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Jackson National Life Insurance Co. v. Poole

United States District Court, M.D. Tennessee, Nashville Division

January 22, 2015

JACKSON NATIONAL LIFE INSURANCE COMPANY, Plaintiff,
v.
CYNTHIA MEDLINE POOLE, JERE POOLE COWAN, CHARLES A. POOLE, JR., and FORETHOUGHT CAPITAL FUNDING, INC., Claimants.

MEMORANDUM

ALETA A. TRAUGER, District Judge.

There are two pending motions before the court. On November 21, 2014, plaintiff Jackson National Life Insurance Company ("Jackson") filed a Motion to Discharge (Docket No. 24), to which (a) claimant Cynthia Medline Poole ("Cynthia Poole") has filed a Response (Docket No. 28) and (b) claimants Jere Poole Cowan ("Poole Cowan") and Charles A. Poole, Jr. ("Poole, Jr.") have filed a Response (Docket No. 30). In addition, Poole has filed a Motion to File an Amended Answer and Counter-Complaint ("Motion to Amend") (Docket No. 29), to which Jackson has filed a Response (Docket No. 31), and Poole has filed a Reply (Docket No. 40). For the following reasons, the court will deny the Motion to Amend and grant the Motion to Discharge.

BACKGROUND AND PROCEDURAL HISTORY

Jackson is a Michigan corporation that, inter alia , issues life insurance policies. Claimant Cynthia Poole resides in Rutherford County, Tennessee. ( Id . at ¶ 2.) Claimants Poole Cowan and Poole Jr. reside in Sumner County, Tennessee. ( Id . at ¶¶ 3-4.) Claimant Forethought Capital Funding, Inc. ("FCF") is an Indiana corporation that provides at-need insurance assignment services for the funeral and cemetery industry. ( Id . at ¶ 5.)

In July 1996, Jackson issued a life insurance policy ("Policy"), insuring the life of Charles A. Poole, Sr. ("Decedent").[1] ( Id . at ¶ 8.) The Decedent was the owner of the policy, and he designated his then-wife Mary Lou Poole and his children Poole Cowan and Poole Jr. as the primary beneficiaries of the Policy (to receive thirty-four percent, thirty-three percent, and thirty-three percent of the proceeds, respectively). ( Id .) In November 2000, the Decedent requested to change his beneficiary designation such that his children, Poole Cowan and Poole Jr., would each receive fifty percent of the proceeds of the Policy. ( Id . at ¶ 9.) In October 2009, Jackson received a beneficiary change form purporting to name the Decedent's then-wife, Cynthia Poole, as the 100% irrevocable primary beneficiary of the Policy. ( Id . at ¶ 10.) Jackson acknowledged this change in writing. (Docket No. 16, Ex. 2.)

The Decedent died on August 3, 2014, in Rutherford County, Tennessee. ( Id . at ¶ 11.) The value of the Policy at the time of the Decedent's death was $100, 000. ( Id .) On August 5, 2014, Cynthia Poole submitted a claim for benefits under the Policy. ( Id . at ¶ 13.) On the same day, Cynthia Poole made an irrevocable assignment of a portion of the proceeds of the Policy to FCF. ( Id . at ¶ 14.)

On August 25, 2014, Poole Cowan sent correspondence to Jackson, via fax and email, stating that she is the daughter of the Decedent and disputing the claim to the Policy proceeds made by Cynthia Poole. ( Id . at ¶ 15.) In the correspondence, Poole Cowan alleged coercion and fraud in connection with the Decedent's October 2009 irrevocable beneficiary change.[2] ( Id . at ¶ 15.) As of that time, Jackson faced adverse claims for the benefits under the Policy and was unable to determine which party is entitled to the death benefit. ( Id . at ¶ 17.) On August 25, 2014, without contacting Cynthia Poole regarding Poole Cowan's allegations, Jackson informed Cynthia Poole by mail that it had decided to file an interpleader action to resolve multiple requests for payment of the Policy proceeds. (Docket No. 16, Ex. 5.) On October 17, 2014, Cynthia Poole made a self-styled "formal demand" on Jackson and threatened litigation pursuant to Tenn. Code Ann. § 56-7-105. (Docket No. 16, Ex. 6.)

On September 29, 2014, Jackson filed a Complaint in Interpleader ("Complaint") pursuant to 28 U.S.C. § 1335, in which Jackson asked the court to determine the proper recipient(s) of the Policy proceeds. (Docket No. 1.) Contemporaneously, Jackson moved to deposit the full amount of the death benefit, plus certain interest, with the court. (Docket No. 10.) The court granted the motion and, on November 12, 2014, Jackson deposited $100, 931.51 into the registry of the court. (Docket No. 20.) On November 21, 2014, Jackson filed the pending Motion to Discharge, in which it seeks to be discharged from this action and relieved of all liability under the Policy. (Docket No. 24.)

The claimants timely filed Answers to the Complaint. (Docket No. 16, 19, 22). On December 3, 2014, Cynthia Poole filed a Motion to Compel Discovery. (Docket No. 26.) The court denied the motion because, under Federal Rule of Civil Procedure 26(d), discovery had been stayed until the initial case management conference. (Docket No. 27.) On December 4, 2014, Cynthia Poole filed the pending Motion to Amend pursuant to Federal Rules of Civil Procedure 13(a)(1)(A) and 15(a)(2), in which she requested permission to file a compulsory counter-complaint pursuant to Tenn. Code Ann. § 56-7-105. (Docket No. 29.)

LEGAL STANDARDS

I. Interpleader

Interpleader is an equitable proceeding that "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." U.S. v. High Tech. Prods., Inc. , 497 F.3d 637, 641-42 (6th Cir. 2007) (quoting 7 CHARLES ALAN WRIGHT, ARTHUR R. MILLER, & MARY KAY KANE, FEDERAL PRACTICE AND PROCEDURE § 1704 (3d ed. 2001) (footnote omitted)); see also Lorillard Tobacco Co. v. Chester, Willcox & Saxbe , 589 F.3d 835, 849 (6th Cir. 2009). Interpleader may be invoked in the federal courts via Federal Rule of Civil Procedure 22 or via the Interpleader Act, 28 U.S.C. § 1335.[3] In this case, Jackson, in its Complaint, invoked interpleader via the Interpleader Act, basing jurisdiction on 28 U.S.C. §§ 1332 and 1335.[4]

Statutory interpleader requires that "[t]wo or more adverse claimants... are claiming or may claim to be entitled to such money or property, or to any one or more of the benefits arising by virtue of any note, bond, certificate, policy or other instrument, or arising by virtue of any such obligation." 28 U.S.C. § 1335(a)(1); see also Treinies v. Sunshine Mining Co. , 308 U.S. 66, 72 (1939) (noting that "there is a real controversy between the adverse claimants" in an interpleader action). 28 U.S.C. § 2361 provides for service of process and personal jurisdiction for statutory interpleader, to the effect that the "district court shall hear and determine the case, and may discharge the plaintiff from further liability, make the injunction permanent, and make all appropriate orders to enforce its judgment, " including awarding award attorney's fees.[5] First Trust Corp. v. Bryant , 410 F.3d 842, 856 (6th Cir. 2005) (citing 28 U.S.C. § 2361; 7 FEDERAL PRACTICE AND PROCEDURE § 1719 at 674; 4 JAMES WM. MOORE ET AL., MOORE'S FEDERAL PRACTICE § 22.06 at 22-98 (3d ed. 2002)). "The primary test for determining the propriety of ...


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