United States District Court, W.D. Texas, San Antonio Division
PULLIAM UNITED STATES DISTRICT JUDGE.
matter is before the Court upon Plaintiff Midland National
Life Insurance Company's Motion for Judgment on its
Interpleader (ECF No. 21) and Defendant Iris V.
Santana-Ayala's Motion for Default Judgment (ECF No. 22).
The premises considered, the Court grants Midland's
judgment on its Interpleader and enters default judgment
against Juan Carlos Vega-Diaz a/k/a Juan Carlos Vega.
31, 2019, Plaintiff Midland National Life Insurance Company
(“Midland”) filed a Complaint for Interpleader
pursuant to 28 U.S.C. § 1335 and Rule 22 of the Federal
Rules of Civil Procedure to resolve competing claims to the
death benefit of a life insurance policy issued by Midland to
Deborah M. Santana (“Deborah”). ECF No. 1. Iris
V. Santana-Ayala a/k/a Iris Santana a/k/a Iris Velia Ayala
a/k/a Iris Velia Ayala-Ayala (“Iris”),
Deborah's mother, was the original beneficiary but
shortly before Deborah's death Midland received an
incomplete change of beneficiary form naming Heriberto
Rodriguez (“Heriberto”) as the beneficiary in
place of Iris.
Midland initially determined that the form was sufficient to
effect the change, and Heriberto made a claim for the
proceeds, Iris and other family members disputed
Heriberto's entitlement to the money. Further, Midland
was concerned that Deborah may have been married both at the
time she applied for the Policy and at the time of her death
even though Deborah stated in her application for the Policy
that she was single, and is listed on her death certificate
as divorced. Midland noted that because Texas is a community
property state, Deborah's estranged spouse, Juan Carlos
Vega-Diaz a/k/a Juan Carlos Vega (“Juan”), may
have a potential claim to some portion of the
proceeds. Consequently, Midland filed its
interpleader asking the Court to determine whom among the
Defendants is entitled to the proceeds and in what amount,
and deposited the proceeds with the Registry of the Court.
contends it has done all that is required to perfect its
interpleader and asks the Court to enter an order discharging
Midland from any further liability under the Policy, award
Midland its attorney fees and costs incurred in bringing its
interpleader, and dismiss Midland from all further
proceedings. See ECF No. 21.
motion states Defendants each waived service of summons, but
only Iris answered the Complaint; Heriberto and Juan are each
in default; and the Clerk has entered default. Thus, Iris
contends, default judgment against Heriberto and Juan is
proper. And, as the only competing claimant to appear in
these proceedings in which the Complaint sufficiently alleges
that she is a putative beneficiary of the death benefit, Iris
argues she is therefore entitled to the disputed death
benefit. See ECF No. 22-1.
Federal Rule of Civil Procedure 55(b)(2), the court may enter
a default judgment where the clerk, under Rule 55(a), has
entered the party's default based upon a failure to plead
or otherwise defend the action. A default occurs when a
defendant has failed to plead or otherwise respond to the
complaint within the time required by the Federal Rules of
Civil Procedure. Saldana v. Zubha Foods, LLC, 2013
WL 3305542 (W.D. Tex. 2013) (citing New York Life Ins.
Co. v. Brown, 84 F.3d 137 (5th Cir. 1996)). Even if a
defendant is technically in default, a plaintiff is not
entitled to a default judgment as a matter of right.
Lewis v. Lynn, 236 F.3d 766, 767 (5th Cir. 2001)
(per curiam); accord Ganther v. Ingle, 75 F.3d 207,
212 (5th Cir. 1996). Generally, the entry of default judgment
is committed to the discretion of the district court.
Mason v. Lister, 562 F.2d 343, 345 (5th Cir. 1977).
Among the factors a district court may consider when deciding
whether to grant a default judgment are: (1) whether the
default was caused by a good-faith mistake or excusable
neglect; (2) whether there has been substantial prejudice;
(3) the harshness of a default; (4) whether there are
material issues of fact; (5) whether grounds for a default
judgment are clearly established; and (6) whether the court
would think it was obligated to set aside the default on the
defendant's motion. Lindsey v. Prive Corp., 161
F.3d 886, 893 (5th Cir. 1998).
Rule of Civil Procedure 22 permits a plaintiff “with
claims that may expose [it] to double or multiple
liability” to join those persons as defendants in a
suit to determine each defendant's rights. Fed.R.Civ.P.
22(a)(1). Rule 22 interpleader does not require deposit of
funds into the court's registry. Murphy v. Travelers
Ins. Co., 534 F.2d 1155, 1159 (5th Cir. 1976).
Interpleader relief is also available under 28 U.S.C. §
1335. To establish a right to relief under § 1335, a
party must show: (1) it has custody of money or property
worth $500 or more; (2) two or more adverse claimants of
diverse citizenship are “claiming or may claim to be
entitled to such money or property, or to any one or more of
the benefits arising by virtue of any note, bond,
certificate, policy or other instrument;” and (3) the
party has deposited such money or property in the registry of
the Court. 28 U.S.C. § 1335. The statute permits all
actual and potential claimants to be named in an interpleader
action so as to ensure complete resolution of all competing
actions are decided through a two-step process. The first
step is for the Court to determine whether a proper case for
interpleader is presented. To so find, the Court must
determine that there is a single fund with adverse claimants
to that fund. If the Court determines that the requirements
for interpleader are met, the next stage of the litigation is
to determine the rights of the claimants.” Fresh
Am. Corp. v. Wal-Mart Stores, Inc., No. 3:03-CV-1299-M,
393 F.Supp.2d 411, 415 (N.D. Tex. Mar. 31, 2005). The effect
of a default judgment against a defendant named in an
interpleader is that the party “who fails to answer the
interpleader complaint and assert a claim to the res forfeits
any claim of entitlement that might have been
asserted.” Metro. Life Ins. Co. v. Theriot,
No. 08-01480, 2010 WL 4644057 (W.D. La. Nov. 8, 2010)
(quoting Shuqualak Lumber Co., Inc. v. Hardin, No.
1:08CV297-P-S, 2009 WL 2767676, at * 1-2 (N.D. Miss. Aug. 27,
district court has the authority to award reasonable
attorneys' fees in interpleader actions. Rhoades v.
Casey, 196 F.3d 592, 603 (5th Cir. 1999). “Fees
may be awarded ‘when the interpleader is a
disinterested stakeholder, and is not in substantial
controversy with one of the claimants.'” New
York Life Ins. & Annuity Corp. v. Cannatella, 550
Fed.Appx. 211, 217 (5th Cir. 2013) (quoting Rhoades,
196 F.3d at 603). A district court may take into account a
number of factors when assessing whether attorneys' fees
are appropriate: “1) whether the case is simple or
involved; 2) whether the stakeholder performed any unique
services for the claimants or the court; 3) whether the
stakeholder acted in good faith and with diligence; 4)
whether the services rendered benefited the stakeholder; and
5) whether the claimants improperly protracted the
proceedings.” Id. (quoting 7 Charles Alan
Wright, Arthur R. Miller, Mary Kay Kane, Federal Practice and
Procedure § 1719, at 688-89 (3d ed. 2001) and citing
Royal Indem. Co. v. Bates, 307 Fed.Appx. 801, 806
(5th Cir. 2009)). Courts in this circuit may apply the
lodestar method to determine whether requested attorney's
fees are reasonable and equitable in interpleaders. See
Transamerica Annuity Serv. Corp. v. Symetra Life Ins.
Co., No. 16-1426, 2017 WL 3442464 (S.D. Tex. Aug. 9,
2017); Metro. Life Ins. Co. v. Linnear, No. 14-0047,
2014 WL 4678713 (W.D. La. Sept. 18, 2014). Because all that
is required in a typical interpleader action is the
“preparation of a petition, the deposit in court or
posting of a bond, service on the claimants, and the
preparation of an order discharging the stakeholder, ”
the amount of the attorney's fee award is usually
moderate. Charles Alan Wright, Arthur R. Miller & Mary
Kay Kane, Federal Practice and Procedure § 1719 (3d ed.
review of the complaint, motions, exhibits, and the record,
the Court finds the following. Midland issued a flexible
premium adjustable universal life insurance policy, no.
1503074616, to “Deborah M. Santana” as the owner
and insured, with a face value of $250, 000 and a Policy ...