Opinion
No. 610703–2015.
04-11-2017
AETNA LIFE INSURANCE COMPANY, Plaintiff(s), v. Mary ANDACKY, Julie Faust, and Michael Faust, Defendant(s).
Epstein Becker & Green, P.C., New York, Attorney for Plaintiff. Schwartz Law, Garden City, Attorneys for Defts Andacky and Faust. Connor & Magee, Rockville Centre, Attorneys for Deft Julie Faust.
Epstein Becker & Green, P.C., New York, Attorney for Plaintiff.
Schwartz Law, Garden City, Attorneys for Defts Andacky and Faust.
Connor & Magee, Rockville Centre, Attorneys for Deft Julie Faust.
PETER H. MAYER, J.
Upon the reading and filing of the following papers in this matter: (1) Notice of Motion by the plaintiff, dated April 20, 2016, and supporting papers; (2) Affirmation in Opposition by the defendants Andacky and Michael Faust, dated June 13, 2016, and supporting papers; (3) Reply Affirmation by the plaintiff, dated June 16, 2016, and supporting papers; and now
UPON DUE DELIBERATION AND CONSIDERATION BY THE COURT of the foregoing papers, the motion is decided as follows: it is
ORDERED that the motion (001) by the interpleading plaintiff, Aetna Life Insurance Company ("Aetna"), which seeks, inter alia, an order pursuant to CPLR § 1006(f) permitting Aetna to pay into this Court the insurance proceeds claimed by the defendants, is hereby granted to the extent that Aetna shall, upon final Judgment in accordance with this Order, deposit into Court pursuant to CPLR § 2601 et seq , the amount in dispute, $61,000.00 less $6,891.87 ($5,647.50 attorneys fees, plus $1,244.37 disbursements), for a total deposit amount of $54,108.13; and it is further
ORDERED that, pursuant to CPLR § 1006(f) and § 2601(a), upon providing proof to the Clerk or other officer receiving monies paid into Court of compliance with this Order and depositing said amount into Court, Aetna shall be discharged from any and all liability, in whole or in part, to any other party to this action by reason of any matter or thing set forth in the pleadings, including but not limited to attorneys fees and costs; and it is further
ORDERED that, pursuant to 22 NYCRR § 202.48, within 60 days after the signing and filing of this Order, Aetna shall settle Judgment on notice in accordance with this Order; and it is further
ORDERED that Aetna shall promptly serve a copy of this Order upon all appearing parties, or their attorneys if represented by counsel, by Certified Mail (return receipt requested) and by First Class Mail, and shall thereafter promptly file the affidavit(s) of such service with the Clerk of the Court; and it is further
ORDERED that Aetna shall annex a copy of this Order, as well as the affidavit(s) of service of this Order, as exhibits to the Judgment submitted to Chambers as set forth herein.
In this action, Aetna seeks leave to pay into Court, pursuant to CPLR § 1006, life insurance proceeds pursuant to a life insurance policy Aetna issued to Mel J. Faust, who died on May 27, 2015. A dispute exists between the decedent's widow, Julie Faust ("Faust"), on the one hand, and the decedent's son, Michael Faust, and the decedent's mother, Mary Andacky (collectively "Andacky defendants"), on the other hand, who claim mutually exclusive entitlement to the insurance proceeds. Aetna commenced this interpleader action on the ground that, as the insurer, it is a mere stakeholder with no interest in the policy proceeds and that payment of the proceeds to either Faust or the Andacky defendants may render Aetna liable to one side or the other for improper payment under the policy.
Pursuant to CPLR § 1006(a), "[a] stakeholder is a person who is or may be exposed to multiple liability as the result of adverse claims. A claimant is a person who has made or may be expected to make such a claim. A stakeholder may commence an action of interpleader against two or more claimants." In relevant part, CPLR § 1006(f) states:
After the time for all parties to plead has expired, the stakeholder may move for an order discharging him from liability in whole or in part to any party. The stakeholder shall submit proof by affidavit or otherwise of the allegations in his pleading. The court may grant the motion and require payment into court ... of the subject matter of the action to be disposed of in accordance with further order or the judgment ... The court shall impose such terms relating to payment of expenses, costs and disbursements as may be just and which may be charged against the subject matter of the action.
Likewise, CPLR § 2601(a) provides that "[a] party paying money into court pursuant to the direction of the court is discharged thereby from all further liability to the extent of the money so paid in." However, where claims of independent liability are asserted against a party, such party is not a mere stakeholder, notwithstanding its assertion that it has no interest in the disputed funds (see Inovlotska v. Greenpoint Bank, 8 AD3d 623, 780 N.Y.S.2d 358 [2d Dept 2004] ). Under such circumstances, it is an improvident exercise of discretion for a court to discharge the interpleader party before the question of such alleged liability has been adjudicated (id.; Birnbaum v. Marine Midland Bank, 96 A.D.2d 776, 465 N.Y.S.2d 725 [1st Dept 1983] ). When there are adverse claims to a particular fund, but those claims do not expose the interpleader party to multiple liability, the interpleader party is not a stakeholder within the meaning of CPLR § 1006(a) and, therefore, may not proceed by way of interpleader (see Royal Bank of Canada v. Weiss, 172 A.D.2d 167, 567 N.Y.S.2d 707 [1st Dept 1991] ).
Here, however, the Court finds that Aetna is, in fact, a stakeholder as contemplated in CPLR § 1006(a). In opposition to Aetna's motion, the Andacky defendants assert that their counterclaim against Aetna effectively thwart's Aetna's claim to be a mere stakeholder, since the Andacky defendants' counterclaim against Aetna has not yet been determined. The Court notes, however, that the Andacky defendants' answer contains no specific allegations of negligence against Aetna. In fact, other than seeking a declaration that Michael Faust is the sole beneficiary of the policy, the prayer for relief in the Andacky defendants' answer requests judgment "allowing [Aetna] to deposit the life insurance proceeds to be deposited with the Court " (emphasis added). This is the very relief Aetna prays for in its complaint and which Aetna was compelled to seek in this motion. As for defendant Faust, she does not oppose Aetna's motion and contends in her answer that the claim asserted by the Andacky defendants is frivolous.
The Court finds that the motion and opposition papers demonstrate that Aetna is a stakeholder as defined in CPLR § 1006(a). Therefore, the Court also finds that Aetna is entitled to the remedies and protections afforded a stakeholder under CPLR § 1006 and § 2601. In an interpleader action pursuant to CPLR § 1006, where the stakeholder demonstrates that it is a neutral stakeholder with no interest in the disputed matter, and that it was forced to participate in the dispute between two other parties, the stakeholder may be entitled to an award of costs, disbursements, and reasonable attorneys fees ( CPLR § 1006[f] ; Sun Life Ins. & Annuity Co. of N.Y. v. Braslow, 38 AD3d 529, 831 N.Y.S.2d 497 [2d Dept 2007] ; American Int'l Life Assur. Co. v. Ansel, 273 A.D.2d 421, 709 N.Y.S.2d 621 [2d Dept 2000] ).
Where a court order recognizes the status of a party as a stakeholder, the court is empowered to impose terms relating to payment of expenses, costs and disbursements (see Silber v. Lachs, 33 A.D.2d 544, 304 N.Y.S.2d 289 [1st Dept 1969], affd 28 N.Y.2d 554, 319 N.Y.S.2d 447 [1971] ). It may, indeed, be error for a court to deny an insurer's request for attorneys fees and costs under CPLR § 1006(f) where the insurer is a neutral stakeholder and was prompted to commence an interpleader action when the parties failed to reach an agreement, despite the insurer's efforts toward that end (see New York Life Ins. Co. v. Lowy, 40 AD3d 295, 836 N.Y.S.2d 78 [1st Dept 2007] ). Here, Aetna has shown that as a result of having to commence this action and engage in motion practice, it is entitled to recover its fees and disbursements, to wit, $5,647.50 in attorneys fees, plus $1,244.37 in disbursements, for a total amount of $6,891.87.
This constitutes the Order of the Court.
Submit Judgment on Notice in accordance with this Order.