Life Insurance – Interpleader

Life Insurance cases can have a surprising number of twists to them.  Readers of the DallasFortWorthInsuranceBlog have seen some of these various twists.

The U.S. District Court, Eastern District of Texas, Sherman Division, issued an opinion in a case styled, Reliastar Life Insurance v. Trina R. Wiemer, Laura R. Weimer, and Roderich W. Weimer, Jr., which is interesting.

This case is an interpleader action.  Reliastar issued a life insurance policy on the life of Vincent H. Weimer, who died on August 19, 2017.  The policy was for $3,000,000.00 and this amount is claimed by competing persons.  Because of these competing persons, Reliastar filed this interpleader action pursuant to Federal Rule of Civil Procedure 22 and 28 U.S.C. Section 1335.

Generally, an interpleader action involves two stages.  First, the court determines whether the requirements for rule or statutory interpleader action have been met by determining if there is a single fund at issue and whether there are adverse claimants to that fund.  If the requirements have been met, the court then moves to the second stage of determining the respective rights of the claimants, either through summary judgment or trial in which each claimant proves its right to the fund by a preponderance of the evidence—or, as in this case, by agreement of the parties.  Once the court determines that the first stage has been satisfied, the court may dismiss the stakeholder Plaintiff from the action.
The Court determined Reliastar was entitled to interpleader relief and was dismissed from the lawsuit.
The remaining parties advised the Court they had reached a settlement regarding the disbursement of the interpled funds.  The Court appointed a guardian ad litem to protect the interests of the minor children and the ad litem filed a report with the Court agreeing that the proposed settlement should be approved and a trust was established for the benefit of the minors.
This is a case for Insurance Law Lawyers to know about and to read for when a similar situation arises in their own practice.