SCHLAFLY v. THE LINCOLN NATIONAL LIFE INSURANCE COMPANY

CourtDistrict Court, D. New Jersey
DecidedMay 30, 2020
Docket2:17-cv-02522
StatusUnknown

This text of SCHLAFLY v. THE LINCOLN NATIONAL LIFE INSURANCE COMPANY (SCHLAFLY v. THE LINCOLN NATIONAL LIFE INSURANCE COMPANY) is published on Counsel Stack Legal Research, covering District Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
SCHLAFLY v. THE LINCOLN NATIONAL LIFE INSURANCE COMPANY, (D.N.J. 2020).

Opinion

Not for Publication

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

ANDREW L. SCHLAFLY, on behalf of

himself individually and on behalf of all other

members of Eagle Forum, a non-profit Civil Action No. 17-2522 (ES) (SCM) membership corporation,

OPINION Plaintiff,

v.

EAGLE FORUM, et al.,

Defendants.

SALAS, DISTRICT JUDGE Before the Court is Defendant Eagle Forum’s motion (i) to alter or amend this Court’s June 17, 2019 Opinion and Order granting plaintiff Andrew Schlafly’s motion to dismiss Eagle Forum’s counterclaims for costs and attorneys’ fees; and (ii) for an appeal bond in light of the Court’s July 8, 2019 Order staying disbursement of the interpleader funds at issue, pending the resolution of the parties’ appeals to the Third Circuit. (D.E. No. 252 (the “Motion”)). The Court has reviewed the parties’ submissions and decides this matter without oral argument. See Fed. R. Civ. P. 78(b); L. Civ. R. 78.1(b). For the reasons that follow, Eagle Forum’s Motion is DENIED. I. Background This case arises out of a statutory interpleader action brought by plaintiff Andrew Schlafly (“Andrew”), individually and on behalf of all other members of defendant Eagle Forum, against defendants Edward Martin, John Schlafly, Eagle Trust Fund, Eagle Forum Education and Legal Defense Fund, Estate of Phyllis Schlafly (collectively, “Eagle Trust Defendants”) and defendant Eagle Forum (altogether, “Defendants”). (D.E. No. 204, Second Amended Complaint with Class Action, (“Compl.”) ¶¶ 1 & 13). Andrew and Defendants alleged competing claims to collect proceeds (“Funds”) on two life insurance policies (collectively, the “Policies”) held by the late Phyllis Schlafly. (See Compl. ¶¶ 13 & 14). The Lincoln National Life Insurance Company (“Lincoln”) and John Hancock Life Insurance Company (U.S.A.) (“John Hancock”) (collectively,

the “Insurance Companies”) issued the respective Policies. (See id. ¶¶ 14, 18 & 44). On June 17, 2019, the Court issued an Opinion declaring Eagle Forum as the sole beneficiary of the Policies at issue. (D.E. No. 238 at 10). Relevant here, the Court granted Andrew’s motion to dismiss Eagle Forum’s counterclaims in part with respect to Eagle Forum’s request for costs and attorneys’ fees on its counterclaims. (D.E. No. 238 at 13–14 & D.E. No. 239 at 2). The Court also directed Eagle Forum to prepare an order to disburse the interpleaded Funds under Local Rule 67.1(b) within 30 days of the June 17, 2019 Opinion and Order. (D.E. No. 239 at 2). Andrew and the Eagle Trust Defendants filed notices of appeal to the Third Circuit on June 17, 2019—the same day this Court issued its Opinion and Order. (D.E. Nos. 240 & 241). On July 2, 2019, the Court issued an Order directing the Clerk of Court to pay the principal

amount of $3,271,593.51, plus all interest and minus administrative Court fees, to Eagle Forum pursuant to the Court’s July 17, 2019 Opinion. (D.E. No. 246 (“Disbursement Order”)). Andrew informed the Court of the parties’ appeals on July 5, 2019, and requested a stay of the Disbursement Order pending appeal, reasoning that disbursement would interfere with a potential remand for recalculation by the Third Circuit. (D.E. No. 247). On July 8, 2019, after having received no response from the other parties and in an effort to maintain the status quo, the Court issued a stay of the Disbursement Order pending the resolution of the parties’ appeals to the Third Circuit. (D.E. No. 250 (“Order Staying Disbursement”)). Twenty-two days later, on July 30, 2019, Eagle Forum filed the instant Motion to alter the Court’s judgment pursuant to Federal Rule of Civil Procedure 59(e). (D.E. No. 252). First, Eagle Forum seeks its own attorneys’ fees to be taxed against Andrew and the Eagle Trust Defendants.1 (D.E. No. 252-1 (“EF Mov. Br.”) at 3). Second, Eagle Forum asks this Court to tax Lincoln and

John Handcock’s attorneys’ fees against the same unsuccessful claimants. (Id.). Third, Eagle Forum seeks an appeal bond from Andrew and the Eagle Trust Defendants in light of the Order Staying Disbursement dated July 8, 2019. (Id.). Specifically, Eagle Forum requests an appeal bond to cover “costs, interest, and delay damages” in excess of the Funds that it admits are already held in the Court’s Registry. (Id. at 6–7). On August 1, 2019, two days after it filed the instant Motion, Eagle Forum filed a notice of cross appeal to the Third Circuit. (D.E. No. 253). Andrew and the Eagle Trust Defendants filed oppositions on September 3, 2019 (D.E. No. 257 (“Andrew Opp.”) & D.E. No. 258 (“ET Opp.”)), and Eagle Forum filed a reply on September 9, 2019. (D.E. No. 259 (“EF Reply”)). II. Legal Standard

Pursuant to Federal Rule of Civil Procedure 59(e), “[a] motion to alter or amend a judgment must be filed no later than 28 days after the entry of the judgment.” See also Pellicano v. Blue Cross Blue Shield Ass’n, 540 F. App’x 95, 97 (3d Cir. 2013). “A proper Rule 59(e) motion . . . must rely on one of three grounds: (1) an intervening change in controlling law; (2) the availability of new evidence; or (3) the need to correct clear error of law or prevent manifest injustice.” Lazaridis v. Wehmer, 591 F.3d 666, 669 (3d Cir. 2010) (citing N. River Ins. Co. v. CIGNA

1 While Eagle Forum seemingly attempts to argue that it “does not seek its [own] attorneys’ fees” and instead claims that it seeks to recover attorneys’ fees previously paid out from the Funds to the disinterested stakeholders (EF Reply at 4), its briefs also state otherwise. (See EF Mov. Br. at 3 (“Eagle Forum respectfully requests . . . Eagle Forum’s attorneys’ fees, as costs against the unsuccessful claimants . . . .”); EF Reply at 7 (requesting that Eagle Forum’s attorneys’ fees be taxed against Andrew and the Eagle Trust Defendants)). Reinsurance Co., 52 F.3d 1194, 1218 (3d Cir. 1995)); see also Pellicano, 540 F. App’x at 98. Here, Eagle Forum’s Motion is premised on the third ground—the alleged need to correct a “clear error of law or prevent manifest injustice.” See Lazaridis, 591 F.3d at 669; (see also EF Mov. Br. at 1; EF Reply at 3–4).

Relief should be granted “sparingly” under Rule 59(e) because “reconsideration of a judgment after its entry is an extraordinary remedy.” NL Indus., Inc. v. Commercial Union Ins. Co., 935 F. Supp. 513, 516 (D.N.J. 1996). Further, a motion for reconsideration “should not raise new arguments that the party could have made previously.” Wiest v. Lynch, 710 F.3d 121, 128 (3d Cir. 2013); accord Rhines v. United States, 677 F. App’x 34, 36 n.5 (3d Cir. 2017) (finding “no abuse of discretion in the District Court’s denial of [plaintiff’s] motion to supplement his Rule 59 motion . . . [because such motion] may not be used to raise new arguments that could have or should have been raised . . . prior to judgment”); Venkataram v. Office of Info. Policy, No. 09- 6520, 2013 WL 5674346, at *2 (D.N.J. Oct. 16, 2013), aff’d, 590 F. App’x 138 (3d Cir. 2014) (“The Court will not consider new arguments upon a motion for reconsideration.”); Mason v.

Sebelius, No. 11-2370, 2012 WL 3133801, at *2 (D.N.J. July 31, 2012) (“To prevail under the third prong, the movant must show that ‘dispositive factual matters or controlling decisions of law were brought to the court’s attention but not considered.’”). III.

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