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Metropolitan Life Insurance Co. v. Smith

United States District Court, D. Maryland

April 14, 2016

METROPOLITAN LIFE INSURANCE COMPANY
v.
CARL SMITH, et. al.

MEMORANDUM OPINION

DEBORAH K. CHASANOW, United States District Judge.

Presently pending in this statutory interpleader action are: (1) a motion for summary judgment filed by Defendant Starelle Gladden (ECF No. 23); and (2) a motion for discharge filed by Plaintiff Metropolitan Life Insurance Company (“Plaintiff” or “MetLife”) (ECF No. 28). The issues have been briefed, and the court now rules, no hearing being deemed necessary. Local Rule 105.6. For the following reasons, Defendant Gladden’s motion for summary judgment will be denied, and Plaintiff’s motion for discharge will be granted.

I. Background

A. Factual Background

James Innocent (the “Decedent”) died due to multiple gunshot wounds on June 24, 2010. His death was ruled a homicide. (ECF No. 1-4). Prior to his death, the Decedent participated in the Washington Metropolitan Area Transit Authority (“WMATA”) Employee Health & Welfare Plan (the “Plan”). The Plan included group life insurance coverage, which was funded by a group life insurance policy issued to WMATA by Plaintiff MetLife (the “Group Policy”). Under the terms of the Group Policy Certificate of Insurance (the “Certificate”), the Decedent was permitted to name his beneficiary. (See ECF No. 1-1). At the time of his death, the Decedent maintained life insurance coverage totaling $102, 000.00 (the “Life Insurance Benefits”). (ECF No. 1-2).

The Life Insurance Benefits became payable to the authorized beneficiary upon the Decedent’s death, pursuant to the terms of the Certificate. According to the most recent “Designation of Beneficiary and Contingent Beneficiary(ies)” (the “Designation”) on file dated December 1, 2008, the Decedent listed Defendant Gladden as the primary beneficiary and Defendant Carl Smith as the contingent beneficiary. (ECF No. 1-3). Defendant Gladden was the Decedent’s fiancée, and Defendant Smith was the Decedent’s friend. Immediately after the Decedent’s death, Defendant Gladden made a funeral home assignment to Defendant Beta Capital Corp. (“Beta Capital”) for $6, 695.00. (ECF No. 1-5). Defendant Gladden also completed and submitted a beneficiary claim form (the “Claim”) requesting that MetLife distribute the Life Insurance Benefits to her. (ECF No. 1-6).

MetLife informed Defendant Gladden that because the Decedent’s death was ruled a homicide, a copy of the police report was needed to process the Life Insurance Benefits. (ECF No. 28-8). Defendant Gladden responded by providing a copy of the reward poster in connection with the investigation into the Decedent’s death, as well as contact information for Detective Allyson Hamlin of the Prince George’s County Police Department (the “Department”). (ECF No. 28-9, at 2). MetLife contacted Detective Hamlin in October 2010. (ECF No. 28-10). She informed MetLife that Defendant Gladden had not been ruled out as a suspect in the Decedent’s death. (ECF No. 28-11). MetLife requested a statement from the Department again in December 2010 and throughout 2011. (ECF Nos. 28-12; 28-13). In January 2012, Detective Hamlin advised MetLife that the Department still could not rule out Defendant Gladden as a suspect in the Decedent’s death. (ECF No. 28-14). According to MetLife, it continued to contact the Department seeking updated information. (ECF No. 28-1, at 4). In April 2013, Detective Hamlin informed MetLife that although the Decedent could be ruled out as an aggressor, Defendants Gladden and Smith had not been ruled out as suspects. (ECF No. 28-15). The following month, Detective Hamlin notified MetLife that no charges had been filed against Defendants Gladden and Smith, and that the status of the case was unlikely to change. (ECF No. 28-16).

MetLife contacted Defendant Gladden seeking a claimant affidavit that would allow MetLife to determine whether the Decedent’s relatives or heirs have potential claims to the Life Insurance Benefits. (ECF No. 28-17). Defendant Gladden provided a properly notarized claimant affidavit on January 18, 2014. (ECF No. 28-19). MetLife also requested a claimant affidavit from Defendant Smith, the contingent beneficiary, but he never responded to multiple attempts to contact him at his last known address. (ECF Nos. 28-1, at 4-5; 28-18). By letter on February 6, 2014, MetLife advised Defendants Gladden, Smith, and J.I. (the minor son of Defendant Gladden and the Decedent) that their potential claims to the Life Insurance Benefits were adverse to one another and “raise questions of fact and law that cannot be resolved by MetLife without exposing the [P]lan to the danger of double liability.” (ECF No. 28-20, at 1). MetLife noted that, before initiating an interpleader action, it sought to give the defendants “the opportunity to try to resolve the matter amicably in order to preserve the benefits from litigation costs and fees.” (Id. at 2). According to MetLife, it received no response from Defendants Gladden, Smith, J.I., and Beta Capital (collectively, the “Defendants”). (ECF No. 28-1, at 5).

B. Procedural Background

On November 25, 2014, MetLife filed a complaint in interpleader pursuant to 28 U.S.C. § 1335 seeking certainty regarding Defendants’ respective rights to the Life Insurance Benefits. (ECF No. 1). Defendants Beta Capital, Gladden, and J.I. answered. (ECF Nos. 11; 14; 18). Defendant Smith did not answer, and his default was entered on September 30, 2015. (ECF No. 22; see ECF Nos. 19; 20).

MetLife also moved to deposit the Life Insurance Benefits into a court registry, and Defendant Gladden consented. (ECF Nos. 21; 24). The court granted MetLife’s motion, and its counsel provided a check in the amount of $104, 691.78. (ECF Nos. 25; 27).

On October 8, Defendant Gladden moved for summary judgment requesting that the Life Insurance Benefits be distributed to Defendant Gladden and that MetLife’s demand for attorneys’ fees and costs be denied because, according to her, there was no basis to initiate an interpleader action. (ECF No. 23). MetLife responded in opposition. (ECF No. 26). As a disinterested stakeholder, MetLife explains that it “does not oppose Defendant Gladden’s summary judgment motion to the exten[t] that she contends that there are no genuine factual disputes to a finding that she is the appropriate beneficiary and that she is entitled to the [Life Insurance Benefits] as a matter of law.” (Id. at 2). MetLife challenges Defendant Gladden’s motion, however, to the extent that she contends that it lacked a reasonable basis to pursue this matter as an interpleader and is not entitled to attorneys’ fees and costs. (Id.).

Shortly after depositing the Life Insurance Benefits, MetLife moved for discharge. (ECF No. 28). Defendant Gladden filed a response noting that she does not object, and MetLife replied. (ECF Nos. 29; 30).[1] In March 2016, MetLife’s counsel Thomas Bundy withdrew ...


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