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West Coast Life Insurance Co. v. Clark

United States District Court, C.D. California

August 13, 2014

GLENDA CLARK, an individual, and KATHLEEN CLARKE-PATERSON, an individual, formlerly known as KATHLEEN CLARKE STOKES, Defendants.


DEAN D. PREGERSON, District Judge.

Presently before the Court is Defendant and Cross-Claimant Kathleen Paterson's motion for an order staying disbursement of the interpleaded funds pending appeal (the "Motion"). (Docket No. 65.) For the reasons stated in this Order, the Motion is GRANTED.

I. Background[1]

Plaintiff West Coast Life Insurance Company ("WCLIC") filed this action after a dispute arose as to the proper beneficiary under a life insurance policy on the life of Jeffrey L. Clarke ("Decedent"). (See Complaint, Docket No. 1.) WCLIC filed the action against Defendants Glenda Clarke ("Glenda"), Decedent's ex-wife, and Kathleen Clarke-Paterson ("Kathleen"), Decedent's sister. (Id.) WCLIC was discharged from the action. (Docket No. 30.) Glenda then filed a motion for summary judgment, which the Court granted. (Docket No. 60.) Kathleen has appealed the Court's order granting summary judgment in favor of Glenda and now requests that the Court stay disbursement of the interpleaded life insurance proceeds pending Kathleen's appeal. (Docket No. 65.) The disbursement of the funds is currently stayed temporarily to allow the Court to decide the Motion. (See Docket No. 62.) Glenda has not filed any opposition to the Motion.

II. Discussion

A stay is "an exercise of judicial discretion" that turns "upon the circumstances of the particular case." Id. at 672-73; see also Nken v. Holder , 556 U.S. 418, 433 (2009). Courts consider four factors when determining whether a stay is appropriate under the circumstances: "(1) whether the stay applicant has made a strong showing that he is likely to succeed on the merits; (2) whether the applicant will be irreparably injured absent a stay; (3) whether issuance of the stay will substantially injure the other parties interested in the proceeding; and (4) where the public interest lies." Hilton v. Braunskill , 481 U.S. 770, 776 (1987).

Here, the Court previously granted a temporary stay and requested that Kathleen file a noticed motion for a stay pending appeal so that any opposition Glenda might have to a stay could be presented to the Court. However, Glenda filed no opposition to the Motion. Pursuant to Local Rule 7-12, the Court deems Glenda's failure to file an opposition to the Motion as consent to granting the motion.

The Court also finds that Kathleen has made a sufficient showing to support her request for a stay. Though the Court does not find that Kathleen is highly likely to succeed on appeal, Kathleen's appeal presents serious legal questions such that a stay may be appropriate. See Alliance for Wild Rockies v. Cottrell , 632 F.3d 1127, 1131-34 (9th Cir. 2011). Further, Kathleen has established that she is likely to be irreparably harmed if the funds are disbursed to Glenda and Kathleen wins on appeal, as it is likely that the funds will be spent or no longer available such that Kathleen would have a hard time recovering them. The Court presumes that Glenda will suffer no serious hardship by not having access to the interpleaded funds that the Court awarded to her on summary judgment until the appeals process is complete, since she provided no opposition to the Motion. Further, although disbursement will be delayed, Glenda will still be guaranteed to receive her payout if the Court's decision is affirmed on appeal, while if the funds are disbursed to Glenda now, there will be no guarantee that the funds will remain accessible to Kathleen should she succeed on appeal. Therefore, the potential harm to Kathleen sharply outweighs any harm to Glenda, who has not provided any argument that a stay will cause her any harm at all.

III. Conclusion

For the foregoing reasons, the Court GRANTS the Motion. The clerk shall not disburse the interpleaded funds, pending further order from the Court.


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