Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_07-cv-00216/USCOURTS-cand-5_07-cv-00216-1/pdf.json

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

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Case No. C 07-216 JF (HRL)

ORDER GRANTING DECLARATORY JUDGMENT

(JFEX2)

**E-Filed 11/19/2007**

NOT FOR CITATION

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

AURORA NATIONAL LIFE ASSURANCE

COMPANY,

 Plaintiff,

 v.

MATTHEW C. JOHNSON, et al.,

 Defendants.

Case Number C 07-216 JF (HRL)

ORDER GRANTING 1

DECLARATORY JUDGMENT

[re: docket no. 39]

AND RELATED CLAIMS

I. BACKGROUND

On January 11, 2007, Plaintiff Aurora National Life Insurance Company (“Aurora”) filed

the instant complaint in interpleader. The complaint alleges the following facts: Aurora is the

stakeholder obligated under an annuity contract. Complaint ¶ 5. On or about May 15, 1986, the

parents of Matthew C. Johnson (Johnson) entered into a settlement (“the Settlement”) with

certain insureds of Progressive Insurance Company in connection with the resolution of certain

claims made on behalf of Johnson. Complaint ¶ 7. Progressive was to purchase an annuity to

Case 5:07-cv-00216-JF Document 48 Filed 11/19/07 Page 1 of 5
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Case No. C 07-216 JF (HRL)

ORDER GRANTING DECLARATORY JUDGMENT

(JFEX2)

fund the Settlement. Complaint ¶ 8. Progressive made a qualified assignment to First Executive

Corporation (“First Executive”) to fund the settlement. Complaint ¶ 10. In turn, First Executive

purchased an annuity from Executive Life Insurance Company (“the ELIC Annuity”). Complaint

¶ 11. Pursuant to the terms of the annuity, Johnson was to receive the following payments:

March 5, 1994 $10,000.00

March 5, 1995 $10,000.00

March 5, 1996 $10,000.00.

March 5, 1997 $10,000.00

March 5, 2001 $55,000.00

March 5, 2006 $90,000.00

March 5, 2011 $135,550.00 

 

Complaint ¶ 12. Subsequently, Executive Life Insurance Company was placed into rehabilitation

and the ELIC Annuity was assumed and reinsured by Aurora as annuity contract number

C21403189A (“the Annuity”). Complaint ¶ 13. As a result, Aurora’s subsequent benefit

payments were to be made at 95.4775% of the original benefit amount. Id. The Annuity 

currently is owned by FL Assignments. Id. The payments that remain due under the Annuity are

$85,929.75, due on March 5, 2006, and $129,419.75, due on March 5, 2011. Complaint ¶ 14.

The complaint also alleges the following additional facts: On or about March 5, 1998,

Johnson entered into a purported purchase agreement with J.G. Wentworth SSC Limited

Partnership (“Wentworth”). Complaint ¶ 16. Under that agreement, Johnson purported to assign

to Wentworth the payment of $85,929.75, due on March 5, 2006. Id. On or about August 25,

2004, Aurora received notice that 321 Henderson Receivables Limited Partnership

(“Henderson”) had filed a petition for approval for transfer of structured settlement payment

rights by and between Johnson and Henderson. Complaint ¶ 17. In light of the potentially

competing claims to payment between Wentworth and Johnson, Aurora suspended the payment

due on March 5, 2006. Complaint ¶ 21. Aurora requested direction from FL Assignments with

respect to the payment at issue. Complaint ¶ 22. FL Assignments has taken the position that

Wentworth has no right to the payment at issue absent a court order. Complaint ¶ 23. 

Aurora requests that the Court order Wentworth and Johnson to interplead their

respective claims to the payment at issue. On February 14, 2007, Wentworth filed a cross-claim

and a counter-claim against Aurora, asserting that Aurora is a stakeholder not knowing whom to

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Case No. C 07-216 JF (HRL)

ORDER GRANTING DECLARATORY JUDGMENT

(JFEX2)

pay without direction from the Court or FL Assignments, and that Aurora should release the

payment to Wentworth pursuant to the terms of Wentworth’s purchase agreement with Johnson.

Wentworth also included a cross-claim against Johnson and FL Assignments, seeking an order

declaring the rights, title, and interests in the payment. On Johnson and FL Assignments were

served with the cross-claim. On February 22, 2007, at Aurora’s request, the Clerk entered

defaults as to FL Assignments and Johnson. On April 5, 2007, Aurora moved for discharge from

liability in connection with the payment at issue. Aurora requested directions as to the proper

disposition of the payment at issue or, alternatively, an order permitting it to deposit the

suspended payment into the registry of the Court. No opposition to the motion was received. On

May 15, 2007, the Court granted Aurora’s motion for discharge on the condition that Aurora

deposit $85,929.75 with the Clerk of the Court. Additionally, the Court ordered Johnson,

Wentworth, and FL Assignments to interplead their claims to the disputed payment without

further involvement of Aurora. 

On May 24, 2007, Aurora deposited the sum of $85,929.75 with the Clerk of the Court.

On June 4, 2007, the clerk entered default judgment against FL Assignments for failure to appear

or otherwise respond to the cross-complaint. On July 24, 2007, the Clerk entered default

judgment against Johnson for failure to appear or otherwise respond to the cross-complaint. On

September 11, 2007, Wentworth moved for entry of a declaratory judgment and mailed a copy of

the motion to Johnson and FL Assignments. No written opposition was filed, and neither

Johnson nor FL assignments appeared at the hearing on November 16, 2007. 

II. DISCUSSION

Wentworth seeks a judgment authorizing the release of the $85,929.75, plus any accrued

interest, to Wentworth. Wentworth has obtained default judgments against Johnson and FL

Assignments. Aurora has already sought and obtained its discharge in this case and has deposited

the payment at issue with the Clerk of the Court. Neither Johnson nor FL Assignments has

appeared to oppose Wentworth’s request. Accordingly, Wentworth is entitled to a judgment

authorizing the release of $85,929.75, plus any accrued interest, to Wentworth.

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Case No. C 07-216 JF (HRL)

ORDER GRANTING DECLARATORY JUDGMENT

(JFEX2)

III. ORDER

Good cause therefor appearing, IT IS HEREBY ORDERED, ADJUDGED AND

DECREED that the Clerk of the Court release the sum of $85,929.75, plus any interest on that

has accrued on such amount since May 24, 2007, be paid to Wentworth.

DATED: November 19, 2007

 

JEREMY FOGEL

United States District Judge

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Case No. C 07-216 JF (HRL)

ORDER GRANTING DECLARATORY JUDGMENT

(JFEX2)

This Order has been served upon the following persons:

James Richard Felton jfelton@greenbass.com 

William Michael Pierce sjlaw@yahoo.com 

Will Spencer Skinner Will.Skinner@dbr.com 

Case 5:07-cv-00216-JF Document 48 Filed 11/19/07 Page 5 of 5