Navy Federal Credit Union v. McEntire

D. Arizona

Navy Federal Credit Union v. McEntire

DecidedSeptember 25, 2024

Docket2:24-cv-01699

StatusUnknown

This text of Navy Federal Credit Union v. McEntire (Navy Federal Credit Union v. McEntire) is published on Counsel Stack Legal Research, covering District Court, D. Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Navy Federal Credit Union v. McEntire, (D. Ariz. 2024).

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Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 Navy Federal Credit Union, No. CV-24-01699-PHX-DJH

10 Plaintiff, ORDER

11 v.

12 Travis McEntire and Wendy Armstrong,

13 Defendants. 14 15 Plaintiff Navy Federal Credit Union (“Plaintiff”) has filed a Motion for Interpleader 16 Deposit. (Doc. 6). Plaintiff seeks leave to deposit with this Court the sum of $201,994.78, 17 pursuant to Federal Rule of Civil Procedure 67(a) (allowing for disputed funds to be 18 deposited in the Court’s registry “on notice to every other party and leave of court.”). The 19 Court will grant Plaintiff’s Motion and allow it to deposit this sum with the Court’s registry 20 for the following reasons. 21 I. Background 22 This action arises from a dispute among two siblings regarding their mother’s bank 23 accounts. (See Doc. 1). Plaintiff’s Complaint alleges the following: 24 Plaintiff is a not-for-profit credit union. (Id. at ¶ 1). One of its customers, Kayleen 25 McEntire Weyer (“Decedent”) has passed away, leaving behind $206,715.86. (Id. at ¶ 10). 26 Decedent has two children involved in a dispute: Travis McEntire (“Decedent’s son”), who 27 is named as the beneficiary to these accounts, and Wendy Armstrong (“Decedents 28 daughter”), who is not. (Id. at ¶¶ 2–3). Decedent designated her son as the Payable on 1 Death Beneficiary of her accounts held with Plaintiff. (Id. at ¶ 16). Decedent executed 2 various wills within the last few years, with her latest will being executed on August 14, 3 2023. (Id. at ¶ 15). Decedent and her spouse, Clarence Weyer, established a trust providing 4 for the division of trust property upon the death of the survivor trustee giving a 50% share 5 to Decedent’s son and daughter. (Id. at ¶ 14). This trust was also amended after Decedent’s 6 spouse died. (Id. at ¶ 15). 7 Decedent passed away on January 26, 2024, and Plaintiff states that Decedent’s 8 daughter contacted it alleging that: “(a) [Decedent’s son] may have improperly used the 9 Decedent’s debit card; (b) the Decedent may have been pressured to sign the change in 10 beneficiary designation and Payable on Death Designation; and (c) a police report had been 11 filed related to [Decedent’s son’s] alleged treatment of the Decedent’s finances.” (Id. at ¶¶ 12 18–19). Decedent’s daughter also informed Plaintiff that she was going to contest the 13 disbursement—upon which Plaintiff notified Decedent’s son that it could not proceed with 14 settlement of the Decedent’s accounts. (Id. at 21). Decedent’s son threatened to contact 15 the FBI and the media. (Id. at ¶ 22). Plaintiff has encouraged Decedent’s children to reach 16 some sort of settlement, but they have not. (Id. at ¶¶ 23–25). Now, fearful to being subject 17 to double liability, Plaintiff has filed an interpleader action and seeks to deposit the 18 proceeds from the Decedent’s accounts with the Clerk of this Court and be discharged of 19 liability. (Id. at ¶¶ 26–29). Plaintiff also seeks to recover its attorneys’ fees and costs 20 related to this matter. (Id. at ¶ 30). 21 II. Deposit of Disputed Funds 22 Plaintiff asks the Court for an Order instructing it to “deposit the funds from the 23 Decedent’s [] accounts into the registry of the Court for future disbursement according to 24 the judgment of this Court.” (Doc. 6 at 1). Plaintiff seeks such an Order under 25 28 U.S.C. § 1335, Federal Rules of Civil Procedure 22 and 67, as well as Local Rule of 26 Civil Procedure 67.1. (Id.). 27 “Interpleader is a procedural device used to resolve conflicting claims to money or 28 property. It enables a person or entity in possession of a tangible res or fund of money (the 1 stakeholder) to join in a single suit two or more claimants asserting mutually exclusive 2 claims to that stake.” Metro. Life Ins. Co. v. Reynolds, 2013 WL 6048808, at *2 (D. Ariz. 3 Nov. 15, 2013) (citing Nevada v. Pioneer Cos., Inc., 245 F Supp.2d 1120, 1125 (D. Nev. 4 2003)). Interpleader is designed to protect the stakeholder “against the problems posed by 5 multiple claimants to a single fund.” Mack v. Kuckenmeister, 619 F.3d 1010, 1024 (9th Cir. 6 2010) (quoting Minnesota Mut. Life Ins. Co. v. Ensley, 174 F.3d 977, 980 (9th Cir. 1999)). 7 An “[i]nterpleader's primary purpose is not to compensate, but rather to protect 8 stakeholders from multiple liability as well as from the expense of multiple litigation.” 9 Aetna Life Ins. Co. v. Bayona, 223 F.3d 1030, 1034 (9th Cir. 2000). 10 An interpleader action usually proceeds in two stages: first, the court determines 11 whether the interpleader action is appropriate. Reynolds, 2013 WL 6048808, at *2. If so, 12 the Court “may order the plaintiff to deposit the disputed funds, discharge the plaintiff, and 13 direct the claimants to interplead.” Id. Second, the Court “adjudicates the defendants’ 14 competing claims to the interplead funds, and the action usually proceeds as any other civil 15 action.” Id. (citing Wells Fargo Bank, N.A. v. Magellan Owners Ass’n, 2010 WL 46794, 16 at *2 (D. Ariz. Jan. 4, 2010)). 17 Plaintiff has demonstrated that this action is appropriate. QBE Specialty Ins. Co. v. 18 Kane as Tr. for Hawaii Island Air, Inc., 653 F. Supp. 3d 780, 790 (D. Haw. 2023). 19 Interpleader is appropriate, where, as here, a plaintiff has filed a motion alleging that there 20 are competing claims to a single fund. See id. (“Interpleader is proper [when] there is a 21 single fund at issue [and] adverse claimants to that fund.”); Lincoln Nat'l Life Ins. Co. v. 22 Ridgway, 293 F. Supp. 3d 1254, 1261 (W.D. Wash. 2018) (“Interpleader is proper when a 23 stakeholder has at least a good faith belief that there are present or prospective colorable 24 competing claims to the stake.”). A plaintiff need only show that it has a “real and 25 reasonable fear of exposure to double liability or the vexation of conflicting claims.” 26 Michelman v. Lincoln Nat. Life Ins. Co., 685 F.3d 887, 894 (9th Cir. 2012). To do this, it 27 can “merely demonstrate that potential adverse claims meet ‘a minimal threshold level of 28 substantiality.’ ” QBE Specialty, 653 F. Supp. 3d at 790. A party may initiate an 1 interpleader “even if some or all of the claims against the stake are prospective.” Ridgway, 2 293 F. Supp. 3d at 1260. 3 The Court finds that Plaintiff has demonstrated it may face exposure to double 4 liability due to competing claims for funds it is holding on behalf of Decedent. Michelman, 5 685 F.3d at 894. Plaintiff has alleged that Defendant Armstrong contacted it because she 6 believed that Defendant McEntire may have improperly used the Decedent’s debit card, 7 that he pressured Decedent to sign the change in beneficiary designation and Payable on 8 Death Designation and that a police report had been filed related to Defendant McEntire’s 9 alleged treatment of the Decedent’s finances. (Doc. 1 at ¶ 19). Plaintiff also notes that, 10 after Decedent’s death, Defendant McEntire sought to withdraw the funds from Decedent’s 11 Accounts and informed Plaintiff that Defendant Armstrong had been removed from the 12 Decedent’s will and trust. (Id. at ¶ 20).

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1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 Navy Federal Credit Union, No. CV-24-01699-PHX-DJH

10 Plaintiff, ORDER

11 v.

12 Travis McEntire and Wendy Armstrong,

13 Defendants. 14 15 Plaintiff Navy Federal Credit Union (“Plaintiff”) has filed a Motion for Interpleader 16 Deposit. (Doc. 6). Plaintiff seeks leave to deposit with this Court the sum of $201,994.78, 17 pursuant to Federal Rule of Civil Procedure 67(a) (allowing for disputed funds to be 18 deposited in the Court’s registry “on notice to every other party and leave of court.”). The 19 Court will grant Plaintiff’s Motion and allow it to deposit this sum with the Court’s registry 20 for the following reasons. 21 I. Background 22 This action arises from a dispute among two siblings regarding their mother’s bank 23 accounts. (See Doc. 1). Plaintiff’s Complaint alleges the following: 24 Plaintiff is a not-for-profit credit union. (Id. at ¶ 1). One of its customers, Kayleen 25 McEntire Weyer (“Decedent”) has passed away, leaving behind $206,715.86. (Id. at ¶ 10). 26 Decedent has two children involved in a dispute: Travis McEntire (“Decedent’s son”), who 27 is named as the beneficiary to these accounts, and Wendy Armstrong (“Decedents 28 daughter”), who is not. (Id. at ¶¶ 2–3). Decedent designated her son as the Payable on 1 Death Beneficiary of her accounts held with Plaintiff. (Id. at ¶ 16). Decedent executed 2 various wills within the last few years, with her latest will being executed on August 14, 3 2023. (Id. at ¶ 15). Decedent and her spouse, Clarence Weyer, established a trust providing 4 for the division of trust property upon the death of the survivor trustee giving a 50% share 5 to Decedent’s son and daughter. (Id. at ¶ 14). This trust was also amended after Decedent’s 6 spouse died. (Id. at ¶ 15). 7 Decedent passed away on January 26, 2024, and Plaintiff states that Decedent’s 8 daughter contacted it alleging that: “(a) [Decedent’s son] may have improperly used the 9 Decedent’s debit card; (b) the Decedent may have been pressured to sign the change in 10 beneficiary designation and Payable on Death Designation; and (c) a police report had been 11 filed related to [Decedent’s son’s] alleged treatment of the Decedent’s finances.” (Id. at ¶¶ 12 18–19). Decedent’s daughter also informed Plaintiff that she was going to contest the 13 disbursement—upon which Plaintiff notified Decedent’s son that it could not proceed with 14 settlement of the Decedent’s accounts. (Id. at 21). Decedent’s son threatened to contact 15 the FBI and the media. (Id. at ¶ 22). Plaintiff has encouraged Decedent’s children to reach 16 some sort of settlement, but they have not. (Id. at ¶¶ 23–25). Now, fearful to being subject 17 to double liability, Plaintiff has filed an interpleader action and seeks to deposit the 18 proceeds from the Decedent’s accounts with the Clerk of this Court and be discharged of 19 liability. (Id. at ¶¶ 26–29). Plaintiff also seeks to recover its attorneys’ fees and costs 20 related to this matter. (Id. at ¶ 30). 21 II. Deposit of Disputed Funds 22 Plaintiff asks the Court for an Order instructing it to “deposit the funds from the 23 Decedent’s [] accounts into the registry of the Court for future disbursement according to 24 the judgment of this Court.” (Doc. 6 at 1). Plaintiff seeks such an Order under 25 28 U.S.C. § 1335, Federal Rules of Civil Procedure 22 and 67, as well as Local Rule of 26 Civil Procedure 67.1. (Id.). 27 “Interpleader is a procedural device used to resolve conflicting claims to money or 28 property. It enables a person or entity in possession of a tangible res or fund of money (the 1 stakeholder) to join in a single suit two or more claimants asserting mutually exclusive 2 claims to that stake.” Metro. Life Ins. Co. v. Reynolds, 2013 WL 6048808, at *2 (D. Ariz. 3 Nov. 15, 2013) (citing Nevada v. Pioneer Cos., Inc., 245 F Supp.2d 1120, 1125 (D. Nev. 4 2003)). Interpleader is designed to protect the stakeholder “against the problems posed by 5 multiple claimants to a single fund.” Mack v. Kuckenmeister, 619 F.3d 1010, 1024 (9th Cir. 6 2010) (quoting Minnesota Mut. Life Ins. Co. v. Ensley, 174 F.3d 977, 980 (9th Cir. 1999)). 7 An “[i]nterpleader's primary purpose is not to compensate, but rather to protect 8 stakeholders from multiple liability as well as from the expense of multiple litigation.” 9 Aetna Life Ins. Co. v. Bayona, 223 F.3d 1030, 1034 (9th Cir. 2000). 10 An interpleader action usually proceeds in two stages: first, the court determines 11 whether the interpleader action is appropriate. Reynolds, 2013 WL 6048808, at *2. If so, 12 the Court “may order the plaintiff to deposit the disputed funds, discharge the plaintiff, and 13 direct the claimants to interplead.” Id. Second, the Court “adjudicates the defendants’ 14 competing claims to the interplead funds, and the action usually proceeds as any other civil 15 action.” Id. (citing Wells Fargo Bank, N.A. v. Magellan Owners Ass’n, 2010 WL 46794, 16 at *2 (D. Ariz. Jan. 4, 2010)). 17 Plaintiff has demonstrated that this action is appropriate. QBE Specialty Ins. Co. v. 18 Kane as Tr. for Hawaii Island Air, Inc., 653 F. Supp. 3d 780, 790 (D. Haw. 2023). 19 Interpleader is appropriate, where, as here, a plaintiff has filed a motion alleging that there 20 are competing claims to a single fund. See id. (“Interpleader is proper [when] there is a 21 single fund at issue [and] adverse claimants to that fund.”); Lincoln Nat'l Life Ins. Co. v. 22 Ridgway, 293 F. Supp. 3d 1254, 1261 (W.D. Wash. 2018) (“Interpleader is proper when a 23 stakeholder has at least a good faith belief that there are present or prospective colorable 24 competing claims to the stake.”). A plaintiff need only show that it has a “real and 25 reasonable fear of exposure to double liability or the vexation of conflicting claims.” 26 Michelman v. Lincoln Nat. Life Ins. Co., 685 F.3d 887, 894 (9th Cir. 2012). To do this, it 27 can “merely demonstrate that potential adverse claims meet ‘a minimal threshold level of 28 substantiality.’ ” QBE Specialty, 653 F. Supp. 3d at 790. A party may initiate an 1 interpleader “even if some or all of the claims against the stake are prospective.” Ridgway, 2 293 F. Supp. 3d at 1260. 3 The Court finds that Plaintiff has demonstrated it may face exposure to double 4 liability due to competing claims for funds it is holding on behalf of Decedent. Michelman, 5 685 F.3d at 894. Plaintiff has alleged that Defendant Armstrong contacted it because she 6 believed that Defendant McEntire may have improperly used the Decedent’s debit card, 7 that he pressured Decedent to sign the change in beneficiary designation and Payable on 8 Death Designation and that a police report had been filed related to Defendant McEntire’s 9 alleged treatment of the Decedent’s finances. (Doc. 1 at ¶ 19). Plaintiff also notes that, 10 after Decedent’s death, Defendant McEntire sought to withdraw the funds from Decedent’s 11 Accounts and informed Plaintiff that Defendant Armstrong had been removed from the 12 Decedent’s will and trust. (Id. at ¶ 20). These facts demonstrate that Plaintiff could be 13 subject to multiple liability as well as the expense of multiple litigation. See Bayona, 223 14 F.3d at 1034. Thus, this interpleader action is appropriate under Section 1335. Reynolds, 15 2013 WL 6048808, at *2. 16 Accordingly, 17 IT IS ORDERED that Plaintiff’s Motion (Doc. 6) seeking to deposit the disputed 18 Navy Federal Weyer accounts into the Court’s registry is GRANTED. Plaintiff must 19 deposit the funds from the Navy Federal Weyer accounts, totaling $201,994.78, plus 20 applicable interest, into the Court’s registry. 21 IT IS FURTHER ORDERED that Plaintiff may file a Motion for Attorney’s Fees 22 within thirty (30) days of this Order. 23 / / / 24 / / / 25 / / / 26 / / / 27 / / / 28 / / / 1 IT IS FINALLY ORDERED that when the disputed funds are deposited with the Clerk of Court, Plaintiff shall file a Notice of Deposit, after which Plaintiff will be || dismissed from this action. The Defendants are hereby ordered to interplead their claims. 4 Dated this 25th day of September, 2024. 5 6 fe □□ 7 norable'Diang/4. Hurfetewa g United States District Fudge 9 iol °°: Finance 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

_5-

99 Cal. Daily Op. Serv. 2511, 1999 Daily Journal D.A.R. 3292 Minnesota Mutual Life Insurance Company, Plaintiff-Counter-Defendant-Appellee v. Donald Joe Ensley, Defendant-Counter-Claimant-Cross-Claimant-Appellant v. Laura L. Ensley, Defendant-Cross-Defendant-Appellee, and Kevin Burke Burke Group, Counter-Defendants-Appellees

174 F.3d 977 (Ninth Circuit, 1999)

Aetna Life Insurance Company v. Rey L. Bayona

223 F.3d 1030 (Ninth Circuit, 2000)

Gail Michelman v. Lincoln National Life Insuranc

685 F.3d 887 (Ninth Circuit, 2012)

Lincoln Nat'l Life Ins. Co. v. Ridgway

293 F. Supp. 3d 1254 (W.D. Washington, 2018)

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Navy Federal Credit Union v. McEntire, Counsel Stack Legal Research, https://law.counselstack.com/opinion/navy-federal-credit-union-v-mcentire-azd-2024.

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