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Brimberry v. The Northwestern Mutual Life Insurance Co.

United States District Court, C.D. California

February 20, 2014

P. Kellie C. Brimberry, Plaintiff,
v.
The Northwestern Mutual Life Insurance Company, and Does 1 through 50, inclusive Defendant. The Northwestern Mutual Life Insurance Company, a Wisconsin corporation, Counter-Claimants,
v.
P. Kellie C. Brimberry, an individual; Fiduciary Trust International of California, a California corporation; and Does 1 through 10, inclusive, Counter-Defedants.

ORDER RE: COUNTER- DEFENDANT FIDUCIARY TRUST INTERNATIONAL OF CALIFORNIA'S MOTION TO JOIN AS COUNTER- DEFENDANTS FIDUCIARY TRUST COMPANY INTERNATIONAL AND FRANKLIN TEMPLETON COMPANIES, LLC [94]

RONALD S.W. LEW, Senior District Judge.

Currently before the Court is Counter-Defendant Fiduciary Trust International of California's ("Fiduciary") Motion to Join as Counter-Defendants Fiduciary Trust Company International ("FTCI") and Franklin Templeton Companies, LLC ("Franklin") [94]. The Court, having reviewed all papers submitted pertaining to this Motion, NOW FINDS AND RULES AS FOLLOWS: The Court DENIES Fiduciary's Motion.

I. BACKGROUND

Prior to Kurt Brimberry's ("Mr. Brimberry") death in 2012, The Northwestern Mutual Life Insurance Company ("Northwestern") issued two life insurance policies ("Policies") to Mr. Brimberry, which specified that in the event of his death, the Policies' benefits would be given to a beneficiary as designated by Mr. Brimberry. Mr. Brimberry died in August 2012 of unknown causes. At the time of his death, the Policies provided a net benefit of $3, 501, 691.46, and the sole designated beneficiary under the Policies was P. Kellie C. Brimberry ("Mrs. Brimberry"). On August 31, 2012, Mrs. Brimberry notified Northwestern of a claim for benefits under the Policies. While investigating Mrs. Brimberry's claim, Northwestern was contacted by counsel for Fiduciary, the company for which Mr. Brimberry had worked from November 2001 until his termination on August 14, 2012. Fiduciary's counsel asserted that Fiduciary had an interest in the benefits payable under the Policies because Mr. Brimberry had embezzled funds from Fiduciary during his employment there and had used the embezzled funds to pay some or all of the Policies' premiums.On November 29, 2012, Fiduciary's counsel wrote to Northwestern on behalf of both Fiduciary and Mrs. Brimberry, making a joint demand that Northwestern stay further processing of their separate claims for benefits while Fiduciary and Mrs. Brimberry attempted to informally resolve their competing claims.

Mrs. Brimberry instigated the present Action against Northwestern in California state court on December 5, 2012, for failure to pay benefits due to Mrs. Brimberry under the Policies [1]. On January 8, 2013, Northwestern removed the Action to this Court [1] and filed a Counterclaim in Interpleader pursuant to Federal Rule of Civil Procedure 22 against Mrs. Brimberry, Fiduciary, and Does 1 through 10, alleging that Northwestern was unable to determine which of the claimants, as between Mrs. Brimberry and Fiduciary, was entitled to policy benefits [3]. Although Mrs. Brimberry and Northwestern subsequently stipulated to the dismissal of Mrs. Brimberry's Complaint against Northwestern [23, 24], Northwestern's counterclaim in interpleader remains.

Fiduciary filed the instant Motion to Join as Counter-Defendants FTCI and Franklin on January 14, 2014 [94]. Concurrent with the Motion to Join, Fiduciary filed an Ex Parte Application to Shorten Time for Hearing to January 29, 2014 [95], which this Court denied [101].

Fiduciary's Motion to Join as Counter-Defendants FTCI and Franklin was set for hearing on February 11, 2014, and was taken under submission on February 5, 2014 [127].

II. LEGAL STANDARD

Federal Rule of Civil Procedure 19 describes the requirements for determining whether an absent party is necessary in an Action:

(a) Persons Required to Be Joined if Feasible.

(1) Required Party. A person who is subject to service of process and whose joinder will not deprive the court of subject-matter jurisdiction must be joined as a party if:
(A) in that person's absence, the court cannot accord complete relief among existing parties; or
(B) that person claims an interest relating to the subject of the action and is so situated that disposing of the action in the person's absence may:
(i) as a practical matter impair or impede the person's ability to protect the interest; or
(ii) leave an existing party subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations because of the interest.

To determine whether Rule 19 requires the joinder of additional parties, the court may consider evidence outside the pleadings. McShan v. Sherrill , 283 F.2d 462, 464 (9th Cir. 1960); Estate of Burkhart v. United States, C 07-5467 PJH, 2008 WL 4067429, at *2 (N.D. Cal. Aug. 26, 2008); Behrens v. Donnelly , 236 F.R.D. 509, 512 (D. Haw. 2006) (citing Charles A. Wright, Arthur R. Miller and Mary Kay Kane, Federal Practice and Procedure: Civil 3d. § 1359 at 68 (2004)).

III. ANALYSIS

In order to determine whether joinder of FTCI and Franklin is required pursuant to Federal Rule of Civil Procedure 19, the Court must decide whether FTCI and Franklin are "necessary" parties to this Action. Wilbur v. Locke , 423 F.3d 1101, 1112 (9th Cir. 2005), abrogated on other grounds by Levin v. Commerce Energy, Inc. , 560 U.S. 413 (2010).

A party may be necessary under Rule 19(a) in three different ways. First, a person is necessary if, in his absence, the court cannot accord complete relief among existing parties. Second, a person is necessary if he has an interest in the action and resolving the action in his absence may as a practical matter impair or impede his ability to protect that interest. Third, a person is necessary if he has an interest in the action and resolving the action in his absence may leave an existing party subject to inconsistent obligations because of that interest.

Salt River Project Agr. Imp. & Power Dist. v. Lee , 672 F.3d 1176, 1179 (9th Cir. 2012) (internal citations omitted). Although the first and third means of being deemed a "necessary party" do not apply to FTCI and Franklin in the context of this case, and Fiduciary does not argue otherwise, FTCI and Franklin do appear to have a legally protected interest in this Action based on their claims of entitlement to the same death benefit proceeds that Mrs. Brimberry seeks. If FTCI's and Franklin's interests in this Action will be impaired or impeded by resolution of the case in their absence, then FTCI and Franklin are necessary parties that should be joined.

Fiduciary asserts that both FTCI and Franklin claim "interest[s] relating to the subject matter of the action, " - the proceeds payable under the Northwestern Mutual policies insuring Mr. Brimberry's life. Mot. 3:20-4:2. Thus, Fiduciary asserts that FTCI and Franklin are "so situated that disposing of [this] action in [their] absence may"... "as a practical matter impair or impede [their] ability to protect [those] interest[s]." Id . at 5:7-10.

However, to the extent that the interests of FTCI and Franklin may be impaired, "[i]mpairment may be minimized if the absent party is adequately represented in the suit." P. Coast Fed'n of Fishermen's Ass'ns v. U.S. Dept of the Interior, No. 1:12-CV-01303-LJO, 2013 WL 923407, at *19 (E.D. Cal. Mar. 8, 2013). The Ninth Circuit has set forth three factors to be used in determining whether an existing party adequately represents the interests of an absent party:

(1) whether the interests of a present party to the suit are such that it will undoubtedly make all of the absent party's arguments; (2) whether the party is capable of and willing to make such arguments; and (3) whether the absent party would offer any necessary element to the proceedings that the present parties would neglect.

Salt River, 672 F.3d at 1180 (internal quotation marks omitted).

In other words, an absent party with an interest in the action is not a necessary party under Rule 19(a) "if the absent party is adequately represented in the suit." Id . (citing Shermoen v. United States , 982 F.2d 1312, 1318 (9th Cir. 1992) (citation and internal quotation marks omitted)).

Here, Fiduciary can be expected to adequately represent Franklin's and FTCI's interests in this case. First, Fiduciary's interests are aligned with the interests of FTCI and Franklin. Notably, Fiduciary, Franklin, and FTCI asserted a joint claim to the death benefit proceeds (Hoffman Decl. ¶ 2, Ex. A) and there is no evidence that Fiduciary has an ulterior claim to the proceeds that competes with or is adverse to FTCI's and Franklin's claims to the same. Second, there is no reason to believe that Fiduciary cannot or will not make any reasonable argument that FTCI or Franklin would make if they were parties. Third, there is no indication that FTCI or Franklin would offer any necessary element to the action that Fiduciary would neglect. See id. at 1180-81. Indeed, none of the Parties argue otherwise. Therefore, because Fiduciary adequately represents FTCI's and Franklin's interests here, the Court finds that FTCI and Franklin are not necessary parties that need to be joined in this Action. Accordingly, the Court DENIES Fiduciary's Motion to Join FTCI and Franklin in this Action.

IV. CONCLUSION

Based on the foregoing, the Court DENIES Fiduciary's Motion to Join as Counter-Defendants FTCI and Franklin.

IT IS SO ORDERED.


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