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Hartford Life Insurance Company v. Mary Banks

June 21, 2011

HARTFORD LIFE INSURANCE COMPANY, PLAINTIFF,
v.
MARY BANKS, ET AL. DEFENDANTS.



The opinion of the court was delivered by: Hayes, Judge

ORDER

The matter before the Court is the Motion to Enter Default Judgment against Cross-Defendant North American Mercantile, Inc. ("NAM") filed by Defendant and Cross-Plaintiff Sanberg Phoenix & Von Gontard P.C. ("Sandberg") (ECF No. 126).

On July 16, 2008, Plaintiff Hartford Life Insurance Company ("Hartford") initiated this action by filing the Complaint in Interpleader ("Complaint") against Sandberg, Mary Banks ("Banks"), Beryl Rayford ("Rayford"), Umar Almajid ("Almajid"), and NAM.*fn1 (ECF No. 1). This case concerns a dispute over the inheritance of two 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 that Sandberg, a law firm, represented Almajid and NAM in the St. Louis action. Id. at 5. The Complaint alleges that a settlement was memorialized in writing on July 10, 2007. Id. at 6. The Complaint alleges that 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 that 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 that 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 March 25, 2009, this Court dismissed Almajid's Cross-Claim in its entirety for failure to state a claim. (ECF No. 39). On July 17, 2009, the Court granted Sandberg's Motion for Leave to File Cross-Complaint Against North American Mercantile, Inc. (ECF No. 48). On July 20, 2009, the Court struck the Answer that Almajid filed on behalf of NAM, holding that Almajid may not represent NAM because Almajid is not an attorney. (ECF No. 48). Also on July 20, 2009, the Court granted Almajid's Motion for Leave to File an Amended Answer and Cross-Complaint. Id.

On August 3, 2009, Sandberg filed a Cross-Claim against NAM for breach of contract. (ECF No. 49). Sandberg alleges that on "April 15, 2005, Sandberg and NAM entered into an agreement whereby Sandberg agreed to provide legal representation to NAM for defense of the St. Louis Action and various other legal matters, and NAM agreed to pay Sandberg for said legal representation." Id. at 2. "Sandberg alleges, "NAM has breached its contract with Sandberg by failing to pay for legal services and costs provided by Sandberg in connection with the St. Louis Action." Id. Sandberg alleges that it "has complied with all conditions precedent under the contract, and is not now and never has been in breach of the contract." Id. at 3. Sandberg alleges that "NAM has 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 2. NAM did not file an answer to Sandberg's Cross-Claim.

On August 12, 2009, Almajid filed his amended Answer and Cross-Complaint against Sandberg, Banks, Rayford, Gross, and Wier. (ECF No. 52). In his Answer, Almajid denies "that Defendant Banks, Rayford, or Sandberg has any legitimate or bona fide interest in the accounts . . . ." Id. at 2. The Cross-Claim alleges claims for (1) civil RICO violations, (2) conspiracy, (3) interference with contractual relationship, (4) fraudulent concealment and (5) accounting. Id. at 23-26.

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-Complaint. (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). 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 January 26, 2010, the Court denied Almajid's Motion to Drop Defendant (ECF No. 56), which sought to substitute Almajid for NAM as the defendant to Sandberg's Cross-Claim. (ECF No. 86). In the same order, the Court denied Banks, Rayford, and Sandberg's Motion for Judgment on the Pleadings (ECF No. 69) and granted Sandberg's Motion to Dismiss Cross-Complaint (ECF No. 54). Also on January 26, 2010, the Court issued five orders to show cause (ECF Nos. 80-84). The Court issued Orders to Show Cause to Banks (ECF No. 81), Rayford (ECF No. 80), and NAM (ECF No. 82) requiring them to show cause why they should not be dismissed as to the complaint in interpleader for failure to file an answer. The Court issued two orders to show cause to Almajid, requiring him to show cause why his Cross-Claim against Gross and Wier should not be dismissed for failure to serve them within the 120 day period allowed pursuant to Federal Rule of Civil Procedure 4(m) and to show cause why his Cross-Claims against Banks and Rayford should not be dismissed for failure to move for default judgment within the time allowed pursuant to Local Civil Rule 55.1 after obtaining a clerk's default. (ECF Nos. 83, 84).

On February 19, 2010, Banks filed an answer to the Complaint in Interpleader (ECF No. 88) and a declaration stating she had previously failed to file an answer because she cannot afford counsel and is "not familiar with the Rules of Court" and therefore "was not aware that [she] had to respond to the Complaint . . ." (ECF No. 88-1).

On February 22, 2010, Almajid filed responses to orders to show cause issued as to him and as to NAM. (ECF Nos. 89-91). In his filing on behalf of NAM, Almajid contended "[t]he statutory provision requiring NAM to retain counsel is unduly prejudicial and burdensome . . . ." (ECF No. 89 at 3). Almajid sought to "excuse NAM from answering the Complaint in Interpleader . . . ." Id.

On February 23, 2010, Rayford filed an answer to the complaint in interpleader. (ECF No. 93). On February 26, 2010, the Court ordered Rayford to file a proof of service on her answer to the Complaint in Interpleader within ten days. (ECF No. 94). On ...


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