Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_07-cv-01606/USCOURTS-azd-2_07-cv-01606-1/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1335 Interpleader Action

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

New York Life Insurance Company, 

Plaintiff, 

vs.

Matthew L. Koscove and Terry L.

Koscove; the Estate of Marvin Koscove,

by and through its Personal

Representative, Charisse E. Koscove,

Defendants. 

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No. CV-07-1606-PHX-DGC

ORDER

Plaintiff New York Life Insurance Company (“New York Life”) filed a Complaint for

Interpleader, seeking a determination as to whether Defendants Matthew and Terry Koscove

or Defendant Charisse E. Koscove are entitled to a disputed portion of the proceeds from an

annuity contract issued to Decedent Marvin Koscove. Dkt. #1. Pending before the Court is

New York Life’s motion for an order directing the Clerk of the Court to accept, deposit, and

invest a check from New York Life in the amount of the proceeds at issue, $39,243.65.

Dkt. #2. In addition, Plaintiff seeks the Court’s permission to serve Defendants through

Rule 4(d) or Rule 4(c) of the Federal Rules of Civil Procedure. Id. Finally, Plaintiff asks the

Court to enjoin Defendants from instituting or prosecuting any proceeding in any state or

United States Court affecting the impleaded property. Id. For reasons set forth below, the

Court will provisionally grant Plaintiff’s motion. 

Case 2:07-cv-01606-DGC Document 5 Filed 09/19/07 Page 1 of 5
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1

 Plaintiff appears to argue that the Court has jurisdiction over this case pursuant to Federal

Rule of Civil Procedure 22 and 28 U.S.C. § 1335. Dkt. #1, at 2 ¶6. To the extent Plaintiff

contends that Rule 22, by itself, may serve as the basis for federal jurisdiction, the Court

notes that “[r]ule interpleader is merely a procedural device, and does not confer federal

jurisdiction over a claim.” Selective Ins. Co. of America v. Norris, 209 F.Supp.2d 580, 582

(E.D.N.C. 2002). Accordingly, the Court will limit its discussion of jurisdiction to 28

U.S.C. § 1335.

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I. Jurisdiction under 28 U.S.C. § 1335.

In its complaint, Plaintiff acknowledges that it owes funds under the annuity contract

and that it is unable to determine which of the claimants is to be paid. Dkt. #1, at 3-4 ¶¶15-

16. Plaintiff states that it “cannot pay any portion of the proceeds from the [annuity contract]

without danger of being compelled to pay the proceeds to more than one competing

claimant.” Id, at 4 ¶16. Plaintiff therefore has filed an impleader action under 28 U.S.C.

§ 1335, which generally shields stakeholders from multiple liability and conversely enables

claimants to settle their alleged rights to an obligation in a single judicial proceeding. See

Aetna Life Ins. Co. v. Bayona, 223 F.3d 1030, 1034 (9th Cir. 2000).

Before reaching the merits of a statutory interpleader action, a court must first address

the threshold question of whether jurisdiction is proper under 28 U.S.C. § 1335.1

 See

Rhoades v. Casey, 196 F.3d 592, 600 (5th Cir. 1999) (describing the bifurcated process

involved in an interpleader action). In a statutory impleader action, there are three

prerequisites to a court’s exercise of jurisdiction: (1) the party filing “any civil action of

interpleader or in the nature of interpleader [must have] in his or its custody or possession

money or property of the value of $500 or more,” (2) “[t]wo or more adverse claimants, of

diverse citizenship . . . are claiming or may claim to be entitled to such money or property,”

and (3) “the plaintiff has deposited such money or property . . . into the registry of the court.”

28 U.S.C. § 1335. 

First, Plaintiff suggests that it has, in its possession, the disputed proceeds, which total

$39,243.65 and are in excess of $500. Dkt. #2, at 1. Second, Plaintiff states that Defendants

are adverse claimants to the proceeds and that Defendants Matthew and Terry Koscove are

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2

 Rule 67.1(b) of the Local Rules requires funds deposited into the Court’s registry to be

“placed in some form of interest bearing account.” Therefore, Plaintiff’s request for the

deposited funds to be invested is unnecessary. 

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residents of Colorado, while Defendant Charisse E. Koscove is a resident of Arizona, thus

creating diversity of citizenship between at least two of the claimants. Dkt. #1 at 1-3. 

The third prong of the jurisdictional inquiry relates to Plaintiff’s motion for

permission, under 28 U.S.C. § 2041, to deposit the disputed funds into the Court’s registry.

As Plaintiff has alleged facts supporting a conclusion that it has met the first two elements,

the Court will provisionally grant this part of Plaintiff’s motion. The Court reminds Plaintiff

that Rule 67.1(a) of the Rules of Practice of the United States District Court for the District

of Arizona (“Local Rules”) requires Plaintiff, in making the deposit, to serve a copy of this

order on the Clerk or the Chief Deputy Clerk, and upon the Financial Deputy, and to file a

“Notice of Deposit” with the Clerk.2

 Satisfied that Plaintiff has met the jurisdictional

requirements of 28 U.S.C. § 1335, the Court provisionally holds that it has jurisdiction over

this impleader action.

II. Service of Process.

Plaintiff moves for the Court’s permission to serve Defendants under Rule 4(d) or

Rule 4(c). “Personal service is normally effective only within the boundaries of the state in

which the federal court sits; however, federal statutes may provide for nationwide service of

process.” Cripps v. Life Ins. Co. of North America, 980 F.2d 1261, 1267 (9th Cir. 1992).

The statute which governs process and procedure in interpleader actions under 28 U.S.C.

§ 1335 enables a plaintiff to employ nationwide service of process. 28 U.S.C. § 2361; State

Farm Fire & Cas. Co. v. Tashire, 386 U.S. 523, 529 n.3 (1967); see York Life Ins. Co. v. Lee,

232 F.2d 811, 815 n.1 (9th Cir. 1956) (“Section 2361 permits service of process in any

district where the claimants reside or may be found.”). Accordingly, the Court will grant

Plaintiff permission to execute nationwide service of process on Defendants in accordance

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3

 28 U.S.C. § 2361 states that “process . . . shall be addressed to and served by the United

States marshals[.]” Plaintiff, however, should understand that “it appears to be the practice

of plaintiffsin interpleader actions to directly serve process on claimants, without burdening

the U.S. marshals.” Star Ins. Co. v. Cedar Valley Express, LLC, 273 F.Supp.2d 38, 42 n.4

(D.D.C. 2002) (emphasis added).

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with Rule 4.3

III. Preliminary Injunction.

Finally, Plaintiff seeks an injunction, pursuant to 28 U.S.C. § 2361, restraining

Defendants from instituting or prosecuting any proceeding in any state or federal court

affecting the disputed proceeds. Dkt. #2. In light of Plaintiff’s stated interest in avoiding

multiple lawsuits regarding the single disputed property and the broader policy reasons that

undergird impleader actions, see Star Ins. Co., 273 F.Supp.2d at 43-44, the Court will

provisionally grant this injunction. 

The Court will direct Plaintiff to serve Defendants with a copy of this order when

executing service of process, and will permit the parties to file memoranda within 20 days

of service that shall be limited to two questions: (1) whether the Court has the authority to

hear this case under 28 U.S.C. § 1335, and (2) whether the issuance of a preliminary

injunction is proper under 28 U.S.C. § 2361. See Prudential Ins. Co. of America v. Shawver,

208 F.Supp. 464, 470-71 (W.D.Mo. 1962) (observing that an order allowing for

reconsideration of a preliminary injunction in an impleader action “after service of process

proved to be a sufficient safeguard against the failure to give notice.”). The parties’

memoranda shall not exceed 10 pages in length. 

IT IS ORDERED:

1. Plaintiff’s motion to deposit $39,243.65 to the Court’s registry is granted.

Dkt. #2. Plaintiff is instructed to make the deposit in a manner consistent with

Local Rule 67.1(a). 

2. Plaintiff’s motion to effectuate nationwide service in accordance

with Rule 4 is granted. Dkt. #2.

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3. Plaintiff’s motion for a preliminary injunction, restraining Defendants from

instituting or prosecuting any proceeding in any state or federal court

affecting the disputed proceeds of the annuity contract, is granted. Dkt. #2.

4. Plaintiff shall serve Defendants with a copy of this order when service of

process is executed. The parties may file memoranda, not to exceed 10 pages

in length, on the Court’s jurisdiction under 28 U.S.C. § 1335 and the propriety

of the preliminary injunction under 28 U.S.C. § 2361. The briefs shall be filed

no later than 20 days after service of Defendants.

DATED this 18th day of September, 2007.

Case 2:07-cv-01606-DGC Document 5 Filed 09/19/07 Page 5 of 5