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Sun Life Assurance Company of Canada v. O'Connor

United States District Court, W.D. Washington, Seattle

March 9, 2017

MARYANNAH O'CONNOR and THERESA WYSONG, Defendants-in-Interpleader.



         This matter comes before the Court on the motion to dismiss by Plaintiff-in-Interpleader Sun Life Assurance Company of Canada (Dkt. No. 22). Having thoroughly considered the parties' briefing and the relevant record, the Court finds oral argument unnecessary and hereby GRANTS the motion for the reasons explained herein.

         I. BACKGROUND

         Plaintiff-in-Interpleader Sun Life Assurance Company of Canada issued a group insurance policy to Rockwood Service Corporation as part of an employee welfare benefit plan. (Dkt. No. 1 at 2.) The Insured, David O'Connor, was a Rockwood employee and acquired coverage for certain benefits under this plan, including life insurance. (Id.) The Insured's wife, Defendant-in-Interpleader Theresa Wysong, was the primary beneficiary for his group life insurance benefit. (Id.)

         On May 29, 2015, the Insured turned 65 and lost coverage under the Rockwood group policy. (Id.) On June 16, 2015, Sun Life sent the Insured a letter and application allowing him to convert his group coverage into an individual policy. (Id.) The Insured had until July 16, 2015, to return this application to Sun Life. (Id. at 3.)

         On July 2, 2015, the Insured signed the application. (Id.) On July 13, 2015, the Insured submitted the application converting the group coverage to an individual policy (“the Policy”) and paid the associated premium. (Id.) The primary beneficiary listed on the Policy was the Insured's daughter, Defendant-in-Interpleader Maryannah O'Connor. (Id.) The contingent beneficiary was the Insured's son, John O'Connor. (Id.) The Policy was issued to the Insured in the amount of $150, 000.00. (Id.)

         On July 22, 2015, the Insured passed away. (Id.) On July 23, 2015, Sun Life received a fax from the Insured's son, Israel O'Connor. (Id.; see also Dkt. No. 24-1 at 4.) The fax included a copy of the Insured's July 2 conversion application, as well as the Insured's signed and notarized declaration purporting to revoke “any and all power of attorney documents” that Wysong had over the Policy. (Dkt. No. 1 at 3.) The Insured indicated that he wanted to keep his daughter Maryannah as the Policy's primary beneficiary and his son John as the secondary beneficiary.[1] (Id.) The Insured's declaration is dated July 22, 2015. (Id.) Three witnesses attested to witnessing the declaration: John O'Connor, Israel O'Connor, and Jeff Heckman. (Id.)

         On August 21, 2015, Sun Life sent a letter to Maryannah O'Connor providing her instructions on how to file a claim under the Policy. (Id. at 3.) That day, Sun Life also sent the same instructions to Wysong, at Wysong's request. (Id. at 3-4.)

         On August 31, 2015, Wysong sent a letter to Sun Life making a claim for the Insured's life insurance proceeds. (Id. at 4.) Wysong stated that she was the primary beneficiary under the group policy; that she had been removed as a beneficiary when the group policy was converted; that the Insured was incapable of changing the beneficiaries because of his declining physical and mental health; and that the Insured's children took advantage of the Insured's condition to influence him to remove Wysong as the primary beneficiary on the group policy and replace her with his children on the individual policy. (Id.)

         On October 12, 2015, Maryannah O'Connor also made a claim to the insurance proceeds under the Policy. (Id.)

         Sun Life was thus unsure as to the proper recipient of the Policy proceeds. (Id. at 4-5.) Sun Life filed a complaint for interpleader on May 31, 2016. (Id.) On September 9, 2016, per the Court's order, Sun Life deposited the insurance proceeds plus interest into the court registry. (Dkt. No. 14 at 1.) Sun Life now asks the Court to dismiss Sun Life from this case with prejudice, to “enter an order discharging Sun Life from any and all liability arising out of the subject life insurance policy and proceeds, ” and to award Sun Life its reasonable fees and costs. (Dkt. No. 22 at 1.)

         Wysong opposes the motion, arguing that Sun Life may have been negligent in processing the change of beneficiary request. (Dkt. No. 24 at 2.) Wysong asks the Court to dismiss Sun Life without prejudice, to find that Sun Life is not discharged from future liability, and to deny Sun Life fees and costs. (Id. at 1.) In the alternative, Wysong asks the Court to “stay any dismissal for a period of 90 days so that Ms. Wysong can better assess through discovery the nature of the information Sun Life had at its disposal when it accepted improperly obtained documents that changed [the Insured]'s insurance policy to Ms. Wysong's detriment.” (Id. at 3.)


         “In an interpleader action, the ‘stakeholder' of a sum of money sues all those who might have claim to the money, deposits the money with the district court, and lets the claimants litigate who is entitled to the money.” Cripps v. Life Ins. Co. of N. Am., 980 F.2d 1261, 1265 (9th Cir. 1992). The Court first determines whether there is a single fund at issue with two or more adverse claims to the fund. Mack v. ...

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