Barbara Graham v. New York Life Insurance Company

• Court: District Court, W.D. Washington
• Decided: December 1, 2025
• Docket: 3:25-cv-05483
• Status: Unknown

Opinion

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5 6 7 UNITED STATES DISTRICT COURT 8 WESTERN DISTRICT OF WASHINGTON AT TACOMA 9 10 BARBARA GRAHAM, CASE NO. 3:25-cv-05483-DGE 11 Plaintiff, ORDER GRANTING MOTION 12 v. FOR DEFAULT JUDGMENT (DKT. NO. 26) 13 NEW YORK LIFE INSURANCE COMPANY, 14 Defendant. 15 16 This matter comes before the Court on Plaintiff Barbara Graham’s motion for default 17 judgment. (Dkt. No. 26.) For the reasons explained below, the Court GRANTS the motion. 18 I BACKGROUND 19 This is an interpleader action involving a dispute over the proceeds of a life insurance 20 policy administered by Defendant/Interpleader New York Life Insurance Company (“New York 21 Life”). Glenn Lee Graham purchased a $500,000 life insurance policy (“the Policy”) from New 22 York Life. (Dkt. Nos. 1 at 2, 6 at 9.) In March 2002, Mr. Graham signed a Change of 23 Beneficiary Request naming his then-wife Constance Graham as the first beneficiary on the 24 1 Policy and Plaintiff as the second beneficiary. (Id.) In November 2007, Mr. Graham and Ms. 2 Graham dissolved their marriage. (Id.) Under Washington law, if a couple divorces, then a 3 revocation provision applies, which dictates that a life insurance policy passes as if the former 4 spouse, failed to survive the decedent, having died at the time of entry of the decree of

5 dissolution. See Wash. Rev. Code § 11.07.010(2)(a). However, this revocation does not apply if 6 the divorce decree provides otherwise. See Wash. Rev. Code § 11.07.010(2)(b)(i). In Exhibit A 7 of the divorce decree, Mr. Graham was awarded, among other property, “all the benefits from his 8 own . . . life insurance policies.” (Dkt. No. 6-3 at 4.) 9 Mr. Graham died on October 1, 2023, (Dkt. No. 6-4 at 2), and both Plaintiff and Ms. 10 Graham made claims for benefits under the Policy (Dkt. Nos. 1 at 3, 6 at 9). Plaintiff claimed 11 Washington Revised Code § 11.07.010 automatically revoked the designation in favor of Ms. 12 Graham when she and Mr. Graham divorced. Ms. Graham claimed California was the 13 controlling choice of law and in the alternative, she was exempt from the Washington statute. 14 (See Dkt. No. 6-5 at 2–3.)

15 On June 2, 2025, Plaintiff sued New York Life, alleging breach of contract, Consumer 16 Protection Act violations, bad faith, and Insurance Fair Conduct Act violations for failure to pay 17 her the Policy benefits. (Dkt. No. 1 at 4–6.) On August 11, 2025, New York Life filed a 18 counterclaim and interpleader action to attempt to limit its liability in response to the multiple 19 claims. (Dkt. No. 6.) New York Life moved for leave to deposit the Policy proceeds with the 20 Court (id.), which the Court granted (Dkt. Nos. 15, 22). On September 23, 2025, New York Life 21 served Ms. Graham with summons and a copy of the complaint. (Dkt. No. 13.) Plaintiff moved 22 for and was granted an order of default against Ms. Graham. (Dkt. Nos. 17, 19.). Plaintiff has 23 now moved for default judgment against Ms. Graham. (Dkt. No. 26.)

24 1 II DISCUSSION 2 After entry of default, the Court may enter a default judgment. Fed. R. Civ. P. 55(b). The 3 general rule upon default is that well-pled allegations in the complaint regarding liability are 4 deemed true. Fair Hous. of Marin v. Combs, 285 F.3d 899, 906 (9th Cir. 2002). However,

5 allegations related to damages must be supported with evidence. See TeleVideo Sys., Inc. v. 6 Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987); see also Fed. R. Civ. P. 55(b)(2)(B). “A 7 named interpleader defendant who fails to answer the interpleader complaint and assert a claim 8 to the res forfeits any claim of entitlement that might have been asserted” if service was properly 9 effected upon them. Stand. Ins. Co. v. Asuncion, 43 F. Supp. 3d 1154, 1156 (W.D. Wash. 2014) 10 (quoting Sun Life Assur. Co. of Canada, (U.S.) v. Conroy, 431 F.Supp.2d 220, 226 (D.R.I.2006)). 11 The Court may accordingly, in its discretion, grant default judgment against the non-appearing 12 interpleader defendants where the only remaining claimants demonstrate their entitlement to the 13 funds and do not dispute the respective distributions. See Cripps v. Life Ins. Co. of N. Am., 980 14 F.2d 1261, 1267 (9th Cir. 1992) (appearing claimants must demonstrate entitlement to benefits);

15 Nationwide Mutual Fire Ins. Co. v. Eason, 736 F.2d 130, 133 n.6 (4th Cir. 1984) (“Clearly, if all 16 but one named interpleader defendant defaulted, the remaining defendant would be entitled to the 17 fund.”). In the Ninth Circuit, entry of default judgment is governed by Eitel v. McCool, 782 F.2d 18 1470 (9th Cir. 1986). Eitel requires the Court to consider the following factors: 19 (1) the possibility of prejudice to the plaintiff, (2) the merits of plaintiff’s substantive claim, (3) the sufficiency of the complaint, (4) the sum of money at stake in the action; 20 (5) the possibility of a dispute concerning material facts; (6) whether the default was due to excusable neglect, and (7) the strong policy underlying the Federal Rules of Civil 21 Procedure favoring decisions on the merits.

22 Id. at 1471–1472. 23 24 1 Based on the Eitel factors, default judgment is appropriate. First, both Plaintiff and New 2 York Life would be prejudiced absent entry of default judgment. In interpleader actions, the 3 possibility of prejudice to the defendant and to the plaintiff-in-interpleader are both relevant. See 4 Asuncion, 43 F. Supp. 3d at 1156. Without an entry of default, Plaintiff’s claims could not

5 otherwise be resolved, and the insurance proceeds would merely sit in the Court’s registry. Cf. 6 Aetna Life Ins. Co. v. Bayona, 223 F.3d 1030, 1034 (9th Cir.2000) (“Interpleader’s primary 7 purpose is not to compensate, but rather to protect stakeholders from multiple liability as well as 8 from the expense of multiple litigation.”); W. Conference of Teamsters Pension Plan v. Jennings, 9 No. C10–3629, 2011 WL 2609858, at *3 (N.D. Cal. June 5, 2011) (“Plaintiff and [answering 10 defendant] would suffer prejudice if the Court does not enter default judgment. The dispute 11 concerns [d]efendants’ competing claims to interpleaded funds. Without entry of default 12 judgment, the competing stakeholders’ claims cannot be resolved.”). 13 The remaining factors also support entry of default judgment. In her complaint and 14 answer, Plaintiff asserts her entitlement to the Policy funds by relying on Washington Revised

15 Code § 11.07.010. Neither here, due to her absence, nor in her previous communications with 16 New York Life did Ms. Graham ever provide a substantiated basis for her original assertion that 17 the Policy was governed by California law, or an exception applied to § 11.07.010. The Court 18 finds that Plaintiff has alleged a viable claim such that it is more likely than not that she is 19 entitled to the Policy funds. 20 The Court notes that the sum of money here, $500,000, neither favors nor disfavors an 21 award of default judgment. See Jennings, 2011 WL 2609858 at *3 (finding that the fourth Eitel 22 factor is neutral in an interpleader action). Regarding the fifth and sixth Eitel factors, by virtue 23 of her absence, Ms. Graham has failed to provide the Court with any excuse for her failure to

24 1 answer or otherwise defend, and failed to point to any factual dispute that may turn the case in 2 her favor. Thus, these factors support the entry of default judgment. And finally, Ms. Graham’s 3 absence precludes a full decision on the merits, which the Federal Rule of Civil Procedure 4 normally favor. Because Ms. Graham failed to take part in this action and has made it

5 impractical, if not impossible to reach a decision on the merits, she has forfeited her right to the 6 Policy proceeds. The Policy funds shall instead be paid to Plaintiff. 7 III CONCLUSION 8 For the foregoing reasons, Plaintiff’s motion for default judgment (Dkt. No. 26) is 9 GRANTED. The Clerk is authorized and directed to draw a check on the funds deposited in the 10 registry of this Court in the principal amount of $500,000.00 plus all accrued interest, payable to 11 Barbara Graham, and mail or deliver the check to Barbara Graham. Pursuant to Local Rule 67, 12 Plaintiff shall provide her mailing address, and a completed IRS W-9 form directly to the Clerk 13 of Court. 14 Dated this 1st day of December, 2025.

15 A 16 David G. Estudillo 17 United States District Judge

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