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Reliastar Life Insurance Co. v. Moore

February 28, 2010

RELIASTAR LIFE INSURANCE COMPANY PLAINTIFF
v.
FAY MOORE, KRISTI HATFIELD-BINGAMAN DEFENDANTS



The opinion of the court was delivered by: Judge Vanaskie

MEMORANDUM

This interpleader action was brought by ReliaStar Life Insurance Company ("ReliaStar") against competing claimants to the proceeds of a life insurance policy under a Group Life Insurance Plan in which Budd A. Moore, a now-deceased employee of the Board of Education of Washington County, participated. Kristi Hatfield-Bingaman, the deceased's niece, claims the proceeds as the named beneficiary on the plan. Fay Moore, the deceased's wife, is the second claimant to the proceeds. ReliaStar, acknowledging its liability for the payment of the life insurance benefits, has deposited $150,503.88 with the Court and has moved for dismissal from the action. It also requests costs and attorneys' fees incurred in bringing this interpleader action. (Dkt. 25.)*fn1 As the parties do not opposed ReliaStar's dismissal from this action, the Motion to Dismiss Party ReliaStar Life Insurance will be granted. ReliaStar's motions for attorney's fees and for bill of costs, however, will be denied as the current action is a typical claim that ReliaStar normally faces in the ordinary course of business.

I. BACKGROUND

ReliaStar issued a group life insurance policy, number 26257-9GAT ("the Policy"), to the Board of Education of Washington County as part of its employee welfare benefit plan. (Comp., Dkt. 1, at ¶ 6.) Budd A. Moore ("Budd"), as an employee of the Board of Education of Washington County, was eligible for basic life insurance and supplemental life insurance benefits under the Policy. (ReliaStar Supp. Br., Dkt. 26, at 2.) On June 8, 1994, Budd completed a Beneficiary Designation form, naming his niece, Kristi Lynn Hatfield (nka Kristi Lynn Hatfield-Bingaman) ("Hatfield-Bingaman"), as the primary beneficiary. (Comp., Dkt. 1, at ¶ 8.) On April 21, 2008, Budd passed away. (Id. at ¶ 9.)

On May 8, 2008, Hatfield-Bingaman, Budd's primary beneficiary under the Policy, signed a document titled "Disclaimer." (Id. at ¶ 10.) The document stated that Hatfield-Bingaman does "hereby disclaim any and all of my rights under the aforesaid policy as primary beneficiary, and do[es] direct that the policy benefits be paid to the Estate of Budd A. Moore." (Id.) That same day, Defendant Faye Moore ("Moore"), the executrix of Budd's estate and Budd's widow, filed a death claim for the Policy proceeds by virtue of her status as the Executrix of Budd's Estate. (Id. at ¶ 11.)

On June 5, 2008, ReliaStar sent a letter to Hatfield-Bingaman stating that she was the primary beneficiary of the Policy and that ReliaStar understood that she wished to disclaim her interest in the Policy proceeds and direct them to Budd's estate. (Id. at ¶ 12.) "The letter explained that once a person disclaims any interest in the proceeds, that person cannot also direct the proceeds." (Id.) The letter also stated that if Hatfield-Bingaman "did wish to disclaim her interest, the proceeds would be payable under the preferential beneficiary clause of the contract, which allows payment to the first eligible surviving heir in the following order: spouse, children, parents, and estate." (Id.) Since Moore is Budd's living spouse, the letter indicated that all funds would be payable to her under the preferential clause. (Id.)

On June 11, 2008, ReliaStar received a telephone call from Hatfield-Bingaman in which she stated that she had been told to sign the Disclaimer at Faye Moore's attorney's office on May 8, 2008, or that legal action would be taken. (Id. at ¶ 13.) ReliaStar's records indicate that "Hatfield-Bingaman indicated to ReliaStar's claim department that she did not want to disclaim the proceeds and that she felt 'bombarded and threatened' in the attorney's office." (Id.)

On June 11, 2008, after receiving Hatfield-Bingaman's phone call, "ReliaStar sent a letter to Martha Walker, Esq., the attorney for Ms. Faye Moore," notifying Attorney Walker that Hatfield-Bingaman did not wish to disclaim her interest in the Policy proceeds. (Id. at ¶ 14.) The letter also suggested that Moore and Hatfield-Bingaman contact each other to determine if an amicable agreement could be reached in regard to the distribution of the Policy proceeds.

(Id.) The letter indicated that if an agreement was reached it should be in writing, notarized, and signed by both parties. (Id.) If, however, no agreement could be reached within sixty (60) days, the letter informed Ms. Walker that the file would be referred to attorneys for a possible interpleader action. (Id.)

Also on June 11, 2008, ReliaStar sent a letter to Hatfield-Bingaman confirming the telephone conversation in which she indicated that she did not wish to disclaim her interest in the Policy proceeds and suggesting that she contact Moore to determine if an amicable agreement could be reached with regard to the distribution of the Policy proceeds. (Id. at ¶ 15.) Again, the letter indicated that if an agreement was reached it should be in writing, notarized, and signed by both parties; if an agreement could not be reached, Hatfield-Bingaman was notified that ReliaStar would refer the file to attorneys for a possible interpleader action. (Id.)

On June 12, 2008, Hatfield-Bingaman filed a death claim for the Policy proceeds by virtue of her status as the named beneficiary on the Policy. (Id. at ¶ 16.) Consequently, there were two competing claims to the Policy proceeds. (Id. at ¶ 17.)

On July 9, 2008, ReliaStar received a letter from Attorney Walker "stating that no agreement to a distribution of the Policy proceeds had been reached by Ms. Moore and Ms. Hatfield-Bingaman and that ReliaStar should file an interpleader action." (Id. at ¶ 18.) On August 15, 2008, ReliaStar received a letter from an attorney retained by Hatfield-Bingaman demanding payment of the Policy proceeds to Hatfield-Bingaman. (Id. at ¶ 19.)

On October 23, 2008, ReliaStar initiated the current action. (Comp., Dkt. 1.) On December 19, 2008, ReliaStar filed a Motion for Leave to Deposit Interpleader Funds into the Registry of the Court. (Dkt. 7.) By order dated January 13, 2009, this Court granted the motion and ordered the Policy proceeds deposited in the Court's registry. (Dkt. 13.) On January 22, 2009, ReliaStar deposited a check in the amount of $150,503.88 ($74,000 in standard life benefits, $74,000 in supplemental life, and $2,503.88 in interest) into the Court's Registry. (Id.)

On June 23, 2009, ReliaStar filed a Motion for Dismissal and Fees (Dkt. 25), requesting this Court award ReliaStar costs and attorney's fees incurred as a result of bringing the above-captioned action and thereafter dismiss ReliaStar from the ...


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