United States District Court, D. Connecticut
RULING ON MOTION FOR ENTRY OF STIPULATED JUDGMENT
[ECF NO. 27] AND MOTIONS FOR DEFAULT JUDGMENT [ECF NOS. 28
& 30]
Michael P. Shea, U.S.D.J.
This
case arises out of a dispute regarding the rightful
beneficiary of life insurance proceeds held, at the time the
complaint was filed, by Jackson National Life Insurance
Company (“Jackson National”). Jackson National
filed a Complaint in Interpleader against three potential
beneficiaries: Elizabeth Roosen (“Roosen”), Lisa
Johnstone (“Johnstone”), and Dorothy Johnson
(“Johnson”). ECF No. 1. Johnson failed to appear
to defend against the Complaint in Interpleader. Roosen and
Johnstone filed an Answer to the Complaint in Interpleader
and a Cross Complaint against Jackson National and Johnson.
ECF No. 16. Jackson National, Roosen, and Johnstone
successfully moved for entry of default against Johnson under
Federal Rule of Civil Procedure 55(a). ECF Nos. 20 & 22.
Jackson National has now filed a Motion for Default Judgment
against Johnson under Federal Rule of Civil Procedure
55(b)(2). ECF No. 28. Roosen and Johnstone have filed a
separate Motion for Default Judgment against Johnson under
the same rule. ECF No. 30. Finally, Jackson National, Roosen,
and Johnstone together filed a Motion for Entry of Stipulated
Judgment. ECF No. 27.
For the
reasons discussed below, the Court hereby enters the
following orders. Jackson National's Motion for Default
Judgment, ECF No. 28, is GRANTED IN PART and DENIED IN PART.
The order of default with respect to Johnstone and Roosen
against Johnson, ECF No. 22, is VACATED. Roosen's and
Johnstone's Motion for Default Judgment, ECF No. 30, is
DENIED WITHOUT PREJDUICE. The Joint Motion for Entry of
Stipulated Judgment, ECF No. 27, is DENIED WITHOUT PREJUDICE.
I.
Factual Background
The
following facts are taken from the Complaint in Interpleader,
ECF No. 1, and the Cross Complaint, ECF No. 16.
On July
11, 1998, Valley Forge Life Insurance Company issued a life
insurance policy that provided for the payment of a $100, 000
death benefit, plus interest, upon the death of Jerome
Shinners (“Shinners”). ECF No. 1 at ¶ 2; ECF
No. 28-1 at 2. This policy is now held by Jackson National.
ECF No. 1 at ¶ 2. Jackson National is a corporation
organized under the laws of the State of Michigan and
maintains its principal place of business in Lansing,
Michigan. Id. at ¶ 4. Roosen is Shinners's
friend and maintains a primary residence in Avon,
Connecticut. Id. at ¶¶ 5, 13. Johnstone is
Shinners's daughter and maintains a primary residence in
San Diego, California. Id. at ¶¶ 6, 12.
Johnson is Shinners's ex-wife and maintains a primary
residence in West Palm Beach, Florida. Id. at
¶¶ 7, 13.
In his
application for the policy, Shinners designated Johnson as
the irrevocable beneficiary and Johnstone as the contingent
beneficiary. Id. at ¶ 12. Shinners and Johnson
were later divorced and a Judgment of Divorce and Agreement
(“Divorce Judgment”) was entered on September 20,
2000. Id. at ¶ 17. The Divorce Judgment stated,
in part, that Shinners would pay alimony to Johnson for eight
years and would continue to name her as the irrevocable
beneficiary of the insurance policy for the same term:
1. The Plaintiff shall pay alimony to the Defendant in the
amount of $300.00 per week for a period of 8 years from the
date of dissolution. Said alimony shall be non-modifiable as
to term, but shall terminate sooner upon the death of either
party or the Defendant's remarriage . . . .
2. The Plaintiff shall maintain a $100, 000.00 life insurance
policy on his life, naming the Defendant as the irrevocable
beneficiary of same, for as long as he has an obligation to
pay alimony to the Defendant.
Id. at ¶ 18. On November 5, 2001, Shinners
executed a Change of Beneficiary Form in which he designated
Johnson as a Primary Beneficiary eligible to receive 50% of
the death benefit, and Roosen as a Primary Beneficiary
eligible to receive 50% of the death benefit. Id. at
¶ 13. Johnson did not execute the form. Id. On
September 5, 2008, Shinners executed another Request for
Change of Beneficiary Form and designated Roosen and
Johnstone as co-equal Primary Beneficiaries, each to receive
50% of the death benefit. Id. at ¶ 14; ECF No.
16 at 2-3 ¶ 1. Johnson again did not execute the form.
ECF No. 1 at ¶ 14.
Shinners
died on December 18, 2017 in Avon, Connecticut. Id.
at ¶ 1. Following his death, the death benefit became
payable to the proper beneficiaries. Id. at ¶
15. On January 28, 2018, Roosen executed a Life Claimant
Statement, seeking payment of the benefit. Id. At
¶ 16. Roosen and Johnstone each claim entitlement to 50%
of the death benefit on the basis that each was properly
named as a beneficiary in the Change of Beneficiary Form
submitted on September 5, 2018. ECF No. 16 at 2-3 ¶ 1.
They further claim that the divorce agreement obligated
Shinners to designate Johnson the irrevocable beneficiary
only for as long as his obligation to pay alimony remained
and this obligation terminated in 2008. ECF No. 1 at ¶
19. Johnson claims entitlement to 100% of the death benefit
on the basis that she was designated the irrevocable
beneficiary under the policy. Id. at ¶ 20.
II.
Procedural History
On June
5, 2018, Jackson National filed a Complaint in Interpleader
seeking an order (1) granting interpleader relief; (2)
compelling Johnson, Roosen, and Johnstone to settle or
litigate their respective entitlement to the death benefit;
(3) declaring the lawful and proper beneficiaries of the
death benefit; (4) awarding Jackson National attorneys'
fees and costs and permitting Jackson National to pay the
resulting net death benefit to the Registry of the
Court[1]; (5) absolving Jackson National of any
further liability to any claimant of the death benefit and
dismissing Jackson National from the suit upon its payment of
the death benefit to the Registry of the Court; (6)
restraining the parties to this action from instituting or
prosecuting any other suit against Jackson National seeking
the death benefit or asserting claims under the policy; and
(7) providing any other relief the Court deems equitable and
just. ECF No. 1 at 6-7. On the same date, Jackson National
filed a motion to deposit the death benefit proceeds with the
Court. ECF No. 3. On June 8, 2018, the Court granted this
motion and directed the Clerk of the Court to deposit the
proceeds in an interest-bearing account. ECF No. 8. On June
22, 2018, the Court issued a notice indicating that it
received a deposit in the amount of $100,
561.42.[2] ECF No. 9.
Jackson
National filed waiver of service forms as to Johnson, Roosen,
and Johnstone on June 5, 2018, June 19, 2018, and June 25,
2018, respectively.[3] ECF Nos. 12, 17, 18. Johnson did not
appear or file an answer. On July 12, 2018, Roosen and
Johnstone filed an Answer and Cross Complaint, asserting that
Johnson has no legal or equitable claim to the death benefit
and seeking payment of the death benefit plus all interest.
ECF No. 16 at 3. In contravention of Federal Rule of Civil
Procedure 5, Roosen and Johnstone did not serve this pleading
on Johnson - or at least they have failed to file proof of
service on the docket. Fed.R.Civ.P. 5(a)(1)(B) (requiring
service of “a pleading filed after the original
complaint”); Id. at 5(a)(2) (“No service
is required on a party who is in default for failing to
appear. But a pleading that asserts a new claim for relief
against such a party must be served on that party under Rule
4.”).[4] As such, Roosen and Johnstone shall serve
this order, together with their Answer and Cross Complaint,
on Johnson in accordance with the Court's directions
below.
On
August 28, 2018, Jackson National filed a motion for default
entry under Rule 55(a) against Johnson. ECF No. 19. On
September 11, 2018, Roosen and Johnstone filed a motion for
default entry under Rule 55(a) against Johnson. ECF No. 21.
The Clerk of the Court entered a default against Johnson as
to Jackson National on September 10, 2018, ECF No. 20, and as
to Roosen and Johnstone on September 17, 2018, ECF No. 22.
This order vacates the latter order of default due to lack of
evidence of service of the Cross Complaint on Johnson.
On
October 5, 2018, Jackson National, Roosen, and Johnstone
filed a Joint Motion for Entry of Stipulated Judgment seeking
an order (1) providing interpleader relief in favor of
Jackson National; (2) discharging and absolving Jackson
National from further liability to Johnson, Roosen,
Johnstone, and any other claimant in connection with the
death benefit; (3) discharging and absolving Jackson
National, its employees, agents, representatives,
predecessors, successors-in-interest, parents, subsidiaries,
and assigns, from all liability to Johnson, Roosen, and
Johnstone, and from any claims arising under the policy; (4)
entering judgment on the Cross Complaint in favor of Roosen
and Johnstone; (5) restraining Johnson from instituting or
prosecuting any other suit against Jackson National, Roosen,
or Johnstone seeking the death benefit; (6) restraining
Roosen from instituting or prosecuting any other suit against
Jackson National, Johnstone, or Johnson seeking the death
benefit; (7) restraining Johnstone from instituting or
prosecuting any other suit against Jackson National, Roosen,
or Johnson seeking the death benefit; (8) distributing 50% of
the funds deposited with the Court to Roosen and 50% of the
funds to Johnstone; and (9) dismissing all parties with
prejudice and without costs and with each party bearing its
own attorney fees. ECF No. 27-1 at 1-3. On the same day,
Jackson National filed a Motion for Default Judgment against
Johnson, seeking the relief requested in the Complaint in
Interpleader. ECF No. 28. On October 10, 2018, Roosen and
Johnstone filed a Motion for Default Judgment against
Johnson, seeking the relief requested in their Cross
Complaint. ECF No. 30.
III.
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