Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_16-cv-03904/USCOURTS-cand-3_16-cv-03904-1/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1335 Interpleader Action

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ORDER — No. 16-cv-03904-LB

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

San Francisco Division

AMERICAN GENERAL LIFE 

INSURANCE COMPANY,

Plaintiff,

v.

GAYLE HART, et al.,

Defendants.

Case No. 16-cv-03904-LB 

ORDER DENYING LEAVE TO SEEK 

RECONSIDERATION

Re: ECF No. 48

INTRODUCTION

This is a statutory-interpleader case. Defendants Gayle and Lawrence Hart recently moved to 

dismiss the original interpleader claim, their co-defendant David L. Lewis’s cross-claim against 

Gayle Hart, and Mr. Lewis’s third-party claim against Lawrence Hart.

1

The Harts argued that this 

case lacked the ―minimal diversity‖ that the federal interpleader statute (28 U.S.C. § 1335) 

requires. The court denied that motion.2It reasoned that Mr. Lewis had been ―sued in his capacity 

as trustee‖ of the Cora Lewis Management Trust and ―not as the representative of [the deceased] 

Ms. Lewis’s estate.‖3For purposes of jurisdictional diversity, ―[a] trust has the citizenship of its 

 

1 Mot. to Dismiss – ECF No. 37-1. Record citations are to material in the Electronic Case File 

(―ECF‖); pinpoint citations are to the ECF-generated page numbers at the top of documents.

2 Order – ECF No. 47.

3

See id. at 3; Mot. for Leave – ECF No. 48 at 2.

Case 3:16-cv-03904-LB Document 50 Filed 01/13/17 Page 1 of 5
ORDER — No. 16-cv-03904-LB 2

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trustee.‖ Johnson v. Columbia Props. Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006). Because 

the trustee, Mr. Lewis, is a citizen of Georgia, while Ms. Hart is a citizen of California, the court 

held that minimal diversity existed.4

The Harts now ask the court to reconsider that decision. (ECF No. 48); see Civ. L. R. 7-9.5In 

sum, the Harts argue that the court made a ―clear[]‖ factual error in focusing on Mr. Lewis’s role 

as trustee — and thus using his Georgia citizenship to determine diversity under the interpleader 

statute. The Harts insist that Mr. Lewis also appears in this case as Ms. Lewis’s executor.6

Executors, unlike trustees, take the jurisdictional citizenship of their decedent. 28 U.S.C. 

§ 1332(c)(2). In the Harts’ view, the court thus should have treated Mr. Lewis as an executor and a 

citizen of California like Ms. Lewis. ―On that basis,‖ the Harts conclude, the court should 

reconsider its previous order and ―the cross-claim should be dismissed.‖7

The court has carefully weighed the Harts’ motion but denies them leave to move for 

reconsideration.

ANALYSIS

The court will not reconsider its order. Even if Mr. Lewis not only is both trustee and executor, 

but also is litigating as both trustee and executor — and even if this dual role would defeat 

―complete diversity‖ under 28 U.S.C. § 1332 — even then, the court has supplemental jurisdiction 

over the Trustee’s cross-claim and third-party claim under 28 U.S.C. § 1367. The court chooses to 

exercise that jurisdiction.

 

4 Order – ECF No. 47 at 2–3; see Opp. – ECF No. 38 at 6 (analyzing parties’ citizenship under 

minimal-diversity test).

5

Strictly speaking, the Harts ask for leave to move for reconsideration. (Mot. for Leave – ECF No. 

48); Civ. L.R. 7-9.

6 Mot. for Leave – ECF No. 48 at 2 (―The answer to the interpleader complaint and the cross-claim 

plainly state [that] Mr. Lewis was defending the interpleader complaint as executor and bringing 

claims against the Harts in that capacity as well.‖), 5.

7

Id. at 5. It is unclear whether the Harts wish the court to reconsider and dismiss the interpleader and 

third-party claims, as well. The court assumes that they do. For the reasons given in the main 

discussion, however, the court declines to do so.

Case 3:16-cv-03904-LB Document 50 Filed 01/13/17 Page 2 of 5
ORDER — No. 16-cv-03904-LB 3

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1. The Interpleader Complaint Supplies Original Jurisdiction

The Trustee expressly invokes § 1367 as a jurisdictional basis for his affirmative claims 

against the Harts.8Supplemental jurisdiction indeed lies here. The federal supplementaljurisdiction statute provides:

[I]n any civil action of which the district courts have original jurisdiction, the 

district courts shall have supplemental jurisdiction over all other claims that are so 

related to claims in the action within such original jurisdiction that they form part 

of the same case or controversy under Article III of the United States Constitution. 

Such supplemental jurisdiction shall include claims that involve the joinder or 

intervention of additional parties.

28 U.S.C. § 1367(a).

The court has original interpleader jurisdiction under 28 U.S.C. § 1335. As the court’s previous 

order discussed, statutory interpleader requires only ―minimal diversity‖ among parties to 

establish ―original‖ federal subject-matter jurisdiction. See, e.g., State Farm Fire & Cas. Ins. Co. 

v. Tashire, 386 U.S. 523 (1967). It is jurisdictionally enough under § 1335, that is, if any two 

adverse parties are citizens of different states. (The amount in controversy in the interpleader 

claim is $5000, well over the statutory minimum of $500. See 28 U.S.C. § 1335(a).) The court 

continues to hold that minimal diversity exists within the confines of the original interpleader 

complaint. The Trustee, qua trustee, is undisputedly a citizen of Georgia; Ms. Hart, the original 

interpleader defendant, is alleged to be a citizen of California.9

The Harts take issue with this. They contend that the court should have treated Mr. Lewis as an 

executor. This would have given him the same California citizenship as his decedent, Ms. Lewis, 

and would have destroyed subject-matter jurisdiction over the cross-claim. (And, again, 

presumably over the third-party claim.10) The court believes that the Harts are mistaken. The 

original interpleader complaint names Mr. Lewis only in his role as trustee.11 It was apparently in 

that capacity (according to the complaint) that the Trustee claimed the life-insurance proceeds at 

 

8 ECF No. 17 at 6 (¶ 8).

9

See Compl. – ECF No. 3 at 2 (¶¶ 4–5); Order – ECF No. 47 at 2–3.

10 See Mot. for Leave – ECF No. 48 at 2, 4–5.

11 E.g., Compl. – ECF No. 3 at 1–4 (caption, 2 (¶ 5), 3–4 (¶ 15). 

Case 3:16-cv-03904-LB Document 50 Filed 01/13/17 Page 3 of 5
ORDER — No. 16-cv-03904-LB 4

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issue.12 The complaint does not mention the fact that Mr. Lewis serves as both trustee and 

executor.13 Nor does the interpleader claim depend on Mr. Lewis’s status as executor.14 The 

question of Mr. Lewis’s citizenship as executor thus does not arise under the interpleader 

complaint itself. It is only with Mr. Lewis’s responsive pleading — comprising his answer, crossclaim, and third-party claim — that his dual role emerges. It is only this latter pleading that the 

Harts cite to invoke the decedent’s California citizenship.15 The interpleader complaint itself gave 

the court original subject-matter jurisdiction.

2. The Interpleader and the Trustee’s Affirmative Claims Spring from the “Same Case or 

Controversy”

The question under § 1367(a) then becomes whether the interpleader claim, and the Trustee’s 

claims against the Harts, ―are so related . . . that they form part of the same case or controversy 

under Article III.‖ See 28 U.S.C. § 1367(a). The court holds that they do. Section 1367(a)’s ―same 

case or controversy‖ formulation ―unambiguously extends jurisdiction to the limits of Article III.‖ 

Montoya v. Espanola Pub. Sch. Dist. Bd. of Educ., 861 F. Supp. 2d 1307, 1310 (D.N.M. 2012) 

(quoting Jones v. Ford Motor Credit Co., 358 F.3d 205, 212 n. 5 (2nd Cir. 2004)). The facts that 

underlie the Trustee’s affirmative claims meet this test. Those claims allege (in sum) that the Harts 

―subjected Ms. Lewis to various forms of elder abuse, unlawfully absconded with Ms. Lewis’s 

property, and wrongfully coerced Ms. Lewis to designate Ms. Hart as the beneficiary of Ms. 

Lewis’s multiple life insurance policies.‖16 The interpleader complaint likewise springs from the 

Harts’ relationship with the deceased Ms. Lewis and from the competing claims that the Harts and 

the Trustee made to the proceeds of Ms. Lewis’s American General life-insurance policy.17 Those 

 

12 See id. at 3–4 (¶¶ 13–15). On the propriety of the Trust, apart from the executor, seeking the 

disputed life-insurance proceeds, see especially id. at 4 (¶ 16) (―[A]t Decedent’s direction, [her 

lawyers] created the Cora Lewis Management Trust for the transfer of all of decedent’s assets.‖).

13 Id., passim.

14 See id. at 3–6 (¶¶ 6–28).

15 Mot. for Leave – ECF No. 48 at 2, 5.

16 ECF No. 17 at 5 (¶ 1).

17 See Compl. – ECF No. 3 at 3–4 (¶¶ 11, 13–16).

Case 3:16-cv-03904-LB Document 50 Filed 01/13/17 Page 4 of 5
ORDER — No. 16-cv-03904-LB 5

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competing claims are exactly what led American General to interplead the insurance proceeds.18

The interpleader claim, and the Trustee’s claims against the Harts, are thus ―so related‖ as to ―form 

part of the same case or controversy.‖

Finally, the court chooses to exercise supplemental jurisdiction over the Trustee’s cross-claim 

and third-party claim. The supplemental-jurisdiction statute lays out several considerations that 

―may‖ lead a court, in its discretion, to decline such jurisdiction, but the court finds that, in the 

circumstances of this case, none of these warrants declining to exercising supplemental 

jurisdiction. See, e.g., 28 U.S.C. § 1367(c); Acri v. Varian Assocs., Inc., 114 F.3d 999, 1000 (9th 

Cir.), supplemented, 121 F.3d 714 (9th Cir. 1997), as amended (Oct. 1, 1997) (―[A] federal district 

court with power to hear state law claims has discretion to keep, or decline to keep, them under the 

conditions set out in § 1367(c) . . . .‖).

* * *

Additional problems infect the Harts’ present analysis. It is unnecessary to elaborate upon 

them. The discussion above conveys the court’s essential reasoning and suffices to establish the 

court’s subject-matter jurisdiction over all the claims that are in play: those in the original 

interpleader complaint (ECF No. 3), and those in the Trustee’s responsive pleading (ECF No. 17).

CONCLUSION

The court denies the Harts’ motion for leave to seek reconsideration of the court’s order of 

December 27, 2016.

This disposes of ECF No. 48.

IT IS SO ORDERED.

Dated: January 11, 2017

______________________________________

LAUREL BEELER

United States Magistrate Judge

 

18 Id. at 3–5 (¶¶ 13–24).

Case 3:16-cv-03904-LB Document 50 Filed 01/13/17 Page 5 of 5