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Metlife Life and Annuity Co. of Connecticut v. Akpele

United States Court of Appeals, Eleventh Circuit

March 29, 2018

METLIFE LIFE AND ANNUITY COMPANY OF CONNECTICUT, Plaintiff-Counter Defendant-Appellee-Cross-Appellee,
v.
UZO AKPELE, J.E.A., a minor, Defendants-Counter Claimants-Appellees Cross Appellants, ANN HERRERA, in her capacity as Temporary Administrator of The Estate of Ignatius Esehaigbe Akpele, Defendant-Appellant-Cross Appellee, AIE SURGICAL PRACTICE, LLC DEFINED BENEFIT PLAN, a.k.a. Dr. Ignatius Akpele Defined Benefit Plan, Third Party Defendant-Counter Defendant-Appellee-Cross Appellee.

          Appeals from the United States District Court for the Northern District of Georgia D.C. Docket No. 1:13-cv-03898-TWT

          Before ROSENBAUM and JILL PRYOR, Circuit Judges, and BARTLE, [*] District Judge.

          BARTLE, DISTRICT JUDGE

         Plaintiff MetLife Life and Annuity Co. of Connecticut ("MetLife") initiated this interpleader action under Rule 22 of the Federal Rules of Civil Procedure and sought to pay into the registry of the district court the proceeds of an insurance policy on the life of Dr. Ignatius Akpele, deceased. The defendants named by MetLife were Uzo Akpele (the widow of Dr. Akpele), J.E.A. (a minor child of Dr. Akpele and his widow), and Ann Herrera (the temporary administrator of the estate of Dr. Akpele). Dr. Akpele purchased the policy in issue to fund the AIE Surgical Practice Defined Benefit Plan ("Plan") he had established as its sole member and trustee pursuant to the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq.

         As will be discussed in more detail below, the salient issues before this court concern whether the amount deposited into the registry of the district court was correct and which defendant is entitled to the life insurance proceeds. Following resolution of these issues on summary judgment, the Akpeles and Herrera filed notices of appeal from various orders of the district court.

         I

         To understand this action, it is necessary to recite in some detail its involved procedural history. In the complaint filed on November 22, 2013, MetLife alleged that it could not determine the proper beneficiary under the insurance policy on Dr. Akpele's life and sought to obtain a declaration as to which defendant was entitled to receive its benefits. Shortly thereafter, the district court granted MetLife's motion to deposit into the court registry $635, 562.25, which MetLife represented to be the proper amount of death benefits provided under the policy plus interest.

         Herrera filed an answer to MetLife's complaint. In that answer, she alleged that Dr. Akpele's will established a trust for the benefit of his two minor children, one of whom was J.E.A., and that the will had been executed after Dr. Akpele initiated divorce proceedings against Uzo, although the divorce had not been finalized at the time of Dr. Akpele's death. Herrera admitted that the Plan had been named as owner and beneficiary of the insurance policy. She requested that the court determine to what extent Uzo Akpele would be entitled to the insurance proceeds as a surviving spouse under ERISA or the terms of the Plan and that the court decide what remaining assets, if any, the estate should receive. Herrera did not file any crossclaim against the Akpeles, who were co-defendants.

         Uzo and J.E.A. (collectively the "Akpeles") also filed an answer to the complaint, which included a counterclaim against MetLife. The Akpeles maintained that they were entitled in equal shares to the full death benefit and that the proper amount owed by MetLife was not $635, 562.25 but $5, 148, 206, the full face value of the policy. The counterclaim against MetLife sought a declaratory judgment as well as damages for breach of contract, breach of fiduciary duty, and bad faith.

         Thereafter the Akpeles filed a motion to join the Plan as an indispensable party and for appointment of a successor trustee for the Plan. The court granted this motion on September 29, 2014 and appointed Brent Wilson as Plan trustee. The Plan was now a defendant in this interpleader action along with Herrera, Uzo Akpele, and J.E.A.

         Meanwhile on September 24, 2014, Herrera had filed a motion to enforce settlement and/or motion for partial summary judgment against the Akpeles. In that motion, Herrera asserted that in January 2014 an enforceable settlement was reached between Herrera and the Akpeles, which provided for the equal division of the policy proceeds between Dr. Akpele's estate and Uzo Akpele. According to the motion, the settlement came about through emails and documents exchanged between counsel for Herrera and counsel for the Akpeles, although the final settlement agreement was never executed.

         On October 1, 2014, the Akpeles filed an amended answer and counterclaim against MetLife. The Akpeles changed their theory of the case to assert that Uzo Akpele, as the surviving spouse of Dr. Akpele, was the sole and inalienable beneficiary of the policy under the terms of the Plan documents and ERISA. They also expanded their counterclaim against MetLife to include: (a) Count I- Declaratory Judgment and Reformation; (b) Count II-Breach of Contract; (c) Count III-Negligence and Breach of Fiduciary Duty; (d) Count IV-Bad Faith; (e) Count V-Fraud and Deceit; and (f) Count VI-Conversion.

         On December 5, 2014, MetLife filed a motion for summary judgment. In that motion, MetLife asked to be dismissed from the action and discharged from all liability. It also requested a permanent injunction to preclude further litigation against MetLife as to the policy. MetLife further argued that the counterclaim filed by the Akpeles was meritless and resulted in unnecessary expense to MetLife. Finally, it sought reasonable attorneys' fees.

         In support of its motion, MetLife submitted the affidavit of James McCarthy, a Senior Technical Insurance Advisor who authenticated certain business records attached to the affidavit. The records included Dr. Akpele's application for the life insurance policy at issue, the policy itself, correspondence, and computer screen shots from MetLife's billing system. In conjunction with its reply brief, MetLife also submitted a complete copy of First Actuarial Corporation's ("FAC") records related to Dr. Akpele and the Plan. FAC was the Plan sponsor and administrator.

         The Akpeles filed a brief in opposition to Herrera's motion for summary judgment and/or to enforce. They disputed that any final settlement had been reached with Herrera and asserted that any purported agreement would be void and unenforceable under ERISA. The Akpeles also filed a brief in opposition to MetLife's motion for summary judgment. They simultaneously moved to strike or disregard portions of the McCarthy affidavit and the attached documents on which MetLife relied on the ground they contained inadmissible hearsay.

         The Akpeles also filed a countermotion for summary judgment against MetLife on their counterclaim. The Akpeles maintained that Uzo Akpele was the sole and inalienable beneficiary of the full death benefit as the surviving spouse of Dr. Akpele, or in the alternative sought reformation of the insurance policy to reflect that Uzo and J.E.A. were entitled to receive a death benefit of $5, 148, 206 as equal beneficiaries, and not simply the $635, 562.25 deposited with the court.

         The district court filed an opinion and order on the pending motions for summary judgment on September 11, 2015. The court first found that there was a genuine dispute of material fact regarding whether counsel for the Akpeles had apparent authority to settle the matter with Herrera and thus denied Herrera's motion for partial summary judgment and/or to enforce the settlement. The court next denied the Akpeles' countermotion for summary judgment. In doing so, the court noted that the Akpeles had conceded that the insurance proceeds should not be paid directly to Uzo Akpele, but instead to the trustee of the Plan.

         The court then granted MetLife's motion for summary judgment on each count in the Akpeles' counterclaim. The court determined that it was clear from the policy that the Plan was the beneficiary. The court also concluded that there was no evidence to dispute that MetLife correctly deposited into the registry of the court $635, 562.25 instead of the $5, 148, 206 sought by the Akpeles. The court thus rejected the Akpeles' contract and tort claims against MetLife.

         Finally, the court granted MetLife's motion for summary judgment on the claims in its complaint. The court ruled that MetLife had fulfilled its obligation as an interpleader plaintiff by turning over to the court registry the proceeds of the policy in the proper amount of $635, 562.25. It dismissed MetLife from the action and granted it a permanent injunction against future litigation regarding any obligations under the policy.

         The court also exercised its discretion to award MetLife its reasonable attorneys' fees incurred in defending against the Akpeles' counterclaim. It based the award of attorneys' fees on its finding that the time and expense MetLife incurred in defending against the counterclaim went beyond the normal course of business for an interpleader insurance company, but the court did not make any explicit finding that the Akpeles had engaged in bad faith. Thereafter on October 12, 2015, MetLife filed a notice and affidavit requesting $81, 347.17 in fees and $453.03 in costs. The court has not yet determined the amount of the award nor specified against whom the award would be taxed.

         As noted above, the district court in its September 11, 2015 opinion and order denied Herrera's motion for summary judgment and/or to enforce a settlement with the Akpeles because of the existence of genuine disputes of material fact. On February 23, 2016, the district court began a scheduled hearing to consider evidence regarding the purported settlement. However, by this time the Plan trustee had filed an objection to Herrera's motion in which the trustee asserted that neither the Akpeles nor Herrera had authority to settle the case because the Plan was the only beneficiary under the policy. The court heard argument from counsel on this point. After a short recess, the court declared that there was "no purpose in going forward with the evidentiary hearing to ...


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