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Lincoln National Life Insurance Co. v. Ridgway

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

February 14, 2018

CLAUDIA RIDGWAY, et al., Defendants.




         This matter involves a dispute over the payment of life insurance proceeds. It comes before the Court on: 1) Defendant Claudia Ridgway's Motion for Summary Judgment Dismissal Against Defendants Joseph M. Gonzales, Amanda Gonzales, Bethany Kristiansen and Estate of Joseph Gonzales and Requiring Payment of Life Insurance Proceeds (Dkt. #14); 2) Defendant Claudia Ridgway's Motion to Extend Time For Filing Answer and for Default Against Joseph M. Gonzales (Dkt. #20); and 3) Plaintiff's Motion for Judgment In Interpleader (Dkt. #22). The Court has reviewed each motion, along with the attendant briefing in support thereof and in opposition thereto, and addresses each motion in turn below.


         This interpleader action was filed by Plaintiff on October 3, 2017. Dkt. #1. Plaintiff asserts federal question jurisdiction as the insurance policies at issue are governed by ERISA. Dkt. #1 at ¶ ¶ 2.1, fn. 3 and 4.4. The following background facts are not in dispute unless otherwise noted by the Court.

         Interpleader-Plaintiff Lincoln National Life Insurance Company (“Lincoln National”) is an insurance company that provides employee welfare benefit plans, including group life insurance policies, and administers claims brought under these plans. Dkts. #1 at ¶ 1.1, #14 at 3, ¶ ¶ 8-10, and #22 at 2. Lincoln National issued Group Policy No. 000010213421(the “Basic” Policy) and Group Policy No. GL 000400001000-20816 (the “Voluntary” Policy) (together, the “Policies”) to Healthcare Partners, LLC, which employed the decedent, Joseph B. Gonzales. Dkt. #1 at ¶ 1.1 and Exs. A and B thereto.

         Mr. Gonzales[1] resided in Skagit County, Washington. Dkts. #1 at ¶ 3.1 and #14 at 2, ¶ 2. He began working as a materials management supervisor for Healthcare Partners, LLC (specifically the Everett Clinic, which was subsequently acquired by Davita), on February 20, 2017. Dkts. #1 at ¶ 1.1 and #14 at 2 ¶ ¶ 4-5. As noted above, Lincoln National issued the insurance policies at issue to Healthcare Partners. Dkt. #1 at ¶ 1.1 and Exs. A and B thereto. The policies provided group life insurance benefits for Healthcare Partners employees, such as Mr. Gonzales. Id. at ¶ 3.2 and Dkt. #14 at 3 ¶ ¶ 7-10. The policies became effective for Mr. Gonzales on April 1, 2017. Dkt. #1 at ¶ 3.3.

         On or about Monday, March 13, 2017, Mr. Gonzales designated Ms. Ridgway as “the sole” beneficiary of all of the life insurance policies. Dkts. #14-1 at ¶ 6 and Ex. A thereto, #1 at ¶3.3 and #22 at 2, fn. 4. Mr. Gonzales informed Ms. Ridgway of this decision in an email at 9:37 a.m. on that date.[2] Dkt. #14-1 at ¶ 6, Ex. A.[3]

         Mr. Gonzales passed away on July 16, 2017, due to recurrent ventricular fibrillation and ischemic cardio myopathy. Dkt. #1 at ¶ 3.4 and #14 at 1, ¶ 1. Plaintiff then became obligated to pay $61, 000 in benefits under the Basic Policy, and $181, 000 in benefits under the Voluntary Policy. Dkt. #1 at ¶ 3.5.

         On August 1, 2017, the Skagit County Superior Court appointed Mr. Gonzales's daughters, Amanda Gonzales and Bethany Kristiansen, as co-personal representatives of his Estate. Id. at ¶ 3.6.

         On August 16, 2017, Ms. Ridgway submitted a claim to Lincoln National for the life insurance benefits. ¶ 3.7 and Dkt. #14 at 8, ¶ 23 and Ex. D thereto. On August 24, 2017, Claim Examiner Nadine Beck contacted Mr. Gonzales's employer's Benefits Specialist, Nykeia Tolliver.[4] Dkt. #37 at ¶ 7. During that phone call, Ms. Tolliver informed Ms. Beck that Mr. Gonzales's daughters, Amanda Gonzales and Bethany Kristiansen, disputed Ms. Ridgway's designation as the beneficiary under the policies, and said she had received a letter from Ms. Gonzales on August 1, 2017, to that effect. Dkt. #37 at ¶ 7. Ms. Beck asked for a copy of that letter, which she received that afternoon. Id. at ¶ 8 and Ex. A thereto.

         As a result, Ms. Beck contacted a Senior Claims Examiner, Kaline Carter, seeking guidance about how to proceed. Id. at ¶ 9. Ms. Carter questioned why Ms. Beck had failed to pay the claim to Ms. Ridgway as planned, particularly because there had been no dispute on record at the time the claim was made. Dkt. #23-1, Ex. G. Ms. Carter then noted that when Ms. Beck had initially contacted the employer about beneficiary information, no dispute had been mentioned. Id. Ms. Carter then directed that, as a result of Ms. Beck's actions, Ms. Beck would need to contact Ms. Ridgway's attorney and Ms. Gonzales and Ms. Kristiansen to determine if there was an actual dispute, the basis of the dispute and whether the dispute could be resolved informally, otherwise, legal action would be necessary. Id.

         Ms. Beck sent a letter to Ms. Gonzales on August 28, 2017, in which she requested a formal explanation of any contest to Ms. Ridgway's claim, as well as the name of Ms. Gonzales's attorney. Dkt. #37 at ¶ 10. She also contacted Ms. Ridgway's counsel and informed him that Ms. Gonzales and Ms. Kristiansen disputed Ms. Ridgway's claim. Id. at ¶ 11. On September 7, 2017, a lawyer representing Ms. Gonzales and Ms. Kristiansen responded, stating that they contested “payment of the death benefit to anyone other than [Mr. Gonzales's] children or estate as they have reason to believe the beneficiary was recently changed as a result of undue influence.” Dkt. #23, Ex. K. On September 18, 2017, Ms. Ridgway's counsel sent a letter to Ms. Beck disputing the merits of the daughters' claim of undue influence. Dkt. #23-1, Ex. L.

         On October 3, 2017, Plaintiff filed the instant Complaint for Interpleader. Ms. Ridgway followed by filing a Motion for Summary Judgment on December 5, 2017, prior to any Answers to the Complaint being filed by any party, and prior to Plaintiff seeking an Interpleader Judgment. Dkt. #14. On December 13, 2017, co-Defendants Amanda Gonzales, Bethany Kristiansen and the Estate of Joseph Gonzales filed an Answer to the Complaint and Cross-Claims for Undue Influence and Unjust Enrichment against Ms. Ridgway. Dkt. #18. Two days later, Ms. Ridgway filed a motion for extension of time to file her Answer to the Complaint and to the Cross-Claims, along with a motion for default against Co-Defendant Joseph M. Gonzales. Dkt. #20. This was followed by a Motion for Judgment in Interpleader filed by Plaintiff. Dkt. #22.

         On January 5, 2018, while these motions were pending, Ms. Ridgway filed her Answer to the Complaint and to Co-Defendants' Cross-Claims, and asserted a Counterclaim against Plaintiff for violations of 29 U.S.C. § 1132. Dkt. #33. Plaintiff filed its Answer to the Counterclaim on January 12, 2018. Dkt. #35. The pending motions are now ripe for review.


         A. Procedural Posture of this Matter

         As an initial matter, the Court addresses the procedural posture of this matter. As noted above, at the time Ms. Ridgway filed her Motion for Summary Judgment, no Answers to the interpleader Complaint had been filed (including her own), and Plaintiff had not yet moved to interplead the disputed funds to the Court. As a result, Plaintiff responded that summary judgment should be denied as premature, and asked the Court to address its Motion for Interpleader Judgment first. Dkt. #24.

         Since then, Answers to the interpleader Complaint have been filed by all Defendants except for Mr. Joseph M. Gonzales, and Plaintiff has moved for Judgment in Interpleader. Dkts. #18, #22, #33 and #35. In addition, the Court acknowledges that the proper determination as to how policy proceeds should be disbursed is through the interpleader action itself. Thus, the Court agrees with Plaintiff that Ms. Ridgway's summary judgment motion was premature at the time it was filed, but finds that it should now be determined after the Court addresses whether interpleader is appropriate. That conclusion comports with the way interpleaders are typically addressed in other Districts. For example, in State Farm Life Ins. Co. v. Jonas, the U.S. District Court for the Southern District of Indiana found that summary judgment was inappropriate when the Court had not yet determined whether the prerequisites to statutory interpleader had been met, and whether interpleader was available. 2013 U.S. Dist. LEXIS 86703, *3-4 (S.D. Ind. June 20, 2013).

         In addition, the U.S. District Courts for the Eastern District of Louisiana and the Southern District of Mississippi have also found summary judgment to be premature when filed prior to an interpleader determination. In Bunkers Int'l Corp., the Louisiana District Court explained:

By filing the instant motion for partial summary judgment, BIC has essentially asked the Court to bypass the first stage of the interpleader action and decide the merits of its claim under stage two. Although admittedly, on its face, this action appears to present a classic textbook example of interpleader, see Hapag-Lloyd, 2016 U.S. App. LEXIS 3232, 2016 WL 731776, at *3, a decision has not been rendered on the stage-one issue. For this reason, BIC's motion for summary judgment is premature at this time. See Progressive Am. Ins. Co. v. Thorn, No. 06-717, 2007 U.S. Dist. LEXIS 33600, 2007 WL 1381576, at *3 (M.D. Ala. May 8, 2007) (denying motion for summary judgment as premature because stage one of the interpleader claim had not yet come before the court by motion or otherwise).

Bunkers Int'l Corp. v. M/V Wuchow, 2016 U.S. Dist. LEXIS 37889, *10 (E.D. La. March 23, 2016). Likewise, the Mississippi District Court noted:

“There can be no determination of rights between the claimants to the insurance benefits until there has first been a determination that interpleader is appropriate.” Markes v. Metropolitan Life Ins. Co., No. 98-cv-0391, 1999 U.S. Dist. LEXIS 1161, 1999 WL 55220, at *2 (N.D.N.Y. Jan. 26, 1999) (denying plaintiff's motion for default judgment on the merits as premature where “stage one of the traditional interpleader claim has yet to come before the Court by motion or otherwise”); see also Progressive Am. Ins. Co. v. Thorn, No. 2:06cv717, 2007 U.S. Dist. LEXIS 33600, 2007 WL 1381576, at * 2-3 (M.D. Ala. May 8, 2007).

Landrum v. Conseco Life Ins. Co., 2012 U.S. Dist. LEXIS 81861, *5 (S.D.Miss. June 13, 2012).

         This Court finds that reasoning persuasive in this case. Because Ms. Ridgway's motion for summary judgment was filed before any Answers to the interpleader Complaint had been filed, and before the Court has made a determination as to whether interpleader is appropriate, the Court finds that the merits of the summary judgment motion should be addressed after the Court's determination of whether interpleading is appropriate. Because both motions are now before the Court, both motions will be resolved through this Order. See N.Y. Life Ins. Co. v. Connecticut Development Authority, 700 F.2d 91, 95 (2nd Cir. 1983) (‚ÄúNormally an interpleader action is concluded in two stages, the first determining that the requirements of [federal jurisdiction] are met and relieving the plaintiff ...

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