17-308-cv 

Citigroup Glob. Mkts., Inc. v. KLCC Invs., LLC, et al., D and D Trust

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY

ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE 

OF APPELLATE PROCEDURE 32.1 AND THIS COURT'S LOCAL RULE 32.1.1. WHEN CITING A 

SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE 

FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION "SUMMARY ORDER"). A

PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED 

BY COUNSEL.

At a stated term of the United States Court of Appeals for the Second 

Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in 

the City of New York, on the eighteenth day of December, two thousand seventeen.

PRESENT: BARRINGTON D. PARKER,

GERARD E. LYNCH,

DENNY CHIN,

Circuit Judges.

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CITIGROUP GLOBAL MARKETS, INC.,

Interpleader Plaintiff-CounterDefendant-Appellee,

v. 17-308-cv

KLCC INVESTMENTS, LLC,

Interpleader Defendant-CounterClaimant-Appellee,

KENNETH CAYRE,

Third-Party-Defendant-Appellee,
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D AND D TRUST,

Interpleader Defendant-CounterClaimant-Third-Party-PlaintiffAppellant. *

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FOR INTERPLEADER PLAINTIFF- JOHN EVAN JENKINS, III, Lubiner, Schmidt

COUNTER-DEFENDANT-APPELLEE: & Palumbo, LLC, Cranford, New Jersey.

FOR INTERPLEADER DEFENDANT- M. RYAN PINKSTON (Richard M. Resnik, on 

COUNTER-CLAIMANT-APPELLEE the brief), Seyfarth Shaw LLP, San Francisco, 

AND THIRD-PARTY-DEFENDANT- California, and New York, New York.

APPELLEE:

FOR INTERPLEADER DEFENDANT- EUGENE KILLIAN, JR., The Killian Firm, P.C., 

COUNTER-CLAIMANT-THIRD- New York, New York.

PARTY-PLAINTIFF-APPELLANT: 

Appeal from the United States District Court for the Southern District of 

New York (Preska, J.). 

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, 

ADJUDGED, AND DECREED that the orders of the district court are AFFIRMED.

This interpleader action was filed in the district court below in 2006 by 

interpleader plaintiff Citigroup Global Markets, Inc. ("Citigroup"), the holder of an 

account containing securities pledged as collateral -- twice -- by non-party Solomon 

Dwek. By memorandum and order entered September 28, 2015, the district court 

granted summary judgment in favor of KLCC Investments, LLC and Kenneth Cayre 

 

* The Clerk of Court is respectfully directed to amend the official caption to conform to 

the above.
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(together "KLCC"), dismissed the crossclaims of D and D Trust ("D&D"), dismissed all 

counterclaims against Citigroup, discharged Citigroup as interpleader plaintiff, and 

denied without prejudice Citigroup's request for attorneys' fees and expenses. By order 

entered January 24, 2017, after Citigroup filed a new motion for fees and costs, the 

district court awarded Citigroup fees and costs in the amount of $246,125.15 to be paid 

by D&D. The district court found that, as a matter of law, KLCC had priority over D&D

to the securities account, and assessed fees and costs against D&D as "the losing 

claimant." S. App. 47. D&D appeals both the grant of summary judgment and the 

award of attorneys' fees and costs to KLCC. We assume the parties' familiarity with the 

underlying facts, procedural history, and issues on appeal.

 "We review the grant of . . . summary judgment de novo, accepting as true 

the factual allegations of the . . . complaint[] and drawing inferences based upon these 

allegations in the light most favorable to the . . . plaintiffs." In re Bank of N.Y. Derivative 

Litig., 320 F.3d 291, 297 (2d Cir. 2003) (alteration in original) (citation omitted). 

"Summary judgment is appropriate only if it can be established that 'there is no genuine 

issue as to any material fact and that the moving party is entitled to a judgment as a 

matter of law.'" Alibrandi v. Fin. Outsourcing Servs., Inc., 333 F.3d 82, 85 (2d Cir. 2003)

(per curiam) (quoting Fed. R. Civ. P. 56(c)).

In an interpleader action, as a general matter, the interpleader's costs and 

attorneys' fees are awarded from the interpleader fund, but ultimately they are to be
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"paid by the party whose claim has been adjudged groundless, and whose assertion of 

the claim necessitated the interpleader and thereby prevented the successful claimant 

from obtaining the fund undiminished by interpleader costs." Globe Indem. Co. v. Puget 

Sound Co., 154 F.2d 249, 250 (2d Cir. 1946). The court only deviates from this general 

rule when "special circumstances" warrant it. Id. at 251. We review a district court's 

award of fees and costs in an interpleader action for abuse of discretion. See

Septembertide Publ'g, B.V. v. Stein & Day, Inc., 884 F.2d 675, 683 (2d Cir. 1989) ("[Costs 

and attorneys' fees] may, in the discretion of the court, be taxed against one of the 

parties when their conduct justifies it.").

An independent review of the record and relevant case law confirms that 

KLCC was entitled to summary judgment for substantially the reasons set forth in the 

district court's September 28, 2015 memorandum and order. See Citigroup Glob. Mkts., 

Inc. v. KLCC Invs., LLC, No. 06-CV-5466 (LAP), 2015 WL 5853916, at *7-14 (S.D.N.Y. 

Sept. 28, 2015). In addition, we discern no error or abuse of discretion in the district 

court's award of fees and costs to Citigroup against D&D. 

We have considered all of D&D's arguments and find them to be without 

merit. Accordingly, we AFFIRM the orders of the district court. 

FOR THE COURT:

Catherine O'Hagan Wolfe, Clerk