Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_04-cv-04968/USCOURTS-cand-5_04-cv-04968-0/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 29:1132 E.R.I.S.A.: Employee Benefits

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Case No. C 04-04968 JF

ORDER (1) GRANTING PLAINTIFFS’ MOTION TO DEPOSIT BENEFITS WITH THE COURT, (2) GRANTING

PLAINTIFFS’ MOTION FOR DISCHARGE OF STAKEHOLDER IN INTERPLEADER ACTION, AND (3)

GRANTING IN PART AND DENYING IN PART PLAINTIFFS’ MOTION FOR ATTORNEY’S FEES AND COSTS

(JFLC1)

** E-filed on 6/9/05 **

NOT FOR CITATION

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

SUN MICROSYSTEMS, INC., et al.,

 Plaintiffs,

 v.

SEAORIA SIGNARS LEMA, et al.,

 Defendants.

Case Number C 04-04968 JF

ORDER (1) GRANTING

PLAINTIFFS’ MOTION TO DEPOSIT

BENEFITS WITH THE COURT, (2)

GRANTING PLAINTIFFS’ MOTION

FOR DISCHARGE OF

STAKEHOLDER IN INTERPLEADER

ACTION, AND (3) GRANTING IN

PART AND DENYING IN PART

PLAINTIFFS’ MOTION FOR

ATTORNEY’S FEES AND COSTS

[Docket Nos. 19 and 22]

Plaintiffs Sun Microsystems, Inc. (“Sun”) and Sun Microsystems, Inc. Tax Deferred

Retirement Savings Plan (“Plan”) (collectively “Plaintiffs”) move to (1) deposit benefits with the

Court, (2) be discharged from liability in connection with this interpleader action, and (3) recover

their attorney’s fees and costs. Plaintiffs’ motions to deposit benefits and for discharge are

unopposed. All Defendants except Michael-Anthony Lawrence Lema oppose Plaintiffs’ motion

Case 5:04-cv-04968-JF Document 40 Filed 06/09/05 Page 1 of 13
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1

 Seaoria Signars Lema was the only Defendant to file any response to Plaintiffs’ motions.

Defendants David Thomas Lema, Gabrielle Lynn Lema, Paul Philip Lema, Paula Sarah Lema,

and Tomica Ann Parham-Lema were represented by counsel at the hearing but failed to file any

opposition to the instant motions, because they did not substitute counsel for themselves as pro

se litigants until several days before the hearing (in the case of David, Gabrielle, Paul, and

Tomica) or several days after the hearing (in the case of Paula). To date, Defendant MichaelAnthony Lawrence Lema has not filed an answer or otherwise appeared in this action.

2

 Rule 22 interpleader “provides a process by which a party may ‘join all other claimants

as adverse parties when their claims are such that the stakeholder may be exposed to multiple

liability.’” Aetna Life Ins. Co. v. Bayona, 223 F.3d 1030, 1033 (9th Cir. 2000). 

3

 All parties appear to be proceeding under the belief that Decedent’s enrollment form

listed only his six children as beneficiaries. However, the Court notes that Seaoria also is listed as

a beneficiary in the same part of the form where Michael-Anthony, David, Gabrielle, Paul, Paula,

2

Case No. C 04-04968 JF

ORDER (1) GRANTING PLAINTIFFS’ MOTION TO DEPOSIT BENEFITS WITH THE COURT, (2) GRANTING

PLAINTIFFS’ MOTION FOR DISCHARGE OF STAKEHOLDER IN INTERPLEADER ACTION, AND (3)

GRANTING IN PART AND DENYING IN PART PLAINTIFFS’ MOTION FOR ATTORNEY’S FEES AND COSTS

(JFLC1)

for attorney’s fees and costs.

1

 The Court has read the moving and responding papers and has

considered the oral arguments of counsel presented on May 27, 2005. For the reasons set forth

below, the motion to deposit benefits will be granted, the motion for discharge will be granted,

and the motion for attorney’s fees and costs will be granted in part and denied in part.

I. BACKGROUND

Plaintiffs brought this action in interpleader pursuant to the Employee Retirement Income

Security Act of 1974 (“ERISA”) and Federal Rule of Civil Procedure 22 (“Rule 22”)2 to

determine who among the seven Defendants—Seaoria Signars Lema (“Seaoria”), MichaelAnthony Lawrence Lema (“Michael-Anthony”), David Thomas Lema (“David”), Gabrielle Lynn

Lema (“Gabrielle”), Paul Philip Lema (“Paul”), Paula Sarah Lema (“Paula”), and Tomica Ann

Parham-Lema (“Tomica”)—is or are the proper beneficiary or beneficiaries of Michael H.

Lema’s account under the Plan.

Michael H. Lema (“Decedent”) was a participant in the Plan and was eligible to designate

a beneficiary or beneficiaries to receive, in the event of his death, payment of his Plan benefits

that were not distributed prior to his death. When Decedent enrolled in the Plan in February

1989, he listed his wife, Seaoria, and his six children, Michael-Anthony, David, Gabrielle, Paul,

Paula, and Tomica, as equal beneficiaries on his enrollment form.3 The terms of the Plan required

Case 5:04-cv-04968-JF Document 40 Filed 06/09/05 Page 2 of 13
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and Tomica are listed as beneficiaries.

4

 Seaoria’s counsel has submitted a declaration that he called Plaintiffs’ attention to the

potential invalidity of this designation in August 2004.

3

Case No. C 04-04968 JF

ORDER (1) GRANTING PLAINTIFFS’ MOTION TO DEPOSIT BENEFITS WITH THE COURT, (2) GRANTING

PLAINTIFFS’ MOTION FOR DISCHARGE OF STAKEHOLDER IN INTERPLEADER ACTION, AND (3)

GRANTING IN PART AND DENYING IN PART PLAINTIFFS’ MOTION FOR ATTORNEY’S FEES AND COSTS

(JFLC1)

that Decedent’s spouse give her written consent, which was to be witnessed by a Plan

representative or notary public, in order for Decedent’s designation of persons other than his

spouse as beneficiaries to be valid. Plaintiffs assert that, while the enrollment form appears to

bear Seaoria’s signature, her signature was neither notarized nor witnessed by a Plan

representative, and thus, under the terms of the Plan, the beneficiary designation therein is

invalid. However, the invalidity of the designation does not appear to have been discovered until

at least July 2004.4

More than twelve years later, in July 2001, Decedent attempted to designate the Michael

Henry Lema Trust (“Lema Trust”) as the beneficiary of his Plan benefits using Sun’s online Plan

administration system. Plaintiffs assert that when he did so, the system generated a notification

informing Decedent that, in order for his designation to be valid, he needed to provide the Plan

with written spousal consent to the beneficiary designation. Plaintiffs also assert that the Plan

never received such consent from Seaoria, and thus, under the terms of the Plan, this beneficiary

designation is invalid as well. It appears that the invalidity of this second designation was not

discovered until at least March 2004. 

Decedent died on November 14, 2001. At the time of his death, he had benefits under the

Plan that had not yet been distributed to him. As of April 7, 2005, the value of the benefits was

$127,796.37. The benefits currently are held in a money market fund within the Plan, where their

value fluctuates.

On January 31, 2003, the Plan received from Seaoria a “Distribution Request Form” in

which she requested that the Plan distribute Decedent’s benefits to her. Plaintiffs assert that,

throughout 2003, the Plan communicated with Seaoria and the executor of the Lema Trust

regarding which of them was the proper party to receive Decedent’s benefits. Plaintiffs further

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5

 Seaoria has submitted an unauthenticated document entitled “Second Amendment to the

Michael Henry Lema Trust” in support of her assertion that Decedent amended the Lema Trust

document to name her as the “sole beneficiary of the Trust’s right to the Benefits.” Seaoria’s

Opp’n at 4 & Ex. A.

6

 The factual allegations in this paragraph appear in the First Amended Complaint.

Plaintiffs have submitted no evidence supporting these allegations, with the exception of a copy

of Seaoria’s “Distribution Request Form.” The Court includes the allegations in order to provide

a fuller factual background. However, these particular matters have not materially influenced the

Court’s rulings on the instant motions, and thus the absence of evidentiary support is of no

import.

7

 Like the factual allegations in the preceding paragraph, the allegations in this sentence

appear in the First Amended Complaint and are not supported by evidence submitted for

purposes of the instant motions. See supra note 6. 

4

Case No. C 04-04968 JF

ORDER (1) GRANTING PLAINTIFFS’ MOTION TO DEPOSIT BENEFITS WITH THE COURT, (2) GRANTING

PLAINTIFFS’ MOTION FOR DISCHARGE OF STAKEHOLDER IN INTERPLEADER ACTION, AND (3)

GRANTING IN PART AND DENYING IN PART PLAINTIFFS’ MOTION FOR ATTORNEY’S FEES AND COSTS

(JFLC1)

assert that, in December 2003, the Plan received a “Verified Petition of Trustee for Instructions

and Order Directing Distribution of Personal Property” (“Verified Petition”) in a case entitled In

the Matter of the Michael Henry Lema Trust Dated February 27, 2001 as Amended, which

included a copy of the Lema Trust document and its amendments. The “Second Amendment” to

the Lema Trust document stated that Seaoria was to “receive full distribution of [Decedent’s]

Sun 401K account.”5 According to Plaintiffs, the Verified Petition alleged that Decedent’s Plan

benefits should be distributed to Seaoria under the terms of the “Second Amendment” to the

Lema Trust document. However, Plaintiffs assert that, in March 2004, the Plan informed Seaoria

that Decedent’s designation of the Lema Trust as his beneficiary was not accompanied by the

requisite spousal consent and that, unless she could furnish proof of spousal consent, Decedent’s

Plan benefits would be distributed in accordance with the designation in his February 1989

enrollment form.6

Plaintiffs assert that, in June 2004, the Plan informed Decedent’s six children listed on his

enrollment form that they had a right to claim equal portions of Decedent’s benefits, and it

provided them with “Distribution Request Forms” by which they could submit their claims.7 In

June and July 2004, the Plan received claims from five of the six children: Michael-Anthony,

David, Gabrielle, Paul, and Paula. However, on August 31, 2004, after the Plan had concluded

Case 5:04-cv-04968-JF Document 40 Filed 06/09/05 Page 4 of 13
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8

 The Plan provides that, in the absence of a valid beneficiary designation at the time of

the participant’s death, the beneficiary “shall be the following person or persons living on the

date of distribution in descending order of priority: (i) the Participant’s spouse, or (ii) the

Participant’s children, in equal shares.” 

9

 The operative complaint is the First Amended Complaint, which was filed on December

2, 2004.

5

Case No. C 04-04968 JF

ORDER (1) GRANTING PLAINTIFFS’ MOTION TO DEPOSIT BENEFITS WITH THE COURT, (2) GRANTING

PLAINTIFFS’ MOTION FOR DISCHARGE OF STAKEHOLDER IN INTERPLEADER ACTION, AND (3)

GRANTING IN PART AND DENYING IN PART PLAINTIFFS’ MOTION FOR ATTORNEY’S FEES AND COSTS

(JFLC1)

that Decedent’s beneficiary designation in his enrollment form was invalid, it informed

Decedent’s six children of both that invalidity and Seaoria’s right, as Decedent’s spouse, to

receive the full amount of benefits in the absence of a valid beneficiary designation.8 In the same

letter, the Plan also provided Decedent’s children with an opportunity to release their claims to

the benefits by September 30, 2004, in order to avoid an interpleader action. Decedent’s children

have not agreed to release their claims. On November 23, 2004, Plaintiffs commenced this

lawsuit.9

II. DISCUSSION

A. Motion to Deposit Benefits with the Court

Plaintiffs move to deposit the disputed Plan benefits in the Court’s registry pursuant to

Federal Rule of Civil Procedure 67 (“Rule 67”) pending the outcome of this interpleader action

so that they may obtain a discharge of liability. Rule 67 provides that, “[i]n an action in which

any part of the relief sought is . . . the disposition of a sum of money . . . , a party, upon notice to

every other party, and by leave of court, may deposit with the court all or any part of such sum or

thing.” Fed. R. Civ. P. 67. While depositing the disputed funds in the Court’s registry is not a

jurisdictional requirement for Rule 22 interpleader, as it is for statutory interpleader, the Court

has discretion to allow such a deposit. See Gelfgren v. Republic Nat’l Life Ins. Co., 680 F.2d 79,

81-83 (9th Cir. 1982). Having received no opposition to Plaintiffs’ motion to deposit the disputed

benefits in the Court’s registry and finding no reason to deny it, the Court will GRANT this

motion.

//

//

Case 5:04-cv-04968-JF Document 40 Filed 06/09/05 Page 5 of 13
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28 6

Case No. C 04-04968 JF

ORDER (1) GRANTING PLAINTIFFS’ MOTION TO DEPOSIT BENEFITS WITH THE COURT, (2) GRANTING

PLAINTIFFS’ MOTION FOR DISCHARGE OF STAKEHOLDER IN INTERPLEADER ACTION, AND (3)

GRANTING IN PART AND DENYING IN PART PLAINTIFFS’ MOTION FOR ATTORNEY’S FEES AND COSTS

(JFLC1)

B. Motion for Discharge and Permanent Injunction

Plaintiffs next move for an order (1) discharging them from further liability to Defendants

with respect to Decedent’s benefits under the Plan and (2) permanently enjoining Defendants

from bringing claims against them arising from Decedent’s participation in the Plan. The United

States Court of Appeals for the Ninth Circuit has explained that 

[i]nterpleader is a valuable procedural device for ERISA plans who are confronted

with conflicting multiple claims upon the proceeds of an individual’s benefit plan.

A plan in this position risks defending against multiple lawsuits brought by the

adverse claimants. Interpleader provides a way out of this quandary, allowing the

plan to petition the court to sort out the conflicting claims. Thus, the interpleader

plaintiff effectively disclaims any position as to which of the claimants is entitled

to the fund.

Trs. of the Dirs. Guild of Am.–Producer Pension Benefits Plans v. Tise, 234 F.3d 415, 426 (9th

Cir. 2000) (internal citation omitted). In the context of ERISA, the Tise court recognized that the

stakeholder properly may move for discharge from liability and dismissal from the interpleader

action after depositing the disputed funds in the district court’s registry. See id. at 426-27

(observing that an interpleader plaintiff’s “[c]ompensable expenses” include the cost of

“preparing an order discharging the plaintiff from liability and dismissing it from the action”);

see also 28 U.S.C. § 2361 (authorizing district courts to hear and determine interpleader actions

and to discharge the interpleader plaintiff from further liability). Here, Plaintiffs have

acknowledged their obligation to pay Decedent’s Plan benefits to the proper beneficiary or

beneficiaries, do not claim any entitlement to the benefits themselves, and have expressed

indifference as to which Defendant(s) eventually receive(s) the benefits. Defendants have not

opposed Plaintiffs’ motion for discharge. Accordingly, Plaintiffs’ motion for discharge from

further liability to Defendants with respect to Decedent’s Plan benefits will be GRANTED, and

the discharge shall be effective following Plaintiffs’ deposit of the benefits in the Court’s

registry. 

In addition to authorizing district courts to hear and determine interpleader actions and to

discharge the interpleader plaintiff from further liability, 28 U.S.C. § 2361 gives district courts

the authority to issue a permanent injunction restraining the claimants from instituting or

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28 7

Case No. C 04-04968 JF

ORDER (1) GRANTING PLAINTIFFS’ MOTION TO DEPOSIT BENEFITS WITH THE COURT, (2) GRANTING

PLAINTIFFS’ MOTION FOR DISCHARGE OF STAKEHOLDER IN INTERPLEADER ACTION, AND (3)

GRANTING IN PART AND DENYING IN PART PLAINTIFFS’ MOTION FOR ATTORNEY’S FEES AND COSTS

(JFLC1)

prosecuting any proceeding in any state or federal court affecting the property involved in the

interpleader action and to “make all appropriate orders to enforce [their] judgment.” 28 U.S.C. §

2361. Defendants have presented—and the Court finds—no reason for denying Plaintiffs’ request

for a permanent injunction restraining Defendants from bringing claims against them arising

from Decedent’s participation in the Plan. Accordingly, Plaintiffs’ motion for a permanent

injunction will be GRANTED.

C. Motion for Attorney’s Fees and Costs

Finally, Plaintiffs move for an award of the reasonable attorney’s fees and costs they have

incurred in preparing and filing the interpleader action, serving the complaint, bringing the

instant motions, and communicating with Defendants and their counsel. Courts generally have

discretion to award attorney’s fees and costs to a disinterested stakeholder in an interpleader

action. See Abex Corp. v. Ski’s Enters., Inc., 748 F.2d 513, 516 (9th Cir. 1984); Tise, 234 F.3d at

426 (committing award of attorney’s fees in interpleader action to “sound discretion” of district

court); Gelfgren, 680 F.2d at 81 (stating that award of costs to stakeholder in interpleader action

is in court’s discretion). The rationales for awarding the stakeholder attorney’s fees “for the

services of his attorneys in interpleading” are that the stakeholder has “benefited the claimants by

promoting early litigation on ownership of the fund, thus preventing dissipation,” and that the

stakeholder “should not have to pay attorney fees in order to guard himself against the

harassment of multiple litigation.” Schirmer Stevedoring Co. v. Seaboard Stevedoring Corp., 306

F.2d 188, 193-94 (9th Cir. 1962). Courts have awarded stakeholders their attorney’s fees incurred

in preparing and filing the complaint in interpleader, obtaining service of process on the

claimants, and securing issuance of court orders restraining further prosecution against the

stakeholder and dismissing the stakeholder from the action. See id. at 194; Tise, 234 F.3d at 426-

27. 

Because the scope of compensable expenses is limited, awards of attorney’s fees to

disinterested interpleader plaintiffs typically are “modest.” Tise, 234 F.3d at 427 (affirming

reduction of fee award where the stakeholder litigated the merits of the adverse parties’ claims to

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10 Plaintiffs did not update these figures in their reply brief or at the hearing. The Court’s

Order therefore will be based upon the only figures provided.

8

Case No. C 04-04968 JF

ORDER (1) GRANTING PLAINTIFFS’ MOTION TO DEPOSIT BENEFITS WITH THE COURT, (2) GRANTING

PLAINTIFFS’ MOTION FOR DISCHARGE OF STAKEHOLDER IN INTERPLEADER ACTION, AND (3)

GRANTING IN PART AND DENYING IN PART PLAINTIFFS’ MOTION FOR ATTORNEY’S FEES AND COSTS

(JFLC1)

the fund rather than merely litigating on the interpleader itself). The Court has discretion to

award attorney’s fees from the interpleaded fund or to assess some or all of the amount against

any or all of the claimants. See Schirmer Stevedoring, 306 F.2d at 195. When attorney’s fees are

paid from the interpleaded fund, “there is an important policy interest in seeing that the fee award

does not deplete the fund at the expense of the party who is ultimately deemed entitled to it.”

Tise, 234 F.3d at 427. 

At the time Plaintiffs filed the instant motions, they claimed to have incurred $15,287.50

in attorney’s fees for “commencing this interpleader action and filing the motions necessary for

their discharge of liability” and $798.71 in costs for filing and serving the complaint. Phillips

Decl. ¶¶ 23-24. They assert that the rates of their counsel, Trucker Huss, are within the range of

fees charged for similar work in the San Francisco Bay Area. See Phillips Decl. ¶ 21. The

invoices submitted in support of their motion cover legal work and expenses from October 1,

2004, almost two months before Plaintiffs commenced this action, through March 21, 2005. See

Phillips Decl., Ex. E. Thus, Plaintiffs have requested a total award of $16,086.21 in attorney’s

fees and costs.10

Seaoria states that she does not object in principle to the deduction of reasonable

attorney’s fees and costs from Decedent’s Plan benefits. Her opposition to Plaintiffs’ motion is

based on her argument that, should she ultimately prevail in this action, it would be unfair to

assess the full amount of attorney’s fees and costs against the interpleaded fund for two reasons.

First, she asserts that over half of Plaintiffs’ attorney’s fees and costs are attributable to their

unsuccessful efforts to serve Michael-Anthony with the complaint and other documents over the

course of several months. As detailed in Plaintiffs’ March 21, 2005, ex parte application for an

order to serve the summons on Michael-Anthony by publication and for an extension of time for

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11 The Court granted Plaintiffs’ ex parte application on March 29, 2005.

12 A search through the Texas Department of Motor Vehicles confirmed that a car parked

in the driveway during two of the four service attempts was registered to Michael-Anthony.

13 None of the correspondence sent to Michael-Anthony at his Texas address has been

returned to Plaintiffs as undeliverable. 

14 The Court disagrees with Seaoria’s calculation of $8,088.25 for two reasons. First, it is

not the actual total of the numbers in the column of attorney’s fees set forth in her opposition

brief. Instead, the correct total of the numbers in that column is $7,931.25. Second, her list of

activities is missing legal work performed on February 24, 2005, regarding waiver of service, for

which $112.50 in attorney’s fees was generated. Adding the correct total of Seaoria’s

list—$7,931.25—to the additional fees for work regarding waiver of service—$112.50—equals

the Court’s total of $8,043.75. See Seaoria’s Opp’n, Ex. B. 

9

Case No. C 04-04968 JF

ORDER (1) GRANTING PLAINTIFFS’ MOTION TO DEPOSIT BENEFITS WITH THE COURT, (2) GRANTING

PLAINTIFFS’ MOTION FOR DISCHARGE OF STAKEHOLDER IN INTERPLEADER ACTION, AND (3)

GRANTING IN PART AND DENYING IN PART PLAINTIFFS’ MOTION FOR ATTORNEY’S FEES AND COSTS

(JFLC1)

service on Michael-Anthony,11 these efforts included (1) four unsuccessful attempts to serve

Michael-Anthony personally between December 14, 2004, and December 18, 2004, at the

address in Texas that he had provided on his July 27, 2004, “Distribution Request Form,”12 (2)

unsuccessful attempts to obtain Michael-Anthony’s contact information from his sisters Paula

and Gabrielle in January 2005, (3) an unsuccessful Internet search for Michael-Anthony’s

address, (4) an unsuccessful attempt in February 2005 to obtain a waiver of service of the

summons from Michael-Anthony by sending the requisite documents and forms to his Texas

address via FedEx, which forms were not returned, (5) sending copies of the summons and First

Amended Complaint to Michael-Anthony’s Texas address via certified mail in March 2005,13

and (6) additional unsuccessful searches for Michael-Anthony’s address and telephone number in

March 2005. 

By comparing Plaintiffs’ description of these efforts in their ex parte application with the

invoices they submitted in support of the instant motion, the Court has calculated the attorney’s

fees generated by these efforts, including the preparation and filing of the ex parte application for

service by publication, to be $8,043.75.14 In addition, Plaintiffs appear to have paid $105.00 to

Professional Civil Process for its attempts to serve Michael-Anthony and obtain his contact

information in January and March 2005. This total of $8,148.75 comprises just over fifty percent

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15 The Court declines to assess any portion of Plaintiffs’ attorney’s fees and costs against

any of Decedent’s other children individually solely on the basis of Seaoria’s conjecture that they

are acting in concert with one another or that they could have persuaded Michael-Anthony to

accept service of process. 

10

Case No. C 04-04968 JF

ORDER (1) GRANTING PLAINTIFFS’ MOTION TO DEPOSIT BENEFITS WITH THE COURT, (2) GRANTING

PLAINTIFFS’ MOTION FOR DISCHARGE OF STAKEHOLDER IN INTERPLEADER ACTION, AND (3)

GRANTING IN PART AND DENYING IN PART PLAINTIFFS’ MOTION FOR ATTORNEY’S FEES AND COSTS

(JFLC1)

of Plaintiffs’ attorney’s fees and costs, and well over half of these fees were generated by work

relating to Plaintiffs’ ex parte application for service by publication alone. The facts presented

with respect to Michael-Anthony suggest that, at best, he simply failed to notify Plaintiffs of a

new address after submitting his “Distribution Request Form” and, at worst, he intentionally

avoided service of process for several months. Whatever the case, Michael-Anthony’s actions

clearly have increased the costs of this action considerably, and he has not provided any

explanation to the Court for his apparent elusiveness. Accordingly, the Court finds it most

equitable to assess a portion of Plaintiffs’ attorney’s fees and costs against Michael-Anthony

himself rather than against the interpleaded fund.15

Seaoria’s second argument in opposition to assessing the full amount of Plaintiffs’

attorney’s fees and costs against the interpleaded fund is that Plaintiffs themselves are partially

responsible for the existence of competing claims to Decedent’s benefits, which have made this

interpleader action necessary. According to Seaoria, had Plaintiffs verified the validity—or, more

accurately, the invalidity—of Decedent’s attempted beneficiary designation on his enrollment

form before contacting Decedent’s children, none of them would have filed claims to the

benefits, and this controversy would not have arisen. Counsel for David, Gabrielle, Paul, Paula,

and Tomica made a similar argument at the hearing, suggesting that Plaintiffs are not entitled to

all of their attorney’s fees and costs since they are partially at fault for not having obtained the

proper signatures on Decedent’s beneficiary designations in the first place. While it certainly is

true that some confusion could have been avoided had Plaintiffs noticed the defects in

Decedent’s attempted beneficiary designations earlier—either at the time he made them or when

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16 The Court notes that Defendants have presented no evidence that Plaintiffs were under

such an obligation. The Court also acknowledges Plaintiffs’ argument that it was in fact

Decedent’s failure to comply with the Plan’s spousal-consent requirements that gave rise to

Defendants’ competing claims.

17 At this stage of the proceedings, the Court need not address the legal theories suggested

by Plaintiffs that could serve to validate Decedent’s attempted beneficiary designations despite

their noncompliance with the terms of the Plan.

18 The Court has taken into consideration the fact that, based on the latest figures

provided, the total award sought by Plaintiffs constitutes more than twelve percent of Decedent’s

benefits under the Plan.

11

Case No. C 04-04968 JF

ORDER (1) GRANTING PLAINTIFFS’ MOTION TO DEPOSIT BENEFITS WITH THE COURT, (2) GRANTING

PLAINTIFFS’ MOTION FOR DISCHARGE OF STAKEHOLDER IN INTERPLEADER ACTION, AND (3)

GRANTING IN PART AND DENYING IN PART PLAINTIFFS’ MOTION FOR ATTORNEY’S FEES AND COSTS

(JFLC1)

Plaintiffs were preparing to distribute his benefits after his death16—the Court is not persuaded

that Plaintiffs have acted improperly in naming all potential beneficiaries of Decedent’s benefits

as defendants in this interpleader action such that the attorney’s fees and costs that the Court

otherwise would award to Plaintiffs should be reduced on this ground. Indeed, even knowing, as

they admittedly do now, of the alleged deficiencies in Decedent’s attempted beneficiary

designations under the terms of the Plan, all Defendants continue to assert their rights to the

benefits—a state of affairs that only serves to validate Plaintiffs’ perceived need for an

interpleader action,17 as well as the rationales for awarding disinterested stakeholders their

reasonable attorney’s fees and costs. 

In light of the foregoing discussion, the Court concludes that Plaintiffs are entitled to the

full amount of their attorney’s fees and costs as requested in their motion—$16,086.21—as it

appears that such fees and costs were incurred reasonably and in good faith in the prosecution of

this interpleader action. However, because of the important policy interest in preserving the

interpleaded fund for the party or parties ultimately deemed to be entitled to it18 and because a

substantial portion of Plaintiffs’ fees and costs appear to be attributable to the actions of a single

Defendant—Michael-Anthony—the Court will deny Plaintiffs’ request that their award be

recovered completely from Decedent’s Plan benefits. Instead, $8,148.75 will be charged against

Michael-Anthony, and the remaining $7,937.46 will be assessed against the interpleaded fund.

Contrary to Seaoria’s assertion, there is no reason to defer ruling on Plaintiffs’ motion for

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Case No. C 04-04968 JF

ORDER (1) GRANTING PLAINTIFFS’ MOTION TO DEPOSIT BENEFITS WITH THE COURT, (2) GRANTING

PLAINTIFFS’ MOTION FOR DISCHARGE OF STAKEHOLDER IN INTERPLEADER ACTION, AND (3)

GRANTING IN PART AND DENYING IN PART PLAINTIFFS’ MOTION FOR ATTORNEY’S FEES AND COSTS

(JFLC1)

attorney’s fees and costs until after the Court adjudicates Defendants’ rights to the benefits.

Should Seaoria eventually prevail in her claim to the benefits, the Court has the equitable power

to order the losing claimants to compensate the interpleaded fund for any unfair burden they may

have placed on the fund as a result of their actions in this lawsuit and the events leading up to it.

III. ORDER

Good cause therefore appearing, IT IS HEREBY ORDERED that (1) Plaintiffs’ motion to

deposit Decedent’s Plan benefits in the Court’s registry is GRANTED, (2) Plaintiffs’ motion for

discharge from further liability and for a permanent injunction is GRANTED, and (3) Plaintiffs’

motion for attorney’s fees and costs is GRANTED IN PART and DENIED IN PART. Counsel

for Plaintiffs is directed to prepare and submit an appropriate permanent injunction order.

Moreover, the parties shall appear for their initial case management conference on July 8, 2005,

at 10:30 a.m.

DATED: June 9, 2005

/s/ (electronic signature authorized)

JEREMY FOGEL

United States District Judge

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Case No. C 04-04968 JF

ORDER (1) GRANTING PLAINTIFFS’ MOTION TO DEPOSIT BENEFITS WITH THE COURT, (2) GRANTING

PLAINTIFFS’ MOTION FOR DISCHARGE OF STAKEHOLDER IN INTERPLEADER ACTION, AND (3)

GRANTING IN PART AND DENYING IN PART PLAINTIFFS’ MOTION FOR ATTORNEY’S FEES AND COSTS

(JFLC1)

This Order has been served upon the following persons:

R. Bradford Huss bhuss@truckerhuss.com

Clarissa A. Kang ckang@truckerhuss.com 

Jonathan Marc Kaplan jonnymkap@aol.com 

Karen Elaine Phillips kphillips@truckerhuss.com 

Robert Frank Schwartz rschwartz@truckerhuss.com 

Loren Nizinski 

Law Offices of Loren Nizinski

14622 Victory Boulevard, 2nd Floor

Van Nuys, CA 91411

Case 5:04-cv-04968-JF Document 40 Filed 06/09/05 Page 13 of 13