American General Life Insurance Company v. Mehta

Background

American General Life Insurance Company filed an interpleader action after issuing two life-insurance policies to Jeffrey Terhune. All four interpleader defendants—Ritika Mehta, Lisa Terhune, Ryan Terhune, and Mikaela Terhune—submitted beneficiary claims. American General said it could not determine how to distribute the death benefits because of questions involving a divorce agreement between Jeffrey Terhune and Lisa Terhune and the validity of an online request designating Ritika Mehta as the 100% primary beneficiary.

The court authorized American General to deposit the insurance funds with the Clerk of Court. American General deposited $678,030.74 on June 20, 2024. Ritika Mehta and Lisa Terhune appeared and filed answers. Mikaela Terhune and Ryan Terhune waived service but did not appear. The Clerk entered certificates of default against them on July 9, 2024.

Motion and Analysis

American General, Ritika Mehta, and Lisa Terhune jointly moved for default judgment against Ryan Terhune and Mikaela Terhune. The motion was filed on January 15, 2025. After the court requested proof of service, American General submitted a declaration stating that copies of the motion were delivered to Ryan Terhune and Mikaela Terhune at their last known addresses. More than three months passed without a response.

The court explained that interpleader generally has two stages: first, deciding whether the plaintiff properly brought the interpleader action; and second, resolving the competing claims to the fund. The court concluded that the complaint satisfied the first stage because it alleged the required facts, including a fund worth more than $500, adverse claimants of diverse citizenship, deposit of the fund with the court, and a real and reasonable fear of conflicting claims or double liability.

For the second stage, the court held that Ryan Terhune and Mikaela Terhune forfeited any potential claim to the fund by defaulting. The court concluded that the movants were entitled to default judgment against them, dismissal of the parties’ claims with prejudice, and payment of attorneys’ fees to American General.

Disposition

The motion for entry of default judgment against Ryan Terhune and Mikaela Terhune was GRANTED. The court stated that it would separately enter an Order and Judgment and that the Clerk should terminate the motion and close the case. The court also stated that the forthcoming order would include an injunction against further claims or proceedings against American General and would distribute $285,000 to Lisa Terhune, $10,000 to American General, and the remaining amounts to Ritika Mehta.