in this litigation. The Court concludes Prudential has met its burden. Prudential is the stakeholder of $100, 000 of benefits. Defendant Bacon is currently the beneficiary, but his arrest for the murder of the Insured casts legitimate doubt on his right to collect. If he cannot collect, Defendant Smith may be the proper beneficiary. In other words, Prudential faces multiple liability: it has a finite amount of funds that could be claimed by multiple persons.

         Because Prudential has demonstrated that it faces multiple liability, the Court GRANTS Prudential's interpleader request and joins Defendants Bacon and Smith as defendants in this litigation. Accordingly, the Court ORDERS Defendants Bacon and Smith to interplead, and both SHALL enter pleadings establishing their adversity to one another and stating their claims to the Death Benefit WITHIN 21 DAYS of the entry of this Order. See 22 Federal Practice, § 1715 at 632 ("If interpleader is ordered, each claimant should respond to the claims of the other claimants by denying their validity so that issue is joined."). Defendants Bacon and Smith SHALL also serve each other with their pleadings in accordance with the Federal Rules of Civil Procedure.

         B. Request to ...


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