Metropolitan Life Insurance Co. v. Valdepena

Full title: METROPOLITAN LIFE INSURANCE CO., Plaintiff, v. MARIA VALDEPENA and BETTY…

Court: United States District Court, W.D. Texas, San Antonio Division

Date published: Aug 17, 2005

Civil Action No. SA-05-CA-140-XR (W.D. Tex. Aug. 17, 2005)

Opinion

Civil Action No. SA-05-CA-140-XR.

August 17, 2005

ORDER

XAVIER RODRIGUEZ, District Judge

On this date, the Court considered Defendant Betty Jo Sinksi's Motion to Dismiss (docket no. 5) and Plaintiff's Motion for Order Authorizing Deposit of Funds, for Discharge, and for Attorneys' Fees (docket no. 18).

I. Facts and Procedural Background

This dispute involves competing claims to the benefits of a life insurance policy. According to the Complaint, Wayne Valdependa, now deceased (hereinafter referred to as "Decedent"), was a participant in an employee benefit plan provided by his employer, DuBois Chemicals (a part of JohnsonDiversey, Inc.), and the plan is governed by ERISA. Decedent was enrolled for $10,000 in Basic Life Insurance coverage under the plan. Metropolitan Life Insurance Company ("MetLife") is the claims administrator for the plan and issued a group insurance policy to fund the life insurance benefits payable under the Plan.

In 1991, Decedent divorced Betty Jo Valdepena (now Betty Jo Sinski), and the Agreed Decree of Divorce provided that "as long as Petitioner [Betty Jo] remains alive and the policy remains in force, Respondent [Decedent] shall not change the designation of Petitioner, BETTY JO VALDEPENA, as Beneficiary of that certain policy of life insurance issued by Life Insurance Company of North America . . . through DuBois Chemicals." MetLife succeeded Life Insurance Company of North America as the issuer of the group policy that funded the plan.

On January 2, 2001, Decedent signed a Retiree Life Insurance Beneficiary Form designating his current wife, Maria Valdepena, as the sole beneficiary of the plan proceeds, and submitted the form to his employer.

When Decedent died on July 10, 2004, the proceeds became payable. In August 2004, Maria Valdepena submitted a claim for the proceeds on the grounds that she was the named beneficiary of the proceeds under the beneficiary designation in effect on the date of Wayne's death. Betty Jo Sinski also filed a claim to the proceeds and submitted the 1990 divorce decree "as a qualified domestic relations order (QDRO) in accordance with U.S. Code, Title 29: Section 1056."

Faced with conflicting claims, MetLife sent a letter to Maria Valdepena and Betty Jo Sinki, describing the conflicting claims and notifying them of its intent to file an interpleader action should the parties be unable to work out a compromise. When no compromise was reached, MetLife filed this interpleader suit on February 22, 2005.

MetLife alleges that this Court has jurisdiction pursuant to 28 U.S.C. § 1331 because this case arises under ERISA, and files the interpleader claim pursuant to Federal Rule of Civil Procedure 22. Met Life further alleges that "Under the Plan, benefits are paid to the beneficiary designated by the Decedent on forms approved by MetLife and filed with Decedent's insurance records, provided the beneficiary is alive at Decedent's death. However, Betty [Jo Sinski] claims that the Agreed Decree of Divorce is a qualified domestic relations order (QDRO) in accordance with 29 U.S.C. § 1056, which controls payment of the Proceeds, and because the Agreed Decree of Divorce stipulates that the designation of Betty as beneficiary shall not be changed, Betty is entitled to 100% of the Proceeds. MetLife cannot determine whether the beneficiary designation or the divorce decree controls the payment of the Proceeds under the Plan because the Fifth Circuit has not ruled on whether QDROs apply to employee welfare benefit plans. Given the conflicting claims of the rival claimants to the Proceeds, MetLife has been unable to determine who is entitled to the Proceeds and cannot determine who is the proper recipient of the Proceeds without danger of incurring multiple liabilities or defending itself in a multiplicity of suits." In addition to its interpleader, MetLife seeks attorneys' fees.

On March 30, 2005, Defendant Betty Jo Sinski filed her "Answer and Motion to Dismiss." Sinski filed a one-sentence general denial of all allegations in Plaintiff's complaint. In addition, Sinski filed a "Plea to Jurisdiction," in which she denies that this Court has jurisdiction under ERISA, alleges that the Agreed Decree of Divorce does not qualify as a domestic relations order, and alleges that she has a claim against the Decedent's Estate and Maria Valdepena for breach of contract and fraud. Accordingly, Sinski prays that this Court dismiss this interpleader suit.

MetLife responded to Sinski's motion to dismiss, arguing that jurisdiction is proper under ERISA. In addition, on June 24, MetLife moved for an order authorizing it to deposit the Proceeds, less an award of attorneys' fees and costs, into the registry of the Court and dismissing MetLife from the suit. Neither party opposes the request to deposit the proceeds into the Court's registry, but Sinski opposes MetLife's request for attorneys' fees and costs.

II. Analysis

A. Subject Matter Jurisdiction/Sinski's Motion to Dismiss

MetLife has alleged that the life insurance plan was an employee welfare benefit plan governed by ERISA, and, other than her general denial, Sinski has not directly challenged this allegation. MetLife attached a copy of the Plan and Certificate of Insurance stating that the Plan is governed by ERISA in its appendix to its response. Whether a particular insurance policy is an employee welfare benefit plan within ERISA is a question of fact governed by well-established legal standards. Hansen v. Continental Ins. Co., 940 F.2d 971, 976 (5^th Cir. 1991). The policy was established or maintained by Decedent's employer, JohnsonDiversey, Inc., for the purpose of providing benefits to its employees. JohnsonDiversey provided the policy and funded it up to two times annual earnings benefits, retained the right to terminate or modify the terms of the policy at any time, kept all claim forms on file, and provided assistance in filing claims. It does not appear to seriously be in dispute that the Plan qualifies as an ERISA employee welfare benefit plan.

Section 1132 of ERISA provides:

(a) Persons empowered to bring a civil action A civil action may be brought —

. . .

(3) by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter or the terms of the plan.

Further, pursuant to § 1132(e)(1), the district courts of the United States shall have exclusive jurisdiction of such civil actions brought by a participant, beneficiary, or fiduciary. 29 U.S.C. § 1132(e)(1).

MetLife argues that it is a plan fiduciary bringing a civil action to obtain appropriate equitable relief to enforce provisions of ERISA and the terms of the plan under § 1132(a)(3)(B)(ii), and thus this Court has jurisdiction under 29 U.S.C. § 1132(e)(1). This Court agrees.

At least three Circuit Courts of Appeals have held that federal subject matter jurisdiction exists under §§ 1132(e) based on § 1132(a)(3)(B)(ii) in interpleader suits brought by insurance companies to determine which of competing beneficiaries is entitled to the insurance proceeds. See Metropolitan Life Ins. Co. v. Bigelow, 283 F.3d 436 (2d Cir. 2002) (holding that MetLife, as a plan fiduciary, had standing to bring an interpleader action pursuant to FRCP 22 and 29 U.S.C. § 1132(a)(3)(B) and that federal subject matter jurisdiction exists under 29 U.S.C. § 1132(e)(1) and 28 U.S.C. § 1331); Aetna Life Ins. Co. v. Bayona, 223 F.3d 1030 (9^th Cir. 2000); Central States, Southeast Southwest Areas Pension Fund v. Howell, 227 F.3d 672, 674 n. 2 (6^th Cir. 2000); Metropolitan Life Ins. Co. v. Marsh, 119 F.3d 415, 418 (6^th Cir. 1997); see also Metropolitan Life Ins. Co. v. Cronenwett, 162 F. Supp. 2d 889 (S.D. Ohio 2001); Aetna Life Ins. Co. v. Hager, 930 F. Supp. 343 (E.D. Wis. 1996). In addition, numerous other courts, including the Fifth Circuit, have entertained such suits without questioning the existence of subject matter jurisdiction. See Guardian Life Ins. Co. v. Finch, 395 F.3d 238 (5^th Cir. 2004) (life insurance company brought interpleader action to determine whether decedent's ex-wife or decedent's estate should receive the proceeds of a life insurance plan governed by ERISA); see also Metropolitan Life Ins. Co. v. Pettit, 164 F.3d 857 (4^th Cir. 1998); Equitable Life Assur. Soc'y v. Crysler, 66 F.3d 944 (8^th Cir. 1995); Metropolitan Life Ins. Co. v. Wheaton, 42 F.3d 1080 (7^th Cir. 1994); Aetna Life Ins. Co. v. Montgomery, 286 F. Supp. 2d 832 (E.D. Mich. 2003); Sun Life Assur. Co. v. Sullivan, 206 F. Supp. 2d 191 (D. Mass. 2002); Sun Life Assur. Co. v. Dunn, 134 F. Supp. 2d 827, 833 (S.D. Tex. 2001); Metropolitan Life Ins. Co. v. Williams, 82 F. Supp. 2d 1346 (M.D. Fla. 1999). This Court agrees that jurisdiction exists pursuant to § 1132(e) based on § 1132(a)(3)(B)(ii), and finds that this case is properly brought as an interpleader action. Accordingly, Defendant Sinski's Motion to Dismiss (docket no. 5) is DENIED.

B. MetLife's Motion for Deposit of Funds, Discharge, and Attorneys' Fees

MetLife asserts that it has done everything necessary and appropriate to bring about this interpleader action, and that it is proper to have it, as a neutral stakeholder, dismissed from the suit and awarded its fees. MetLife asserts that it has incurred reasonable attorneys' fees in the amount of $2,734 and costs in the amount of $566.12, for a total of $3,300.12. MetLife seeks to deposit the $10,000 insurance proceeds into the Court's registry, less its fees and costs, and then requests to be discharged and dismissed from the case. MetLife states that Defendant Maria Valdepena does not oppose the relief sought, but that Defendant Sinski opposes MetLife's request for attorneys' fees.

A district court has the authority and the discretion to award reasonable attorneys' fees in successful interpleader suits to a disinterested stakeholder whenever it is fair and equitable to do so. Rhoades v. Casey, 196 F.3d 592, 603 (5^th Cir. 1999). The fee is usually modest because "all that is necessary is the preparation of a petition, the deposit in the court or posting of a bond, service on the claimants, and the preparation of an order discharging the stakeholder." FEDERAL PRACTICE AND PROCEDURE § 1719. In this case, MetLife incurred fees for these actions, and also incurred additional attorneys' fees contesting Sinski's motion to dismiss. MetLife is entitled to a reasonable attorneys' fee for its actions taken to initiate this interpleader action, and because Sinski is the only party who opposes an award of fees (and some of these fees were incurred as a result of Sinski's motion to dismiss), the Court will award MetLife its reasonable attorneys' fee and expenses.

Though the Court concludes that MetLife is entitled to recover its reasonable expenses, MetLife has failed to offer any evidence detailing the $416.12 in expenses, and thus the Court cannot determine if these expenses are reasonable and should be allowed. Accordingly, the Court will award only $150 in filing fees as expenses.

With regard to attorneys' fees, the Court will reduce the award based on unnecessarily duplicative attorney hours spent reviewing the file. Specifically, the Court will reduce Ms. Dietel's hours by 1 hour and Ms. Pollak's hours by 1 hour. In addition, the Court finds Ms. Evans's hours to be excessive and thus reduces those hours by .5 hours, for a total reduction of $420. Thus, the total award of fees to MetLife equals $2364. MetLife is thus entitled to an award of $2514 for attorneys' fees and costs.

Conclusion

This Court has subject matter jurisdiction over this interpleader action, and Sinski's Motion to Dismiss (docket no. 5) is DENIED. Plaintiff's Motion for Order Authorizing Deposit of Funds, for Discharge, and for Attorneys' Fees (docket no. 18) is GRANTED as follows: (1) MetLife is awarded $2364 in attorneys' fees and $150 in costs, for a total award of $2514; (2) MetLife shall tender to the Clerk of this Court $10,000, plus applicable interest, less $2514 in attorneys' fees and costs, for deposit into the Court's registry; (3) upon such deposit, MetLife shall be DISMISSED from this case.