Aviva Life and Annuity Co. v. White (In re Millennium Multiple Employer Welfare Benefit Plan)
- Summarized by Lars Fuller , BakerHostetler
- 10 years 2 months ago
- Citation:
- Aviva Life and Annuity Co. v. White (In re Millennium Multiple Employer Welfare Benefit Plan), Nos. 14-6006 & 14-6007 (10th Cir. Nov. 13, 2014)
- Tag(s):
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- Ruling:
- The 10th Circuit affirmed the U.S. District Court (W.D. Okla.) decision affirming the bankruptcy court's order limiting the scope of the interpleader relief granted in two interpleader actions. Tenth Circuit agreed that federal interpleader statute, 28 USC 1335, only allowed enjoining claims against disputed property, i.e., an identified stake, but did not allow enjoining other claims that arose from transactions involving disputed property. Consequently, bankruptcy court order was proper refusing to enjoin suits asserting tort claims against interpleader plaintiff, even though tort claims against insurer arose in relation to the insurance policies that were the disputed property in the interpleader actions.
- Procedural context:
- Plaintiff commenced two interpleader actions as adversary proceedings related to a third party's bankruptcy. Bankruptcy court entered orders limiting scope of interpleader relief and then dismissed adversaries. Plaintiff appealed orders to the district court, which affirmed. Plaintiff appealed to 10th Circuit.
- Facts:
- Debtor commenced Chapter 11. Debtor was an employee benefit plan which provided insurance benefits to employees. At time of bankruptcy filing, debtor's assets included insurance policies that insured employees, but for which debtor was sole beneficiary and policy holder. Chapter 11 trustee sought surrender value of policies. Employees also sought surrender value of policies from insurer. Certain employees also asserted additional tort claims against insurer, including fraud, and commenced separate actions in different jurisdictions, against insurer. Insurer commenced interpleader adversary actions and tendered full surrender value of policies to bankruptcy court registry. Insurer sought injunction that precluded employees from continuing litigation in any other forum, on any claims related to the policies. Bankruptcy court entered judgment in favor of Chapter 11 trustee in interpleader actions giving full surrender value of policies to trustee. Trustee administered estate, and distributed surrender value of policies, paying employees' claims against debtor in full. After dismissing claims related to surrender value of policies, Whites and other employees sought to continue tort claims against insurer in other forums seeking damages related to policies. Insurer sought injunction order from bankruptcy court enjoining Whites and employees from proceeding with suits on claims related in any way to policies. Whites cross moved for dismissal of interpleader actions. Bankruptcy court dismissed interpleader suits, and declined to enjoin suits on tort claims.
- Judge(s):
- Holmes, Bacharach, McHugh
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