Williams v. Lincoln National Life Insurance

121 F. Supp. 3d 1025, 2015 U.S. Dist. LEXIS 101481, 2015 WL 4644886
CourtDistrict Court, D. Oregon
DecidedAugust 3, 2015
DocketCase No. 3:15-CV-00196-MO
StatusPublished
Cited by3 cases

This text of 121 F. Supp. 3d 1025 (Williams v. Lincoln National Life Insurance) is published on Counsel Stack Legal Research, covering District Court, D. Oregon primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Williams v. Lincoln National Life Insurance, 121 F. Supp. 3d 1025, 2015 U.S. Dist. LEXIS 101481, 2015 WL 4644886 (D. Or. 2015).

Opinion

OPINION AND ORDER

MOSMAN, District Judge.

Plaintiffs Gerald Williams, Jr. and Construction & Engineering Management Research, Inc. (“CEMR”) (collectively, “the Williams plaintiffs”) originally brought this diversity action seeking a court order directing Lincoln National Life Insurance Company (“Lincoln”) to change the ownership name on a policy it issued and to pay the surrender value of the policy. Lincoln filed a third-party complaint interpleading the listed owner on the policy, Grist Mill Trust Welfare Benefit Plan, (“Grist Mill”) and Universitas Education LLC (“Universitas”), a company that obtained a restraining notice in a matter pending in United States District Court for the Southern District of New York. Universitas’s restraining order purports to prohibit Lincoln from permitting the transfer of any property in which Grist Mill has an interest. Universitas- filed with this Court a Motion to Dismiss the third-party complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). .In the alternative, Universitas seeks the transfer of the matter to the Southern District of New York. For the reasons stated below, the Motion is DENIED with respect to dismissal and GRANTED with respect to transfer.

BACKGROUND

Mr. Williams is the sole shareholder in CEMR. Pl.’s Compl. at ¶ 2. In 2004 CEMR adopted Grist Mill’s Section 419 Welfare Benefit Plan. Id. at ¶ 6-7. CEMR made annual contributions to Grist Mill on behalf of Mr. Williams. Id. at ¶ 9. Grist Mill used the contributions to purchase life insurance from Jefferson Pilot, listing Mr. Williams as the insured. Id. at ¶ 10. Grist Mill held the policy in trust for the benefit of Mr. Williams. Id. Mr. Williams’s wife, Caroline Reay, was to be the beneficiary of the trust in the event of Mr. Williams’s death. Id. Jefferson Pilot then merged with Lincoln, assuming Lincoln’s name. Id. at ¶ 11.

[1029]*1029In 2014, Mr. Williams signed forms instructing Lincoln to transfer ownership from Grist Mill to himself and to change the policy’s beneficiary from Mr. Williams to Dr. Reay. Id. at ¶ 14. Grist Mill sent the forms to Lincoln. Id. at ¶ 15. Lincoln did not change the ownership of the policy, as requested. Id. at ¶ 16. Lincoln answers that it had been. provided with.'a restraining notice that purported.to bar it from “permitting any sale, assignment.or transfer of any property in which the Grist Mill Trust has an interest.” Def.’s Answer at ¶ 16.

The Williams plaintiffs filed a motion in United States District Court for the Southern District of New York requesting a protective order preventing Universitas from restraining the transfer of life insurance policies written by Lincoln. Judge Laura Taylor Swain dismissed the motion without prejudice, holding that she could not exercise ancillary jurisdiction to resolve the issues raised in the motion. Def.’s Answer [9], Ex. 2 at 6) Mr. Williams then filed this action against Lincoln. Lincoln alleged that “Plaintiffs dispute appears to be with Universitas and Grist Mill Trust as to whether the ownership of thé policies can be transferred.” Def.’s Answer at ¶ 16. Lincoln then filed its Third Party Complaint interpleading Universitas and Grist Mill, invoking Federal Rule of Civil Procedure 22. Third Party Compl. [10] at ¶ 22-28.

DISCUSSION

Universitas’s motion presents two questions: (1) Does this Court ‘have jurisdiction to interplead Universitas, a company with no contacts with Oregon; and (2) if this Court has jurisdiction, should the matter be transferred to the Southern District of New York? Before reaching those questions, I address the Williams plaintiffs’ argument that Universitas failed to comply with Local Rule 7-1.

I. Local Bule 7-1

The Williams plaintiffs argue that Universitas failed to confer with Plaintiffs’ counsel, Michael Bloom, before filing its motion for transfer of venue. PL’s Resp. [33]. at 23. Universitas replies that it conferred with Lincoln’s counsel because “as the" caption of this case readily reflects, it was Lincoln Life — and not the Plaintiffs — who brought Universitas into, this action as a third-party defendant.” Third party Def.’s Reply [35] at 1-2.

Interpleader is a two-stage action. Ip .the first stage, the Court determines whether interpleader is appropriate. In the second stage, the Court determines the merits of competing claims. See Moore, et ah, Moore’s Federal Practice § 22.03[l][a]. In the first stage, Universitas’s opposing party is Lincoln, but in the second stage, it is the Williams plaintiffs. Universitas’s motion for dismissal implicates the first stage of interpleader, but its motion in the alternative for transfer of venue implicates the second stage:'Universitas should have conferred with the relevant opposing parties for each motion.

Yet Universitas has explained its failure to do' so by reference to its belief that it was proper to confer with Lincoln’s counsel. Local Rule 7-1 requires the parties to make “a good faith effort through personal or telephone conferences to resolve the dispute.” Universitas has "argued that, it acted in good, faith in conferring with Lincoln.

Moreover, the. purpose of ' Local Rule 7-1 is to preserve judicial resources by promoting the amicable resolution of disputes, As this Court has previously explained, “[i]t is clear-from the attomdys’ conversations that if [the] motion were de[1030]*1030nied on procedural grounds, [the movant] immediately would seek leave to refile the motion. Preservation of judicial resources is served by considering the motion now, on its merits.” Exact Order Specialties v. Glow Indus., Inc., 2012 WL 3597432, at *3 (D.Or. Aug. 20, 2012).

II. Jurisdiction

Universitas argues that it lacks minimum contacts with Oregon and is subject to neither specific nor general jurisdiction in the state. Third-party Def.’s Mot. to Dismiss [19] at 6-11. A defendant must be subject to personal jurisdiction in the state to be interpleaded under Rule 22. See Cal. Pipe Recycling, Inc. v. Sw. Holdings, Inc., 2008 WL 4690534, at *8 (E.D.Cal. Oct. 23, 2008). Neither Lincoln nor the Williams plaintiffs contend that Universitas is subject to personal jurisdiction in Oregon. So neither Lincoln nor the Williams plaintiffs contend that interpleader was properly pleaded under Rule 22.

The Williams plaintiffs argue, instead, that Lincoln’s complaint asserted all the elements for statutory interpleader pursuant to 28 U.S.C. § 1335. Service of process for interpleader pursuant to this statute may be served nationwide. 28 U.S.C. § 2361. If Lincoln’s complaint may be construed to interplead Universitas under 28 U.S.C. § 1335, then Universitas’s objection that this Court lacks jurisdiction over it is unavailing.

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121 F. Supp. 3d 1025, 2015 U.S. Dist. LEXIS 101481, 2015 WL 4644886, Counsel Stack Legal Research, https://law.counselstack.com/opinion/williams-v-lincoln-national-life-insurance-ord-2015.