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Hartford Life Insurance v. Mary Banks

August 15, 2011

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



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

ORDER TO DISTRIBUTE ACCOUNT FUNDS AND TO CLOSE INTEREST BEARING

The matter before the Court is the final distribution of the interpleaded funds.

BACKGROUND

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"), and North American Mercantile, Inc. ("NAM").*fn1 (ECF No. 1). This case concerned a dispute over the inheritance of two annuities owned by Cleona Bailey Shortridge. The Complaint alleged 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 alleged that on June 2, 2002, Shortridge changed the beneficiary of the annuities to NAM. Id. at 4.

The Complaint alleged 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 alleged that Sandberg, a law firm, represented Almajid and NAM in the St. Louis action. Id. at 5. The Complaint alleged that a settlement of the St. Louis action was memorialized in writing on July 10, 2007. Id. at 6. The Complaint alleged 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 alleged that the forms were never returned. Id. The Complaint alleged that Almajid sent a letter to Hartford stating that there was a dispute between Almajid, NAM, and Sandberg. Id. at 7. The Complaint alleged that Hartford requested confirmation from Almajid and NAM that Sandberg still represented them, but received no response. Id. The Complaint alleged 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 a Cross-Claim filed by Almajid 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-Claim Against NAM. (ECF No. 48). On July 20, 2009, the Court struck an Answer that Almajid filed on behalf of NAM. The Court stated:

As a corporation, NAM may not appear pro se. Almajid purported to file the Answer and Counterclaim on behalf of himself and NAM.

Although Almajid may represent himself pro se, Almajid may not file pleadings on behalf of NAM.... If NAM does not obtain legal representation, NAM may be subject to default proceedings. (ECF No. 48 at 3) (citations omitted). 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 alleged 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 alleged that NAM "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 alleged that it "complied with all conditions precedent under the contract, and [did not breach] the contract." Id. at 3. Sandberg alleged 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 a amended Answer and Cross-Complaint against Sandberg, Banks, Rayford, Gross, and Wier. (ECF No. 52). In his Answer, Almajid denied "that Defendant Banks, Rayford, or Sandberg has any legitimate or bona fide interest in the accounts ...." Id. at 2. Almajid alleged 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-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). 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 that same day, Almajid filed a request for Clerk's Entry of Default against Banks and Rayford. (ECF No. 68). On October 14, 2009, the Clerk of the Court entered default as to both Banks and Rayford. (ECF No. 71).

On January 26, 2010, the Court denied the "Motion to Drop Defendant" filed by Almajid (ECF No. 56), which sought to substitute Almajid for NAM as the defendant to Sandberg's Cross-Claim. (ECF No. 86). The Court stated: "As a non-lawyer, Almajid may not file motions or pleadings on behalf of NAM." Id. at 9. 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 the Cross-Complaint filed by Almajid. (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. With regard to NAM, the Court stated:

To date, NAM has not filed an answer. Pursuant to Federal Rule of Civil Procedure 41(2)(b), NAM is subject to dismissal for failure to comply with the Federal Rules of Civil Procedure.... This order constitutes notice to NAM that the Court will dismiss NAM as a party to the complaint in interpleader on or after February 22, 2010, unless no later than that date, NAM files an answer to the complaint in interpleader....

Id. at 1-2.

The Court issued two orders to show cause to Almajid, requiring him to show cause why his Cross-Complaint 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-Complaints against Banks and Rayford should not be dismissed for failure to move for default judgment within ...


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