Phillips v. Sun Life Assurance Co. of Can.

641 F.Supp.3d 453

Paris PHILLIPS, et al., Plaintiffs, v. SUN LIFE ASSURANCE COMPANY OF CANADA, Defendant.

Case No. 1:20-cv-937

United States District Court, S.D. Ohio, Western Division

Signed November 16, 2022

Tony C. Merry, Law Offices of Tony C. Merry LLC, Worthington, OH, for Plaintiffs.

Salvatore A. Clemente, Wilson Elser Moskowitz Edelman & Dicker LLP, Philadelphia, PA, Edna S. Kersting, Chicago, IL, for Defendant.

OPINION AND ORDER

DOUGLAS R. COLE, UNITED STATES DISTRICT JUDGE

Paris Phillips and his sister, M.A., are the only named beneficiaries of their late mother's life insurance policy. The insurer, Sun Life Assurance Company of Canada, instead paid the policy proceeds to the siblings' grandmother, Adlen Silas, who later died. The siblings now sue Sun Life seeking the money they claim they were (and are) owed under the policy. But Sun Life argues that the siblings should have joined their grandmother's estate to this action as a necessary party under Federal Rule of Civil Procedure 19(a).

The burden is on Sun Life to show that Silas's estate is a necessary party. See Eagle Realty Invs., Inc. v. Dumon, No. 18-cv-362, 2019 WL 608830, at *2 (S.D. Ohio Feb. 13, 2019) (citing Marshall v. Navistar Intern. Transp. Corp., 168 F.R.D. 606, 611 (E.D. Mich. 1996)). For reasons briefly set forth below, the Court concludes that Sun Life has failed to carry its burden. Thus, the Court DENIES Sun Life's Motion for Dismissal or Joinder (Doc. 22).

BACKGROUND

Nicole Powell died tragically young, at age 33. (Compl., Doc. 3, #26). She left behind two then-minor children, Paris Phillips and his sister, M.A. (Am. Compl., Doc. 14, #142). At the time of her passing, Powell worked at Fifth Third Bank. (Id.). The bank provided its employees with life insurance under a group policy with Sun Life. (Id.). Powell participated in this life insurance plan, naming her two children as her sole beneficiaries. (Id.).

Powell died in April 2014. (Id.). In August, the bank's third-party administrator sent Sun Life "a spreadsheet, identifying Ms. Adlen Silas [Powell's mother] in a column titled 'Beneficiary Contact Information.' " (Decl., Doc. 23, #208-09). That September, Silas submitted a claim to Sun Life for the proceeds of her daughter's policy. (Mot. Dismiss, Doc 22, #161). Sun Life paid her the full amount unconditionally—meaning the company did not state that it was paying the money to her for the benefit of the siblings. (See Doc. 23-1, #211).

Apparently, the money never made its way to the siblings. (Resp., Doc. 24, #212). Four years later, Phillips turned 18. (Doc. 14, #142). The next year, he submitted a claim to Sun Life on behalf of himself and his sister, seeking the proceeds of their mother's policy. (Id. at #143). He waited two years. (Id.). When he received no response, he filed this action in state court. (Doc. 3).

Sun Life removed to federal court, arguing that the case arose under the Employee Retirement Income Security Act (ERISA). (Doc. 1). Sun Life also moved to dismiss the case for failure to state a claim. (Doc. 4). Phillips, meanwhile, moved for leave to amend the Complaint. (Doc. 8). He wanted to add his minor sister, M.A., as a second plaintiff through her maternal grandfather as next friend. (Id. at #87). He also sought to clarify that the real defendant is Sun Life Assurance Company of Canada. (Id.). And he wanted to agree that his (and his sister's) claims arise under ERISA. (Id.). The Court granted his motion for leave to amend, thus denying as moot Sun Life's motion to dismiss. (Doc. 13).

After the siblings filed their Amended Complaint (Doc. 14), Sun Life again moved for dismissal, or in the alternative joinder. (Doc. 22). This time Sun Life argued that the siblings had not joined Silas's estate, which Sun Life argued was a necessary party to the litigation. (Id.). The siblings opposed the Motion, (Doc. 24), and Sun Life replied in support, (Doc. 25). The matter is now ripe.

LAW AND ANALYSIS

In its Motion, Sun Life argues that the siblings' failure to name Silas's estate as a party here requires dismissal (for failure to name an indispensable party) or at the very least joinder (of that party). As a general matter, indispensable-party issues require the Court to answer three questions. See Glancy v. Taubman Centers, Inc., 373 F.3d 656, 666 (6th Cir. 2004) (citing 4 JAMES WM. MOORE ET AL., MOORE'S FEDERAL PRACTICE, § 19.02[3][a], at 19-17 (3d ed. 2003)). As relevant here, those questions are:

1. Is Silas's estate "a necessary party under Rule 19(a)"?

2. If the estate is a necessary party, will joining the estate as a party "deprive the court of subject matter jurisdiction"?

3. And if joinder will "eliminate the court's ability to hear the case," is the estate an indispensable party? If so, then the case should be dismissed.

Id. (first citing Temple v. Synthes Corp., 498 U.S. 5, 8, 111 S.Ct. 315, 112 L.Ed.2d 263 (1990), then W. Md. Ry. Co. v. Harbor Ins. Co., 910 F.2d 960, 961 (D.C. Cir. 1990)).

But a court need not always address all three of these questions. That is because, as noted above, the moving party bears the burden on the first question—showing that joinder is necessary. See Eagle Realty, 2019 WL 608830, at *2 (citing Marshall, 168 F.R.D. at 611). And if the moving party fails to carry that burden, then "joinder, as well as further analysis, is unnecessary." Id. (quoting Local 670 v. Int'l Union, 822 F.2d 613, 618 (6th Cir. 1987)) (internal quotation marks omitted). To be sure, the "moving party may satisfy this burden through the production of affidavits or other relevant extra-pleading evidence," and Sun Life has provided an affidavit here. Sabre Energy Corp. v. Gulfport Energy Corp., No. 2:19-cv-5559, 2021 WL 2779157, at *2 (S.D. Ohio July 2, 2021) (quoting Reilly v. Meffe, 6 F. Supp. 3d 760, 774 (S.D. Ohio 2014) (internal quotations omitted)); see also Hensley v. Conner, 800 F. App'x 309, 312 (6th Cir. 2020) ("In determining whether Rule 19 requires the joinder of additional parties, the court may consider evidence outside the pleadings." (citing Citizen Band Potawatomi Indian Tribe of Okla. v. Collier, 17 F.3d 1292, 1293 (10th Cir. 1994))). But, even considering that affidavit, Sun Life has not carried its burden of showing that Silas's estate is a necessary party. Thus, the Court need not venture beyond the first question in denying Sun Life's Motion.

A. Silas's estate is not a necessary party.

Rule 19 describes when a party is "required." According to that rule, a party "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 [here, likely Sun Life] subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations because of the interest.

Fed. R. Civ. P. 19(a)(1). As described below, Sun Life has not shown that the first condition, or either aspect of the second condition, is met here.

1. The Court can provide complete relief without Silas's estate.

Start with the first of those conditions—"complete relief." On that front, "Rule 19(a)(1)(A) is only concerned with whether Plaintiff may receive complete relief from this defendant." Norfolk S. Ry. Co. v. Baker Hughes Oilfield Operations, LLC, 443 F. Supp. 3d 877, 884 (S.D. Ohio 2020). That a judgment here may lead to later litigation involving an absent party does not make that party indispensable, even if such litigation is "inevitable." Id. In other words, the complete-relief question "does not concern any subsequent relief via contribution or indemnification for which the absent party might later be responsible." Id. (quoting Yates v. Applied Performance Techs., Inc., 209 F.R.D. 143, 149 (S.D. Ohio 2002)) (internal quotation marks omitted). Rather, "[t]he 'complete relief' requirement concerns the ability of the already-included defendants to fully satisfy any judgment awarded to the plaintiff." Camps v. Gore Cap., LLC, No. 3:17-cv-1039, 2019 WL 2763902, at *10 (M.D. Tenn. July 2, 2019) (citing Bedel v. Thompson, 103 F.R.D. 78, 80 (S.D. Ohio 1984)).

Here, the siblings seek the proceeds of their late mother's policy. "Complete relief" on that claim requires only the existing parties. If the policy required Sun Life to pay the policy proceeds to the siblings, then a judgment against Sun Life in the siblings' favor will fully redress that harm. True, if Sun Life mistakenly gave the proceeds of Powell's policy to Silas, perhaps Sun Life will in turn have a claim of unjust enrichment against Silas's estate. Or Sun Life may wish to implead her estate (if it exists)¹ as a third-party defendant, to indemnify Sun Life if the insurer is found liable to the siblings. But even assuming the estate may "later be responsible" for indemnification, that would not make the estate a necessary party here. Norfolk S. Ry. Co., 443 F. Supp. 3d at 884. Thus, the complete-relief condition requires neither dismissal nor joinder on the facts here.

2. Proceeding without Silas's estate will not impair its claimed interests, as the estate has claimed no interest.

Alternatively, joinder is required if an absent party claims an interest and proceeding without that party would impair its interests. See Fed. R. Civ. P. 19(a)(1)(B)(i). In deciding whether this condition is met, though, a threshold question is whether the absent party has come forward to claim an interest. See, e.g., Munson Hardisty, LLC v. Legacy Pointe Apartments, LLC, No. 3:15-cv-547, 2022 WL 4390636, at *7 (E.D. Tenn. Sept. 22, 2022) (denying Rule 19(a) motion where the absent party "has not come forward and claimed an interest relating to the subject matter of the action"); Abriq v. Metro. Gov't of Nashville & Davidson Cnty., No. 3:17-0690, 2018...