The opinion of the court was delivered by: Hayes, Judge:
The matter before the Court is the Joint Response to this Court's Order regarding the distribution of the share of the annuity proceeds which the settlement agreement awarded to defaulted Defendant NAM filed by Defendants Mary Banks, Beyrl Rayford, and Sanberg Phoenix & Von Gontard P.C. (ECF No. 124).
On July 16, 2008, Plaintiff Hartford Life Insurance Company ("Hartford") initiated this action by filing the Complaint in Interpleader ("Complaint") against Sandberg, Phoenix & Von Gontard, P.C. ("Sandberg"), Mary Banks ("Banks"), Beryl Rayford ("Rayford"), Umar Almajid ("Almajid"), North American Mercantile ("NAM").*fn1 (ECF No. 1). This case concerns a dispute over the inheritance of annuities owned by Cleona Bailey Shortridge. The Complaint alleges that Almajid and Rayford, Shortridge's nephew and niece, were named as the beneficiaries of the annuities in a revocable trust executed on August 4, 1997, with Banks as the successor trustee. Id. at 5. The Complaint alleges that on June 2, 2002, Shortridge changed the beneficiary of the annuities to NAM. Id. at 4.
The Complaint alleges that after Shortridge's death, Banks and Rayford filed a Petition in the Circuit Court of the city of St. Louis, Missouri ("St. Louis action") which disputed ownership of the annuities. Id. at 5. The Complaint alleges Sandberg, a law firm, represented Almajid and NAM in the state court suit. Id. at 5. The Complaint alleges a settlement was memorialized in writing on July 10, 2007. Id. at 6. The Complaint alleges Hartford sent forms to allow the disbursement of funds pursuant to the settlement to Sandberg for Almajid and NAM to complete. Id. at 6. The Complaint alleges the forms were never returned. Id. The Complaint alleges that Almajid sent a letter to Hartford stating that there was a dispute between Almajid, NAM, and Sandberg. Id. at 7. The Complaint alleges Hartford requested confirmation from Almajid and NAM that Sandberg still represented them, but received no response. Id. The Complaint alleges that the dispute over disbursement of proceeds necessitated this interpleader action by Hartford. Id. Hartford deposited $36,329.06 with this Court which represented Annuity 2. (ECF No. 4).
On March 18, 2009, this Court issued an Order discharging and dismissing Plaintiff Hartford Life Insurance Company with prejudice from this action and awarding Hartford the sum of $8,500.00 as reasonable attorney's fees and costs. (ECF No. 38).
On August 3, 2009, Sandberg filed a Cross-claim against NAM seeking $56,236.70 for costs and legal services provided to NAM in connection with the Sandberg's representation of NAM in the St. Louis action. (ECF No. 49). On September 2, 2009, Sandberg filed a Request for Entry of Clerk's Default against NAM under Federal Rule of Civil Procedure 55(a) for NAM's failure to respond to the Complaint and the Cross-claim. (ECF No. 55). On September 4, 2009, the Clerk of the Court entered default against NAM on the Cross-claim. (ECF No. 58).
On October 2, 2009, Sandberg filed a Motion for Clerk's Default Judgment against NAM pursuant to Federal Rule of Civil Procedure 55(b)(1) for the amount of $56,236.70.
(ECF No. 64). Sandberg submitted the Declaration of Martin L. Daesch who stated that "NAM [had] a remaining balance due to Sandberg in the amount of $56,236.70 for costs and legal services provided to NAM in the St. Louis action." Id. at 4. On October 2, 2009, the Clerk of the Court entered default judgment in favor of Sandberg against NAM in the amount of $56,236.70 on the Cross-claim. (ECF No. 65).
On May 28, 2010, Sandberg moved for summary judgment in its favor on the Complaint. (ECF No.106). On October 8, 2010, this Court issued an Order granting Sanberg's motion for summary judgment and ordering Hartford to liquidate Annuity 1 and deposit it with the Court.*fn2 (ECF No. 121 at 5-8, 11). This Court stated the following:
Pursuant to the settlement agreement, NAM was to receive the entire proceeds of Annuity 1, which was at that time worth $33,802.41. The proceeds of Annuity 2, which at that time was worth $36,030.09 were to be divided as follows: $25,000.00 to Sandberg, $4,930.59 to NAM, $4,246.50 to Rayford, $1,353.00 to Banks as partial payment of her fee as trustee, and $1,000.00 to Banks to be held in a separate trust checking account 'for preparation of final Federal and State Fiduciary Tax Returns for the Trust.'....
NAM did not enter an appearance in this case and has defaulted. Sandberg contends that it is entitled to the proceeds awarded to defaulted defendant NAM in the settlement agreement to satisfy Sandberg's default judgment against NAM on Sandberg's cross claim. The Court concludes that Sandberg has thus far failed to establish that Sandberg is entitled to NAM's share of the settlement. Sandberg, Banks, and Rayford may file further briefing as to the proper resolution of this case as to the share of the annuities which the settlement agreement awarded to defaulted defendant NAM.
Id. at 7-8 (citations omitted).
In an interpleader action, the court may approve a settlement as proposed if the settlement is reasonable and consistent with the record. See U.S. Specialty Ins. Co. v. Estate of Schurrer, Cause No. 4:09CV353, 2010 WL 2598269 at *2 (E.D. Tex. 2010) ("Having reviewed the record and heard the arguments of counsel, and recognizing the Court's equitable powers in this proceeding, the Court finds that the apportionment requested by the remaining should be made as agreed.").
On October 28, 2010, Defendants Banks, Rayford, and Sandberg filed a Joint Response to this Court's Order. (ECF No. 124). Banks, Rayford, and Sandberg contend that they "have agreed to the proper resolution of this case with respect to the amount awarded NAM under the settlement agreement ...." (ECF No. 124 at 2). The parties have agreed to distribute the funds as follows: $3,353.00 to Banks which includes $2,353.00 under the settlement agreement and $1,000.00 "for her share of NAM's funds"; $9,475.90 to Rayford which includes $4,246.50 under the settlement agreement and $5,229.40 "for her share of NAM's funds" as well as the balance of any funds not otherwise distributed; and $52,236.70 to Sandberg which includes $25,000.000 under the settlement agreement and $27,236.70 for its "share of NAM's funds." (ECF No. 124 at 3). The ...