Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-91-05088/USCOURTS-ca10-91-05088-0/pdf.json

Parties Involved:
Linda C. Lucas
Appellant
State Farm Mutual Automobile Insurance Company
Appellee
Mary Jane Wagnon
Appellant

Document Text:

UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT MAR 3 0 1992 

ROBERT L. HOECKEE 

Clerk 

STATE FARM MUTUAL AUTOMOBILE INSURANCE 

COMPANY, 

Plaintiff-Appellee, 

v. 

MARY JANE WAGNON, individually and as 

Administratrix of the Estate of James 

Dean Lucas, Deceased~ and LINDA C. 

LUCAS, individually and as 

Administratrix of the Estate of Curtis 

James Lucas, Deceased, 

Defendants-Appellants. 

) 

) 

) 

) 

) 

) No. 91-5088 

) (D.C. No. 86-C-1140-B) 

) (N.D. Okla.) 

) 

) 

) 

) 

) 

) 

) 

ORDER AND JUDGMENT* 

Before EBEL, BARRETT, Circuit Judges, and KANE,** District Judge. 

**Honorable John L. Kane, Jr., Senior District Judge, United 

States District Court for the District of Colorado, sitting by designation. 

After examining the briefs and appellate record, this panel 

has determined unanimously that oral argument would not materially 

assist the determination of this appeal. See Fed. R. App. P. 

* This order and judgment has no precedential value and shall 

not be cited, or used by any court within the Tenth Circuit, 

except for purposes of establishing the doctrines of the law of 

the case, res judicata, or collateral estoppel. 10th Cir. R. 36.3. 

Appellate Case: 91-5088 Document: 010110239096 Date Filed: 03/30/1992 Page: 1 
34(a); 10th Cir. R. 34 . 1 . 9 . The case i s therefore ordered 

submitted without oral argument. 

In this statutory interpleader action, 28 u.s.c. § 1335, 

Defendants appeal the district court order denying their motion 

seeking payment of interest from Plaintiff on the interpleaded 

funds. We determine that, in light of the default judgments 

entered against both Defendants, their motion for interest was 

moot. See Johnson v. Riveland, 855 F.2d 1477, 1480 (10th Cir. 

1988)(court may raise issue of mootness sua sponte). If the 

record incorrectly reflects that the default judgments remain in 

effect, then, in the alternative, we hold that the district court 

did not abuse its discretion in denying Defendants' motion. 

This controversy arises out of a fatal automobile accident 

caused by Plaintiff's insured. Defendants have both claimed an 

interest in the remaining proceeds of an automobile insurance 

policy covering Plaintiff's insured. Faced with these adverse 

claims, Plaintiff commenced this interpleader action on 

December 22, 1986 . Despite Plaintiff's assertions to the district 

court that it had deposited the insurance proceeds at issue with 

the court registry, through "inadvertence or otherwise," 

Appellants' App. at 17, Plaintiff actually failed to do so. 

On July 2, 1987, in light of Defendants' failure to appear or 

otherwise answer the interpleader complaint, the district court 

clerk entered defaults against both Defendants. The district 

court entered judgment on the defaults September 8, 1987. 

Almost three and one-half years later, on 

Defendants filed the motion at issue in 

2 

February 1, 1991, 

this appeal, which 

Appellate Case: 91-5088 Document: 010110239096 Date Filed: 03/30/1992 Page: 2 
notified the district court of Plaintiff's failure to deposit the 

insurance proceeds in the court registry and sought an order 

requiring Plaintiff to pay Defendants the interest which would 

have accrued during the time that the funds should have been 

deposited with the court. Plaintiff responded with an application 

for leave to deposit the funds at issue in the court's registry. 

The district court granted the application, directing Plaintiff to 

pay into the court registry the sum of $6,666.60, and denied 

Defendants' motion for interest. 

denial of interest. 

Defendants appeal only the 

A default judgment entered against a claimant in an 

interpleader action terminates that party's interest in the fund 

at issue. See, e.g., Nationwide Mut. Fire Ins. Co. v. Eason, 736 

F.2d 130, 132-33 and 133 n.4 (4th Cir. 1984); New York Life Ins. 

Co. v . Connecticut Dev. Auth . , 700 F.2d 91, 95-96 (2d Cir. 1983); 

see also General Accident Group v. Gagliardi, 593 F. Supp. 1080, 

1089 (D. Conn . 1984)("The failure of a named interpleader 

defendant to answer the interpleader complaint and assert a claim 

to the res can be viewed as forfeiting any claim of entitlement 

that might have been asserted."), aff' d, 767 F.2d 907 (2d Cir. 

1985) . 

The record before this court indicates that the default 

judgments entered against both Defendants have not been vacated or 

set aside. In light of those default judgments, Defendants no 

longer have any legally cognizable interest in the remaining 

insurance proceeds. Defendants' motion for interest was, 

therefore, moot. In the alternative, if the actual state of the 

3 

Appellate Case: 91-5088 Document: 010110239096 Date Filed: 03/30/1992 Page: 3 
record is otherwise and Defendants do have an interest in the 

interpleader fund, we hold that the district court did not abuse 

its discretion in denying Defendants' motion for interest. 

The judgment of the United States District Court for the 

Northern District of Oklahoma is AFFIRMED. 

Entered for the Court 

David M. Ebel 

Circuit Judge 

4 

Appellate Case: 91-5088 Document: 010110239096 Date Filed: 03/30/1992 Page: 4