United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
VIRGINIA M. KENDALL, District Judge.
Josefina Mounts filed a complaint against Metropolitan Life Insurance Company ("MetLife") in the Circuit Court of Cook County, Illinois seeking $775, 000 to be paid from a life insurance policy on her daughter, Beatrice Mounts. MetLife timely removed the case to federal court and filed an interpleader counterclaim and third party complaint. (Dkt. No. 10). In the interpleader action, MetLife added Josephine Mounts in her capacity as executor of Beatrice Mounts's estate (the "Estate") and Ismael Gomez, the decedent's husband, as interpleader defendants. The Estate, Josefina, and Gomez had all filed claims on the proceeds of Beatrice Mounts's life insurance policy. Both Gomez and Josefina filed motions to dismiss the interpleader action. (Dkt. Nos. 16, 23). The Court granted leave to Josefina to amend her complaint to add Gomez and the Estate as parties. (Dkt. No. 32). Josephine then filed a motion to remand because the addition of Gomez and the Estate destroyed the Court's diversity jurisdiction. (Dkt. No. 40). MetLife opposed the motion to remand and moved the Court to reconsider its order granting Josefina leave to amend her complaint without analyzing the effect of the amendment on the Court's jurisdiction. (Dkt. No. 47).
Beatrice Mounts, the decedent, died with a valid life insurance policy issued by MetLIfe. (Dkt. No. 10 ¶ 8). The policy's benefits totaled $775, 000. ( Id. ¶ 10).
Beatrice submitted a beneficiary form in September 2012 designating Josefina, her mother, as the primary beneficiary and her sister Josephine, as the contingent beneficiary. ( Id. ¶ 11; Dkt. No. 10-3). In October 2012, MetLife informed Beatrice that it could not process the beneficiary form because it was not legible (Dkt. No. 10 ¶ 12). MetLife sent her a new beneficiary form to complete, but she never submitted it. ( Id. ¶¶ 12-13). As a result, MetLife determined that Beatrice did not have a valid beneficiary designation when she died on July 28, 2013. ( Id. ¶¶ 9, 14). The life insurance policy provided that if no beneficiary had been designated when the insured died, MetLife would pay the proceeds to the insured's estate. ( Id. ¶ 8). However, the policy also states that MetLife may pay all or part of the benefits to the insured's surviving spouse, child, parent, or sibling. ( Id. ¶ 8).
Following Beatrice Mounts' death, several family members asserted their claims to the MetLife policy benefits. In August 2013, Josefina submitted a Claimant's Affidavit to MetLife. Unbeknownst to Josefina in September 2013, Gomez, the Decedent's husband, submitted a Claimant's Statement. Also unbeknownst to Josefina in October 2013, Josephine submitted a Claimant's Affidavit as executor of the Estate. ( Id. ¶¶ 15-17; Dkt. Nos. 10-5, 10-6, 10-7). Josephine also sent MetLife a notice of intent to open a probate estate for the Decedent. (Dkt. No. 10-7).
Still unaware that others had filed claims on Beatrice's insurance policy, Josefina filed suit against MetLife in the Circuit Court of Cook County, Illinois on December 16, 2013 seeking a declaratory judgment that she was the proper beneficiary of the life insurance policy. (Dkt. No. 10 ¶ 19; Dkt. No. 1-1). On December 23, 2013, MetLife notified all of the claimants that their claims were adverse to one another. MetLife was served with Josefina's complaint on January 6, 2014. (Dkt. No. 1 ¶ 2). In February 2014, MetLife timely removed the case to federal court based on diversity of citizenship. (Dkt. No. 1). MetLife then filed an interpleader counterclaim and third party complaint, naming Josefina, the Estate, and Gomez as interpleader defendants. (Dkt. No. 10). Both Gomez and Josefina filed motions to dismiss MetLife's interpleader action. (Dkt. Nos. 16, 23).
Josefina moved the court for leave to amend her complaint to add parties pursuant to Fed.R.Civ.P. 15 and 19, but did not inform the court of the citizenship of either of the parties she sought to add. (Dkt. No. 25). The Court granted the Plaintiff's motion without hearing and Josefina amended her complaint to add Gomez and the Estate as defendants. (Dkt. No. 32). Both the Estate and Gomez, like Josefina, are Illinois residents. The Estate then filed a motion to remand this action and requested the Court to grant either or both Gomez's or Josefina Mounts' motion to dismiss; grant the Plaintiff's motion to amend and add parties; and remand the case to State court under 28 U.S.C. § 1447(e). (Dkt. No. 27).
When considering a motion to dismiss under Rule 12(b)(6), the Court accepts as true all facts alleged in the complaint and construes all reasonable inferences in favor of the plaintiff. Yeftich v. Navistar, Inc., 722 F.3d 911, 915 (7th Cir. 2013). To state a claim upon which relief can be granted, a compliant must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). "Detailed factual allegations" are not required, but the plaintiff must allege facts that when "accepted as true... state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). To determine whether a complaint meets this standard, the "reviewing court [must] draw on its judicial experience and common sense." Iqbal, 556 U.S. at 678.
A. Motions to Dismiss the Interpleader Action
Interpleader exists to resolve disputes in which multiple parties assert claims against a single stakeholder alleging that the stakeholder is liable to them for the same res that can be paid only once, the proceeds of a single insurance policy for example. Interpleader protects a party from "double liability or the vexation of litigating conflicting claims." Aaron v. Mahl, 550 F.3d 659, 663 (7th Cir. 2008). Through interpleader, a disinterested stakeholder can bring all competing claimants into a single forum to resolve the dispute. Rule 22 allows a party to join as interpleader defendants any "persons with claims that may expose [the interpleader] plaintiff to double or multiple liability." The procedure is also available to a defendant by way of counterclaim. Fed.R.Civ.P. 22(a)(2). To justify the use of interpleader, the stakeholder must have a "real and reasonable fear of double liability or conflicting claims." Aaron, 550 F.3d at 663. Diversity jurisdiction exists over Rule 22 interpleader actions when the stakeholder is diverse from all of the claimants, but the claimants need not be diverse from one another. See Arnold v. KJD Real Estate, LLC, 752 F.3d 700, 704 (7th Cir. 2014); see also Stewart Oil Co. v. Sohio Petroleum Co., 315 F.2d 759, 762 (7th Cir. 1963) ("Under Rule 22 interpleader, diversity of citizenship between an interested stakeholder plaintiff and all adverse claimants is all that is required.")).
MetLife has pled, and no claimant has disputed, that it has a real and reasonable fear of double liability or conflicting claims. Indeed, it has already received claims from three parties for the proceeds of Beatrice Mounts's life insurance policy. No party disputes that complete diversity exists. MetLife is a Delaware corporation with its principal place of business in New York while each of the claimants is a resident of Illinois. The amount in controversy is $775, 000. See 28 U.S.C. § 1332. Nevertheless, Gomez and Josefina moved to dismiss the interpleader counterclaim and third party complaint arguing that MetLife is not a neutral and disinterested stakeholder because its rejection of the beneficiary form caused the present dispute, it possesses information necessary to the resolution of the competing claims, and may be independently liable to the plaintiffs. (Dkt. Nos. 16, 23). Neither explains why MetLife might be exposed to liability independent of the policy; neither has filed a counterclaim against MetLife and the original complaint seeks only a declaratory judgment that Josefina is entitled to the proceeds of the policy. Even if counterclaims against MetLife did exist, however, the presence of counterclaims against an interpleader plaintiff do not render interpleader unavailable. See e.g., Metropolitan Life Ins. Co. v. Johnson, No. 11 C 8210, 2012 WL 2192283 ...