The Western and Southern Life Insurance Company Benefits Committee v. Jenkins

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF OHIO

WESTERN DIVISION

THE WESTERN AND SOUTHERN

LIFE INSURANCE COMPANY

BENEFITS COMMITTEE,

Case No. 1:23-cv-609

Plaintiff,

JUDGE DOUGLAS R. COLE

v.

JENNIFER JENKINS, et al.,

Defendants.

OPINION AND ORDER

The genesis of this dispute is a contest over the proper beneficiary of a $118,700

life insurance policy issued by Plaintiff The Western and Southern Life Insurance

Company Benefits Committee (W&S). But who is entitled to the proceeds is not

currently before the Court. Rather, the Court must address some predicate questions:

Has W&S properly filed an interpleader action, such that it may deposit the life

insurance proceeds with the Court and be dismissed with prejudice? If it has, is W&S

entitled to the reasonable costs and fees it incurred in doing so? And finally, if so, how

much?

The parties do not contest the first—they agree that W&S properly

interpleaded both Defendants Jennifer Jenkins and Kelly Blanton1 as potential

beneficiaries, that W&S should be ordered to deposit the proceeds with the Court,

and that it should be dismissed with prejudice from the suit. The Court agrees, too.

1 The Court will refer to Kelly Blanton as Kelly, to avoid confusion with her father, Harold

Blanton, who is the policy owner.

But the parties disagree about whether W&S may recover its reasonable fees

and costs for filing this suit and what constitute “reasonable” measures of both. On

these issues, the Court does not fully agree with either party. W&S is correct that

caselaw supports awarding W&S its reasonable fees and costs. But the Court finds

aspects of the requested award here unreasonable, especially in light of how much it

would dissipate what is already a limited fund. So, while the Court will award some

fees and costs to W&S, it declines to award the full measure that W&S seeks.

Accordingly, as explained further below, the Court GRANTS IN PART AND

DENIES IN PART W&S’s Motion (1) for Leave to Deposit Funds with the Court;

(2) for Interpleader; (3) for Injunction; (4) for Dismissal with Prejudice; and (5) for

Reasonable Costs and Fees (Doc. 17).

BACKGROUND

Before his death, Harold R. Blanton, a district sales manager at the Western

and Southern Life Insurance Company, sought life insurance coverage as part of his

employee benefits package—a policy currently valued at $118,700. (Doc. 1 ¶¶ 4, 9,

#2–3; Doc. 9 ¶ 9, #38; Doc. 13 ¶ 9, #50). Blanton at first designated his daughter,

Kelly, as the intended beneficiary of the policy on August 27, 2019. (Doc. 1 ¶ 10, #3;

Doc. 1-1; Doc. 9 ¶ 10, #38; Doc. 13 ¶ 10, #50). On May 17, 2022, though, he appears

to have executed a separate beneficiary designation form purporting to change the

designated beneficiary to his caregiver, Jenkins. (Doc. 1 ¶ 11, #3; Doc. 1-2; Doc. 9 ¶ 11,

#38). Then, in May 2023, a state probate court declared Blanton incompetent and

appointed his daughter Kelly as his guardian, which gave her the authority to make

financial decisions on his behalf. (Doc. 1 ¶¶ 12–13, 15, #3–4; Doc. 9 ¶¶ 12–13, 15, #39;

Doc. 13 ¶¶ 12–13, 15, #50). On June 9, 2023, during the time Kelly was authorized to

act as the guardian of Blanton and his estate, Blanton appears to have executed

another beneficiary designation form, which again listed Kelly as the sole beneficiary

of the life insurance policy—a result in line with his August 2019 designation but

contrary to his May 2022 designation. (Doc. 1 ¶ 14, #4; Doc. 1-3; Doc. 13 ¶ 14, #50).

Blanton passed away shortly thereafter on July 19, 2023. (Doc. 1 ¶ 16, #4; Doc. 9 ¶ 16,

#39; Doc. 13 ¶ 16, #51).

Following Blanton’s passing, W&S sought to establish the proper beneficiary

of his life insurance policy. Kelly filed a claim form on July 27, 2023. (Doc. 1 ¶ 17, #4;

Doc. 1-4). That same day, W&S contacted Jenkins to determine whether she intended

to claim any part of the benefits, which she did on August 9, 2023. (Doc. 1 ¶¶ 18–19,

#4; Docs. 1-5, 1-6). Having received two competing claims to the proceeds and having

decided that it lacked the authority to resolve those competing claims, W&S informed

both Kelly and Jenkins that unless they managed to resolve the matter between them

by September 25, 2023, W&S would be forced to file an interpleader action. (Doc. 1

¶¶ 20–22, #4–5; Doc. 1-7). As no resolution was obtained, W&S filed this Federal Rule

of Civil Procedure 22 interpleader action on September 26, 2023. (Doc. 1). W&S

invoked the Court’s federal question jurisdiction because Blanton’s life insurance

policy was issued pursuant to his employer’s retirement benefit plan governed by the

Employee Retirement Income Security Act of 1974 (ERISA). (Doc. 1 ¶¶ 4, 6, #2

(alleging that the action was filed to enforce the terms of an ERISA plan under

§ 502(a)(3)(B) of ERISA)).

W&S then set about serving the two interpleader Defendants. It sought

waivers of service from both, but neither responded. (Doc. 17-1 ¶ 13, #103). So W&S

requested an issuance of summons for Jenkins; service was executed four days later.

(Docs.4, 6). Service on Kelly, in contrast, posed additional problems. W&S represents

that when it sought to serve Kelly in Ohio at her last known location, it learned she

had left the country with no forwarding address. (Doc. 17-1 ¶ 13, #103). After a second

attempt to obtain a waiver of service went unanswered, W&S hired outside counsel

and a private investigator in England, which resulted in its finally serving Kelly in

London on December 23, 2023. (Doc. 12; Doc. 17-1 ¶ 13, #103).

Following Defendants’ answering the Complaint, (Docs. 9, 13), the parties filed

a Rule 26(f) report and attended the Rule 16 conference held on February 13, 2024.

(Doc. 14; 2/13/24 Min. Entry). At this conference, W&S’s counsel informed the Court

that W&S intended to file the instant motion to extricate itself from the suit and to

leave the interpleader Defendants to duke it out over the policy proceeds (or at least

those portions of the proceeds remaining after its fee request, as discussed below).

W&S’s counsel further explained that its delay in moving for dismissal stemmed from

the parties’ reaching an impasse over an agreed-upon award of fees and costs to W&S

for bringing the suit. It admitted this delay was partially caused by the fact that

Defendants were not given an accounting (redacted or otherwise) of the hours W&S’s

counsel spent on the action. (See Doc. 14, #60; 2/13/24 Min. Entry). W&S’s counsel

also informed the Court on that call that it intended to seek an award of over $20,000

in fees and costs—more than one-sixth of the fund. At the Court’s suggestion, W&S’s

counsel agreed to provide Defendants an accounting of their hours to allow the parties

to try another round of negotiations over the proper fee award to avoid further

dissipation of the limited fund. (2/13/24 Min. Entry). Those negotiations also

ultimately bore no fruit. (3/7/24 Not. Order).

So W&S filed its pending motion—now requesting $32,465.73 in fees and costs

(some 27% of the fund). (Doc. 17, #90). The Court held a conference with the parties

on March 20, 2024, to discuss the motion, to ensure that Defendants had sufficient

information from the redacted timesheets W&S had provided to respond to W&S’s

motion, (see id. at #97 n.9), and to have W&S send the unredacted invoices for the

Court to consider when adjudicating the pending motion (which its counsel ultimately

did). (See 3/20/24 Min. Entry). Defendants jointly responded contesting both whether

W&S merited any award and the reasonableness of W&S’s request. (Doc. 18, #153–

56). W&S thereafter replied. (Doc. 22). So the motion is ripe for review.

LAW AND ANALYSIS

W&S seeks interpleader relief pursuant to Federal Rule of Civil Procedure 22,

which authorizes “[p]ersons with claims that may expose a plaintiff to double or

multiple liability [to] be joined as defendants and required to interplead.” This

procedural mechanism “affords a party who fears being exposed to the vexation of

defending multiple claims to a limited fund or property that is under his control a

procedure to settle the controversy and satisfy his obligation in a single proceeding.”

7 Wright & Miller, Fed. Prac. & Proc. Civ. § 1704 (3d ed. 2023). The Sixth Circuit has

explained that if interpleader is properly invoked, a district court may discharge the

disinterested stakeholder currently holding the disputed funds or property once he

deposits said monies or property with the court. United States v. High Tech. Prods.,

Inc., 497 F.3d 637, 641–42 (6th Cir. 2007). But such an order must be limited to

discharging the disinterested stakeholder from liability to the extent that it protects

the stakeholder only from competing claims against the single fund Id. at 643–44

(holding that potential damages claims against the stakeholder for damage sustained

to the property while in the stakeholder’s custody were not meaningfully subject to

competing claims such that it fell outside the ambit of an interpleader action). In

other words, interpleader relief must be limited to the basis for invoking the

mechanism. Id.

No party contests that interpleader relief is warranted here. (Doc. 17; Doc. 18,

#152). The Court agrees.

As noted, ERISA governs this dispute given Blanton’s life insurance policy was

issued under an ERISA benefits package offered by W&S. (Doc. 1 ¶¶ 6, 9, #2–3). And

W&S has statutory standing to sue, under § 502(a)(3)(B) of ERISA, 29 U.S.C.

§ 1132(a)(3)(B), as it is the fiduciary with respect to Blanton’s policy and it is seeking

equitable interpleader relief to enforce the terms of his policy. Metro. Life Ins. Co. v.

Marsh, 119 F.3d 415, 417–18 (6th Cir. 1997). So the Court has federal question

jurisdiction here. 28 U.S.C. § 1331.

Beyond that, the Court finds that this case presents a quintessential example

of a dispute justifying an interpleader. W&S holds the funds of a life insurance policy

as a fiduciary for the insured’s beneficiary. (See Doc. 1 ¶¶ 7–9, #3). But which

Defendant is the proper beneficiary is uncertain: there are competing claims made

manifest by the various designation-of-beneficiary forms Blanton purportedly

executed, which may or may not be enforceable given the state probate court’s finding

him incompetent. (Id. ¶¶ 10–15, #3–4; Docs. 1-1 to -4, 1-6). As W&S claims no interest

in the funds, (Doc. 17, #88), it is a disinterested stakeholder who faces potential

double liability were it to pay the wrong beneficiary—a hornbook fact pattern for

which interpleader gives relief. State Farm Fire & Cas. Co. v. Tashire, 386 U.S. 523,

533 n.15, 534 (1967) (noting that the modern interpleader device was “envisioned” as

a mechanism to resolve a dispute in which “an insurer [was] faced with conflicting

but mutually exclusive claims to a policy”). So W&S’s motion is well-taken inasmuch

as it requests interpleader relief. Accordingly, the Court will permit W&S to deposit

the disputed funds with the Court, dismiss it from this case with prejudice, and enjoin

Defendants from prosecuting further claims against W&S related to these funds.

But that leaves the two disputed questions. Is W&S entitled to an award of

fees and costs? And if so, how much? Let’s take each in turn.

A. W&S Is Entitled to an Award of Reasonable Fees and Costs

As to whether W&S is entitled to an award of reasonable fees and costs, Sixth

Circuit caselaw makes clear that the answer is yes. “An interpleading party is

entitled to recover [reasonable] costs and attorney’s fees when it is (1) a disinterested

stakeholder, (2) who has conceded liability, (3) has deposited the disputed funds into

the court, and (4) has sought a discharge from liability.” Holmes v. Artists Rts. Enf’t

Corp., 148 F. App’x 252, 259 (6th Cir. 2005). W&S satisfies each prong. It does not

claim an interest in the funds, (Doc. 17, #88), recognizes that it must pay one or the

other Defendant such funds under the policy as both are potential beneficiaries, (see

id. at #88–89), and has moved to deposit these funds with the Court and to obtain a

dismissal from this suit, (id. at #81–82). So an award is merited.

Defendants object, (Doc. 18, #153), pointing to cases from this district that have

constructed an exception to this test when the “conflicting claims to proceeds [] arise[]

in the normal course of business.” Life Ins. Co. of N. Am. v. Bond, No. 1:11-cv-146,

2013 WL 12178133, at *8–*9 (S.D. Ohio Feb. 5, 2013) (chalking this up as “simply

part of [an insurer’s] cost of doing business” (citation omitted)). While this exception

has some intuitive appeal, it appears to contravene the Sixth Circuit’s

pronouncement on the matter.2 And, even were that not the case, the Court is

unconvinced the incentives inherent to insurance markets completely justify it as a

policy matter.

Let’s start with the more important of those—Sixth Circuit precedent. That

court has made clear that the “interpleading party is entitled to recover costs and

2 The Court takes occasion to reject (again) the commonly-asserted-but-nonetheless-mistaken

assumption Defendants make in their briefing, (see Doc. 18, #153): there is no ‘law of the

district court.’ See Washington v. City of Cincinnati, No. 1:23-cv-230, 2024 WL 474403, at *5

n.7 (S.D. Ohio Feb. 7, 2024). Other district courts’ decisions are not binding—only persuasive.

Id. And to the extent their decisions are unreasoned; conflict with binding, superior authority;

or otherwise lack persuasive legal analysis justifying their holdings, a district court may

reject such caselaw. See Lovelo v. Clermont Cnty. Sheriff’s Off., No. 1:23-cv-114, 2023 WL

8828008, at *3–*4 (S.D. Ohio Dec. 21, 2023).

attorney’s fees” when it meets all four prongs of the applicable test (as is true here)

and that “[t]he only limiting principle is reasonableness.”3 Holmes, 148 F. App’x at

259 (emphases added). That does not appear to admit of the exception on which

Defendants seek to rely here.

Against that backdrop, the caselaw to which Defendants allude—which has

denied insurers recovery on normal-course-of-doing-business grounds—seems to

ground that denial in a conclusion that insurers are not truly “disinterested

stakeholders” as interpleader plaintiffs, and thus do not meet the first prong of the

Sixth Circuit’s test. Bond, 2013 WL 12178133, at *8–*9. The Court is not convinced.

In the interpleader context, a “disinterested stakeholder” merely refers to any

stakeholder who holds no claim to the disputed funds. It is used in contrast to the

phrase “interested stakeholder,” which refers to a stakeholder who does have a claim

3 While the Sixth Circuit decision upon which the Court relies here was unpublished and

therefore not strictly binding, the Court finds that this statement of the law governs for two

reasons. First, it is the only Sixth Circuit opinion directly setting forth the test governing a

district court’s award of fees and costs to an interpleader plaintiff. Cf. First Tr. Corp. v.

Bryant, 410 F.3d 842, 852–56 (6th Cir. 2005) (rejecting an award of fees and costs to an

interpleader plaintiff as inequitable because the interpleader plaintiff was not disinterested

and engaged in bad faith and vexatious litigation behavior, but not setting forth a specific

test to govern when such awards are permissible in interpleader actions). And second, the

Sixth Circuit’s test is drawn directly from the weight of circuit court authority that has

confronted this question and provided guidance to lower courts. Holmes, 148 F. App’x at 259

(adopting the test set forth in Septembertide Publ’g, B.V. v. Stein & Day, Inc., 884 F.2d 675,

683 (2d Cir. 1989)); accord Sun Life Assurance Co. of Can. v. Sampson, 556 F.3d 6, 8–9 (1st

Cir. 2009); Metro. Life Ins. Co. v. Kubichek, 83 F. App’x 425, 431 (3d Cir. 2003); Rhoades v.

Casey, 196 F.3d 592, 603 (5th Cir. 1999); Schirmer Stevedoring Co. v. Seaboard Stevedoring

Corp., 306 F.2d 188, 195 (9th Cir. 1962); but see Aaron v. Mahl, 550 F.3d 659, 667 (7th Cir.

2008) (adopting the “normal course of business” exception). The consistent support for this

test therefore lends credence to the legally binding force of Holmes. So, for these reasons, and

absent further guidance from that court, this Court will hew closely to the Sixth Circuit’s

pronouncement in Holmes of the test governing when interpleader plaintiffs are entitled to

an award of reasonable fees and costs.

to the fund or who otherwise seeks to advocate for a specific outcome (and therefore

presumably would not have a strong argument for why he should be extricated from

the suit). Am. Heritage Life Ins. Co. v. Baker, No. 3:18-cv-2178, 2019 WL 6341636, at

*2 (N.D. Ohio Nov. 27, 2019) (“[A] disinterested stakeholder is a party without an

interest in the ultimate disposition of the funds.”); Trs. of Dirs. Guild of Am.-Producer

Pension Benefits Plan v. Tise, 234 F.3d 415, 426 (9th Cir. 2000) (holding that an

interpleader plaintiff may not recover fees and costs incurred “in litigating the merits

of the adverse claimants’ positions” because he “is supposed to be disinterested”); cf.

First Tr. Corp. v. Bryant, 410 F.3d 842, 852–55 (6th Cir. 2005) (distinguishing

between the concepts of disinterested stakeholder and claimant in the interpleader

context). So insurers like W&S that disclaim any interest in the disputed policy fall

within the ambit of the term “disinterested stakeholder.”

The cases going the other way treat insurers as “interested parties” because

“the filing of the interpleader action immunizes [them] from further liability under

the contested policy.” Bond, 2013 WL 12178133, at *9. But if that theory works, it

would appear to apply equally to all interpleader plaintiffs; after all, the central

purpose of the interpleader vehicle is to allow parties to absolve themselves of the

possibility of multiple liability arising from their possession of disputed funds or

property. Fed. R. Civ. P. 22(a) (authorizing interpleader for “plaintiffs [who face]

double or multiple liability,” which thereby means they have an interest in avoiding

such inconsistent liability through a court order dismissing them from the suit with

prejudice); accord Baker, 2019 WL 6341636, at *2. So as to interpleader actions, there

would be no such thing as a disinterested party if that theory were correct, which

means there would never be any fee recovery under the Holmes test.

Nor can this understanding of the term “disinterested stakeholder” be squared

with the Sixth Circuit’s rule requiring the interpleader plaintiff to show that he was

both a “disinterested stakeholder” and that he “sought a discharge from liability” to

obtain an award of fees and costs. Holmes, 148 F. App’x at 259. If an interpleader

plaintiff’s seeking and obtaining a release from liability renders him an interested

stakeholder—as Defendants’ caselaw implies—then, as a matter of basic logic, no

interpleader plaintiff could ever satisfy both the “disinterested stakeholder” and

“discharge from liability” prongs at the same time. Anyone who received the latter

would not qualify as the former. Again, that implies no award of fees and costs could

ever be awarded in an interpleader action. Assuredly, the Sixth Circuit did not intend

to pen a test that was at war with itself, as Defendants’ caselaw would require.

In reality, the exception that cases like Bond have created appears to be

grounded not so much in Sixth Circuit precedent, as in a policy argument—that

interpleader insurers should not receive interpleader awards because filing such suits

is just a “cost of doing business” as an insurer. Bond, 2019 WL 6341636, at *2–*3

(collecting cases rejecting fee awards in insurer contexts, which all rely on this

argument). But to this argument, the Court offers two responses. First, such a policy

argument is not a reason to discard clear Sixth Circuit precedent, see supra note 3,

which holds that “[t]he only limiting principle [for these awards] is reasonableness.”

Holmes, 148 F. App’x at 259. Second, even if one were to rely on policy considerations,

the Court is not so sure that such arguments cut clearly against all fee awards.

To expand a bit on the latter point, consider that to remain in business,

insurers must collect enough in premiums or other revenues to cover benefit

payments plus the insurers’ operating costs. These costs include the costs associated

with processing policy payouts. One example is the costs of interpleader actions when

proper beneficiaries are unclear. If insurers cannot recover the costs of such actions,

they must build those costs into policy premiums, thereby spreading those costs

among all policyholders. Dates v. HSBC, No. 1:24-cv-81, 2024 WL 860918, at *8–*9

(S.D. Ohio Feb. 29, 2024) (describing similar market forces in the mortgage context

in which the costs of drawn-out foreclosure actions are passed onto debtors through

higher interest rates). But imagine a given interpleader action arises from a

policyholder’s taking insufficient care with his beneficiary designations. Providing

the insurer recovery for its interpleader costs for the resulting action acts as a sort of

a “tax” on that specific policyholder, as it decreases the net payout of the policy

proceeds by the amount of the insurer’s interpleader costs. On this account, contrary

to the suggestion in cases like Bond, cost-shifting in interpleader actions may

advance an admirable goal. The “tax” means that it is those policyholders who cause

such costs to arise who bear them (rather than all policyholders). And that, in turn,

provides an incentive for policyholders to take greater care with beneficiary

designations, which thereby reduces the need for interpleader actions overall.

On the other hand, it may be unfair to characterize interpleaders as always (or

even typically) arising from policyholder shortcomings. Inherent in insurance (and

particularly life insurance) is the reality that many are incentivized to make claims

on policies even if they are not proper beneficiaries.4 And to Bond’s point, in that

sense, the likelihood that an insurer needs to obtain judicial resolution of competing

claims is something known to the insurer up front. The price of filing these

interpleader mechanisms could be characterized as a de minimis overhead cost that

the insurer could price into policies—a form of protection for insureds against

unforeseen difficulties that arise when an insurer attempts to pay out under their

policies. In other words, the life insurance policy is in a sense bundled with an

interpleader insurance policy. And on that account, insurers, which aggregate the

risk of an interpleader action across thousands of policyholders, can better predict

how often judicial proceedings are necessary. That, in turn, may make them the more

efficient cost bearer as compared to a particular policyholder, especially in those cases

where the insured is largely blameless for the administrative difficulties (e.g., if a

contest by the avowed beneficiaries is precipitated by one of the claimants making a

spurious claim under the policy).

In short, on the question whether insurers should recover fees at all, differing

considerations cut both ways. That said, however one views the question of insurer

4 One need only call to mind the long history of insurance fraud, or the self-evident competing

interests of spouses, children, and others in consanguinity with insureds that has spawned

the complex world of probate, see 95 Corpus Juris Secundum, Wills § 462 (2024) (“The

overarching purpose of probate is to [] marshal the assets and liabilities of a decedent with

the aim of paying any legitimate debts and distributing what’s left in accordance with the

wishes of that person as expressed in a properly executed will.”).

interpleader cost recovery generally, an unrestricted right for insurers to obtain an

award of costs and fees raises yet further concerns. If that were the rule, insurers

would have little reason to initiate interpleaders in the most efficient manner

possible. Additional legal research before filing a complaint, for example, would in a

sense inure to the benefit of the insurer (or at least to the insurer’s counsel), at the

expense of the policy beneficiaries. Moreover, a blanket entitlement to insurer cost

recovery from policy proceeds may also create poor incentives for potential

beneficiaries who are antagonistic to one another. A beneficiary who realizes up front

he is likely to lose may engage in spiteful litigation behavior simply to drive up costs

and to dissipate the policy proceeds available to the “correct” beneficiary.

Perhaps not surprisingly then, those courts that allow fee recovery for insurers

in interpleader actions have also imposed limitations on that principle. As a historical

matter, the award of insurer costs (including attorney’s fees) for interpleader actions

has its roots in the courts’ equitable powers over such actions. First Tr., 410 F.3d at

856. Reflecting these equitable underpinnings, courts have recognized that a

claimant’s bad faith may justify taxing a fee award against only that vexatious

claimant and not against the interpleaded funds. Prudential Ins. Co. of Am. v. Boyd,

781 F.2d 1494, 1498 (11th Cir. 1986) (explaining that taxing an award of costs and

fees for the interpleader plaintiff against one of the claimant must be supported by

record evidence of bad faith or other “conduct [that] justifies doing so”); see generally

Schirmer Stevedoring Co. v. Seaboard Stevedoring Corp., 306 F.2d 188, 195 (9th Cir.

1962) (explaining that district courts “ha[ve] [the] discretion to decide whether or not

to assess” an interpleader award against “the fund,” “the losing claimants,” or “among

the claimants”). So, to the extent that there is a risk for bad behavior by the

beneficiaries, the law provides some means for courts to ameliorate such concerns.

Likewise, and reflecting similar equitable concerns, the law does not permit

insurers to make unreasonable demands for fees. The touchstone for the analysis

about how much an insurer is entitled to recover in costs and fees remains

“reasonableness,” Holmes, 148 F. App’x at 259—an issue to which the Court turns in

the next section. See infra Part B. Reasonableness thus acts as a shield against

insurers’ unnecessarily multiplying the litigation, thereby ensuring the court can

police vexatious behavior that improperly depletes the disputed funds.

Putting all that together, were the Court free to construct a rule from whole

cloth, the Court would first need to weigh, on the one hand, the intuitive notion that

insurers are better positioned to predict how often interpleaders will occur against,

on the other hand, the various incentives that may arise when policyholders cross-

subsidize through higher premiums at least some of the insurers’ costs that arise in

cases requiring judicial intervention. That issue does not strike the Court as one easy

to resolve. Nor, in any event, have the parties here provided the information the Court

would need to unravel that knot.

Luckily, the Court need not do so, as the Sixth Circuit’s test is clear.

Disinterested interpleader plaintiffs who concede liability and seek to deposit the

disputed property with the Court and to be discharged from further responsibility are

“entitled” to some amount of fees and costs. Holmes, 148 F. App’x at 259. And clarity

in the legal rule governing this issue has benefits of its own. As noted above, insurers

can “price” either rule (recovery or not) into premiums. But they can do so only if the

rule is clear.

In short, the Court declines to depart from Holmes. And, as also explained

above, W&S, who desires to leave Jenkins and Kelly to litigate their respective

entitlements to the policy proceeds, plainly meets that standard. Especially given the

importance of a clear legal rule, the competing caselaw that attempts to import an

exception (not endorsed by the Sixth Circuit) into this test whenever an interpleader

action is simply “the cost of doing business” fails to persuade this Court to jettison

that rule. Baker, 2019 WL 6341636, at *3 (“conclud[ing] that whether the costs arise

in the ordinary course of business is a valid consideration, but it does not justify a

categorical bar on insurance companies receiving costs and fees associated with

interpleader actions”). So the Court concludes that W&S is entitled to some award as

it meets all four prongs of the Holmes test. 148 F. App’x at 259.

B. W&S’s Requested Award Is Unreasonable and Will Be Reduced

That W&S merits an award does not resolve the matter, though, as the Court

also must ensure that the award it orders is reasonable. Holmes, 148 F. App’x at 259.

This is where W&S’s motion runs into some trouble. W&S’s counsel seeks an award

of $32,465.73 in fees and costs ($29,675.35 in fees and $2,790.38 in costs, $2,086.69

of which relate to serving Kelly in London). (Doc. 17-1, #102). As described below, the

Court concludes that a portion of this request is unreasonable.

“The traditional test for determining attorneys[’] fees in an interpleader action

is less rigorous than the more elaborate factors used to consider fee awards in other

contexts.”5 Sun Life Assurance Co. of Can. v. Chan’s Est., No. C-03-2205, 2003 WL

22227881, at *3 (N.D. Cal. Sept. 22, 2003). In this context, the Court must consider

the complexity of the case and whether the interpleader plaintiff acted with diligence

or engaged in dilatory tactics. Wright & Miller, supra, § 1719.

Here, these factors point to a significant reduction of the claimed award

amount. This is a straightforward case that should not have required extensive effort

on W&S’s part. The two potential claimants to the life insurance policy proceeds at

issue could be identified by a quick review of the designation of beneficiary forms—of

5 W&S erroneously claims its asserted award amount merits a presumption of reasonableness

because it believes its lodestar calculation is in all respects reasonable. (Doc. 22, #253–54).

But for the presumption to attach, W&S must prove “that the number of hours and the rate

claims are [both] reasonable.” Imwalle v. Reliance Med. Prods., Inc., 515 F.3d 531, 552 (6th

Cir. 2008). And as that is a legal question left to the discretion of the district court, Holmes,

148 F. App’x at 259, W&S cannot stipulate to its own reasonableness, (Doc. 22, #254–55).

Neuens v. City of Columbus, 303 F.3d 667, 670 (6th Cir. 2002) (“Parties may not stipulate to

the legal conclusions to be reached by the court.” (cleaned up)). To the extent that W&S claims

the award it seeks is reasonable because other district courts have awarded similar amounts,

(Doc. 17, #92–93, 97–98; Docs. 17-2 to -8; Docs. 22-2 to -6), the Court rejects this argument

for three reasons. First, those holdings are not binding on this Court. See supra note 2.

Second, the Court, without spending much energy in researching the issue, can find a similar

weight of authority in which courts reduced claimed awards as unreasonable in line with the

Court’s determination today. E.g., Sun Life Assurance Co. of Can. v. Chan’s Est., No. C-03-

2205, 2003 WL 22227881, at *3 n.1 (N.D. Cal. Sept. 22, 2003) (collecting cases). And third,

W&S must establish that in the given case its behavior (i.e., the number of hours expended)

was reasonable for the given case. See Imwalle, 515 F.3d at 552. As a result, the fees awarded

in other cases—dependent on the circumstances of those cases (many of which were by agreed

orders, unlike the opposed motion currently before the Court, (e.g., Doc. 17-4, 17-5, 17-8))—

are helpful but only as cross-checks because they cannot and do not serve as substitutes for

W&S’s explaining why its behavior here is reasonable as measured against the complexity of

this case. Cf. Hall v. Cullinan, No. 1:20-cv-918, 2024 U.S. Dist. LEXIS 31344, at *11 (S.D.

Ohio Feb. 23, 2024) (rejecting a party’s reliance on other cases to support its request that the

court enter a preliminary injunction when that party had failed to point to evidence in the

record in that case justifying such relief).

which there are only three. (Docs. 1-1 to -3). The Complaint contains a mere 26

paragraphs of allegations and is 6 pages long. (Doc. 1). Moreover, W&S readily

acknowledges that it has filed similar interpleader actions in the past and that its

current counsel has personally handled such matters. (Doc. 17, #93–94; Docs. 17-2 to

-8; Doc. 22, #255; Docs. 22-2, 22-3). Given W&S and its attorneys are no strangers to

such cases, they presumably have form complaints for such instances that they can

quickly modify for use here. Against that backdrop, the Court questions why 43 hours

were expended to draft the Complaint and to contact the listed beneficiaries (by

email) to see if they could settle their dispute.

True, questions of jurisdiction can certainly raise thorny issues that require

more preparatory caselaw research before drafting a complaint. Interpleaders

involving insurance would typically be state matters, but here ERISA provided a

jurisdictional hook. That said, to the extent that W&S’s counsel’s hours can be

attributed to such questions, it cannot justify more than an hour or two of research.

For starters, as an insurer, interpleader actions are W&S’s bread and butter. So such

jurisdictional issues are likely frequently recurring and thus previously researched—

in other words, counsel did not need to step outside of their comfort zone to determine

that W&S could properly invoke federal jurisdiction here. And importantly, a twenty-

five-year-old Sixth Circuit case directly on point disposes of this jurisdictional

question in one fell swoop. Marsh, 119 F.3d at 417–18, 418 n.2.

Beyond that, the service-of-process issues here admittedly added to the costs

applicable to the mine-run of interpleader cases insurers prosecute. Namely, the

failure of both Jenkins and Kelly to waive service—and the resulting need for W&S

to utilize foreign process servers in London—reasonably required legal research and

added costs an insurer would not normally expend. (Doc. 17-1 ¶ 13, #103). But W&S’s

invoices suggest only 6.2 attorney-hours (and around $2,086.69 in costs, (id. ¶ 6,

#102)) were dedicated to such issues. So that does little to support the roughly

$32,000 fee request here.

Moreover, these facts taken together further undercut W&S’s attempt also to

recover fees incurred following Defendants’ entrance into this suit. W&S points to the

parties’ inability to finalize an agreed order dismissing W&S from the suit as a

principal reason for incurring more fees. But that inability, and W&S’s subsequent

motion practice, largely stemmed from W&S’s counsel’s demanding the entire

(unreasonable) amount of fees and costs it incurred in filing the lawsuit and joining

Defendants to the suit (some $20,000). (See Doc. 14, #60). The Court is not inclined

to award the additional fees occasioned by that activity. First Tr., 410 F.3d at 854

(holding that there would be “considerable inequity [in] extracting from [the

prevailing claimant’s] benefits [the interpleader plaintiff’s] attorney’s fees that were

related to virtually the entire proceedings in th[e] case—fees that [the interpleader

plaintiff] jacked up with numerous [frivolous] arguments”); cf. Murphy v. Travelers

Ins. Co., 534 F.2d 1155, 1164 (5th Cir. 1976) (noting that when an interpleader-

plaintiff insurer’s actions are “improvident, vexatious, or otherwise improper,” they

may support an award of fees to the claimant). The Court therefore will not add to

the award the remaining 36.1 hours (or the 13.1 hours of fees W&S’s counsel incurred

after his affidavit in support of its motion was drafted but which are nonetheless

listed in the invoices sent to the Court).

Having reviewed the invoices, the Court finds that a fee award of $5,750 is

reasonable. This approximates a reasonable amount of time to research the caselaw

governing federal jurisdiction over interpleader actions, to draft, and then to file a

routine interpleader complaint, along with the just over 6 hours counsel spent on the

foreign summons issues, were such time billed at the lowest rate listed in W&S’s

counsel’s affidavit. (Doc. 17-1 ¶ 4, #102). The Court finds that this fee award most

accurately reflects the fact that (1) this suit is in its nascency6 and is lacking in

complexity, and that (2) W&S is sophisticated in interpleader matters, but that

(3) there were fees reasonably incurred to analyze the unique foreign service issue

that arose. As for costs, the Court finds that W&S’s full requested amount of

$2,790.38 is reasonable given $2,086.69 of it stems from the additional expenses

needed to serve Kelly in England. Accordingly, the Court finds that a reasonable

award of fees and costs here totals to $8,540.38.

CONCLUSION

Accordingly, the Court GRANTS IN PART AND DENIES IN PART W&S’s

Motion (1) for Leave to Deposit Funds with the Court; (2) for Interpleader; (3) for

6 The Court takes a moment to reject W&S’s assertion that the fees it requests are reasonable

because spread out “[o]ver the approximately seven[-]month period since the inception of this

dispute, [the 85.3 requested hours] amount[] to under two 8[-]hour days’ work per month.”

(Doc. 22, #255). The problem with this argument is that it ignores that all that has happened

during that seven-month period is the filing of a complaint, service of process, and two

telephone status conferences. That collection of activities does not call for two eight-hour days

every month.

Injunction; (4) for Dismissal with Prejudice; and (5) for Reasonable Costs and Fees

(Doc. 17). More specifically, the Court GRANTS W&S leave to deposit the funds from

Harold R. Blanton’s life insurance policy issued under the Western & Southern

Financial Group Retiree Health Plan into the registry of the Court. And the Court

AWARDS W&S reasonable attorneys’ fees in the amount of $5,750 and

reasonable costs in the amount of $2,790.38.

As a result, the Court ORDERS W&S to deposit into the registry of the Court

the disputed funds in the amount of $118,700 plus interest accrued through

the date of this Opinion and Order, less the fees-and-costs the Court awards

in this Order in the amount of $8,540.38. The Court further ORDERS the Clerk

to accept and to deposit into the registry of the Court said funds. As those funds meet

the IRS definition of a “disputed ownership fund” (DOF), they shall be held in

interest-bearing Government Account Series securities via the Court Registry

Investment System (CRIS) administered by the Administrative Office of the United

States Courts until the Court enters a final judgment in this action. The Court further

ORDERS that the Clerk promptly and properly invest those funds into the CRIS

Disputed Ownership Fund. Income generated from the fund investments will be

reduced by an annualized 20 basis points on assets on deposit for funds held in the

DOF, for the management of investments in the CRIS. According to the Court’s

Miscellaneous Fee Schedule, the CRIS fee is assessed from interest earnings to the

pool before a pro rata distribution of earnings is made to court cases.

Upon depositing said funds, W&S is deemed DISMISSED from this action

WITH PREJUDICE. Further, upon the deposit of those funds and the dismissal of

W&S, the Court ENJOINS Jennifer Jenkins and Kelly Blanton from instituting or

prosecuting any action in state or federal court or elsewhere against W&S related to

Harold R. Blanton’s life insurance policy issued under the Western & Southern

Financial Group Retiree Health Plan or the proceeds thereof. /

SO ORDERED.

May 13, 2024

DATE DOUGLAS R. COLE \

UNITED STATES DISTRICT JUDGE

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