Vertiv Group Corporation v. Rivera

Background

Vertiv Group Corporation brought an interpleader action under Federal Rule of Civil Procedure 22 concerning competing claims to Ricardo Lafuente’s 401(k) account. An interpleader action allows a stakeholder holding disputed funds to place those funds before the court so the claimants can resolve their competing demands, while protecting the stakeholder from potentially having to pay more than once. The account was valued at or near $800,000.

Lafuente originally designated the Justin Louis Lafuente Supplemental Needs Trust #2 as the 100% beneficiary. Shortly before his death, he changed the designation to name Carlos H. Rivera, Kim Mourino, and Lydia Lafuente, allocating 34%, 33%, and 33%, respectively. After Lafuente’s death, Vertiv and its plan administrator received a later purported beneficiary change naming Mourino and Lydia Lafuente as the sole beneficiaries, with allocations of 67% and 33%.

Beth Lafuente was the trustee of the trust. She requested additional time to respond and stated that she understood she could not represent the trust without a lawyer. She did not answer the complaint or file a defense, and no lawyer appeared for her. Mourino answered; Rivera and Lydia Lafuente did not answer. The court clerk later entered default against Beth Lafuente.

Motions and analysis

Vertiv moved for approval of the interpleader, distribution of the 401(k) benefits, discharge from liability, and dismissal from the action with prejudice. Mourino separately moved for default judgment against Beth Lafuente. Beth Lafuente did not oppose that motion.

The court concluded that it had jurisdiction because Vertiv was a Delaware corporation with its principal place of business in Ohio, the claimants were citizens of New Jersey and New York, and the account’s value exceeded $75,000. The court also found that Vertiv could face multiple liability because of the competing claims to the account.

Rivera, Lydia Lafuente, and Mourino agreed to a distribution awarding 48% to Lydia Lafuente, 48% to Mourino, and 4% to Rivera. The court approved that distribution. The opinion does not describe a separate merits determination deciding which beneficiary designation was legally valid; instead, the distribution was based on the agreement of the non-defaulting claimants.

Ruling

The court granted Mourino’s motion for default judgment against Beth Lafuente. It also granted Vertiv’s motion for approval of the interpleader and distribution of the funds. The distribution is 48% to Lydia Lafuente, 48% to Mourino, and 4% to Rivera. Once the funds are distributed under that agreement, Vertiv will be discharged from liability and dismissed with prejudice from the action. The conference scheduled for September 30, 2024, was adjourned.