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OM Financial Life Insurance Co. v. Vang

April 2, 2009


The opinion of the court was delivered by: Gary S. Austin United States Magistrate Judge


I. Introduction

Pending before the court is Defendant, Pa Kou Xiong's ("Xiong") Motion for Leave to File an Impleader Third-Party Complaint filed on March 5, 2009. (Doc. 26). No opposition to the motion has been filed. The court has examined the motion and has determined that this matter is suitable for decision without oral argument pursuant to Local Rule 78-230(h). The hearing scheduled for April 3, 2009 was vacated. Upon examining the motion and the third-party complaint, the motion is DENIED.

II. Procedural Background

Plaintiff Old Mutual Financial Life Insurance Company ("Plaintiff"or "OM Financial") filed the instant interpleader action in this court on August 14, 2008 seeking the court's resolution of adverse claims to the decedent, Chou Vang's ("Decedent") life insurance policy. Funds in the amount of $203,322.28, representing the proceeds of the life insurance policy, plus interest, were deposited with the court on the same date.

At issue in this case is a determination of the proper beneficiary of the life insurance policy. At the time the policy was issued, Xiong, the decedent's wife, was named the primary beneficiary of the policy, and Andy Vang and Shawn Vang, the decedent's sons, were named the contingent beneficiaries.

At some point between January 10, 2008, and January 17, 2008, OM Financial received a Request for Service Form dated January 10, 2008, seeking to have the primary beneficiary changed to Gnia P. Vang ("Vang"), the decedent's father. Sao Lee, the decedent's mother was listed as contingent beneficiary. In the interim, the decedent was involved in a single vehicle motor accident on January 13, 2008. He died on January 25, 2008.

Xiong filed her answer to the complaint on September 11, 2008. Doc. 11. Xiong's answer cross-claims against Vang and counterclaims against OM Financial. On October 9, 2008, Vang filed his answer and cross-claims against OM Financial. Doc. 13. Xiong filed a motion for partial summary judgment on December 30, 2008, contending that because the policy was purchased with community property funds, she is entitled to a community property share, or fifty percent of the proceeds of the policy, separate and apart from any other claims asserted by a party in this action. Doc. 16. Both OM and Vang filed oppositions to the motion for summary judgment. Docs. 19, 20, 21. The Honorable Anthony W. Ishii denied the motion for summary judgment without prejudice on March 18, 2009. Doc. 29.

In support of the Motion to Implead Third-Party Defendants, Xiong contends that the beneficiary change request form was forged and submitted after the decedent had lapsed into a coma. In particular, Xiong alleges that an investigation revealed that an agent, other than the agent who wrote the initial policy, submitted the Request for Service Form to OM Financial. Xiong alleges that Peter Lor, a manager of Americo, is the agent who submitted the request to change the beneficiary form to OM Financial.*fn1 Ms. May Lor, alleged to be an employee of Peter Lor, allegedly never saw the decedent sign the form and committed an act of fraud by signing the form as a witness. As a result, Xiong is requesting that Peter Lor, May Lor, and Americo ( "third-party defendants") be brought into this action through impleader in order to bring causes of action of fraud, intentional infliction of emotional distress, and negligent infliction of emotional distress against these defendants. In the third-party complaint, Xiong is seeking a monetary judgment in an unspecified amount, an unspecified amount of punitive damages, and any other relief the court deems proper.

Xiong contends that granting this motion will preserve judicial resources. Otherwise, she will be forced to litigate a second suit on primarily the same issues duplicating court time and resources in this court or in state court.

III. Discussion

Fed.R.Civ.P. 14(a) provides for service of a third-party complaint upon a person not a party to the action who is or may be liable to [the original defendant] for all or part of the claim against it. Defendant need not obtain leave of the court to serve and file a third-party complaint, if is it filed within 10 days after defendant serves its original answer to the complaint in the main action. Fed. R. Civ. Proc. 14(a)(1). In all other circumstances, leave of the court to serve and file a third party complaint must be sought by motion. Fed. R. Civ. Proc. 14(a)(1).

The purpose of impleader is to promote judicial efficiency by eliminating the need for the defendant to bring a separate action against the parties secondarily or derivatively liable to the defendant on account of the plaintiff's claim. Southwest Admin., Inc. v. Rozay's Transfer, 791 F. 2d 769, 777 (9th Cir. 1986). The decision whether to permit a third party claim under Rule 14 is left to the sound discretion of the trial court. Id.

Xiong argues that impleader is limited to claims that are derivatively liable based on the original claims. Defendant cites to one case, US. v. One 1977 Mercedes Benz, 708 F. 2d 444 (9th Cir. 1983) in support of her position. However, US v. One 1977 Mercedes Benz, also indicates that a third-party claim may be asserted only when the third-party's liability is in some way dependant on the outcome of the main claim and the third-party's liability is secondary or derivative. U.S. v. One 1977 Mercedes Benz, 708 F.2d at 452 (citations omitted). It is not sufficient that the third-party claim is a related claim; the ...

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