United States District Court, S.D. Georgia, Dublin Division
3, 2019, Plaintiff CMFG Life Insurance Company filed its
complaint in interpleader pursuant to Federal Rule of Civil
Procedure 22. The lawsuit concerns an accidental death and
dismemberment policy, Policy No. V1030064, issued by
Plaintiff on the life of the insured, Lewis E. Seay, Jr. The
designated beneficiary of the Policy is Defendant Jonathan
Seay, the brother of Lewis E. Seay, Jr. The Policy was issued
on February 1, 2016; Lewis E. Seay, Jr. was killed from a
gunshot wound on June 1, 2016.
22, 2019, Defendant Jonathan Seay filed an Answer and
Counterclaim, asserting claims of breach of contract and bad
faith against Plaintiff for its failure to timely pay the
death benefits to him. The other Defendants, Lewis E. Seay,
Jr.'s other siblings, filed a joint Answer on June 5,
2019, whereby they disclaim any interest in the insurance
proceeds and further plead that Jonathan Seay is entitled to
13, 2019, the Court granted Plaintiff's motion for leave
to deposit into the Registry of the Court the sum of $301,
165.00, representing the accidental death benefit. (Doc. No.
18, "Order of Deposit.") On June 24, 2019, however,
Plaintiff filed a motion for relief from the Order of
Deposit, seeking to file an amended complaint and to avoid
depositing the insurance proceeds into the Court's
registry. Plaintiff explains that it learned on June 13,
2019, the date the Court entered the Order of Deposit, that
Jonathan Seay had been arrested for insurance fraud by
federal authorities just three days earlier.
the charges involved in the federal indictment against
Jonathan Seay are not related to the subject Policy in this
case, Plaintiff states that it now believes that Jonathan
Seay may have obtained the subject Policy without the
knowledge or consent of his brother, Lewis E. Seay, Jr., and
if proven, the Policy would be void ab initio.
Plaintiff maintains that Jonathan Seay remains a suspect in
his brother's death and now, upon also learning that he
has been accused of procuring a life insurance policy on a
woman he met at church without her knowledge or consent,
Plaintiff wishes to amend the complaint to add a declaratory
judgment claim that the subject Policy is invalid and
Federal Rule of Civil Procedure 15(a)(2), the district court
should "freely give leave [to amend the complaint] when
justice so requires." Yet, "[a] district court may,
in the exercise of its inherent power to manage the conduct
of litigation before it, deny such leave where there is
substantial ground for doing so, such as 'undue delay,
bad faith or dilatory motive on the part of the movant,
repeated failure to cure deficiencies by amendments
previously allowed, undue prejudice to the opposing party by
virtue of allowance of the amendment, [and] futility of
amendment."' Reese v. Herbert, 527 F.3d
1253, 1263 (11th Cir. 2008) (quoting Foman v.
Davis, 371 U.S. 178, 182 (1962)). However,
"[u]nless there is a substantial reason to deny leave to
amend, the discretion of the district court is not broad
enough to permit denial.'' Burger King Corp. v.
Weaver, 169 F.3d 1310, 1319 (11thCir. 1999).
there are no allegations of undue delay,  bad faith or a
dilatory motive, and this would be the complaint's first
amendment. Also, it is difficult to discern any prejudice
that would befall Defendants since the case is in its
infancy.Nevertheless, Defendant Jonathan Seay
opposes the motion to amend the complaint based upon
futility. He contends that the proposed amended complaint
would not withstand a motion to dismiss. He argues that the
criminal allegations in the federal indictment bear no
relation to the procurement of the subject Policy in this
case, and therefore Plaintiff cannot reasonably rely upon
these allegations to establish its claim that the subject
Policy is void ab initio.
context, the futility threshold requires application of the
motion to dismiss standard. Austin v. Caliber Home
Loans, 2019 WL 2306116, *2 (N.D.Ga. 2019); Fletcher
v. Great Am. Ins. Co., 2010 WL 11507440, *3 (M.D. Fla.
2010). That is, "[a]n amendment is futile where the
complaint as amended would still be subject to
dismissal." Cox v. Mills, 465 Fed.Appx. 885,
889 (11thCir. 2012) .
Rule of Civil Procedure 8(a) (2) requires that a complaint
contain "a short and plain statement of the claim
showing that the pleader is entitled to relief." The
United States Supreme Court has provided additional guidance
to the Rule 8 (a) analysis in Bell Atlantic Corp. v.
Twombly, 550 U.S. 544 (2007), and Ashcroft v.
Iqbal, 556 U.S. 662 (2009). Pursuant to the
Twombly/Iqbal paradigm, to survive a motion to
dismiss for failure to state a claim under Federal Rule of
Civil Procedure 12(b)(6), "a complaint must contain
sufficient factual matter, accepted as true, to state a claim
to relief that is plausible on its face.'"
Iqbal, 556 U.S. at 678 (quoting Twombly,
550 U.S. at 570). To be plausible, the complaint must contain
"well-pleaded facts" that "permit the court to
infer more than the mere possibility of misconduct."
Id. at 67 9.
Plaintiff is seeking a declaratory judgment that the subject
insurance policy did not meet the requirements of O.C.G.A.
§ 33-24-6(a) and is therefore void ab initio.
Section 33-24-6(a) provides in pertinent part: "No life
. . . insurance contract upon an individual . . . shall be
made or effectuated unless at the time of the making of the
contract the individual insured, being of competent legal
capacity to contract, applies for a life . . . insurance
contract or consents in writing to the contract . . . ."
In Wood v. N.Y. Life Ins. Co., 336 S.E.2d 806, 809
(Ga. 1985), the Georgia Supreme Court held that §
33-24-6 (a) is an expression of the public policy of Georgia
that "a valid policy of insurance may not be issued on
the life of an adult without the knowledge and consent of the
person insured." By this statute, the insured must
either apply for the insurance or consent thereto in writing.
Id. at 809-10. Further, the failure of an insured to
sign a policy or consent in writing renders the policy void
ab initio as against public policy. Time
Insurance Co. v. Lamar, 393 S.E.2d 734, 735 (Ga.Ct.App.
1990) (citing Wood, 336 S.E.2d at 806)) .
Amended Complaint, Plaintiff alleges that upon information
and belief, the insured, Lewis E. Seay, Jr., "did not
consent to and/or was unaware of the application for and
issuance of the Policy." (Proposed Am. Compl. ¶ 1,
Doc. No. 22, Ex. A.) In factual support of this allegation,
Plaintiff alleges that the Enrollment Summary has Jonathan
Seay's contact email and telephone number and that the
premiums were paid by Jonathan Seay's credit card.
(Id. ¶¶ 12-14.) The insured was killed
only months after issuance of the policy, and Jonathan Seay
remains a suspect in his homicide. (Id. ¶¶
16, 22.) Further, Plaintiff alleges that Jonathan Seay was
recently arrested for insurance fraud and identity theft when
he applied for a policy of insurance as the purported brother
of a woman he met at church. (Id. ¶ 17.) Upon
consideration of these allegations, the Court concludes that
Plaintiff has asserted sufficient facts to make plausible a
claim that Plaintiff may have procured the subject insurance
Policy without the knowledge or consent of his actual
brother, Lewis E. Seay, Jr. Put another way, from these
facts, the Court infers more than the mere possibility of
misconduct by Jonathan Seay.
the foregoing, the Court will allow Plaintiff to file its
Amended Complaint. Accordingly, Plaintiff's Motion for
Leave to File Amended Complaint and for Relief from Order
(doc. no. 21) is GRANTED. The Order of
Deposit dated June 13, 2019, directing Plaintiff to deposit
the insurance proceeds into the Registry of the Court (doc.
no. 18), is hereby VACATED. Further,
Plaintiff is directed to file and serve the Amended Complaint
within fourteen (14) days hereof.
 Jonathan Seay appeared before this
Court on June 11, 2019, and entered a not guilty plea to
twenty-two counts of wire fraud, violations of 18 U.S.C.
§ 1343, and one count of aggravated identity theft, a
violation of 18 U.S.C. § 1028A. United States v.