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Community State Bank v. Wilson

United States District Court, W.D. Arkansas, Texarkana Division

October 30, 2019

COMMUNITY STATE BANK PLAINTIFF
v.
MAXINE WILSON; CARRIE W. WINFORD, ADMINISTRATRIX FOR THE ESTATE OF JENNIFER HARTING WILSON; and J. SCHUYLER MARVIN, DISTRICT ATTORNEY DEFENDANTS GARY WILSON INTERVENOR

          ORDER

          Susan O. Hickey Chief United States District Judge

         Before the Court is Plaintiff Community State Bank's Motion for Discharge and for Award of Attorney's Fees and Costs (ECF No. 89). No. party has responded to the motion and the time to do so has passed. See Local Rule 7.2(b). The Court finds the matter ripe for consideration.

         I. DISCUSSION

         Plaintiff is a state-chartered banking corporation located in Bradley, Arkansas, that holds $255, 209.47 in a checking account (the “Fund”). Plaintiff commenced this interpleader action to resolve competing claims to the Fund. Plaintiff indicates that the following individuals have asserted competing claims to all or part of the Fund: Separate Defendant Marvin, a district attorney in Bossier Parish, Louisiana; Maxine Wilson; Separate Defendant Carrie W. Winford; and Intervenor Gary Wilson.

         On October 9, 2019, Plaintiff filed the instant motion, asking the Court to allow it to deposit the Fund with the Clerk of Court and, accordingly, order that Plaintiff be dismissed and discharged from this lawsuit. Plaintiff also asks the Court to exercise its discretion to award it attorney's fees and costs incurred in bringing this action, to be recovered from the Fund.

         II. DISCUSSION

         Interpleader is a procedural device that allows a party holding money or property, concededly belonging to another, to join in a single suit two or more parties asserting mutually exclusive claims to the fund. A party may bring a claim under statutory interpleader, governed by 28 U.S.C. § 1335, or Federal Rule of Civil Procedure 22. The case at bar is both a statutory and Rule 22 interpleader case. “The purpose of an interpleader action is to shield a disinterested stakeholder from the costs of having to defend against multiple suits, and from the risk of multiple liability or inconsistent obligations where several claimants assert rights to a single stake.” Stonebridge Life Ins. Co. v. Litherland, No. 4:10-cv-1231 (CEJ), 2011 WL 743753, at *1 (E.D. Mo. Feb. 23, 2011) (citing S & W Foreclosure Corp. v. Okenfuss, No. 4:09-cv-353, 2010 WL 106675, at *1 (E.D. Mo. Jan. 6, 2010)).

         Interpleader actions generally unfold in a two-stage process. In a statutory interpleader case, like this one, the Court first determines whether the requirements of the interpleader statute have been met and whether the stakeholder may be relieved from liability. Viking Ins. Co. of Wis. v. Kemp, No. 3:12-cv-0216-KGB, 2013 WL 6780571, at *3 (E.D. Ark. Dec. 19, 2013). If the Court answers those questions affirmatively, it then proceeds to the second stage, where it adjudicates the adverse claims to the interpleaded fund. Id.

         This case is currently in the first stage of the interpleader process. Plaintiff presently asks the Court to determine that it is a disinterested stakeholder. Plaintiff then asks the Court to allow it to deposit the Fund into the registry of the Court and, afterwards, to be dismissed from this action. Accordingly, the Court must now determine whether Plaintiff has satisfied all requirements for this. If so, the Court will then determine whether Plaintiff is a disinterested stakeholder and, thus, whether the instant motion should be granted. If necessary, the Court will determine whether Plaintiff is entitled to fees and costs.

         A. Discharge and Dismissal

         “There is no set procedure for conducting the first stage of interpleader.” 7 Mary Kay Kane, Federal Practice & Procedure Civil § 1714 (3d ed. 2018). Courts typically “determine[] whether the prerequisites to . . . statutory interpleader have been met by examining such things as the citizenship of the litigants, the merits of the asserted threat of multiple vexation, and, if interpleader is sought under the statute, the sufficiency of the stakeholder's deposit or bond.” Prudential Ins. Co. of Am. v. Herzog, No. 4:16-cv-01306 (CEJ), 2017 WL 1477142, at *2 (E.D. Mo. Apr. 25, 2017) (quoting Vanderlinden v. Metro. Life Ins. Co., 137 F.Supp.2d 1160, 1164 (D. Neb. 2001)). “If these requirements are met, the court may dismiss [a] disinterested stakeholder from the interpleader action, leaving the claimants to prosecute their conflicting claims.” Id. Notably, the merits of the claims do not foreclose interpleader relief. See Hunter v. Fed. Life Ins. Co., 111 F.2d 551, 556 (8th Cir. 1940).

         The interpleader statute requires that the value of the money or property in the plaintiff's possession is at least $500.00 and that there are at least two adverse claimants of diverse citizenship asserting claims to the money or property.[1] 28 U.S.C. § 1335(a)(1). The requirements of the statute have been met in this case. The record shows that there are competing claims by minimally diverse parties because Defendant Maxine Wilson is an Arkansas citizen and the other claimants are Louisiana citizens.[2] Thus, Plaintiff “has shown a legitimate fear of ‘multiple vexation' directed against a single fund by identifying adverse parties who claim or could have attempted to claim the [Fund].” Viking, 2013 WL 6780571, at *3. Plaintiff disclaims any interest in the Fund and is therefore a disinterested stakeholder. Prudential, 2017 WL 1477142, at *2. Finally, the value of the Fund exceeds $500.00. Accordingly, interpleader action is appropriate here. For this reason, and because no party has opposed the motion, [3] the Court finds that Plaintiff's request for discharge and dismissal should be granted. The Court must now determine whether Plaintiff is entitled to fees and costs

         B. Fees and Costs

         Plaintiff seeks to recover its attorneys' fees and costs incurred in bringing and maintaining this interpleader action. No. rule or statute permits an interpleader plaintiff to recover its attorney fees. Normally, this lack of authorization would preclude such a recovery. See, e.g., Doe v. Nixon, 716 F.3d 1041, 1048 (8th Cir. 2013) (describing the so-called “American Rule, ” under which each party bears its own attorneys' fees unless Congress has provided “explicit statutory authority for awarding fees to a prevailing party”). “However, federal courts have traditionally relied on the equitable nature of the interpleader remedy to allow a ‘modest' award of attorney fees despite the lack of statutory authority.” Hearing v. Minn. Life Ins. Co., 33 F.Supp.3d 1035, 1042 (N.D. Iowa 2014), aff'd, 793 F.3d 888 (8th Cir. 2015); see also Hunter v. Fed. Life Ins. Co., 111 F.2d 551, 557 (8th Cir. 1940) ...


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