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White Marlin Open, Inc. v. Heasley

United States District Court, D. Maryland

February 3, 2017

WHITE MARLIN OPEN, INC., et al., Plaintiffs,
v.
PHILLIP G. HEASLEY, Defendant.

          MEMORANDUM OPINION

          RICHARD D. BENNETT UNITED STATES DISTRICT JUDGE.

         Plaintiff White Marlin Open, Inc. (“WMO”) filed this Interpleader action in order to obtain a judicial determination of entitlement to the over $2.8 million in first place prize money from WMO's 2016 Open Tournament, held in Ocean City, Maryland on August 8 - 12, 2016. (ECF No. 2.)

         Currently pending before the Court is defendant Philip G. Heasley's (“Heasley”) Motion to Dismiss: (1) plaintiff WMO as a party to this case; (2) WMO's demand for reimbursement of five times its attorney's fees and costs (ECF No. 2 at ¶ 44); (3) the Crossclaim of plaintiffs Richard Kosztyu and Mark Hutchison (“K&H”) against WMO (ECF No. 53); (4) the Crossclaim of K&H against all other parties (ECF No. 54); and (5) the Complaint of K&H against Heasley (ECF No. 55).[1] (“Heasley's Motion, ” ECF No. 56.) The parties' submissions have been reviewed, and no hearing is necessary. See Local Rule 105.6 (D. Md. 2016).

         For the reasons stated below, Heasley's Motion (ECF No. 56) is GRANTED IN PART and DENIED IN PART. Specifically, it is DENIED with respect to a dismissal of WMO, and WMO shall remain as a plaintiff in this case; the Motion is GRANTED with respect to WMO's demand for reimbursement of five times its attorney's fees and costs (ECF No. 2 at ¶ 44) pursuant to the 2016 Tournament Rules. However, WMO eventually may petition this Court for recovery of its actual attorney's fees and costs pursuant to Local Rule 109 and Appendix B.3 of this Court's Local Rules (D. Md. 2016).

         Furthermore, Heasley's Motion (ECF No. 56) is DENIED with respect to a dismissal of plaintiffs' Kosztyu and Hutchison's Crossclaim against WMO (ECF No. 53), but shall be GRANTED with respect to a STAY of that Crossclaim pending resolution of the underlying Interpleader action.

         Finally, Heasley's Motion (ECF No. 56) is GRANTED with respect to a dismissal of Kosztyu and Hutchison's Crossclaim against all other parties (ECF No. 54) and Complaint against Heasley (ECF No. 55). The Crossclaim (ECF No. 54) and Complaint (ECF No. 55) are DISMISSED WITHOUT PREJUDICE.

         BACKGROUND

         Plaintiff White Marlin Open, Inc. (“WMO”) operates the world's largest billfish tournament, the “White Marlin Open, ” in Ocean City, Maryland. (WMO's Complaint, ECF No. 2 at ¶ 2.) Defendant Heasley and each of the individual plaintiffs participated as anglers in WMO's forty-third annual Open Tournament, held from August 8 through August 12, 2016. (Id. at ¶ 3.) The prize money for catching the first place white marlin was $2, 818, 662.00. (Id. at ¶ 5.) Defendant Heasley, competing on board the vessel Kallianassa, caught the tournament's only qualifying white marlin, potentially entitling him to the first place prize money.[2] (Id. at ¶¶ 4-5, 38.) Several of the plaintiffs already have received prize money based on their catches of fish other than white marlin during the tournament. (Id. at ¶¶ 5-18.)

         Under the Tournament's rules, “any angler winning $50, 000.00 or more may be required to take, and pass at the determination of the test administrator, a polygraph examination prior to the distribution of award money” by WMO. (ECF No. 2 at ¶ 20.) The purpose of this rule is “to ensure that the winning anglers complied with the rules of the Open Tournament when they caught their winning fish.” (Id.) Defendant Heasley underwent polygraph examinations on August 13, 2016 and again on August 21, 2016. (Id. at ¶ 21.) Heasley's shipmates also underwent polygraph examinations. (Id. at ¶ 37.) WMO determined that because Heasley and his shipmates failed to pass the polygraph examinations, WMO would not award Heasley the first place prize money. (Id. at ¶ 40.) WMO then filed this Interpleader action pursuant to Maryland Rule 2-221 in the Circuit Court of Maryland for Worcester County requesting judicial determination of the rights and liabilities of the parties. (Id. at ¶ 41.) On September 8, 2016, defendant Heasley, a Florida citizen and the only citizen of that state named in WMO's Interpleader Complaint, removed the case to this Court on the basis of diversity of citizenship jurisdiction, 28 U.S.C. § 1332. (ECF No. 1.)

         Following Heasley's Removal, plaintiff (then defendant) Mark Hutchison moved to remand this case to the Circuit Court of Maryland for Worcester County. (ECF No. 21.) Heasley opposed Hutchison's Motion and cross-moved to realign the parties' based on their interests. (ECF No. 24.) The Court conducted a hearing on these and several related motions on November 18, 2016. As set forth on the record and in the Order that followed, the Court concluded that jurisdiction was proper pursuant to 28 U.S.C. § 1332 and re-aligned the parties to designate Philip Heasley as the sole defendant and WMO and all other anglers as plaintiffs. (ECF No. 44.) The Court also ordered WMO to deposit the tournament prize money in the Court's Registry; WMO deposited the funds on November 23, 2016. See ECF No. 45.

         On December 19, 2016, plaintiffs Kosztyu and Hutchison filed a Crossclaim against WMO alleging breach of contract based on WMO's alleged failure to comply with its own Tournament Rules. (ECF No. 53.) WMO filed a timely Answer to the Crossclaim and asserted a series of affirmative defenses. (ECF No. 58.)

         On December 22, 2016, plaintiffs Kosztyu and Hutchison filed a Crossclaim against all other parties seeking declaratory relief (ECF No. 54) and a Complaint against Heasley, also seeking declaratory relief (ECF No. 55). Plaintiffs Jim Conway and WMO filed separate answers to the Crossclaim (ECF Nos. 59, 65), and defendant Heasley moved to dismiss both the Crossclaim and the Complaint (ECF No. 56).

         STANDARDS OF REVIEW

         The pending Motion arises in a somewhat unique procedural posture based on the nature of the Interpleader action and the subsequent realignment of the parties to conform with their respective interests. Nevertheless, Rules 12 and 22 of the Federal Rules of Civil Procedure remain the touchstones for the Court's analysis of Heasley's Motion and the parties' responses thereto.

         I. Motion for Judgment on the Pleadings Pursuant to Rule 12(c)

         Rule 12(c) provides that “[a]fter the pleadings are closed--but early enough not to delay trial--a party may move for judgment on the pleadings.” Fed.R.Civ.P. 12(c). “A Rule 12(c) motion for judgment on the pleadings is appropriate when all material allegations of fact are admitted in the pleadings and only questions of law remain.” Wells Fargo Equip. Fin., Inc. v. State Farm Fire & Cas. Co., 805 F.Supp.2d 213, 216 (E.D. Va. 2011), aff'd, 494 F. App'x 394 (4th Cir. 2012) (quoting Republic Ins. Co. v. Culbertson, 717 F.Supp. 415, 418 (E.D. Va. 1989). See 5C C. Wright & A. Miller, Federal Practice & Procedure § 1367 (3d ed.). The reviewing Court “is required to view the facts presented in the light most favorable to the nonmoving party.” Corrigan v. Methodist Hosp., 158 F.R.D. 70, 71 (E.D. Pa. 1994) (internal citation omitted). This Court has treated 12(b)(6) motions to dismiss filed after an Answer had been filed as motions for judgment on the pleadings pursuant to Rule 12(c). Yakovets v. Bailin, JKB-13-3439, 2014 WL 279697, at *1 (D. Md. Jan. 23, 2014).

         II. Motion to Strike Pursuant to Rule 12(f)

         Under Rule 12(f) of the Federal Rules of Civil Procedure, the Court “may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter” on its own or on a party's timely motion. Fed.R.Civ.P. 12(f). In Waste Mgmt. Holdings, Inc. v. Gilmore, 252 F.3d 316, 347 (4th Cir. 2001), the United States Court of Appeals for the Fourth Circuit noted that, “Rule 12(f) motions are generally viewed with disfavor ‘because striking a portion of a pleading is a drastic remedy and because it is often sought by the movant simply as a dilatory tactic'” (citing 5A C. Wright & A. Miller, Federal Practice & Procedure § 1380, 647 (2d ed.1990)). See also Stockart.com, LLC v. Caraustar Custom Packaging Grp., Inc., RDB-05-2409, 240 F.R.D. 195, 199 (D. Md. 2006).

         III. Interpleader Pursuant to Rule 22

         “Rule 22 allows a party (often referred to as the ‘stakeholder') to file a claim for interpleader when confronted with “claims that may expose [the party] to double or multiple liability.” J.G. Wentworth Originations, LLC v. Mobley, ELH-11-1406, 2012 WL 4922862, at *5 (D. Md. Oct. 12, 2012). Interpleader “affords a party who fears being exposed to the vexation of defending multiple claims to a limited fund or property that is under his control a procedure to settle the controversy and satisfy his obligation in a single proceeding.” See 7 C. Wright, A. Miller, & M. Kane, Federal Practice & Procedure § 1704, at 540-41 (3d ed. 2001); see also Equitable Life Ins. Soc. v. Jones, 679 F.2d 356, 358 n. 2 (4th Cir. 1982). “Generally, a stakeholder seeking interpleader relief will admit liability regarding the property and deposit the property with the court, and then will be permitted to withdraw from the proceedings.” Mobley, 2012 WL 4922862, at *5 (emphasis added). “The competing claims to the property may subsequently be resolved without the further involvement of the stakeholder.” Id.

         IV. ...


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