United States District Court, D. Maryland
Xinis United States District Judge
in this interpleader action is a Petition to Establish
Attorneys' Fees and Expenses filed by Plaintiff Bank of
America, N.A. ECF No. 89. The issues are fully briefed and
the Court now rules pursuant to Local Rule 105.6 because no
hearing is necessary. For the following reasons, Bank of
America's petition is granted in part.
this action is a longstanding dispute over the control and
governance of Jericho Baptist Church Ministries, Inc.
(“the Church”), located in Landover, Prince
George's County, Maryland. The dispute spawned much
litigation during which the parties and the courts refer to
the surviving members of the original board as “Jericho
DC” to distinguish it from a later-formed Board that
incorporated in Maryland, also under the name “Jericho
Baptist Church Ministries, Inc.” (“Jericho
Church holds four corporate accounts at Bank of America, N.A.
(“BOA”) that it opened between 1999 and 2002. On
September 29, 2015, BOA filed the instant Interpleader action
against Jericho MD, Jericho DC, and their respective board
members. ECF No. 1. The Complaint, brought pursuant to 28
U.S.C. § 1335, sought an order determining which entity-
Jericho DC or Jericho MD-owns and controls the assets held in
four BOA corporate deposit accounts. Related to this action,
the Court granted summary judgment in favor of Jericho DC,
declaring “that Jericho DC is entitled to the funds
currently held in the Court registry.” ECF No. 85.
Jericho DC filed counterclaim against BOA (ECF Nos. 19 and
48) alleging that BOA breached the terms of its customer
agreement with Jericho DC and was negligent in releasing a
substantial portion of the funds at the direction of Jericho
MD. BOA moved to dismiss the counterclaims under Rule
12(b)(6) of the Federal Rules of Civil Procedure, ECF No. 56,
which the Court recently granted in part and denied in part.
See ECF Nos. 108 & 109.
September 15, 2016, BOA filed the present petition seeking to
recover $63, 216.25 in attorneys' fees and $1, 046.96 in
expenses from the interpleaded funds it incurred in
prosecuting the interpleader action. ECF No. 89. Jericho DC
opposed BOA's petition, arguing that BOA is not entitled
to recovery because it is not an “impartial
stakeholder, ” a requirement of any interpleader
plaintiff seeking to recover fees and costs associated with
bringing the action. See ECF No. 101. In the
alternative, Jericho DC asks the court to reduce the
BOA's requested award to reflect a more reasonable amount
associated with the interpleader action. Id.
STANDARD OF REVIEW
the interpleader statute and Rule 22 of the Federal Rules of
Civil Procedure make no mention of awarding costs and
attorneys' fees, courts frequently grant such motions to
encourage interpleader actions and thus avoid the cost of
multiple lawsuits. See, e.g., Powell Valley
Bankshares Inc. v. Wynn, No. 01-79, 2002 WL 728348, at
*1 (W.D. Va. Apr. 11, 2002). The Court retains broad
discretion to award the stakeholder its costs, including
reasonable attorneys' fees, out of the deposited fund.
See Stonebridge Life Ins. Co. v. Kissinger, 89
F.Supp.3d 622, 627 (D.N.J. 2015) (“Because the
stakeholder is considered to be helping multiple parties to
an efficient resolution of the dispute in a single court,
courts find that the stakeholder attorney's fees are
justified.”). “Typically [costs and
attorneys' fees] are available only when the party
initiating the interpleader is acting as a mere stakeholder,
which means that the party has admitted liability, has
deposited the fund in court, and has asked to be relieved of
any further liability.” 7 Charles Alan Wright et al.,
Federal Practice and Procedure § 1719 (3d ed. 2001).
See also Rapid Settlements, Ltd. v. U.S. Fid. & Guar.
Co., 672 F.Supp.2d 714, 722 (D. Md. 2009); ReliaStar
Life Ins. Co. of N.Y. v. LeMone, No. 7:05CV00545, 2006
WL 733968, at *2-3 (W.D. Va. Mar. 16, 2006) (discussing when
stakeholder may recover attorney's fees); Safemasters
Co. v. D'Annunzio & Circosta, No. K-93-3883,
1994 WL 512140, at *5 (D. Md. July 18, 1994); Aetna Life
Ins. Co. v. Outlaw, 411 F.Supp. 824, 825-26 (D. Md.
1976) (noting that only impartial stakeholders may recover
award of costs and attorneys' fees to a stakeholder in a
successful interpleader action is equitable, it should also
be modest. “By its very nature [an interpleader fee] is
of a relatively small amount simply to compensate for
initiating the proceedings.” Ferber Co. v.
Ondrick, 310 F.2d 462, 467 (5th Cir. 1962); Sun Life
Assurance Co. v. Tinsley, No. 6:06-CV-00010, 2007 WL
1388196, at *2 (W.D. Va. May 9, 2007), report and
recommendation adopted sub nom. Sun Life Assur. Co. Canada v.
Tinsley, No. 6:06-CV-00010, 2007 WL 1795728 (W.D. Va.
June 19, 2007). Only a limited recovery is available to
stakeholders because the interpleader process “does not
usually involve any great amount of skill, labor or
responsibility.” Lewis v. Atlantic Research
Corp., No. 98-0070-H, 1999 WL 701383, at *7 (W.D. Va.
Aug. 30, 1999) (quoting Hunter v. Fed. Life Ins.
Co., 111 F.2d 551, 557 (8th Cir. 1940)). Thus, the
stakeholder's recovery is properly limited to the
preparation of the petition for interpleader, the deposit of
the contested funds with the court, and the preparation of
the order discharging the stakeholder. See,
e.g., ReliaStar Life Ins. Co. of N.Y. v.
LeMone, No. 7:05CV00545, 2006 WL 1133566, at *2 (W.D.
Va. Apr. 25, 2006); 7 Charles Alan Wright et al., Federal
Practice and Procedure § 1719 (3d ed. 2001). See
also Dusseldorp v. Ho, 4 F.Supp.3d 1069, 1071 (S.D. Iowa
2014) (“Recoverable expenses are properly limited to
the attorney fees billed to prepare the complaint, obtain
service of process on the claimants to the fund, and secure
the plaintiff's discharge from liability and dismissal
from the lawsuit.”).
Supreme Court has established the “lodestar”
method for determining a reasonable fee. The starting point
in the lodestar calculation is “the number of hours
reasonably expended on the litigation multiplied by a
reasonable hourly rate.” Hensley v. Eckerhart,
461 U.S. 424, 434 (1983); Robinson v. Equifax Info.
Servs., LLC, 560 F.3d 235, 243 (4th Cir. 2009). Twelve
factors, first articulated by the Fifth Circuit in
Johnson v. Georgia Highway Express, Inc., 488 F.2d
714 (5th Cir. 1974), guide the determination of what
constitutes a reasonable fee. The factors are:
(1) the time and labor required; (2) the novelty and
difficulty of the questions; (3) the skill requisite to
perform the legal service properly; (4) the preclusion of
employment by the attorney due to acceptance of the case; (5)
the customary fee; (6) whether the fee is fixed or
contingent; (7) time limitations imposed by the client or the
circumstances; (8) the amount involved and the results
obtained; (9) the experience, reputation, and ability of the
attorneys; (10) the “undesirability” of the case;
(11) the nature and length of the professional relationship
with the client; and (12) awards in similar cases.
Id. at 717-19. Robinson, 560 F.3d at
243-44; Hensley, 461 U.S. at 434. Based on the
foregoing, BOA is indeed entitled to attorneys' fees and
costs for filing and resolving the interpleader action only.