Accordia Life And Annuity Company v. Nguyen

Background

Accordia Life and Annuity Company, the successor to Aviva Financial Life and Annuity Company, issued Thanh Van Pham a $200,000 life-insurance policy. The policy initially named Be Thi Nguyen as beneficiary. In 2015, Pham changed the designation to give Nguyen 60 percent, J.P. 20 percent, and H.P. 20 percent. Pham later died in Vietnam. During its investigation, Accordia learned that Pham had married Vo Thi Be Nam in Vietnam and had two additional children, V.M.T. and V.T.A.T.

Accordia filed an interpleader action under 28 U.S.C. § 1335 to resolve the competing claims to the insurance proceeds. It deposited $207,712.80, including interest, with the court and was discharged from liability. The Nguyen Parties claimed the entire deposited amount, relying in part on Nguyen’s payment of the premiums and the policy’s beneficiary designation. The Nam Parties claimed at least half of the funds based on Nam’s asserted status as Pham’s spouse or putative spouse and their contention that the policy was purchased with community or quasi-community property. They also claimed assets they believed they would have received under California intestate-succession rules.

After answering the crossclaims and exchanging discovery, the parties entered a settlement agreement and general release. Their request asked the court to appoint Nam as guardian ad litem for V.M.T. and V.T.A.T., approve the compromise involving all four minors, distribute the deposited funds, and dismiss the parties’ crossclaims with prejudice.

Guardian ad litem

A guardian ad litem is a person appointed to protect an unrepresented minor’s interests in litigation. The court found that Nam and her children had the same interest in obtaining the best possible recovery for their family and that no inherent conflict existed. The court therefore appointed Nam as guardian ad litem for V.M.T. and V.T.A.T.

Settlement terms and court’s review

Under the settlement, Nam would receive $11,250; J.P. and H.P. would each receive $40,000; and Nguyen would receive the remaining balance. The Nguyen Parties also assigned to Nam any rights they might have to Pham’s financial accounts or other assets in the United States, other than the disputed insurance proceeds, and to Pham’s assets and property in Vietnam. Each party was to bear its own costs and expenses.

The court had a special duty to independently review the minors’ settlement and determine whether it was fair and reasonable. It found the compromise for V.M.T. and V.T.A.T. fair and reasonable, noting that Nam and those children live in Vietnam, that Nam earns $200 per month cleaning houses, and that the settlement would provide money sooner and with certainty. Because establishing custodial accounts for the children in Vietnam would be difficult, the court approved sending Nam’s $11,250 directly by bank transfer for the children’s benefit. The court also found the $40,000 payments to J.P. and H.P. fair and reasonable because each amount represented 20 percent of the policy’s face value, consistent with the beneficiary designation.

Disposition

The court granted the parties’ request. It approved the settlement on behalf of the minors, appointed Nam as guardian ad litem for V.M.T. and V.T.A.T., and dismissed the parties’ respective crossclaims at ECF 86 and ECF 104 with prejudice. The clerk was ordered to distribute $11,250 to Nam by direct bank transfer, $40,000 to each of J.P. and H.P. through Nguyen as custodian under the California Uniform Transfers to Minors Act, and the remaining balance to Nguyen. Nam was permitted to submit Form W-8BEN instead of Form W-9.