Benchmark Insurance Company v. SUNZ Insurance Company
- John Tunheim
- 0:20-cv-00908
- U.S. District Court · District of Minnesota
- 5
In Benchmark Insurance Company v. SUNZ Insurance Company, Magistrate Judge Leung granted one withdrawal request and denied seven others involving disputed interpleaded funds.
SUNZ Insurance Company received permission to withdraw $2,591,732, while its other seven withdrawal requests were denied. Benchmark Insurance Company and other defendants remain affected by the unresolved claims and contract-related disputes concerning the remaining funds.
What happened
Benchmark Insurance Company v. SUNZ Insurance Company concerns SUNZ’s requests to withdraw money deposited in the court’s registry. Benchmark had alleged that other defendants might claim some of the funds.
The court granted SUNZ’s request to withdraw $2,591,732 because the defendants who might claim that money had disclaimed their interests. It denied the other seven requests. For four requests, the court required SUNZ to notify defendants who had not appeared and seek a judgment if they still did not respond. For three others, the court said the parties must address contract and payment-right disputes through discovery and later summary-judgment motions.
Magistrate Judge Leung waived the 30-day waiting period and directed the clerk to issue SUNZ a $2,591,732 check. The order did not resolve the disputed contract and payment-right issues.
The detailed version
- Benchmark Insurance Company v. SUNZ Insurance Company · No. 0:20-cv-00908
- John Tunheim
- July 24, 2020
Background
The court had previously ordered Benchmark Insurance Company to deposit $20,533,594 in interpleader funds with the court. Interpleader is a procedure used when competing parties may claim the same money and the holder asks the court to determine how the funds should be distributed.
SUNZ filed eight motions under Federal Rule of Civil Procedure 67(b) and District of Minnesota Local Rule 67.2 seeking permission to withdraw these amounts:
- $85,749, ECF No. 196 - $548,489, ECF No. 199 - $132,648, ECF No. 202 - $30,466, ECF No. 205 - $1,003,844, ECF No. 208 - $271,918, ECF No. 212 - $4,352, ECF No. 216 - $2,591,732, ECF No. 281
Benchmark alleged that another defendant might claim each amount. No responses were filed to the motions at ECF Nos. 196, 199, 202, and 205, and the four defendants Benchmark identified as potential claimants had not appeared. Century Employer Organization, LLC, Butler America Holdings, Inc., and Payday, Inc. filed memoranda opposing the motions at ECF Nos. 208, 212, and 216, respectively. The five defendants Benchmark identified as potential claimants to the ECF No. 281 funds had disclaimed their interests.
Court’s reasoning
The court granted the ECF No. 281 motion because the parties with possible claims to those funds had disclaimed their interests and had not opposed the motion.
The court denied the other seven motions. For the motions at ECF Nos. 196, 199, 202, and 205, the court declined to extinguish the interests of defendants who had not appeared through a Local Rule 67.2 motion. The court stated that, by separate order, SUNZ would be required to notify those defendants to appear and then seek default judgment if they did not do so.
For the motions at ECF Nos. 208, 212, and 216, the court found that the parties had identified disputes about contracts and the parties’ rights and obligations concerning the interpleaded funds. It declined to decide those disputes through Local Rule 67.2 motions and directed the parties to conduct permitted discovery and then file their respective summary-judgment motions. The court noted that it would discuss the process at the upcoming pretrial scheduling conference. The court also declined to grant the ECF No. 212 motion based on a discrepancy between the names “Butler America Holdings, Inc.” and “Butler America, Inc.” because Butler America Holdings, Inc. explained that the discrepancy was a typographical error.
Order
The court expressly ordered:
- The motions at ECF Nos. 196, 199, 202, 205, 208, 212, and 216 were DENIED. - The motion at ECF No. 281 was GRANTED. - The 30-day waiting period under Local Rule 67.2 was waived. - The clerk was directed to issue SUNZ a check for $2,591,732 from the funds in the court’s registry. - Prior consistent orders remained in effect.
The order also stated that failure to comply with it or prior consistent orders could result in remedies or sanctions, including costs, fines, attorneys’ fees, evidentiary restrictions, striking pleadings, dismissal with prejudice, or default judgment.
Read the full 5-page opinion on CourtListener, the free public archive maintained by the Free Law Project.