(PS) Metropolitan Life Ins. Co. v. Sanchez

— 1 — — 2 — — 3 — — 4 — — 5 — — 6 — — 7 — 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA — 10 — 11 METROPOLITAN LIFE INSURANCE Case No. 2:24-cv-03278-TLN-CSK COMPANY, — 12 — Plaintiff-in13 Interpleader, ORDER GRANTING PLAINTIFF-ININTERPLEADER’S AMENDED 14 v. APPLICATION TO DEPOSIT FUNDS 15 SELENA SANCHEZ, et al., 16 Defendants-in- (ECF No. 28) Interpleader. — 17 — 18 Pending before the Court is Plaintiff-in-Interpleader Metropolitan Life Insurance 19 Company’s amended application for leave to deposit funds into the Court registry 20 pursuant to 28 U.S.C. § 1335 and Federal Rule of Civil Procedure 67. (ECF No. 28.)1 No 21 party has filed an opposition and because the time to do so has passed, the Court 22 construes the amended application as unopposed. See ECF No. 29; E.D. Cal. Local 23 Rule 230(c). Pursuant to Local Rule 230(g), the Court submits the amended application 24 upon the record and pleadings on file. For the reasons that follow, the Court ORDERS 25 Plaintiff’s amended application be GRANTED. 26 / / / — 27 — 1 This matter proceeds before the undersigned pursuant to 28 U.S.C. § 636 , Fed. R. 28 Civ. P. 72, Local Rule 150 and Local Rule 302(c). 1 I. The Complaint-in-Interpleader 2 This interpleader action is brought pursuant to Federal Rule of Civil Procedure 22. 3 The Complaint-in-Interpleader alleges Decedent Neal Sanchez was an employee of JM 4 Eagle, and a participant in the JM Eagle Life and Disability Program (“Plan”), an ERISA5 regulated employee welfare benefit plan sponsored by JM Eagle Life and funded by a 6 group certificate of life insurance issued by Plaintiff-in-Interpleader. Compl. ¶ 8 (ECF No. 7 1). Plaintiff-in-Interpleader is also the claims administrator of Sanchez’s Plan. Id. ¶ 9 . On 8 July 30, 2015, Sanchez died in an accident. Id. ¶¶ 16, 18 . At the time of Decedent’s 9 death, he was enrolled under the Plan for optional life insurance coverage in the amount 10 of $29,0000, Optional Life in the amount of $29,000, and Personal AD&D in the amount 11 of $29,000, which became payable to Decedent’s beneficiary or beneficiaries upon his 12 death. Id. ¶ 17 . On January 19, 2016, Plaintiff denied the claim for Personal AD&D 13 benefits based on the Plan’s drunk driving exclusion because the toxicology report 14 showed Decedent had a BAC of 0.18% at the time of the accident that caused his death. — 15 — Id. ¶ 18 . Accordingly, the benefits payable to Decedent’s beneficiary or beneficiaries 16 were for a total of $58,000. Id. ¶ 19 . 17 Decedent’s beneficiary designation form for the Plan dated March 5, 2014, 18 designates four Defendants-in-Interpleader Selena Sanchez, Anthony J. Sanchez, 19 Armando J. Sanchez, and Haydee Arias Sanchez as equal beneficiaries of 25% each. 20 Compl. ¶ 12. On or about January 1, 2015, Decedent’s beneficiary designation for his 21 401(k) was updated naming Defendants-in-Interpleader Selena Sanchez, Anthony J. 22 Sanchez, and Armando J. Sanchez each as 33% beneficiaries. Id. ¶ 15 . However, due 23 to a technical error in the benefits system that was not discovered until July 2015, the 24 benefits system did not allow JM Eagle employees to update their beneficiary 25 designations for their life insurance benefits and it is unknown to Plaintiff-in-Interpleader 26 if Decedent had intended to make the same beneficiary designation changes to his life 27 insurance as his 401(k). Id. ¶¶ 14-15, 26 . 28 On August 10, 2015, Defendant-in-Interpleader Selena Sanchez filed a 1 Claimant’s Statement. Compl. ¶ 20. Defendant-in-Interpleader Haydee Arias Sanchez 2 completed Claimant’s Statements on behalf of Defendants Anthony and Armando 3 Sanchez, who were minors at the time. Id. ¶¶ 21-22 . As of November 2015, Plaintiff-in4 Interpleader has paid out Defendants Selena, Anthony and Armando Sanchez’s 5 uncontested share of 25% of the Plan benefits. Id. ¶¶ 23-25 . Plaintiff-in-Interpleader has 6 not been able to determine whether Decedent would have changed his beneficiary 7 designations for his life insurance benefits to match his beneficiary designations for his 8 401(k) had it not been for the technical malfunctions on the JM Eagle’s benefits system. — 9 — Id. ¶ 26 . Plaintiff-in-Interpleader asserts if it is determined that Decedent would have 10 changed his beneficiary designation on his life insurance benefits consistent with the 11 changes made to his 40(k) beneficiary designations, thereby excluding Defendant 12 Haydee Sanchez as a beneficiary, the remaining 25% of the overall Plan benefits would 13 be payable to Defendants Selena, Anthony, and Armando Sanchez in equal shares. Id. 14 ¶ 27. However, if it is determined that Decedent would not have changed his beneficiary 15 designations on his life insurance benefits and therefore not exclude Defendant-in16 Interpleader Haydee Sanchez as a beneficiary, the remaining Plan benefits, equaling 17 25% of the overall Plan benefits, would be payable to Haydee Sanchez. Id. ¶ 28 . Thus, 18 Plaintiff-in-Interpleader contends it has remained unable to disburse the remaining Plan 19 benefits “without risking exposure of itself, the Plan and JM Eagle to multiple claims and 20 liabilities.” Id. ¶ 44 . Further, Plaintiff-in-Interpleader contends as a “mere stakeholder” it 21 makes no claim to the remaining Plan benefits other than payment of its reasonable 22 attorney’s fees and costs in connection with this action. Id. ¶ 45 . 23 II. DISCUSSION 24 Federal Rule of Civil Procedure 22(a) and 28 U.S.C. § 1335 permit a party to file 25 an interpleader claim when the party faces possible exposure to multiple liabilities from 26 the defendants. “The purpose of interpleader is for the stakeholder to ‘protect itself 27 against the problems posed by multiple claimants in a single fund.’” Mack v. 28 Kuckenmeister, 619 F.3d 1010 , 1024 (9th Cir. 2010) (quoting Minnesota Mut. Life Ins. 1 Co. v. Ensley, 174 F.3d 977, 980 (9th Cir. 1999)). 2 Through its amended application, Plaintiff-in-Interpleader seeks leave to deposit 3 the Plan’s remaining life insurance benefits at issue, in the amount of $10,159.99 plus 4 applicable interest, into the Court Registry. Pl. Mot. (ECF No. 28). Federal Rule of Civil 5 Procedure Rule 67(a) provides that: 6 If any part of the relief sought is a money judgment or the disposition of a sum of money or some other deliverable 7 thing, a party on notice to every other party and by leave of court may deposit with the court all or part of the money or 8 thing, whether or not that party claims any of it. 9 “The core purpose of Rule 67 is to relieve a party who holds a contested fund from 10 responsibility for disbursement of that fund among those claiming some entitlement 11 thereto.” Lasheen v. Loomis Co., 2018 WL 4679305 , at *3 (E.D. Cal. Sept. 28, 2018) 12 (quoting Alstom Caribe, Inc. v. George P. Reintjes Co., 484 F.3d 106, 113 (1st Cir. 13 2007)). Money deposited under Rule 67 “must be deposited in an interest-bearing 14 account or invested in a court-approved, interest-bearing instrument.” Fed. R. Civ. P. 15 67(b); see also Star Envirotech, Inc. v. Redline Detection, LLC, 2016 WL 1069039 , at *6 16 (C.D. Cal. Mar. 17, 2016) (ordering the disputed funds to be deposited in accordance 17 with Rule 67(b)). “The decision to allow the deposit of property pursuant to Rule 67 is 18 discretionary.” Lasheen, 2018 WL 4679305 , at *3 (citation omitted). 19 Here, the Court finds that deposit of Decedent’s remaining life insurance benefits 20 in the Plan into an interest-bearing account is appropriate. Plaintiff-in-Interpleader 21 contends it is a “mere disinterested stakeholder and makes no claim to these benefits 22 other than payment of its reasonable attorney’s fees and costs in connection with this 23 action.” Pl. Mot. at 2. Plaintiff-in-Interpleader has been unable to determine who among 24 the Defendants-in-Interpleader is entitled to Decedent’s remaining life insurance benefits 25 due to the unresolved issue of whether Decedent would have changed his beneficiary 26 designations for his life insurance Plan benefits but for the technical malfunctions of JM 27 Eagle’s benefits system in 2015. Compl. ¶¶ 39-42. As a result, Plaintiff-in-Interpleader 28 remains unable to disburse the remaining Plan benefits without risking exposure to 1 | multiple claims and liabilities. /d. | 44. Plaintiff-in-Interpleader also alleges that it is 2 | “ready, willing, and able to pay” the remaining Plan benefits to whichever Defendants-in3 | Interpleader the Court designates. /d. 46. Given multiple parties may claim entitlement 4 | to Decedent’s remaining Plan benefits, deposit of the remaining life insurance benefits in 5 | the Plan into an interest-bearing account is appropriate to relieve Plaintiff-in-Interpleader 6 || from responsibility for the remaining Plan benefits while the Court determines how the 7 || remaining Plan benefits should be distributed. See Star Envirotech, Inc., 2016 WL 8 | 1069039, at *6. In addition, there is no opposition by any party to Plaintiff-in9 | Interpleader’s amended application. See Docket; Lasheen, 2018 WL 4679305 , at *3. 10 Accordingly, Plaintiff-in-Interpleader’s amended application is granted for Plaintiff11 | in-Interpleader, or its authorized agent or representative, to deposit a check made 12 | payable to the Clerk of the United States District Court for the Eastern District of 13 | California in the amount of $10,159.99, plus any appliable interest, into an interest14 | bearing account in the Court Registry. 15 In conclusion, IT |S HEREBY ORDERED that: 16 1. Plaintiff-in-Interpleader’s amended application for leave to deposit funds 17 (ECF No. 28) is GRANTED; and 18 2. Within 14 days of the date of entry of this order, Plaintiff-in-Interpleader 19 shall issue and deliver a check payable to the Clerk of the United States 20 District Court for the Eastern District of California in the amount of 21 $10,159.99 plus any appliable interest into an interest-bearing account in 22 the Court Registry. — 23 — 24 | Dated: September 3, 2025 C i s 25 CHI SOO KIM 26 UNITED STATES MAGISTRATE JUDGE 27 || 4, metr3278.24 — 28 —