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Securian Life Insurance Co. v. Dawson

United States District Court, D. Delaware

June 18, 2018

SECURIAN LIFE INSURANCE COMPANY, a New York stock life insurance company Plaintiff,
v.
DAVID DAWSON, an individual BETH P. ULLOM, an individual and as the Administratrix of the Estate of Lee Battis Deceased, IAN C. PAYNE, an individual, and WILLIAM PAYNE, an individual, Defendants.

          MEMORANDUM OPINION

          SHERRY R. FALLON, UNITED, STATES MAGISTRATE JUDGE

         I. INTRODUCTION

         Presently before the court in this interpleader action are two motions: (1) defendant David Dawson's ("Mr. Dawson") motion to strike defendants Beth Ullom ("Ms. Ullom") and William Payne's ("Mr. Payne") answerto the complaint; and (2) Ms. Ullom and Mr, Payne's motion to vacate the entry of default in appearance. (D.I. 17; D.I. 30) For the reasons that follow, Mr. Dawson's motion to strike is DENIED, and Ms. Ullom and Mr. Payne's motion to vacate is GRANTED.

         II. BACKGROUND

         Plaintiff Securian Life Insurance Company ("SLIC") is a stock life insurance company, and is the issuing carrier for a group term life insurance policy issued to a non-party, E.I. DuPont de Nemours and Co. ("DuPont"), Policy #34343-G. (D.I. 1 at ¶¶ 1-2) The decedent, Lee Payne Battis ("Ms. Battis"), was a disabled former employee of DuPont who participated in DuPont's life insurance program and received a life insurance policy, provided by SLIC, which insured her in the amount of $48, 000 in Employee Term insurance, and $188, 000 in Voluntary Employee life insurance, for a total of $236, 000. (Id. at ¶¶ 3, 5) Ms. Battis died intestate on March 24, 2017. (Id. at ¶¶3-4)

         Mr. Dawson holds himself out as a "caretaker" of Ms. Battis, and lived with her prior to her death. Mr. Dawson has made a claim to SLIC for Ms. Battis' death benefits. (Id. at ¶¶ 7-8) Ms. Ullom is Ms. Battis' natural born sister, and has also made a claim to SLIC for her death benefits. (Id. at ¶ 9-10) Mr. Payne is Ms. Battis' natural born brother. (Id. at ¶¶ 16-17) Defendant Ian Payne ("I. Payne") is Ms. Battis' natural born nephew who, prior to a beneficiary change discussed infra, was the contingent beneficiary to her benefits. (Id. at ¶¶ 13-14) Therefore, Ms. Ullom, Mr. Payne, and I. Payne are all heirs to Ms. Battis' estate. (Id. at ¶¶ 18-19)

         Before Ms. Battis' death, I. Payne was the contingent beneficiary of the life insurance Policy.[1] (Id. at ¶¶ 14-15) However, on September 1, 2014, Ms. Battis changed the beneficiary to Mr. Dawson through an on-line benefits portal maintained for use by participants of the DuPont employee benefits plan. (Id. at¶ 14) At the time, Mr. Dawson lived at Ms. Battis' residence as her caretaker. (Id. at ¶¶ 7-8) Upon Ms. Battis' death, Mr. Dawson and Ms. Ullom both made competing claims to SLIC for death benefits payable by the policy. (Id. at ¶¶ 7, 9) On April 7, 2017, Ms. Ullom informed SLIC that she believed the beneficiary change request in favor of Mr. Dawson was obtained by fraud or duress, and that Ms. Battis intended for her nieces and nephews to be the beneficiaries ofher life insurance policy. (Id. at¶27) OnApril ll, 2Ol7, Mr. Dawson executed a beneficiary statement seeking payment of Ms. Battis' death benefits from SLIC. (Id. at¶ 28) However, SLIC did not distribute the benefits to Mr. Dawson because DuPont's third-party benefits administrator notified SLIC that the request was under investigation for fraud. (Id. at ¶ 29) Between June 18, 2017 and August 15, 2017, Mr. Dawson repeatedly submitted correspondence to SLIC seeking payment of the life insurance policy. (Id. at ¶¶ 31, 34) On August 21, 2017, Ms. Ullom asserted a claim for the payment of Ms. Battis' benefits on the basis that the beneficiary change to Mr. Dawson was ineffective due to fraud or duress. (Id. at¶35)

         On September 1, 2017, SLIC initiated this interpleader action concerning Ms. Battis' life insurance policy. (D.I. 1) On December 5, 2017, Mr. Dawson filed his answer to the complaint. (D.I. 5) On December 29, 2017, SLIC filed affidavits of service stating that Mr. Payne was served on or around October 13, 2017, and that Ms. Ullom was served on or around October 14, 2017. (D.L6;D.I. 7) On January 11, 2018, SLIC filed a request for an entry of default in appearance against Ms. Ullom and Mr. Payne. (D.I. 8) On January 12, 2018, the court entered an order for SLIC to show cause as to why I. Payne should not be dismissed due to SLIC's failure to serve process within 90 days of filing the complaint, pursuant to Federal Rule of Civil Procedure 4(m). (D.I. 9) On January 16, 2018, the Clerk of Court entered defaults in appearance against Ms. Ullom and Mr. Payne for their failure to answer or otherwise respond to the complaint after proper service was effectuated. (D.I. 10) On January 23, 2018, SLIC filed a motion for extension of time for service of the complaint on I. Payne. (D.I. 11) The extension was granted by an oral order entered on January 25, 2018. On January 24, 2018, Ms. Ullom and Mr. Payne filed an answer to the complaint. (D.I. 16) On February 1, 2018, Mr. Dawson filed the pending motion to strike Ms. Ullom and Mr. Payne's answer to the complaint. (D.I. 17) On February 9, 2018, 1. Payne filed an answer to the complaint. (D.I. 19) On March 6, 2018, the court held a Rule 16 scheduling conference and entered a case scheduling order. (D.L 25) On March 30, 2018, Ms. Ullom and Mr. Payne filed the pending motion to vacate the Clerk's entry of default. (D.L 30)

         III. ANALYSIS

         A. Time for Filing an Answer

         Federal Rule of Civil Procedure l2(a)(1)(A)(i) states that "the time for serving a responsive pleading is within 21 days after being served with the summons and complaint." A party who fails to timely answer the original complaint risks entry of default and judgment of default. Yellow Book Sales & Distribution Co. v. White, 2011 WL 830520, at *1 (E.D. Pa. Mar. 10, 2011). Federal Rule of Civil Procedure 6(b) provides the method by which a party may seek an extension of time for filing an answer, and provides that: "[w]hen an act may or must be done within a specified time, the court may, for good cause, extend the time if a request is made before the original time expires or on motion made after the time has expired if the party failed to act because of excusable neglect."[2] Fed.R.Civ.P. 6(b).

         Although Mr. Payne was properly served on October 13, 2017 (D.L 6), and Ms. Ullom was properly served on October 14, 2017 (D.L 7), they did not file an answer until January 24, 2018 (D.I. 16). This was eight days after the Clerk of Court entered a default in appearance. (D.L 10) Prior to filing the untimely answer, Ms. Ullom and Mr. Payne at no time availed themselves of the protections provided for in Rule 6(b) by seeking an extension of time, [3] nor does the answer itself offer an acknowledgment or explanation for the late submission. Federal Rule of Civil Procedure 55(a) instructs the clerk to enter a default when a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise. Fed.R.Civ.P. 55(a). Therefore, Ms. Ullom and Mr. Payne's failure to timely plead or otherwise defend constituted a proper basis for an entry of default under Rule 55(a). When a default is entered against a party who has failed to plead or otherwise defend, filing an answer does not vacate the default in appearance. Rather, a party must move to vacate the entry pursuant to Rule 55(c) "for good cause." Fed.R.Civ.P. 55(c).

         B. Motion to Strike

         1. ...


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