17‐1804‐cv N.Y. Life Ins. Co. v. Sahani v. Singh
UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURTʹS LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION ʺSUMMARY ORDERʺ). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 16th day of April, two thousand eighteen.
PRESENT: GUIDO CALABRESI, DENNY CHIN, SUSAN L. CARNEY, Circuit Judges.
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NEW YORK LIFE INSURANCE COMPANY, Plaintiff‐Counter Defendant‐ Appellee,
v. 17‐1804‐cv
SEEMA SAHANI, Defendant‐Cross Defendant‐ Appellee,
v.
SHUKTI SINGH, INDIVIDUALLY AND AS ADMINISTRATOR OF THE ESTATE OF SANJEEV SINGH (A/K/A/ SANJEEV CHARLES),
Defendant‐Cross Claimant‐ Counter Claimant‐Appellant.
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FOR PLAINTIFF‐COUNTER DEIRDRE A. CONNOLLY, dʹArcambal DEFENDANT‐APPELLEE: Ousley & Cuyler Burk LLP, New York, New York.
FOR DEFENDANT‐CROSS MARANDA E. FRITZ (Shaun McElhenny, on DEFENDANT‐APPELLEE: the brief), Thompson Hine LLP, New York, New York.
FOR DEFENDANT‐CROSS ERIC J. DINNOCENZO, Law Offices of Eric CLAIMANT‐COUNTER Dinnocenzo, New York, New York. CLAIMANT‐APPELLANT:
Appeal from the United States District Court for the Eastern District of
New York (Gershon, J.).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,
ADJUDGED, AND DECREED that the judgment of the district court is AFFIRMED.
Plaintiff‐counter defendant‐appellee New York Life Insurance Company
(ʺNYLʺ) filed this interpleader action to adjudicate competing claims to $1.25 million in
benefits from two life insurance policies made by the insured decedentʹs mother,
defendant‐cross claimant‐counter claimant‐appellant Shukti Singh, and his ex‐wife,
defendant‐cross defendant‐appellee Seema Sahani. Singh appeals the district courtʹs
June 7, 2017 judgment, entered pursuant to an order entered May 26, 2017, granting
judgment in favor of Sahani for the entire amount on deposit with the court and
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dismissing all of Singhʹs claims with prejudice. We assume the partiesʹ familiarity with
the underlying facts, procedural history, and issues on appeal.
In 2001, NYL issued a $250,000 whole life insurance policy to the
decedent, who designated Singh as the sole primary beneficiary. In 2007, the decedent
and Sahani married. Shortly thereafter, the decedent transferred ownership of the
policy to Sahani, designated Sahani as the first beneficiary, and designated Singh as the
second beneficiary. In 2007, NYL also issued a $1 million term life insurance policy on
decedentʹs life to Sahani, who was both the owner and sole primary beneficiary of the
policy. The decedent signed the operative documents naming Sahani the owner of both
policies. In 2013, the decedent and Sahani divorced. In 2014, the decedent died
intestate. Both Singh and Sahani then made claims to NYL under both policies.
On September 30, 2014, NYL filed a statutory interpleader action naming
Singh (an Indiana citizen) and Sahani (a New York citizen) as defendants pursuant to
28 U.S.C. § 1335 and sought permission to deposit the proceeds of both policies (the
ʺinterpleader fundʺ) with the court. In her first amended answer, Singh asserted
counterclaims against NYL and cross‐claims against Sahani for breach of contract and
violation of New York Estates, Powers and Trusts Law (ʺEPTLʺ) § 5–1.4, as well as
various state law cross‐claims against Sahani alone. Singh noted her intent to become
administrator of her sonʹs estate (the ʺEstateʺ) and sought payment of the proceeds of
both policies to either Singh or the Estate.
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On May 8, 2015, Singh was appointed administrator of the Estate. On
June 8, 2015, Singh moved for the Estate to intervene pursuant to Federal Rule of Civil
Procedure 24 and to file a second amended answer, in which she proposed to assert
claims similar to those in the amended answer but sought payment of the $1,000,000
term life policy to the Estate (and not her individually) and payment of the $250,000
whole life policy to her individually (but not the Estate).1
On January 12, 2016, the magistrate judge issued a Report and
Recommendation (ʺR&Rʺ) recommending denial of Singhʹs motions on the grounds of
futility because the claims were not cognizable or time‐barred. By order dated April 11,
2016, the district court adopted the R&R in its entirety and directed Singh to show cause
why her pending counterclaims and cross‐claims should not be dismissed, why death
benefits should not be paid to Sahani, and why NYL should not be permitted to amend
its complaint to add the Estate as a defendant.
By order dated March 7, 2017, the district court dismissed Singhʹs
counterclaims and cross‐claims against all parties and denied Singhʹs motions for
reconsideration, to dismiss, and for abstention, rejecting Singhʹs argument that the court
lacked subject matter jurisdiction because (1) NYL had not deposited the interpleader
1 On June 7, 2015, Singh filed a parallel suit in New York Supreme Court, Queens County, against NYL, Sahani, and three NYL insurance agents arising out of the same two policies at issue in this case. On April 4, 2016, the state court stayed the suit pending resolution of certain motions in this action. That stay still appears to be in place.
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fund with the court, and (2) there was no minimal diversity for the $1,000,000 term life
policy because the Estate and Sahani were both New York citizens. The court also
granted NYLʹs motion for leave to deposit the interpleader fund into the registry of the
court and its motion for leave to file an amended complaint joining the Estate as an
interpleader defendant.
On March 10, 2017, NYL filed its amended complaint adding the Estate as
an interpleader defendant. On March 17, 2017, NYL deposited the interpleader fund
with the district court. Singhʹs answer to the amended complaint largely reasserted the
counterclaims and cross‐claims that the district court dismissed in its March 7, 2017
order.2 At a conference on May 25, 2017, the district court orally dismissed Singhʹs
counterclaims and cross‐claims against NYL and Sahani with prejudice, granted NYLʹs
motion for a discharge pursuant to 28 U.S.C. § 2361, and granted summary judgment
for Sahani for death benefits in the full amount of the interpleader fund on deposit with
the court. Judgment was entered June 7, 2017. Singh appealed.3
2 Singh alleged causes of action against both Sahani and NYL for: declaratory relief, a permanent injunction, breach of contract (NYL alone), fraudulent misrepresentation, fraudulent concealment, fraudulent inducement, breach of fiduciary duty, aiding or abetting a breach of fiduciary duty (NYL alone), undue influence, duress (Sahani alone), equitable estoppel, mistake of fact, tortious interference with contract, EPTL § 5–1.4, and negligent misrepresentation. 3 On July 13, 2017, the district court issued an order denying Singhʹs motion to stay distribution of the interpleader fund pending the resolution of this appeal, but granting a limited stay pending the resolution of Singhʹs intended motion to this Court to stay enforcement of the judgment pursuant to Fed. R. App. P. 8(a)(2). On July 26, 2017, Singh filed a motion to stay in this Court. On October 31, 2017, Singhʹs motion was denied.
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Singh argues that the district court lacked subject matter jurisdiction
under 28 U.S.C. § 1335. Singh also contends that the district court erred by joining the
Estate as an interpleader defendant under Rules 15 and 19 after denying intervention
under Rule 24; by failing to toll the statute of limitations or apply equitable estoppel to
Singhʹs state law claims; and by failing to apply the plain language of EPTL § 5–1.4. We
reject Singhʹs arguments and address each in turn.
I. Subject Matter Jurisdiction Under 28 U.S.C. § 1335(a)
In reviewing a district courtʹs determination of subject matter jurisdiction,
we review factual findings for clear error and legal conclusions de novo. Tandon v.
Captainʹs Cove Marina of Bridgeport, Inc., 752 F.3d 239, 243 (2d Cir. 2014).
The federal interpleader statute confers original jurisdiction on federal
district courts if: (1) ʺ[t]wo or more adverse claimants, of diverse citizenship . . . , are
claiming or may claimʺ entitlement to ʺmoney or property of the value of $500 or more,ʺ
and (2) ʺthe plaintiff has deposited such money or property . . . into the registry of the
court, there to abide the judgment of the court, or has given bond payable to the clerk of
the court in such amount and with such surety as the court or judge may deem proper
. . . .ʺ 28 U.S.C. § 1335(a). ʺIt is well established that the interpleader statute is ʹremedial
and to be liberally construed,ʹ particularly to prevent races to judgment and the
unfairness of multiple and potentially conflicting obligations.ʺ Hapag‐Lloyd
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Aktiengesellschaft v. U.S. Oil Trading LLC, 814 F.3d 146, 151 (2d Cir. 2016) (quoting State
Farm Fire & Cas. Co. v. Tashire, 386 U.S. 523, 533 (1967)).
The first requirement has been ʺuniformly construed to require only
ʹminimal diversity,ʹ that is, diversity of citizenship between two or more claimants,
without regard to the circumstance that other rival claimants may be co‐citizens.ʺ
Tashire, 386 U.S. at 530. As for the second requirement, courts disagree over whether
deposit is a prerequisite to jurisdiction or a condition of maintaining jurisdiction.
Compare N.Y. Life Ins. Co. v. Apostolidis, 841 F. Supp. 2d 711, 717 (E.D.N.Y. 2012)
(jurisdictional requirement met where plaintiff alleges ʺthat it has deposited or is
depositing the fund with the courtʺ), and William Penn Life Ins. Co. of N.Y. v. Viscuso, 569
F. Supp. 2d 355, 360 (S.D.N.Y. 2008) (deposit requirement ʺhas been construed as a
requirement of maintaining interpleader jurisdiction, rather than a prerequisite to
bringing suitʺ), with State Farm Life Ins. Co. v. Jonas, 775 F.3d 867, 869 (7th Cir. 2014) (no
interpleader jurisdiction where plaintiff ʺfiled a complaint but not a check or any other
financial instrument,ʺ because ʺ§ 1335(a)(2) requires cash on the barrelheadʺ).
Singh argues that the district court lacked subject matter jurisdiction over
the $1 million term life policy under 28 U.S.C. § 1335(a) because jurisdiction could not
exist until the deposit was made on March 17, 2017, at which point minimal diversity
was not satisfied because all adverse claimants to that policy (the Estate and Sahani)
were New York citizens. As a consequence, she contends that the district courtʹs prior
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April 12, 2016 and March 7, 2017 orders must be vacated, and that the district court
should abstain from adjudicating the adverse claims to the $250,000 whole life policy.4
We need not resolve the question of whether deposit is a prerequisite to
interpleader jursidiction, however, because even assuming that it is, we conclude that
any jurisdictional defect was cured nunc pro tunc when NYL made its deposit on March
17, 2017, before the district court entered final judgment.
Federal courts have authority to cure an initial jurisdictional defect nunc
pro tunc, particularly before entering final judgment. Herrick Co. v. SCS Commcʹns, Inc.,
251 F.3d 315, 329‐330, 330 n.12, (2d Cir. 2001). This authority derives from
ʺconsiderations of finality, efficiency, and economy,ʺ id. at 330 (quoting Caterpillar Inc. v.
Lewis, 519 U.S. 61, 75 (1996)), because ʺrequiring dismissal after years of litigation would
impose unnecessary and wasteful burdens on the parties, judges, and other litigants
waiting for judicial attention,ʺ id. (quoting Newman‐Green, Inc. v. Alfonzo‐Larrain, 490
U.S. 826, 836 (1989)).
In this case, the district court had interpleader jurisdiction at least as of
March 17, 2017, as the claimants were minimally diverse and NYL had made its deposit.
The interpleader statute identifies as claimants those who ʺare claiming or may claimʺ
entitlement to the disputed property, 28 U.S.C. § 1335(a)(1) (emphasis added), and thus
4 Singh concedes that, after the deposit was made on March 17, 2017, the district court had subject matter jurisdiction over the $250,000 whole life policy under 28 U.S.C. § 1335(a).
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interpleader jurisdiction ʺextends to potential, as well as actual, claims,ʺ Michelman v.
Lincoln Nat. Life Ins. Co., 685 F.3d 887, 895 (9th Cir. 2012) (citation omitted); see also
Ashton v. Josephine Bay Paul & C. Michael Paul Found., Inc., 918 F.2d 1065, 1068 n.2 (2d Cir.
1990). Given that Singh initially asserted a claim to the $1 million term life policy, she
never actually waived that claim, and ʺthe interpleader statute is ʹremedial and to be
liberally construed,ʹʺ Hapag‐Lloyd, 814 F.3d at 151 (citation omitted), we conclude that
Singh was at least a potential claimant to the $1 million term life policy,
notwithstanding her later litigation position representing that only the Estate (a New
York citizen) was asserting claims to the policy. See John Hancock Mut. Life Ins. Co. v.
Kraft, 200 F.2d 952, 953 (2d Cir. 1953) (ʺThe stakeholder should not be obliged at its peril
to determine which of two claimants has the better claim.ʺ); 7 Charles A. Wright &
Arthur R. Miller, Federal Practice and Procedure § 1707 (3d ed. Apr. 2017 Update)
(ʺ[C]ourts should not dismiss an interpleader action simply because the claims
confronting plaintiff have not been asserted.ʺ). As Singh was at least a potential
claimant to both policies throughout the litigation, the minimal diversity requirement
was satisfied: Singh is an Indiana citizen, and Sahani and the Estate are New York
citizens.
Therefore, in light of our teaching that the interpleader statute is ʺremedial
and to be liberally construed,ʺ Hapag‐Lloyd, 814 F.3d at 151 (citation omitted), and the
finality, efficiency, and economy principles that underlie the power of federal courts to
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cure jurisdictional defects, Herrick Co., 251 F.3d at 330, we conclude that any
jurisdictional defect that might have existed while the case was pending was cured nunc
pro tunc once NYL made its deposit.
II. Denial of Singhʹs Motion to Intervene on Behalf of the Estate
We review a district courtʹs denial of a motion to intervene for abuse of
discretion. Floyd v. City of New York, 770 F.3d 1051, 1057 (2d Cir. 2014). The district
court did not abuse its discretion by denying Singhʹs motion on behalf of the Estate to
intervene pursuant to Rule 24 on the grounds of futility, as the Estate asserted no viable
claims. See United States v. Glens Falls Newspapers, Inc., 160 F.3d 853, 854, 858 (2d Cir.
1998) (upholding denial of intervention on grounds of futility).
We discern no error in the district courtʹs decision to nonetheless grant
NYLʹs motion to join the Estate as an interpleader defendant pursuant to Rule 15, Rule
19, and 28 U.S.C. § 1335. Absent joinder of the Estate as a defendant, NYL could have
been left ʺsubject to a substantial risk of incurring double, multiple, or otherwise
inconsistent obligations,ʺ Fed. R. Civ. P. 19(a)(1)(B)(ii), and a core purpose of
interpleader is to ʺprevent . . . the unfairness of multiple and potentially conflicting
obligations,ʺ Hapag‐Lloyd, 814 F.3d at 151. Although Singh contends that the district
courtʹs decisions were inconsistent and erroneous, they were neither: intervention and
joinder serve different purposes and are evaluated by different standards.
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III. State Law Claims
We review the district courtʹs grant of a motion to dismiss de novo.
Williams v. Priatno, 829 F.3d 118, 121 (2d Cir. 2016). We also review de novo questions of
statutory interpretation, Roach v. Morse, 440 F.3d 53, 56 (2d Cir. 2006), other ʺlegal
conclusions, including [a district courtʹs] interpretation and application of
a statute of limitations,ʺ City of Pontiac Gen. Emps.ʹ Ret. Sys. v. MBIA, Inc., 637 F.3d 169,
173 (2d Cir. 2011), and a district courtʹs determination that a proposed amendment is
futile, Balintulo v. Ford Motor Co., 796 F.3d 160, 164 (2d Cir. 2015).
We conclude that the district court properly dismissed Singhʹs claims for
fraud and tortious interference because they were barred by the applicable statutes of
limitation.5 The causes of action accrued in 2007, when decedent signed the operative
documents, because the alleged misconduct underlying all of Singhʹs claims ‐‐ that
decedent was misled into transferring and assigning ownership of the policies to Sahani
‐‐ was readily discoverable from the face of those documents: the 2007 change of
beneficiary forms clearly showed that Sahani was being made the new owner and
primary beneficiary. See Cruden v. Bank of N.Y., 957 F.2d 961, 973 (2d Cir. 1992) (ʺIf the
circumstances of the alleged fraud would ʹsuggest to a person of ordinary intelligence
5 Singh does not discuss the dismissal of her remaining state law claims ‐‐ other than EPTL § 5–1.4, which we discuss infra ‐‐ and we therefore deem waived any such additional challenges. Tolbert v. Queens Coll., 242 F.3d 58, 75 (2d Cir. 2001) (ʺIt is a ʹsettled appellate rule that issues adverted to in a perfunctory manner, unaccompanied by some effort at developed argumentation, are deemed waived.ʹʺ (citation omitted)).
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the probability that he has been defrauded, a duty of inquiry arises . . . [and] knowledge
of the fraud will be imputed to him.ʹʺ (quoting Armstrong v. McAlpin, 699 F.2d 79, 88 (2d
Cir. 1983)). Singh did not file suit until 2014, exceeding the most generous applicable
statute of limitations of six years. See N.Y. C.P.L.R. 213(8) (six years for fraud);
Ullmannglass v. Oneida, Ltd., 927 N.Y.S.2d 702, 704 (3d Depʹt 2011) (three years for
tortious interference).
Singh asserts that the limitations period for claims arising out of a
fiduciary relationship does not accrue ʺuntil the fiduciary has openly repudiated his or
her obligation or the relationship has been otherwise terminated.ʺ Golden Pac. Bancorp v.
FDIC, 273 F.3d 509, 518 (2d Cir. 2001) (quoting Westchester Religious Inst. v. Kamerman,
691 N.Y.S.2d 502, 503 (1st Depʹt 1999)). Even assuming Singh is correct that her claim
was tolled until the decedent and Sahani divorced in 2013, it fails on the merits. Singhʹs
theory is premised on the assertion that the decedent was deceived into signing the
documents. But nothing pleaded in Singhʹs counter‐ or cross‐claims supports Singhʹs
allegation of misconduct: she does not allege that anything was said to mislead the
decedent, her allegations do not suggest that NYL or Sahani knew decedent
misunderstood the documents when he signed them, and by all accounts this was a
genuine marriage and the decedent and Sahani remained married for some six years.
Moreover, as noted above, the information Singh alleges should have been disclosed to
decedent when he signed the documents was apparent from the face of the documents
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themselves. ʺ[A]n agreement will not be overturned merely because it was
improvident, not the most advantageous to the dissatisfied party, or because a party
had a change of heart.ʺ Warren v. Rabinowitz, 644 N.Y.S.2d 315, 316 (2d Depʹt 1996)
(declining to overturn separation agreement). We also conclude that equitable estoppel
does not apply, as Singh has not established that she or decedent was induced to refrain
from filing suit over the alleged initial wrongdoing based on ʺsubsequent and specificʺ
instances of fraud, misrepresentation, or deception by NYL or Sahani. Zumpano v.
Quinn, 6 N.Y.3d 666, 674 (2006).
We also agree with the district court that EPTL § 5–1.4(a) does not apply.
Under the statute, a divorce ʺrevokes any revocable . . . disposition or appointment of
property made by a divorced individual to, or for the benefit of, the former spouse,ʺ
including a ʺbeneficiary designation in a life insurance policy.ʺ N.Y. EPTL § 5‐1.4(a). A
ʺrevocableʺ appointment requires that the ʺdivorced individual, at the time of the
divorce or annulment, was empowered, by law or under governing instrument, either
alone or in conjunction with any other person who does not have a substantial adverse
interest, to cancel the designation in favor of the former spouse.ʺ Id. § 5‐1.4(f)(6). In
interpreting a New York statute, we ʺlook first to the plain language of a statute and
interpret it by its ordinary, common meaning.ʺ Elliott Assocs., L.P. v. Banco de la Nacion,
194 F.3d 363, 371 (2d Cir. 1999) (citation omitted). By its plain meaning, EPTL § 5–1.4(a)
does not apply to the situation here: the beneficiary designation was not ʺrevocableʺ
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because the decedent was not ʺempoweredʺ to cancel it, since Sahani ‐‐ not the decedent
‐‐ was the owner of both policies at the time of divorce. For the reasons articulated by
the district court and the magistrate, we reject Singhʹs strained interpretation of the
statute.
We have considered Singhʹs remaining arguments and find them to be
without merit. Accordingly, we AFFIRM the judgment of the district court.
FOR THE COURT: Catherine OʹHagan Wolfe, Clerk
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