United States District Court, D. Maryland
DEBORAH K. CHASANOW UNITED STATES DISTRICT JUDGE.
pending in this interpleader action are: (1) a motion for
entry of default judgment and release of funds filed by
Defendant David William Eckert (“Defendant David
Eckert”) (ECF No. 15); and (2) a motion for order of
interpleader, attorney's fees and costs, discharge from
further liability, and permanent injunction filed by
Plaintiff State Farm Life Insurance Company
(“Plaintiff”) (ECF No. 16). The issues are
briefed and the court now rules, no hearing being deemed
necessary. Local Rule 105.6. For the reasons that follow, the
motions will be denied without prejudice.
September 2012, Plaintiff issued a life annuity policy of
insurance (“the Policy”) to Lorraine Mary Eckert
(“Decedent”). (ECF No. 1 ¶ 6). The Policy
provided lifetime annuity payments to Decedent and, upon
Decedent's death, a cash refund benefit to the designated
beneficiaries. (Id. ¶ 8). Decedent designated
her sons, Defendant David Eckert and John David Eckert
(“Defendant John Eckert”), as primary
beneficiaries to receive one-third of the cash refund benefit
each. (Id. ¶¶ 7-11). In
September 2014, Decedent signed a Change of Beneficiary form
designating Defendant David Eckert to receive two-thirds of
the cash refund benefit and removing Defendant John Eckert as
a designated beneficiary. (Id. ¶ 12).
December 2017, Decedent died. (Id. ¶ 13).
Defendant David Eckert made a claim under the Policy, and
Defendant John Eckert contacted Plaintiff to contest the
September 2014 change of beneficiary. (Id.
¶¶ 14-15). Defendant John Eckert alleged that
Decedent was not mentally competent to make the change of
beneficiary and that Defendant David Eckert exerted undue
influence upon Decedent; Defendant David Eckert denied both
allegations. (Id. ¶¶ 15-16). Plaintiff
paid the primary beneficiaries under the Policy for the
uncontested portion of the benefit, but the remaining third
of the cash refund benefit is still in dispute. (Id.
October 5, 2018, Plaintiff filed this rule interpleader
action to resolve competing claims over amounts payable under
the Policy. (ECF No. 1). The complaint names Defendant David
Eckert and Defendant John Eckert as defendants. (Id.
¶ 7). Plaintiff moved for permission to deposit funds
into the court's registry, (ECF No. 2), and the court
granted the motion (ECF No. 5).
October 30, 2018, Defendant David Eckert filed an answer.
(ECF No. 9). Defendant John Eckert failed to file any
response and Plaintiff moved for entry of default against
him. (ECF No. 13). On January 10, 2019, the clerk entered
default against Defendant John Eckert. (ECF No. 14).
February 6, 2019, Plaintiff and Defendant David Eckert filed
the presently pending motions. (ECF No. 15; ECF No. 16). On
March 12, 2019, Plaintiff filed a Statement Noting Death of a
Party. (ECF No. 17). The Statement indicated that Defendant
John Eckert “died on or about February 11,
2019” and that Plaintiff's counsel “spoke
with Hazel Eckert, believed to be the wife and widow [of
Defendant John Eckert], who confirmed his death[.]”
(Id. at 1).
Statement regarding Defendant John Eckert complicates the
status of this case and requires the court to consider the
possible substitution of the estate of Defendant John Eckert.
Moreover, it is not clear what the effect of the death or
substitution will be on the interpleader action.
Rule of Civil Procedure 25 addresses substitution of parties.
Rule 25(a) provides:
If a party dies and the claim is not extinguished, the court
may order substitution of the proper party. A motion for
substitution may be made by any party or by the
decedent's successor or representative. If the motion is
not made within 90 days after service of a statement noting
the death, the action by or against the decedent must be
dismissed. . . A motion to substitute, together with a notice
of hearing, must be served on the parties as provided in Rule
5 and on nonparties as provided in Rule 4. A statement noting
death must be served in the same manner.
Fourth Circuit requires personal service of the suggestion
of death on a deceased party's successor or
representative. See Fariss v. Lynchburg Foundry, 769
F.2d 958, 961 (4th Cir. 1985). When the identity
of the successor or representative is unknown, the serving
party generally must “determine whom to serve, ”
“rather than permitting the absence of notice to
decedent's representative to lead to forfeiture of the
action.” Fariss, 769 F.2d at 962.
“Absent personal service, there is no reason to presume
that the successor or representative, who must decide whether
to pursue the claim, is aware of the substitution
requirement.” Id. Federal courts apply this
requirement to cases where, as may be the case here, the wife