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Wells Fargo Bank, N.A. v. Wanki

United States District Court, D. Maryland, Southern Division

December 6, 2019

WELLS FARGO BANK, N.A., Plaintiff,
PATRICE WANKI, et al., Defendants.



         In this interpleader action, Plaintiff Wells Fargo Bank, N.A. (“Wells Fargo”) brings suit against Defendants Patrice Wanki and Iota Communications, Inc. f/k/a Solbright Group, Inc. (“Iota”), requesting that the Court authorize Plaintiff to deposit $34, 850.51 in wired funds into the Registry of the Court, dismiss Plaintiff from the action, discharge Plaintiff from further liability relating to the funds, and award Plaintiff the attorneys' fees and costs associated with this case. ECF No. 1. Pending before the Court is Plaintiff's Motion to Interplead Restrained Proceeds into the Registry of the Court and Motion for Dismissal (“Motion for Interpleader Relief”). ECF No. 8. No. hearing is necessary. See Loc. R. 105.6 (D. Md. 2016). For the following reasons, Plaintiff's Motion for Interpleader Relief is granted. Once the wired funds have been deposited with the Registry of the Court, Plaintiff shall be dismissed, discharged from liability, and awarded $6, 637.72 in attorneys' fees and costs from the deposited funds. The remaining parties shall be realigned, with Iota as Plaintiff and Patrice Wanki as Defendant.

         I. BACKGROUND

         Plaintiff is a national banking association with its main office in Sioux Falls, South Dakota. ECF No. 1 ¶ 3. Iota is a Delaware corporation with its principal place of business in New Hope, Pennsylvania, and it holds a Wells Fargo WellsOne account (“Iota Account”). Id. ¶¶ 4, 10. Wanki is a resident of Greenbelt, Maryland and holds a Wells Fargo Everyday Checking account (“Wanki Account”). Id. ¶¶ 5, 10. The relationship between Plaintiff and Iota relative to the Iota Account and the relationship between Plaintiff and Wanki relative to the Wanki Account are governed by the Wells Fargo Deposit Account Agreement (the “Account Agreement”). Id. ¶ 15.

         On or about November 30, 2018, Iota wired $34, 901.00 from the Iota Account to the Wanki Account. Id. ¶ 10. Iota subsequently requested that the wired funds be recalled based on alleged fraud. Id. ¶ 11. Plaintiff restrained the Wanki Account, which now contains a balance of $34, 850.51 (the “Restrained Funds”). Id. Despite multiple requests, Wanki has not authorized Plaintiff to debit the Restrained Funds from the Wanki Account. Id. ¶ 12.

         Plaintiff initiated this interpleader action against Iota and Wanki on March 24, 2019. ECF No. 1. Iota filed an Answer on April 18, 2019. ECF No. 4. An Affidavit of Service filed on May 12, 2019 shows that Wanki was served via substituted service on April 6, 2019. ECF No. 6. Wanki did not file an answer or otherwise respond to this action. Plaintiff subsequently filed a Motion for Clerk's Entry Default on May 13, 2019, ECF No. 7, and the Clerk entered a default against Wanki on August 8, 2019, ECF No. 10. On July 18, 2019, Plaintiff filed a Motion for Interpleader Relief requesting that the Court order it to deposit the Restrained Funds in the Registry of the Court or, in the alternative, to pay the funds directly to Iota. ECF No. 8. Iota responded on July 25, 2019, stating its preference that the Court order the Restrained Funds be paid to it directly. ECF No. 9.


         “Interpleader is a procedural device that allows a disinterested stakeholder to bring a single action joining two or more adverse claimants to a single fund.” Sec. Ins. Co. of Hartford v. Arcade Textiles, Inc., 40 Fed.Appx. 767, 769 (4th Cir. 2002). The device is designed “to protect the stakeholder from multiple, inconsistent judgments and to relieve it of the obligation of determining which claimant is entitled to the fund.” Id. In interpleader claims, the interpleader plaintiff typically will “admit liability, deposit the fund with the court, and be permitted to withdraw from the proceedings.” Wells Fargo Bank, N.A. v. Eastham, No. DKC-16-0386, 2016 WL 2625281, at *3 (D. Md. May 9, 2016) (citing CMFG Life Ins. Co. v. Schell, No. GJH-13-3032, 2014 WL 7365802, at *2 (D. Md. Dec. 22, 2014)).

         28 U.S.C. § 1335(a) “grants the district courts original jurisdiction over interpleader claims involving at least $500.00 in funds or property and at least two claimants of diverse citizenship.” Eastham, 2016 WL 2625281, at *3 (citing 28 U.S.C. § 1335(a)). 28 U.S.C. § 2361 provides that in an interpleader action under Section 1335:

[A] district court may issue its process for all claimants and enter its order restraining them from instituting or prosecuting any proceeding in any State or United States court affecting the property . . . involved in the interpleader action until further order of the court. . . .
Such district court shall hear and determine the case, and may discharge the plaintiff from further liability, make the injunction permanent, and make all appropriate orders to enforce its judgment.

28 U.S.C. § 2361.

         An interpleader action generally proceeds in two stages. Eastham, 2016 WL 2625281, at *2 (citing 7 Charles A. Wright, Arthur R. Miller, & Mary K. Kane, Federal Practice and Procedure § 1714 (3d ed. 2001); Rapid Settlements, Ltd. v. U.S. Fid. & Guar. Co., 672 F.Supp.2d 714, 717 (D. Md. 2009)). Initially, the Court determines “whether the stakeholder has properly invoked interpleader.” Eastham, 2016 WL 2625281, at *2 (citing United States v. High Tech. Prods., Inc., 497 F.3d 637, 641 (6th Cir. 2007)). The propriety of interpleader rests upon whether the stakeholder “legitimately fears multiple litigation over a single fund, ” id., and the Court considers whether: “(1) it has jurisdiction over the suit; (2) a single fund is at issue; (3) there are adverse claimants to the fund; (4) the stakeholder is actually threatened with multiple liability; and (5) equitable concerns [would] prevent the use of interpleader.” Id.; see also Metro. Life Ins. Co. v. Vines, No. WDQ-10-2809, 2011 WL 2133340, at *2 (D. Md. May 25, 2011). If the Court determines interpleader to be proper, consistent with 28 U.S.C. § 2361, “the Court may direct the funds plus interest to be deposited with the Clerk, dismiss the stakeholder with prejudice and discharge it from all liability with respect to the deposited funds, and prohibit the claimants from initiating or pursuing any action or proceeding against the stakeholder regarding the [property at issue].” Eastham, 2016 WL 2625281, at *2.

         During the second stage of an interpleader action, the Court issues a scheduling order and “the case continues between the claimants to determine their respective rights.” Id. (citing Rhoades v. Casey, 196 F.3d 592, 600 (5th Cir. 1999)). The claimants engage in the “normal litigation processes, including ...

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