The opinion
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
RAYMOND JAMES & ASSOCIATES, INC.,
DECISION AND ORDER
Plaintiff,
v. 6:23-CV-06497 EAW
WILLIE JAMES ELLISON, JULIAN
BROWN, SHIRLEY WELLS, JACK
BROWN, MICHAEL BROWN, SCOTT
BROWN, PRECIOUS BROWN, and
CHASTITY GREENE,
Defendants.
INTRODUCTION
Plaintiff Raymond James & Associates, Inc. (“Raymond James”), a financial
services firm, commenced this interpleader action pursuant to 28 U.S.C. § 1335 against
defendants Willie James Ellison, Julian Brown, Shirley Wells, Jack Brown, Michael
Brown, Scott Brown, Precious Brown, and Chasity Greene (collectively “Defendants”).
(Dkt. 1). The action relates to two Individual Retirement Accounts (the “Accounts”) at
Raymond James owned by Gayla Ellison at the time of her death in May 2021, and the
Court assumes familiarity with the facts set forth in its August 29, 2024 Decision and Order
denying without prejudice Raymond James’ first motion for interpleader deposit. (Dkt.
40).
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Pending before the Court is Raymond James’ renewed motion for interpleader
deposit. (Dkt. 43). In its renewed motion, Raymond James moves for a Court order
providing that:
(1) this action shall proceed as an action in interpleader;
(2) Raymond James is ordered to liquidate the Accounts to cash and
deposit the cash in the registry of the Court within 10 days of the
Order;
(3) Raymond James is adjudicated as not liable to any of the Defendants
with respect to the Accounts;
(4) Raymond James is fully and finally discharged from any and all
further liability with respect to the Accounts, and dismissed from this
action;
(5) the Defendants, their agents, attorneys, and/or representatives, shall
be, and are hereby, permanently enjoined from instituting or
prosecuting any proceeding in any jurisdiction against Raymond
James on the basis of the Accounts or their respective claims thereto;
(6) Raymond James is awarded its attorneys’ fees and costs incurred in
bringing this interpleader action, to be further determined after the
adjudication of the merits of this action and upon declaration by
Raymond James’ counsel of the fees and costs incurred by Raymond
James; and
(7) such other and further relief as this Court deems just and equitable.
(Id. at 1-2). Julian Brown and Precious Brown (hereinafter, “Objecting Defendants”)
oppose Raymond James’ renewed motion for interpleader relief in part. (Dkt. 47).
For the reasons that follow, Raymond James’ renewed motion for interpleader relief
is granted in part and denied in part.
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DISCUSSION
I. Interpleader Standard
Pursuant to 28 U.S.C. § 1335(a), a federal district court has “original jurisdiction of
any civil action of interpleader or in the nature of interpleader filed by any person, firm, or
corporation, association, or society having in his or its custody or possession money or
property of the value of $500 or more” if “(1) [t]wo or more adverse claimants, of diverse
citizenship . . . , are claiming or may claim to be entitled to such money or property” and
“(2) the plaintiff has deposited such money or property . . . into the registry of the court . . .
or has given bond payable to the clerk of the court in such amount and with such surety as
the court or judge may deem proper, conditioned upon the compliance by the plaintiff with
the future order or judgment of the court with respect to the subject matter of the
controversy.” Id.; see also Metal Transp. Corp. v. Pac. Venture S. S. Corp., 288 F.2d 363,
365 (2d Cir. 1961) (“As a general rule, when a sum of money is involved, a district court
has no jurisdiction of an action of interpleader if the stakeholder deposits a sum smaller
than that claimed by the claimants.”); William Penn Life Ins. Co. of New York v. Viscuso,
569 F. Supp. 2d 355, 359 (S.D.N.Y. 2008) (“The federal interpleader statute grants district
courts original jurisdiction over actions of interpleader or in the nature of interpleader
where a plaintiff stakeholder has in its possession money or property worth $500 or more
that is or may be the subject of adverse claims by two or more claimants of diverse
citizenship.”).
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“Interpleader actions usually unfold in two stages. First, the court determines
whether interpleader jurisdiction exists and, if it does, discharges the stakeholder from the
action. The court then adjudicates the defendants’ competing claims.” Id. (citations
omitted). “[T]he appropriateness of an interpleader action rests on whether the plaintiff
has a real and reasonable fear of double liability or vexatious, conflicting claims against
the single fund, regardless of the merits of the competing claims.” Metro. Life Ins. Co. v.
Mitchell, 966 F. Supp. 2d 97, 102 (E.D.N.Y. 2013) (quotations and citations omitted).
“[T]he interpleader statute is remedial and to be liberally construed, particularly to prevent
races to judgment and the unfairness of multiple and potentially conflicting obligations.”
Hapag-Lloyd Aktiengesellschaft v. U.S. Oil Trading LLC, 814 F.3d 146, 151 (2d Cir. 2016)
(quotation and citation omitted).
Raymond James requests an Order from the Court directing it to liquidate the
Accounts and deposit the cash in the registry of the Court in satisfaction of the deposit
requirement. (Dkt. 44 at 11). Objecting Defendants consent to this request. (Dkt. 47 at
¶ 5). The Court is satisfied that this relief is appropriate.
As noted above, a plaintiff may seek interpleader relief where there are two or more
claimants adverse to each other and whose claims may expose plaintiff to double or
multiple liability. 28 U.S.C. § 1335. Raymond James has adequately established that it
has a reasonable and legitimate fear of multiple liability and the existence of conflicting
claims as to the proper rights to the Accounts, and Objecting Defendants do not disagree
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with this contention. Accordingly, upon review of the record and there being no opposition
from Defendants, the Court finds that Raymond James has adequately met the jurisdictional
requirements of 28 U.S.C. § 1335 and grants Raymond James interpleader relief.
II. Discharge of Raymond James
The Court next turns to whether it should discharge Raymond James insofar as the
stake is concerned and dismiss it from the case. Objecting Defendants contend that any
request for discharge is “premature” because the parties have not completed discovery and
Objecting Defendants have not determined “whether any claims exist against Raymond
James because of its refusal to disclose the beneficiary designation and unlawfully retain
the decedent’s IRA.” (Dkt. 32 at 12). Raymond James counters that Objecting Defendants
have had ample time to determine whether to assert claims against it and have not done so.
(Dkt. 48 at 7-8). The Court agrees.
“Generally, once an interpleader plaintiff has satisfied the Section 1335
jurisdictional requirements of an interpleader claim, the court should readily grant
discharge of the stakeholder, unless it finds that the stakeholder may be independently
liable to a claimant or has failed to satisfy the various requirements of interpleader,
including, when required, deposit of the stake.” New York Life Ins. Co. v. Apostolidis, 841
F. Supp. 2d 711, 720 (E.D.N.Y. 2012) (quotation and citation omitted); see also Nat’l Life
Ins. Co. v. Gomez, No. 1:15-CV-00439, 2016 WL 2757748, at *2 (N.D.N.Y. May 12, 2016)
(“However, a stakeholder should not be discharged from an action if it ‘may be
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independently liable to a claimant.’” (quoting N.Y. Life Ins. Co., 841 F. Supp. 2d at 720)).
“A discharge in interpleader ‘permits the neutral stakeholder having no claim to the subject
matter of the action, to retire from the action and requires competing claimants to interplead
their claims.’” Aon Corp. v. Hohlweck, 223 F. Supp. 2d 510, 514 (S.D.N.Y. 2002) (quoting
Aliuga v. Perera Co., Inc., 494 F. Supp. 18, 20 (S.D.N.Y.1979)).
Here, while multiple Defendants claim entitlement to beneficiary status and the
rights to the proceeds from the Accounts, there is no cognizable argument that Raymond
James could be properly liable to all Defendants as to the proceeds of the Accounts. Nor
does Raymond James have any claim to the Accounts itself and as noted, no counterclaims
have been asserted against it. In other words, each side argues that they, and not other
parties, are the proper beneficiaries to a single identifiable stake and it will be for the Court
to determine the merits of the competing claims to the Accounts. On these facts, Raymond
James is entitled to discharge. See William Penn Life Ins. Co. of New York v. Viscuso, 569
F. Supp. 2d 355, 361 (S.D.N.Y. 2008) (“Where there are multiple claims to the stake as
well as counterclaims against the stakeholder, interpleader is proper, and the court may
discharge the plaintiff from liability on the stake but retain jurisdiction over the plaintiff
for purposes of adjudicating the counterclaims.”).
Further, to the extent that Defendants seek discovery from Raymond James, they
are not precluded from obtaining it post-discharge and this circumstance does not warrant
denying Raymond James’ request for discharge. See Windmill Distrib. Co., L.P. v.
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Jaigobind, No. 23CV01407(KAM)(JMW), 2023 WL 4565402, at *5 (E.D.N.Y. May 11,
2023) (“Regardless, Arjoon’s position is not an assertion of liability, it is instead a request
premised in convenience. The Court sees no reason to tether Windmill to this action based
on something that can be achieve through other simpler means, such as a third-party
subpoena.”), report and recommendation adopted, 2023 WL 4564913 (E.D.N.Y. July 17,
2023).
Accordingly, Raymond James’s request to be discharged and dismissed from the
case is granted. The Court directs Raymond James to deposit the sum of $528,106.38, plus
accrued interest, if any, from August 30, 2024, into the Court. Once the interpleader funds
are deposited, Raymond James will be discharged from the litigation.
III. Permanent Injunction
“In addition to allowing a district court to discharge an interpleader plaintiff, section
2361 allows a district court to ‘enter its order restraining them from instituting or
prosecuting any proceeding in any State or United States court affecting the property,
instrument or obligation involved in the interpleader action until further order of the court’
and to ‘make the injunction permanent.’” New York Life Ins. Co., 841 F. Supp. 2d at 720
(quoting Bank of America, N.A. v. Morgan Stanley & Co., Inc., No. 10 Civ. 6322, 2011
WL 2581765, at *4 (S.D.N.Y. June 24, 2011)). “Section 2361 enables a party meeting the
requirements of Section 1335 to obtain a restraining order without following the procedures
set forth in Rule 65 . . . which normally governs the issuance of injunctive relief.” Id.
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(quoting Sotheby’s, Inc. v. Garcia, 802 F. Supp. 1058, 1066 (S.D.N.Y.1992)). A court
should grant a permanent injunction when “necessary to protect the Plaintiff . . . from
overlapping lawsuits and to ensure the effectiveness of the interpleader remedy.”
JPMorgan Chase Bank, N.A. v. 29-33 Ninth Ave., LLC, 710 F. Supp. 3d 259, 269 (S.D.N.Y.
2024) (quotation and citation omitted).
Raymond James requests “a permanent injunction that restrains and enjoins the
Defendants, their agents, attorneys, or representatives from instituting or prosecuting and
proceeding in any jurisdiction against Raymond James on the basis of the Accounts or their
respective claims thereto.” (Dkt. 44 at 12). The Court concludes that Raymond James has
not established its entitlement to the broad relief it seeks, which goes beyond any
entitlement to the stake. As noted, while no counterclaims have been asserted presently,
Objecting Defendants contend that Raymond James may be liable to them for in connection
with its administration of the Accounts. Moreover, Raymond James has not provided
admissible proof that would permit the Court to resolve this question in its favor as a matter
of law on the instant motion. Therefore, this portion of Raymond James’ motion is denied.
IV. Attorneys’ Fees and Costs
“District courts possess equitable discretion to award costs and attorneys’ fees to a
disinterested stakeholder who has deposited the disputed res into court and sought a
discharge from liability.” Correspondent Servs. Corp. v. J.V.W. Investments Ltd., 204
F.R.D. 47, 49 (S.D.N.Y. 2001) (citing Septembertide Publishing, B.V. v. Stein & Day, Inc.,
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884 F.2d 675, 683 (2d Cir.1989)). “Whether attorney’s fees should be awarded in an
interpleader action is left to the sound discretion of the trial court.” Commercial Union
Life Ins. Co. of New York v. Almonor, No. 98 CIV. 3649 (JSM), 1999 WL 292562, at *1
(S.D.N.Y. May 7, 1999) (citing Travelers Indemnity Co. v. Israel, 354 F.2d 488, 490 (2d
Cir. 1965)). But “courts need not award attorneys’ fees in interpleader actions where the
fees are expenses incurred in the ordinary course of business.” Travelers Ins. Co. v. Estate
of Garcia, No. 00 Civ. 2130, 2003 WL 1193535, at *4 (E.D.N.Y. Feb. 4, 2003).
Raymond James contends it is entitled to attorneys’ fees and costs because it is an
innocent interpleader plaintiff with no interest in the Accounts and that it has acted in good
faith with respect to the Accounts. Objecting Defendants argue that the ordinary course of
business exception applies because Raymond James routinely manages retirement and
investment accounts and in addition, that Raymond James is responsible for the uncertainty
between the Defendants.
On these facts and in its discretion, the Court will decline to award attorneys’ fees
in connection with the instant motion. The fees and costs incurred by Raymond James
were more likely than not incurred in the normal course of business. See Windmill Distrib.
Co., 2023 WL 4565402, at *1 (denying fee request by plan administrator of 401(k) profit
sharing plan concluding that “resolving conflicting claims to benefits is an inevitable
activity that a plan administrator would undertake in the ordinary course of its business
similar to the issues arise with insurance proceeds or pension funds”); PMP Corp. 401(k)
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Profit Sharing Plan v. Kingrasaphone, No. 3:17-CV-1085 (VAB), 2021 WL 3630957, at
*5 (D. Conn. Mar. 3, 2021) (“While PMP is not an insurance company, determining the
distribution of plan benefits or ‘[c]onflicting claims to the proceeds of a policy are
inevitable and normal risks’ of maintaining and administrating a 401(K) plan.” (quoting
Metro. Life Ins. Co. v. Mitchell, 966 F. Supp. 2d at 105)); PVH Corp. v. Houle, No. 16-CV-
1401 (RJS), 2017 WL 991107, at *1 (S.D.N.Y. Feb. 15, 2017) (“[Courts] have applied the
Second Circuit’s rationale in Travelers ‘beyond the classic insurance context to disputes
over pension benefits,’ finding that ‘[c]onflicting claims to benefits owed to beneficiaries
under an employee welfare benefit plan . . . are inevitable.’” (quoting Croskey v. Ford
Motor Co.-UAW, No. 01-cv-1094 (MBM), 2002 WL 974827, at *10 (S.D.N.Y. May 6,
2002))).
Further, the legal matters conducted by Raymond James in this litigation were not
complex, nor did it appear to incur any unique expenses. Moreover, the Court denied the
relief that Raymond James sought in its initial interpleader motion, and is only granting
partial relief in this renewed motion. Additionally, the Court notes the criticism directed at
Raymond James’ handling of this matter by the assigned magistrate judge. (See Dkt. 51 at
1-2). Based on the foregoing, the Court concludes that an award of attorneys’ fees is not
warranted.
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CONCLUSION
For the foregoing reasons, Raymond James’ renewed motion for interpleader
deposit (Dkt. 43) is granted in part and denied in part. The Court determines that
interpleader relief is appropriate in this action, directs Raymond James to deposit the sum
of $528,106.38, plus accrued interest, if any, from August 30, 2024, into the Court, and
discharges Raymond James from this action. In all other respects, Raymond James’ motion
is denied. Counsel for the remaining parties are instructed to comply with the directions
and deadline set by the assigned magistrate judge in his Decision and Order dated
November 15, 2024. (Dkt. 51 at 4-5).
SO ORDERED.
ELIZABETH“A- WOLFORD
Chief Judge
United States District Court
Dated: November 24, 2025
Rochester, New York
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