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The Prudential Insurance Co. of America v. Williams

United States District Court, N.D. Iowa, Eastern Division

July 30, 2019

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, Plaintiff,
v.
FREDRICK WILLIAMS, PEGGY J. OWENS, and FREDERICK BURNSIDE, Defendants.

          MEMORANDUM OPINION AND ORDER

          C.J. WILLIAMS, UNITED STATES DISTRICT JUDGE

         This matter is before the Court on plaintiff's Unopposed Motion for Default Judgment and other Interpleader Relief. (Doc. 13). Defendant Peggy J. Owens does not oppose plaintiff's motion. (Docs. 13, at 1; 13-7, at 1). Defendants Fredrick Williams (“Williams”) and Frederick Burnside (“Burnside”) have not resisted plaintiff's motion. For the reasons set forth below, plaintiff's motion is granted in part, denied in part, and held in abeyance in part.

         I. PROCEDURAL HISTORY

         Plaintiff filed this interpleader action on March 5, 2019. (Doc. 1). Plaintiff served Burnside and Owens on March 15, 2019, (Docs. 3; 4) and Williams on March 18, 2019, (Doc. 6). To date, only Owens has filed an answer. (Doc. 8). Owens' answer does not assert a cross-claim against the other defendants, or otherwise assert a claim to the funds at issue. (Id.). On May 10, 2019, plaintiff filed its Motion for Clerk's Entry of Default Judgment against Williams and Burnside. (Doc. 11). The Clerk of Court found Williams and Burnside in default. (Doc. 12). Plaintiff then filed the instant motion for entry of default judgment. (Doc. 13). Owens does not resist plaintiff's motion (Docs. 13, at 1; 13-7, at 1), and Williams and Burnside did not file resistances. On July 24, 2019, plaintiff filed a motion for leave to amend to correct the spelling of Williams' first name. (Doc. 18.) The Court granted the motion (Doc. 19) and plaintiff's amended complaint was deemed filed on July 25, 2019.

         II. Factual Background

         In determining the relevant facts, the Court will consider the allegations in the First Amended Complaint in Interpleader (“complaint”) and portions of the affidavits and exhibits attached to plaintiff's motion for default. “An allegation-other than one relating to the amount of damages-is admitted if a responsive pleading is required and the allegation is not denied.” Fed.R.Civ.P. 8(b)(6). Williams and Burnside have not answered plaintiff's complaint, and thus have not denied any of the allegations in the complaint. Plaintiff's complaint does not seek damages from defendants, so the Court will assume the truth of the allegations in the complaint for purposes of ruling on plaintiff's motion for default.[1] The Court will also consider plaintiff's affidavits and exhibits to the extent that the information within the affidavits is within the affiant's personal knowledge and not hearsay, and to the extent the exhibits are accompanied by sworn statements laying proper foundation. See, e.g., Weinreich v. Lamson, 23 Fed.Appx. 597, 598 (8th Cir. 2001) (finding the district court did not commit plain error by relying on the plaintiffs' affidavits when they “were grounded in personal knowledge and sufficient to support the district court's finding the summons was served.”); Oceanic Trading Corp. v. Vessel Diana, 423 F.2d 1, 4 (2d Cir. 1970) (“Unless there are very unusual circumstances to justify it, the evidentiary material offered in support of a final judgment should consist of material within the personal knowledge of the affiant and not hearsay, and attached exhibits should be accompanied by sworn statements of the circumstances that would qualify them as full exhibits.”).

         Plaintiff is an insurance company that issued group life insurance policies to the W.W. Grainger Inc. Group Benefit Trust (the “Trust”). (Doc. 20, at 1-2). Lakisha Williams (the “Insured”) was an eligible employee under the Trust. (Id., at 2). Plaintiff issued the Trust group life insurance policy G-45880 which provided basic term life coverage (“Basic Coverage”) and accidental death and dismemberment coverage (“AD&D Coverage”), and policy G-48380 which provided optional term life coverage (“Optional Coverage”) (collectively, the “Plans”). (Doc. 14-1, at 1-2). The Plans are employee welfare benefit plans, governed by the Employee Retirement Income Security Act of 1974 (“ERISA”). (Doc. 20, at 2). The Insured was enrolled in the Plans, and designated Owens as the sole primary beneficiary of the Basic Coverage and Williams as the sole primary beneficiary of the Optional Coverage and AD&D Coverage. (Id., at 3).

         The Insured died on January 26, 2018. (Id.). The Insured's death was ruled a homicide by the Iowa Office of State Medical Examiner. (Doc. 13-5). Williams was a person of interest in the Insured's death. (Doc. 20, at 3). On February 13, 2019, the State of Iowa charged Williams with Murder in the First Degree of the Insured. State v. Williams, Black Hawk County No. FECR 229282, Criminal Complaint (Feb. 13, 2019).[2] Williams pleaded not guilty to the Insured's murder and is currently awaiting trial. Id., Written Arraignment and Plea of Not Guilty to Trial Information (Mar. 10, 2019); Pretrial Conference Order (May 9, 2019). Plaintiff paid Owens the death benefit for the Basic Coverage under the Plans. (Docs. 14-1, at 2; 20, at 3). If it is determined that Williams intentionally and unjustifiably caused or procured the Insured's death, then under Iowa's “slayer statute” Williams is not entitled to the death benefits for the Optional Coverage or AD&D Coverage (the “Remaining Death Benefits”). (Doc. 20, at 4 (citing Iowa Code § 633.535)). Under the slayer statute, Williams will be treated as though he predeceased the Insured for purposes of determining the recipients of Remaining Death Benefits. (Id.).

         The Plans provide as follows:

Any amount of insurance under a Coverage for which there is no Beneficiary at your death will be payable to the first of the following: your (a) surviving spouse or Civil Union Partner; (b) surviving child(ren) in equal shares; (c) surviving parents in equal shares; (d) surviving siblings in equal shares; (e) estate.

(Id.; see also Doc. 20, at 31). The Insured had no living children at the time of her death. (Id., at 4; Doc. 8, at 2). Under the terms of the policies, if Williams cannot receive the Remaining Death Benefits, then Owens, the insured's mother, and Burnside, the Insured's father, will be the beneficiaries of the Remaining Death Benefits. (Doc. 20, at 4). The Optional Coverage has a death benefit of $28, 000.00, and the AD&D Coverage has a death benefit of $41, 528.00. (Doc. 14-1, at 2).

         Plaintiff seeks to deposit the Remaining Death Benefits, $69, 528.00, plus applicable interest, into the Court Registry Investment System ("CRIS") and requests that the Court discharge plaintiff from any further liability to defendants under the Plans after depositing the funds. (Docs. 13, 20). Plaintiff also seeks an order enjoining defendants from bringing any claim or proceeding against plaintiff for the Remaining Death Benefits and requiring defendants to litigate their claims to the Remaining Death Benefits. (Id.). Plaintiff also requests its attorneys' fees and costs, in their entirety. (Doc. 20).

         III. ANALYSIS

         A. Applicable Law

         1. Default Judgment Standard

         Federal Rule of Civil Procedure 55 governs default judgments:

By its terms, the Rule requires two steps before entry of a default judgment: first, pursuant to [Rule] 55(a), the party seeking a default judgment must have the clerk enter the default by submitting the required proof that the opposing party has failed to plead or otherwise defend; second, pursuant to [Rule] 55(b), the moving party may seek entry of judgment on the default under either subdivision (b)(1) or (b)(2) of the rule.

Dahl v. Kanawha Inv. Holding Co., 161 F.R.D. 673, 683 (N.D. Iowa 1995). “[I]t is of course appropriate for a district court to enter a default judgment when a party fails to appropriately respond in a timely manner.” Marshall v. Baggett, 616 F.3d 849, 852 (8th Cir. 2010). The clerk can enter a judgment on a default when a plaintiff seeks a sum certain, but in all other cases the court must enter the judgment. Fed.R.Civ.P. 55(b). Plaintiff has already obtained a default from the Clerk of Court against Williams and Burnside for failing to plead, answer, or otherwise respond to the complaint. (Docs. 11, 12). Here, ...


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