- Court: 9th Circuit Court of Appeals Archives
- Area(s) of Law: Civil Procedure
- Date Filed: 07-31-2012
- Case #: 11-55026
- Judge(s)/Court Below: Circuit Judge Paez for the Court; Circuit Judges Wardlaw and Rawlinson
Plaintiffs, relatives of deceased, insured by a West Coast Life Insurance Company policy, filed suit in Los Angeles Superior Court for breach of contract and breach of covenant of good faith and fair dealing based on West Coast鈥檚 approval of several different changes to the policy鈥檚 ownership and beneficiaries. Other relatives and beneficiaries filed crossclaims against Plaintiffs and counterclaims against West Coast for negligence and declaratory relief. Under diversity jurisdiction, West Coast removed the case to district court, and counterclaimed in interpleader. The district court granted West Coast鈥檚 52(c) motion for judgment as a matter of law and counterclaimants appealed. The Ninth Circuit held that the district court鈥檚 grant of West Coast鈥檚 52(c) motion was done in error because 鈥渢he federal interpleader remedy does not shield a negligent stakeholder from tort liability for its creation of a conflict over entitlement to the interpleaded funds.鈥 The Court reasoned that negligent stakeholders cannot be shielded from claim liability under the interpleader remedy when claimants are not just seeking the amount of the policy but also claim damages for tortious behavior which caused the conflict, as claimants alleged in this case stemming from West Coast鈥檚 negligent approval of ownership and beneficiary changes. REVERSED and REMANDED.