Opinion
Nos. 1:02-cv-291, 1:02-cv-303
August 11, 2003
MEMORANDUM AND ORDER
Metropolitan Life Insurance ("MetLife") has moved for summary judgment [Court File No. 11] seeking an award of its costs and attorney's fees in the amount of $6,027.42. The Court has signed the agreed orders submitted by the parties reflecting the settlement of this case with the exception of the question of attorneys fees [Court File No. 34 35]. The Court now will resolve the issue of MetLife's attorneys fees.
MetLife was initially named as a defendant in two causes of action brought by members of the deceased policy holder's family. The first, No. 02-0853, was filed by Thomas Chadwick Brown in the Chancery Court for Hamilton County, Tennessee. The second, No. 02C1544, was filed by Wendy L. Brown in the Circuit Court of Hamilton County, Tennessee. MetLife removed each case to federal court, answered asserting a counterclaim in interpleader, and moved for consolidation of the two cases. Once the cases were consolidated, MetLife moved for summary judgment dismissing it from the case and allowing it to pay the insurance proceeds to the Court. Included in MetLife's motion for summary judgment is a request for an award of attorney's fees in the amount of $6,027.42.
The parties acknowledge that the award of attorneys fees is within the discretion of this Court. When addressing the award of attorney's fees brought in an interpleader action, the Middle District of Tennessee has explained that the general federal rule is that a "`mere stakeholder' plaintiff who brings a necessary interpleader action is entitled to a reasonable award of attorney's fees. Unum Life Ins. Co. of Am. v. Kelling, 170 F. Supp.2d 792, 793 (M.D.Tenn. 2001) (citations omitted). The Kelling court notes, however, that the matter of attorney's fees and costs is "committed to judicial discretion" and they are "rarely awarded as a matter of course." Id. at 794 citing In re Robby's Pancake House of Florida, Inc. v. Walker, 24 B.R.989 (Bankr.E.D.Tenn. 1982) and Paul Revere Life Ins. Co. v. Riddle, 222 F. Supp. 867, 868 (E.D.Tenn. 1963).
Specifically, the Kelling court explains three theories used by courts to exclude insurance companies from the general federal rule. First, courts have reasoned that "insurance companies should not be compensated merely because conflicting claims to proceeds have arisen during the normal course of business. Id. at 794 (citations omitted). Second, courts have concluded that "insurance companies, by definition, are interested stakeholders . . . [because] filing the interpleader action immunizes the company from further liability under the contested policy." Id. (citations omitted). Finally, courts have looked to "the policy argument that such an award would senselessly deplete the fund that is the subject of preservation through interpleader." Id. at 795 (citations omitted).
In this case, the Court exercises it discretion to deny the award attorney's fees. The Court finds that this case is a situation reflecting the concerns expressed in the first two exception noted by the Kelling court. First, the claims in this case are of the type of conflicting claims that arise in the ordinary course of the business of an insurance company. Second, because MetLife was sued in two different courts prior to asserting a counter claim in interpleader, its primary interest in this action appears to be the interest of immunizing itself against further liability.
For the reasons stated above, MetLife's request for attorney's fees is hereby DENIED. Costs will be awarded to MetLife pursuant to Fed.R.Civ.P. 54(d)(1) and paid from the amount that was previously ordered to be retained by the Court pending a determination on the issue of attorney's fees [Court File No. 34]. MetLife shall submit a bill of costs pursuant to E.D. TN. LR 54.1 and guidelines available from the Clerk of Court on or before July 7, 2003.
With the exception of MetLife, the parties shall prepare an agreed disbursement order which supplements the existing disbursement schedule [Court File No. 34] and sets forth the exact name or names that should appear on the disbursement check, as well as, the address to which each check should be mailed. After July 7, 2003, a similar order may be submitted if an agreement has been reached among the parties, with the exception of MetLife, regarding the disbursement of the funds remaining after MetLife's costs, if any, are determined and deducted.
SO ORDERED.