7 UNITED STATES DISTRICT COURT 8 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 DELAWARE LIFE INSURANCE Case No.: 21cv01313-LL-MDD COMPANY, 12 ORDER GRANTING JOINT Plaintiff, 13 MOTION FOR DISBURSEMENT, v. DISCHARGE, AND DISMISSAL 14 REGARDING INTERPLEADER COVENANT LIVING COMMUNITIES 15 AND SERVICES, dba MOUNT ACTION
16 MIGUEL, a business organization, form [ECF No. 38] unknown, et al., 17 Defendant. 18 19 I. INTRODUCTION 20 Plaintiff Delaware Life Insurance Company, a Delaware corporation formerly 21 known as Sun Life Assurance Company of Canada (U.S.) (“Plaintiff”), filed this complaint 22 in interpleader concerning competing claims to certain death benefits against Defendants 23 Covenant Living Communities and Services dba Mount Miguel, a business organization, 24 form unknown (“Mount Miguel”); Covenant Trust, as Trustee/Administrator of the 25 Barbara J. Witt Living Trust Agreement dated November 13, 1996 (“Covenant Trust” or 26 the “Trust”); Estate of Doris Irene Harrison (the “Harrison Estate”); Candice Hallman, 27 individually, and as Attorney-in-Fact for Doris I. Harrison (“Hallman”); and DOES 1 28 through 10, inclusive (collectively, Defendants”). ECF No. 1. 1 Before the Court is the Joint Motion for Disbursement, Discharge, and Dismissal of 2 the Interpleader Action. ECF No. 38. After considering the papers submitted, supporting 3 documentation, and applicable law, the Court GRANTS the Joint Motion. 4 II. BACKGROUND 5 A. Statement of Facts 6 Pursuant to an application dated September 2, 2005, Sun Life Assurance Company 7 of Canada (U.S.)1 issued to the Doris I. Harrison IRA its Certificate for Flexible Payment 8 Deferred Combination Variable and Fixed Group Annuity Contract, Non-Participating, 9 No. 90-9000-008773, under Group Contract No. 0001-089725, issued to the MFS Regatta 10 Insurance Trust (hereinafter “Annuity Contract”). Complaint, ECF No. 1 (“Compl.”) at 3,2 11 ¶ 9; ECF No. 38 at 3, ¶ 1. Doris I. Harrison (“Decedent”) was designated as the participant 12 and annuitant under the Annuity Contract, while the primary beneficiaries were her sisters, 13 Barbara Witt and Carolyn Wentz. Id. at 3, ¶¶ 10-11; ECF No. 38 at 3, ¶ 1. 14 On November 16, 2017, Ms. Wentz died. Compl. at 3, ¶ 13; ECF No. 38 at 3, ¶ 5. 15 Under the terms of the Annuity Contract, when more than one primary beneficiary is 16 named, and a named primary beneficiary predeceases the annuitant/participant, any death 17 benefits payable by reason of the later death of the annuitant/participant become payable 18 to the surviving primary beneficiary, meaning Ms. Wentz’s share would go to Ms. Witt. 19 Compl. at 3, ¶ 14; ECF No. 38 at 3, ¶ 6. 20 On November 29, 2019, Decedent died. Compl. at 3, ¶ 15; ECF No. 38 at 3, ¶ 7. 21 Due to Decedent’s death, the death benefit of approximately $29,000.00 became due and 22 payable to the remaining designated beneficiary, Ms. Witt. Id. at 4, ¶ 16; ECF No. 38 at 3, 23 ¶ 8. At the time of her death, Decedent resided at a care facility owned and/or operated by 24 Defendant Mount Miguel. Id. at 4, ¶ 19; ECF No. 38 at 4, ¶ 11. 25 1 During the Annuity Contract, Sun Life Assurance Company of Canada (U.S.) 26 subsequently changed its name to Delaware Life Insurance Company, effective July 31, 27 2014. Compl. at 3, ¶ 12; ECF No. 38 at 3, ¶ 4. 2 Unless otherwise indicated, all page number references are to the ECF-generated 28 1 On February 1, 2021, Ms. Witt died. Compl. at 4, ¶ 17; ECF No. 38 at 4, ¶ 9. At 2 the time of Ms. Witt’s death, her daughter, Hallman, was her Attorney-in-Fact, operating 3 under a General Power of Attorney. Id. at 4, ¶ 17; ECF No. 38 at 4, ¶ 9. Also at that time, 4 the Trust was in effect, controlled the distribution of her assets, and was administered by 5 Covenant Trust. Id. at 4, ¶ 18; ECF No. 38 at 4, ¶ 10. 6 On November 25, 2020, Mount Miguel filed a claim in the probate court concerning 7 Decedent’s estate. See In re Estate of Doris Irene Harrison, San Diego Superior Court 8 Case No. 37-2020-0043812-PR-PL-CTL (the “Probate Proceeding”); see also Compl. at 4, 9 ¶ 21; ECF No. 38 at 4, ¶ 12. Hallman has also made a claim to the death benefit proceeds 10 in her capacity as Attorney-in-Fact for Decedent. Id. at 4, ¶ 24. Plaintiff also pleads that 11 the Trust, administered by Covenant Trust in Chicago, has or may make a claim to the 12 death benefit proceeds at issue, claiming that the Trust is the rightful beneficiary of the 13 death benefit proceeds at issue, by reason of the terms of the Trust. Id. at 5, ¶ 25. 14 On or about June 16, 2021, Letters of Administration were issued by the Probate 15 Court to Attorney John Smith, as the personal representative authorized to administer the 16 Estate of Doris I. Harrison under the Independent Administration of Estates Act. Compl. 17 at 4, ¶ 22; ECF No. 38 at 4, ¶ 13. In his capacity as personal representative for the Estate, 18 Mr. Smith demanded that Plaintiff tender the death benefit proceeds to him. Id. at 4, ¶ 23. 19 B. Procedural History 20 On July 21, 2021, Plaintiff filed the instant Complaint in Interpleader due to the 21 competing claims for death benefits. ECF Nos. 1, 38 at 4, ¶ 15; see also Fed. R. Civ. P. 22 22. On July 22, 2021, Plaintiff filed its notice of deposit of the disputed interpleader funds 23 via check. ECF No. 3; see also Fed. R. Civ. P. 67 (allowing parties to deposit money with 24 the Court by delivering a copy of the order permitting the deposit in a case where the 25 plaintiff seeks, inter alia, the disposition of a sum of money). 26 On August 6, 2021, Plaintiff moved for an order to deposit the interpleader funds 27 with the Court. ECF No. 6-1; see also CivLR 67.1(a) (requiring a court order before money 28 may be sent to or deposited with the Court). On August 31, 2021, Plaintiff notified the 1 Court that the motion was unopposed. ECF No. 11. Accordingly, on September 2, 2021, 2 the Court granted the motion. ECF No. 12. 3 To date, all four defendants have been served and have appeared. See ECF Nos. 7- 4 10, 13, 18-20, 23. Although all answers appear to have been untimely, see ECF Nos. 7, 8, 5 10, 13; see also Fed. R. Civ. P. 4(d)(2)(3), Plaintiff did not seek entry of default; thus, any 6 objection to their untimeliness has been waived. 7 On March 31, 2022, Plaintiff filed a Motion for Discharge, Dismissal, and 8 Reimbursement of Fees and Costs, which was set to be heard on May 5, 2022. ECF No. 9 28. However, on April 29, 2022, Plaintiff and all Defendants filed a Notice of Settlement 10 and Request to Stay or Continue the Pending Motion for Discharge, Reimbursement of 11 Fees, and Dismissal. ECF No. 34. Thus, on May 4, 2022, the Court struck this motion 12 without prejudice, due to the parties’ indication that they would file a joint motion seeking 13 the same relief. ECF No. 37. On May 5, 2022, the parties filed this Joint Motion. ECF 14 No. 38. 15 III. DISCUSSION 16 The parties ask the Court to do the following: 17 1. Award Plaintiff $13,000.00 as reasonable attorneys’ fees and costs incurred 18 in connection with this interpleader action to be paid out of the proceeds deposited with 19 the Clerk of the Court. ECF No. 38 at 5, ¶ 18. 20 2. Distribute the remaining funds, following payment of the aforementioned 21 $13,000.00 in attorneys’ fees and costs, as follows: 22 Made Payable by Check to: Mailed to: Allocation: 23 $13,000.00 for reasonable 24 Plaintiff Delaware Life attorneys’ fees 25 and costs Two-Thirds (2/ or 26 3 Estate of Doris Irene 66.67%) of the 27 Harrison remaining balance following 28 1 disbursement of attorneys’ fees 2 One-Third (1/ or Covenant Trust Company, 3 3 Trustee of The Barbara J.
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7 UNITED STATES DISTRICT COURT 8 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 DELAWARE LIFE INSURANCE Case No.: 21cv01313-LL-MDD COMPANY, 12 ORDER GRANTING JOINT Plaintiff, 13 MOTION FOR DISBURSEMENT, v. DISCHARGE, AND DISMISSAL 14 REGARDING INTERPLEADER COVENANT LIVING COMMUNITIES 15 AND SERVICES, dba MOUNT ACTION
16 MIGUEL, a business organization, form [ECF No. 38] unknown, et al., 17 Defendant. 18 19 I. INTRODUCTION 20 Plaintiff Delaware Life Insurance Company, a Delaware corporation formerly 21 known as Sun Life Assurance Company of Canada (U.S.) (“Plaintiff”), filed this complaint 22 in interpleader concerning competing claims to certain death benefits against Defendants 23 Covenant Living Communities and Services dba Mount Miguel, a business organization, 24 form unknown (“Mount Miguel”); Covenant Trust, as Trustee/Administrator of the 25 Barbara J. Witt Living Trust Agreement dated November 13, 1996 (“Covenant Trust” or 26 the “Trust”); Estate of Doris Irene Harrison (the “Harrison Estate”); Candice Hallman, 27 individually, and as Attorney-in-Fact for Doris I. Harrison (“Hallman”); and DOES 1 28 through 10, inclusive (collectively, Defendants”). ECF No. 1. 1 Before the Court is the Joint Motion for Disbursement, Discharge, and Dismissal of 2 the Interpleader Action. ECF No. 38. After considering the papers submitted, supporting 3 documentation, and applicable law, the Court GRANTS the Joint Motion. 4 II. BACKGROUND 5 A. Statement of Facts 6 Pursuant to an application dated September 2, 2005, Sun Life Assurance Company 7 of Canada (U.S.)1 issued to the Doris I. Harrison IRA its Certificate for Flexible Payment 8 Deferred Combination Variable and Fixed Group Annuity Contract, Non-Participating, 9 No. 90-9000-008773, under Group Contract No. 0001-089725, issued to the MFS Regatta 10 Insurance Trust (hereinafter “Annuity Contract”). Complaint, ECF No. 1 (“Compl.”) at 3,2 11 ¶ 9; ECF No. 38 at 3, ¶ 1. Doris I. Harrison (“Decedent”) was designated as the participant 12 and annuitant under the Annuity Contract, while the primary beneficiaries were her sisters, 13 Barbara Witt and Carolyn Wentz. Id. at 3, ¶¶ 10-11; ECF No. 38 at 3, ¶ 1. 14 On November 16, 2017, Ms. Wentz died. Compl. at 3, ¶ 13; ECF No. 38 at 3, ¶ 5. 15 Under the terms of the Annuity Contract, when more than one primary beneficiary is 16 named, and a named primary beneficiary predeceases the annuitant/participant, any death 17 benefits payable by reason of the later death of the annuitant/participant become payable 18 to the surviving primary beneficiary, meaning Ms. Wentz’s share would go to Ms. Witt. 19 Compl. at 3, ¶ 14; ECF No. 38 at 3, ¶ 6. 20 On November 29, 2019, Decedent died. Compl. at 3, ¶ 15; ECF No. 38 at 3, ¶ 7. 21 Due to Decedent’s death, the death benefit of approximately $29,000.00 became due and 22 payable to the remaining designated beneficiary, Ms. Witt. Id. at 4, ¶ 16; ECF No. 38 at 3, 23 ¶ 8. At the time of her death, Decedent resided at a care facility owned and/or operated by 24 Defendant Mount Miguel. Id. at 4, ¶ 19; ECF No. 38 at 4, ¶ 11. 25 1 During the Annuity Contract, Sun Life Assurance Company of Canada (U.S.) 26 subsequently changed its name to Delaware Life Insurance Company, effective July 31, 27 2014. Compl. at 3, ¶ 12; ECF No. 38 at 3, ¶ 4. 2 Unless otherwise indicated, all page number references are to the ECF-generated 28 1 On February 1, 2021, Ms. Witt died. Compl. at 4, ¶ 17; ECF No. 38 at 4, ¶ 9. At 2 the time of Ms. Witt’s death, her daughter, Hallman, was her Attorney-in-Fact, operating 3 under a General Power of Attorney. Id. at 4, ¶ 17; ECF No. 38 at 4, ¶ 9. Also at that time, 4 the Trust was in effect, controlled the distribution of her assets, and was administered by 5 Covenant Trust. Id. at 4, ¶ 18; ECF No. 38 at 4, ¶ 10. 6 On November 25, 2020, Mount Miguel filed a claim in the probate court concerning 7 Decedent’s estate. See In re Estate of Doris Irene Harrison, San Diego Superior Court 8 Case No. 37-2020-0043812-PR-PL-CTL (the “Probate Proceeding”); see also Compl. at 4, 9 ¶ 21; ECF No. 38 at 4, ¶ 12. Hallman has also made a claim to the death benefit proceeds 10 in her capacity as Attorney-in-Fact for Decedent. Id. at 4, ¶ 24. Plaintiff also pleads that 11 the Trust, administered by Covenant Trust in Chicago, has or may make a claim to the 12 death benefit proceeds at issue, claiming that the Trust is the rightful beneficiary of the 13 death benefit proceeds at issue, by reason of the terms of the Trust. Id. at 5, ¶ 25. 14 On or about June 16, 2021, Letters of Administration were issued by the Probate 15 Court to Attorney John Smith, as the personal representative authorized to administer the 16 Estate of Doris I. Harrison under the Independent Administration of Estates Act. Compl. 17 at 4, ¶ 22; ECF No. 38 at 4, ¶ 13. In his capacity as personal representative for the Estate, 18 Mr. Smith demanded that Plaintiff tender the death benefit proceeds to him. Id. at 4, ¶ 23. 19 B. Procedural History 20 On July 21, 2021, Plaintiff filed the instant Complaint in Interpleader due to the 21 competing claims for death benefits. ECF Nos. 1, 38 at 4, ¶ 15; see also Fed. R. Civ. P. 22 22. On July 22, 2021, Plaintiff filed its notice of deposit of the disputed interpleader funds 23 via check. ECF No. 3; see also Fed. R. Civ. P. 67 (allowing parties to deposit money with 24 the Court by delivering a copy of the order permitting the deposit in a case where the 25 plaintiff seeks, inter alia, the disposition of a sum of money). 26 On August 6, 2021, Plaintiff moved for an order to deposit the interpleader funds 27 with the Court. ECF No. 6-1; see also CivLR 67.1(a) (requiring a court order before money 28 may be sent to or deposited with the Court). On August 31, 2021, Plaintiff notified the 1 Court that the motion was unopposed. ECF No. 11. Accordingly, on September 2, 2021, 2 the Court granted the motion. ECF No. 12. 3 To date, all four defendants have been served and have appeared. See ECF Nos. 7- 4 10, 13, 18-20, 23. Although all answers appear to have been untimely, see ECF Nos. 7, 8, 5 10, 13; see also Fed. R. Civ. P. 4(d)(2)(3), Plaintiff did not seek entry of default; thus, any 6 objection to their untimeliness has been waived. 7 On March 31, 2022, Plaintiff filed a Motion for Discharge, Dismissal, and 8 Reimbursement of Fees and Costs, which was set to be heard on May 5, 2022. ECF No. 9 28. However, on April 29, 2022, Plaintiff and all Defendants filed a Notice of Settlement 10 and Request to Stay or Continue the Pending Motion for Discharge, Reimbursement of 11 Fees, and Dismissal. ECF No. 34. Thus, on May 4, 2022, the Court struck this motion 12 without prejudice, due to the parties’ indication that they would file a joint motion seeking 13 the same relief. ECF No. 37. On May 5, 2022, the parties filed this Joint Motion. ECF 14 No. 38. 15 III. DISCUSSION 16 The parties ask the Court to do the following: 17 1. Award Plaintiff $13,000.00 as reasonable attorneys’ fees and costs incurred 18 in connection with this interpleader action to be paid out of the proceeds deposited with 19 the Clerk of the Court. ECF No. 38 at 5, ¶ 18. 20 2. Distribute the remaining funds, following payment of the aforementioned 21 $13,000.00 in attorneys’ fees and costs, as follows: 22 Made Payable by Check to: Mailed to: Allocation: 23 $13,000.00 for reasonable 24 Plaintiff Delaware Life attorneys’ fees 25 and costs Two-Thirds (2/ or 26 3 Estate of Doris Irene 66.67%) of the 27 Harrison remaining balance following 28 1 disbursement of attorneys’ fees 2 One-Third (1/ or Covenant Trust Company, 3 3 Trustee of The Barbara J. 33.33%) of the remaining 4 Witt Living Trust balance following Agreement Dated Nov. 13, 5 1996 disbursement of attorneys’ fees 6 Covenant Living 7 Communities and Services Not applicable None dba Mount Miguel, a business 8 organization, form unknown 9 Candace Hallman, individually and as Attorney- 10 In-Fact for Barbara J. Witt, 11 erroneously sued as Candice Not applicable None Hallman individually and as 12 Attorney-In-Fact for Doris I. 13 Harrison 14 ECF No. 38 at 5-6, ¶¶ 19-24. 15 3. Order that Plaintiff will be discharged from any liability to Defendants to the 16 full extent permitted by the law with respect to the Annuity Contract. ECF No. 38 at 5, ¶ 17 20. 4. Order that Defendants will be restrained from taking, proceeding with, or 18 commencing any action against Plaintiff Delaware Life or its present, former, and future 19 officers, directors, shareholders, employers, employees, parents, subsidiaries, affiliates, 20 reinsurers, insurers, administrators, agents, or predecessors in any way arising out of or 21 relating to the rights and obligations of the parties with respect to the Annuity Contract 22 and/or with respect to benefits due under the Annuity Contract. ECF No. 38 at 5, ¶ 21. 23 5. Dismiss the action with prejudice as to all parties with each party to bear its 24 own costs and attorneys’ fees except as otherwise provided herein. ECF No. 38 at 6, ¶ 22. 25 On July 22, 2021, Plaintiff deposited two checks with the Court totaling $30,335.76. 26 ECF No. 3. This amount was deposited with the Court on September 2, 2021. ECF No. 27 12. The Court finds that given the parties have agreed to the distribution of funds already 28 1 deposited with the Court, distribution as agreed is appropriate under the law. See Fed. R. 2 Civ. P. 22, 67; see also 28 U.S.C. §§ 1335(a), 2041, 2042. Thus, the Joint Motion is 3 GRANTED with respect to dispersing the funds. 4 As for Plaintiff’s request for attorney’s fees, the interpleader plaintiff claiming such 5 fees must bear the burden of establishing entitlement to attorney’s fees. Trs. of Dirs. Guild 6 of Am.-Producer Pension Benefits Plans v. Tise, 234 F.3d 415, 427 (9th Cir. 2000) (citing 7 Hensley v. Eckerhart, 461 U.S. 424, 437 (1983)). While the interpleader plaintiff’s counsel 8 need not “record in great detail how each minute of his time was expended,” he or she 9 “should identify the general subject matter of his [or her] time expenditures.” In re 1563 10 28th Ave., 333 F.R.D. 630, 636 (N.D. Cal. 2019) (quoting Tise, 234 F.3d at 427). “Where 11 the documentation is inadequate, the district court is free to reduce an applicant’s fee award 12 accordingly.” Id. (quoting Tise, 234 F.3d at 427). 13 Here, while the current Joint Motion does not contain any documentation for the 14 $13,000.00 in attorneys’ fees sought in a case pending for less than one year, see ECF No. 15 38, the Court acknowledges that the previously filed Motion, which the Court struck from 16 the record due to the parties’ intent to file a joint motion, contained such documentation. 17 ECF No. 28. Plaintiff indicates it has incurred reasonable fees and expenses of $31,155.04, 18 representing costs and fees for its counsel’s work from January 8, 2020 through March 13, 19 2022 in ascertaining Defendants’ claims; reviewing the Estate proceedings, corresponding 20 and communicating with Defendants; drafting the interpleader complaint; drafting a 21 motion to deposit funds and depositing funds; serving the complaint; obtaining responsive 22 pleadings; conducting telephone conferences and communications with Defendants 23 towards resolution and addressing procedural requirements; and taking the default of 24 Defendant Covenant Trust. Declaration of Nancy J. Marr in Support of Motion for 25 Discharge and Dismissal, ECF No. 28-2 at 3-6, ¶¶ 6-20. Ms. Marr provides a detailed 26 breakdown of the tasks performed, the dates on which those tasks were performed, the 27 amounts billed, and the billing rates, including her billing rate of $365.00, and her partner’s 28 billing rate of $375.00 in 2020, and $400.00 in 2021. Id. at 10, ¶ 22. The Court finds the 1 amounts and hourly rates for Plaintiff’s counsel reasonable, particularly in light of the 2 reduction of their fees and costs, and thus, GRANTS the Joint Motion as to attorneys’ fees. 3 Finally, because a dismissal is not required under Rule 41(a)(1) of the Federal Rules 4 of Civil Procedure when the parties stipulate to dismissal, the Joint Motion is also granted 5 with respect to dismissing this case. 6 IV. CONCLUSION The Court hereby ORDERS as follows: 7 8 1. Plaintiff is awarded $13,000.00 as reasonable attorneys’ fees and costs 9 incurred in connection with this interpleader action to be paid out of the proceeds deposited 10 with the Clerk of the Court made payable and mailed according to the instructions in 11 Paragraph 2. ECF No. 38 at 5, ¶ 18. 12 2. The Clerk of the Court shall distribute the remaining funds as follows: 13 Made Payable by Check to: Mailed to: Allocation: 14 $13,000.00 for reasonable 15 Plaintiff Delaware Life attorneys’ fees and 16 costs 17 Two-Thirds (2/ 3 or 66.67%) of the 18 Estate of Doris Irene remaining balance
19 Harrison following disbursement of 20 attorneys’ fees 21 One-Third (1/ 3 or Covenant Trust Company, 33.33%) of the 22 Trustee of The Barbara J. remaining balance 23 Witt Living Trust Agreement following Dated Nov. 13, 1996 disbursement of 24 attorneys’ fees 25 Covenant Living Communities and Services 26 dba Mount Miguel, a Not applicable None 27 business organization, form unknown 28 1 Candace Hallman, individually and as Attorney- 2 ||| In-Fact for Barbara J. Witt, 3 ||| erroneously sued as Candice | Not applicable None Hallman individually and as 4 ||| Attorney-In-Fact for Doris I. 5 Harrison 6 || ECF No. 38 at 5-6, □ 19-24. 7 3. Plaintiff will be discharged from any liability to Defendants to the full extent 8 permitted by the law with respect to the Annuity Contract. ECF No. 38 at 5, § 20. 9 4. Defendants will be restrained from taking, proceeding with, or commencing 10 action against Plaintiff Delaware Life or its present, former, and future officers, 11 || directors, shareholders, employers, employees, parents, subsidiaries, affiliates, reinsurers, 12 || insurers, administrators, agents, or predecessors arising out of or relating to the rights and 13 obligations of the parties with respect to the Annuity Contract and/or with respect to 14 || benefits due under the Annuity Contract. ECF No. 38 at 5, { 21. 15 5. The Clerk of the Court is instructed to terminate this case and dismiss it with 16 prejudice as to all parties with each party to bear its own costs and attorneys’ fees except 17 otherwise provided herein. ECF No. 38 at 6, {| 22. IT IS SO ORDERED. he 19 DATED: May 12, 2022 HON. LINDA LOPEZ 20 United States District Judge 21 22 23 24 25 26 27 28