In the

United States Court of Appeals

For the Seventh Circuit

Nos. 07-4004 & 08-2020

JIM AARON,

Plaintiff,

v.

SUSAN J. MAHL,

Defendant-Appellant,

v.

MERRILL LYNCH, PIERCE,

FENNER & SMITH,

Defendant-Appellee.

 

Appeals from the United States District Court 

for the Northern District of Indiana, South Bend Division.

No. 03 CV 656—Robert L. Miller, Jr., Chief Judge.

 

ARGUED OCTOBER 23, 2008—DECIDED DECEMBER 18, 2008

 

Before BAUER, WOOD, and TINDER, Circuit Judges.
2 Nos. 07-4004 & 08-2020

TINDER, Circuit Judge. Susan Mahl and Jim Aaron were

live-in lovers in southern California in the late 1990s. But

the romance only lasted until 2001 when Aaron left Mahl

for another woman. However, for the past seven years or

so, Aaron has been arduously pursing Mahl, from California to Indiana and then South Carolina; but sadly, not

because he is having second thoughts about the demise of

their relationship—as you will soon learn, he has quite a

different motivation. In the meantime, Mahl has been

drastically reinventing herself. And for good reason—in

early 2000, a California law firm sued Mahl for what was

essentially embezzlement from that firm during her tenure

as its managing partner. That suit resulted in a judgment

for a little more than a million dollars in favor of the firm

against Mahl. Not surprisingly, Mahl left the practice of

law, left California, changed her last name to Scott (which

is how we will refer to her from this point on) and moved

eventually to South Carolina where she apparently still

resides. At some point in this transformation, Scott opened

IRA accounts in LaPorte, Indiana, the proceeds of which

are at the heart of the present dispute (and the reason for

Merrill Lynch being in this case). And the inspiration for

Aaron’s continued interest in Scott? According to Aaron,

the California law firm assigned its judgment against Scott

to him (which may seem odd, but that is not important to

this appeal) and he has been attempting—unsuccessfully

so far—to collect on that judgment. Up to this point, these

disputes have journeyed through state and federal courts

in California, Indiana, and South Carolina. Today we

determine whether an Indiana district court properly

granted Merrill Lynch interpleader as the holder of some
Nos. 07-4004 & 08-2020 3

of the assets over which Aaron and Scott are engaged in

tug of war.

I. Background

Aaron brought these matters to the Indiana court system

by seeking to domesticate the California judgment in the

circuit court of LaPorte County, Indiana, where some of

Scott’s assets were located. The LaPorte Circuit Court

entered a temporary restraining order against Scott in

December 2001, prohibiting her from transferring those

assets. Scott promptly violated the court order and moved

the assets into accounts with Merrill Lynch.

The LaPorte Circuit Court domesticated Aaron’s assigned judgment and held Scott in contempt for moving

the funds. It also entered three orders in proceedings

supplemental that are pertinent to this appeal. The first

order, entered in January 2003, ordered Merrill Lynch not

to deliver the assets to Scott or any other person and not to

dispose of or transfer the assets. Like the parties, we will

refer to this as the “freeze order.” Because the Merrill

Lynch accounts contained retirement funds, Scott challenged Aaron’s right to execute on the funds under Indiana

law. The second order, entered in June 2003, determined

that Indiana law did not exempt Scott’s funds from execution by Aaron; however, it also determined that it could

not order the assets moved by Scott in violation of the
4 Nos. 07-4004 & 08-2020

 Scott appealed, and the Indiana Court of Appeals affirmed 1

the LaPorte Circuit Court’s June 2003 determination that Indiana

law did not exempt Scott’s retirement accounts from execution

by Aaron. Mahl v. Aaron, 809 N.E.2d 953, 958-59 (Ind. Ct. App.

2004). 

See Colorado River Water Conservation Dist. v. United States, 424 2

(continued...)

temporary restraining order “back to Indiana.” The parties 1

understandably found the order confusing. The third

order, which we will address momentarily, explained the

reasoning behind the second order.

Despite the LaPorte Circuit Court’s second order that the

funds could not be ordered back to Indiana, Aaron sought

and obtained an ex parte writ of execution from the clerk

of the court, in attempt to have the Merrill Lynch funds

turned over to him. Merrill Lynch, still bound by the freeze

order, refused to comply. Scott filed a motion to quash the

writ of execution, and the LaPorte Circuit Court set a

hearing on the issue. Rather than wait for the hearing,

Aaron filed a complaint against Scott and Merrill Lynch in

the U.S. District Court for the Northern District of Indiana.

Noting that Aaron’s precise legal theory of recovery was

unclear, the district court construed Aaron’s complaint as

requesting that the court enforce the writ of execution and

require Merrill Lynch to turn over the funds to which

Aaron was entitled. Merrill Lynch filed a counterclaim and

cross-claim against Aaron and Scott for interpleader.

In September 2004, the district court stayed the case

pursuant to the Colorado River doctrine while the LaPorte 2
Nos. 07-4004 & 08-2020 5

(...continued) 2

U.S. 800 (1976) (holding that in narrow circumstances a federal

court can decline to exercise jurisdiction where a state court is

contemporaneously exercising jurisdiction). 

Circuit Court considered Scott’s motion to quash the writ

of execution. In March 2005, the LaPorte Circuit Court

entered its third order granting Scott’s motion. The court

explained its second order from June 2003 in greater detail

because “in retrospect, the Order was not artfully drafted

. . . and has created continuing confusion.” The court

clarified that the second order ruled that Indiana law did

not provide Scott with an exemption from execution on her

retirement accounts. The order was not intended, however,

to allow Aaron to execute on the funds because the court

lacked the power to order the funds back to Indiana—“the

attachment of Defendant Scott’s personal property should

be accomplished through a court in her state of residence

or an appropriate federal court.” After this third order had

been affirmed by the Indiana Court of Appeals, see Aaron

v. Scott, 851 N.E.2d 309 (Ind. Ct. App. 2006), trans. denied,

869 N.E.2d 446 (Ind. 2007), the federal district court lifted

its stay in February 2007 to address the parties’ crossmotions for summary judgment.

The district court concluded that Merrill Lynch properly

refused to comply with the now-void writ of execution

and, therefore, Merrill Lynch was not personally liable to

Aaron. The court also determined that interpleader was

appropriate because Merrill Lynch was a disinterested

stakeholder facing conflicting claims between Aaron and
6 Nos. 07-4004 & 08-2020

Scott. The court granted Merrill Lynch’s motion for summary judgment on the interpleader claims, with a note that

the order would become effective after Merrill Lynch

deposited the funds with the federal court’s registry (as

required by statutory interpleader). The LaPorte Circuit

Court then lifted the freeze order to allow Merrill Lynch to

deposit the funds. The district court subsequently granted

Merrill Lynch’s motion to enter final judgment on its

interpleader claim under Fed. R. Civ. P. 54(b). Finally, the

district court awarded Merrill Lynch attorneys’ fees from

the interpleader stake. Scott appealed from the grant of

interpleader and the award of attorneys’ fees.

II. Interpleader

We begin, as we must, with the district court’s subjectmatter jurisdiction, which Scott contends was lacking.

Autotech Tech. LP v. Integral Research & Dev. Corp., 499 F.3d

737, 742 (7th Cir. 2007). Aaron’s complaint alleged diversity

jurisdiction under 28 U.S.C. § 1332. Aaron is a citizen of

Indiana, Scott is a citizen of South Carolina, and Merrill

Lynch is a Delaware corporation with its principal place of

business in New York. The amount in controversy was

alleged to exceed $213,000. Aaron’s allegations satisfied

§ 1332, so the district court clearly had subject-matter

jurisdiction. Scott’s concerns stem, apparently, from the

district court’s initial consideration of Merrill Lynch’s

interpleader claim under Fed. R. Civ. P. 22 and its subsequent use of statutory interpleader, set out in 28 U.S.C.

§ 1335. 
Nos. 07-4004 & 08-2020 7

 Scott points out that the district court’s switch from Rule 22 3

interpleader to statutory interpleader adversely affected the

stake because statutory interpleader’s mandatory deposit of the

funds in the court’s registry was a taxable event. Perhaps

countervailing considerations warranted the switch; in any

event Scott does not argue that the district court should not have

allowed Merrill Lynch to assert statutory interpleader, so we

will not address the issue further.

Section 1335 provides the federal court with an independent basis for asserting subject-matter jurisdiction, but

Rule 22 does not. Commercial Nat’l Bank of Chi. v. Demos, 18

F.3d 485, 488 (7th Cir. 1994). The district court permitted

Merrill Lynch to proceed only under Rule 22 interpleader

initially, because it, unlike statutory interpleader, does not

require the stake to be deposited in the federal court’s

registry. (As previously mentioned, Merrill Lynch could

not deposit the stake due to the LaPorte Circuit Court’s

freeze order.) Jurisdiction was proper, though, because the

district court had diversity jurisdiction over Aaron’s claim

and supplemental jurisdiction over Merrill Lynch’s interpleader claims. See id. That the district court later permitted Merrill Lynch to proceed under statutory interpleader—on the condition that the freeze order be removed

and the stake deposited—did not deprive the court of

subject-matter jurisdiction. On appeal, we have jurisdic3

tion because the district court entered final judgment in

favor of Merrill Lynch under Fed. R. Civ. P. 54(b). 28 U.S.C.

§ 1291.

The district court’s grant of summary judgment in favor

of Merrill Lynch was based purely upon a decision of law,
8 Nos. 07-4004 & 08-2020

which we review de novo. Officer v. Chase Ins. Life &

Annuity Co., 541 F.3d 713, 714 (7th Cir. 2008). Interpleader

is an equitable procedure used when the stakeholder is in

danger of exposure to double liability or the vexation of

litigating conflicting claims. Indianapolis Colts v. Mayor and

City Council of Baltimore, 741 F.2d 954, 957 (7th Cir. 1984).

Interpleader is justified only when the stakeholder has a

real and reasonable fear of double liability or conflicting

claims. Id.; Union Cent. Life Ins. Co. v. Hamilton Steel Prods.,

Inc., 448 F.2d 501, 504 (7th Cir. 1971). A “real and reasonable fear” does not require the party requesting interpleader to show that the claimants might eventually

prevail. “Of course, the claims of some interpleaded parties

will ultimately be determined to be without merit. That,

however, is the very purpose of the proceeding and it

would make little sense in terms either of protecting the

stakeholder or of doing justice expeditiously to dismiss one

possible claimant because another possible claimant asserts

the claim of the first is without merit.” Union Cent. Life Ins.

Co., 448 F.2d at 504; John Hancock Mut. Life Ins. Co. v.

Beardslee, 216 F.2d 457, 460 (7th Cir. 1954) (“[T]he conflicting claims against the funds need not be such claims as can

finally be proved in court.”). On the other hand, the

adverse claims must meet a “minimal threshold level of

substantiality.” Indianapolis Colts, 741 F.2d at 958. After a

court has determined that interpleader is warranted, the

claimants proceed to a second stage in which the merits of

their claims are resolved. United States v. High Tech. Prods.,

Inc., 497 F.3d 637, 641 (6th Cir. 2007). The district court

granted Scott’s motion to stay the second stage of interpleader while this appeal was pending.
Nos. 07-4004 & 08-2020 9

Scott argues that Merrill Lynch did not have a real and

reasonable fear of double liability or the vexation of

litigating conflicting claims. Scott’s position is incredible,

given that Merrill Lynch has been involved since 2003 in

claims filed by Aaron spanning state and federal court (and

multiple appeals) in a dispute over possession of funds

that, from its inception, has been essentially between

Aaron and Scott. There is little doubt that Scott, too, would

have sued Merrill Lynch if Merrill Lynch had turned over

the money to Aaron. In fact, her attorneys wrote a letter

threatening to do so, which was attached as an exhibit to

Merrill Lynch’s claim. Scott presents two arguments

against Merrill Lynch’s real and reasonable fear, based

upon the legitimacy of Aaron’s claims.

First, Scott argues that res judicata determines the

outcome of this suit. Res judicata, or claim preclusion, bars

the relitigating of claims if “the cause of action has been

fully and finally determined on the merits between the

same parties by a court of competent jurisdiction.” Jarrard

v. CDI Telecomms., Inc., 408 F.3d 905, 916 (7th Cir. 2005)

(citing Neese v. Kelley, 705 N.E.2d 1047, 1051 (Ind. Ct. App.

1999)). Res judicata bars not only those issues actually

decided in the prior suit, but all other issues which could

have been brought. Hondo, Inc. v. Sterling, 21 F.3d 775, 779

(7th Cir. 1994). Scott believes that the LaPorte Circuit

Court’s June 2003 order decided on the merits that the

funds could not be returned to Indiana, i.e., that Scott was

entitled to possession of the funds. Aaron’s claim, she

argues, could not be the basis for a real and reasonable fear

of conflicting claims because Aaron already lost that battle

in state court. 
10 Nos. 07-4004 & 08-2020

 Though we must respect the decision of the LaPorte Circuit 4

Court, we note that its determination that it had personal

(continued...)

On the contrary, the June 2003 order decided that

Scott’s funds were not exempt from execution by

Aaron under Indiana law, but the court could not order the

funds back to Indiana. Though the order was somewhat

opaque, the court’s explanation in its March 2005 order

was clear:

The June 13, 2003 Order indicates that this Court

could not order the funds back to Indiana. The

Court was and continues to be of the opinion that

the attachment of Defendant Scott’s personal

property should be accomplished through a court

in her state of residence or an appropriate federal

court. Consequently, this Court does not have the

ability to order the assets held by Merrill Lynch to

be turned over to the Plaintiff in partial satisfaction

of the judgment. Only a South Carolina court or a

federal court can do that.

(internal citation omitted). The LaPorte Circuit Court’s

decision that it lacked the ability to order the funds back to

Indiana is most decidedly not in Scott’s favor on the merits.

See Jarrard, 408 F.3d at 916 (“[Appellant] displays a

less-than-complete understanding of the relevant doctrine

at issue. The . . . dismissal on the basis of jurisdiction

certainly did not amount to a full and final adjudication on

the merits . . . so res judicata, or claim preclusion, clearly

does not apply here.”). Further, the LaPorte Circuit 4
Nos. 07-4004 & 08-2020 11

(...continued) 4

jurisdiction over garnishee-defendant Merrill Lynch in the

proceedings supplemental might have allowed it to order

Merrill Lynch to move the funds back to Indiana. See State Farm

Mut. Auto. Ins. Co. v. Estep, 873 N.E.2d 1021, 1033 n.13 (Ind. 2007)

(Boehm, J., concurring in part and dissenting in part) (noting

that a garnishee’s presence in proceedings supplemental is

necessary to acquire jurisdiction over the debtor’s property that

is in the garnishee’s possession). Obviously the court had the

power to order Scott to return the funds, but Scott had already

been violating the court’s order to return the funds for two years

at that point.

As noted at oral argument, in reality the funds are no more

than an electronic entry in Merrill Lynch’s database system and

are not sitting in a suitcase in a vault somewhere outside of the

state of Indiana. Even under the restrictive view that the funds

were located in South Carolina and beyond the court’s in rem

jurisdiction, the Supreme Court has noted that “the maxim that

personalty has its situs at the domicile of its owner is a fiction of

limited utility.” Hanson v. Denckla, 357 U.S. 235, 249 (1958)

(footnote omitted). Indiana courts have ignored the maxim and

declined to exercise jurisdiction in Indiana where it would have

been inappropriate. See Saler v. Irick, 800 N.E.2d 960, 971-72 (Ind.

Ct. App. 2003) (holding that in rem jurisdiction was not appropriate where the annuities at issue were not present in Indiana,

even though the decedent’s domicile was Indiana). Conversely,

the court may have been able to exercise in rem jurisdiction in an

appropriate situation such as this one, where in rem jurisdiction

was lacking only because Scott removed the funds from Indiana

in violation of the court’s order. See, e.g., United States v. One

1979 Rolls-Royce Corniche Convertible, 770 F.2d 713, 716-17 (7th

(continued...)
12 Nos. 07-4004 & 08-2020

(...continued) 4

Cir. 1985) (“[A] court’s jurisdiction remains over the res in an in

rem action if the res is removed or released accidentally, fraudulently, or improperly from the court’s control.”) (citing The Rio

Grande, 90 U.S. 458, 465 (1874)).

 Scott similarly argues that collateral estoppel applies. 5

Collateral estoppel, or issue preclusion, prevents a party from

relitigating issues that have already been litigated and decided.

Wolverine Mut. Ins. v. Vance ex rel. Tinsley, 325 F.3d 939, 943 (7th

Cir. 2003). “A dismissal for lack of jurisdiction precludes

relitigation of the issue actually decided, namely the jurisdictional issue.” Perry v. Sheahan, 222 F.3d 309, 318 (7th Cir. 2000).

Court’s decision on the limitation of its own jurisdiction

has no bearing on the powers wielded by the federal court.

Scott also argues res judicata on the basis of Aaron’s

state-court appeal. The Indiana Court of Appeals affirmed

the LaPorte Circuit Court’s March 2005 order on two

grounds relevant here: (1) the LaPorte Circuit Court’s clerk

lacked the authority to issue a writ of execution in contravention of the court’s prior order; and (2) Aaron defaulted

his argument that the court did have jurisdiction to order

the funds to Indiana because he never appealed from the

June 2003 order. Res judicata does not apply to bar Aaron’s

claim on the basis of these decisions, either.5

Second, Scott argues that Merrill Lynch did not have a

real and reasonable fear of double liability or the vexation

of litigating conflicting claims because Aaron’s only theory

of recovery espoused in the federal complaint was frivolous from the outset. Aaron’s complaint set out in twelve
Nos. 07-4004 & 08-2020 13

 The able and experienced district court judge can hardly be 6

faulted for failing to be clairvoyant.

paragraphs that Aaron had a judgment against Scott

entered by the LaPorte Circuit Court, Merrill Lynch

controlled five accounts belonging to Scott, Aaron had a

writ of execution against those accounts, and Merrill Lynch

refused to honor the writ. The complaint named both Scott

and Merrill Lynch as defendants. When the district court

stayed the action pending the LaPorte Circuit Court’s

determination of the writ of execution’s validity, it made

two observations that Scott finds significant. First, it noted

that Aaron’s theory of recovery was unclear but he appeared to be asking the court to enforce the writ of execution and require Merrill Lynch to turn over the funds to

which Aaron was entitled. Second, the district court noted

that the state court’s determination of the writ’s validity

would likely dispose of all claims in the federal case.

When the district court lifted the stay nearly three years

later, it permitted the parties to supplement their motions

for summary judgment, after which the court granted

interpleader for Merrill Lynch. The district court’s decision

permitting the case to proceed was contrary to its aforementioned two observations because the case was proceeding under a different theory than expected and the state

court decision had not disposed of all the claims. By 6

granting the motion, Scott complains, the district court

allowed Aaron’s new theory—replevin—to “tip-toe[] in

through the side door.” Scott asserts that the district court

should have dismissed the case because Aaron’s only
14 Nos. 07-4004 & 08-2020

 The Supreme Court explained in Bell Atlantic Corp. v. 7

Twombly, 550 U.S. 544, ——, 127 S. Ct. 1955, 1964-65 (2007), that

“a plaintiff’s obligation to provide the grounds of his

entitle[ment] to relief requires more than labels and conclusions,

and a formulaic recitation of the elements of a cause of action

will not do. . . .” (alteration in original) (internal quotation marks

omitted). Oddly, Scott uses this quotation to argue that in

Aaron’s complaint, “there is no label, let alone any of the

elements of a cause of action for replevin.” Aaron did not need

to provide labels and elements; he merely needed factual

allegations that were “enough to raise a right to relief above the

speculative level.” Id. at 1965.

theory of recovery in the complaint had been foreclosed

when the LaPorte Circuit Court conceded that its clerk

should never have issued Aaron the writ of execution. But

Aaron’s complaint, admittedly more focused on the writ of

execution, also named Scott as a defendant, alleged that he

had a judgment against her, and claimed to be entitled to

her accounts at Merrill Lynch. Scott wants the case to be

dismissed because Aaron’s complaint did not state a claim

—he did not use the word “replevin” or identify any other

workable legal theory. Under the notice pleading standard,

of course, a complaint need not contain legal theories. See,

e.g., O’Grady v. Vill. of Libertyville, 304 F.3d 719, 723 (7th Cir.

2002) (noting that although the plaintiff did not advance a

particular theory until the summary judgment stage, the

complaint was adequate to put the defendant on notice).

Aaron’s complaint gave Scott notice that he had a judgment against her and he believed that he was legally

entitled to the money in her Merrill Lynch accounts. Even 7
Nos. 07-4004 & 08-2020 15

 Scott also asserts that Aaron will never be able to prevail 8

under a replevin theory. She explains which elements of

replevin under Indiana law Aaron has not yet attempted to

show, e.g., under Indiana Code § 32-35-2-4, to recover for

replevin Aaron must file an affidavit showing that he is the

owner of the property or lawfully entitled to the property. This

argument is premature; both parties will have the opportunity

to prove entitlement to the funds in the second stage of interpleader, which the district court stayed pending this appeal. To

prevail, Aaron will need to prove that he is entitled to the funds

under replevin or another legal theory, but his failure to do so

at this time is not fatal to Merrill Lynch’s interpleader claim.

though the writ of execution should not have been issued,

Aaron’s claim was not frivolous from the outset, and the

district court did not err by considering Aaron’s claim

under another theory.

8

Scott’s discussion about whether Aaron has stated a

claim diverts our attention from the question presented by

this appeal, though: Did Merrill Lynch have a real and

reasonable fear of double liability or conflicting

claims—claims which meet a “minimal threshold level of

substantiality”? Indianapolis Colts, 741 F.2d at 957-58. Aaron

and Scott have asserted conflicting claims against the assets

held by Merrill Lynch, and those claims easily meet the

standard for substantiality. Aaron has a judgment against

Scott and a state court’s determination that her funds are

not exempt from execution. Scott was the owner of the

funds and would like to possess them once again. Merrill

Lynch’s fear of conflicting claims was real and reasonable,

and the district court properly granted interpleader to
16 Nos. 07-4004 & 08-2020

Merrill Lynch. See Union Cent. Life Ins. Co., 448 F.2d at 503

(noting that interpleaded parties were proper because they

were adverse claimants who claimed or might claim to be

entitled to the funds held by the stakeholder); Metro. Life

Ins. Co. v. Whitler, 172 F.2d 631, 632 (noting that statutory

interpleader was appropriate where two individuals

claimed to be the beneficiary of a life insurance policy); cf.

Indianapolis Colts, 741 F.2d at 957 (noting that the parties

were not claimants to the same stake where one party

sought to assert ownership of the NFL franchise through

eminent domain but the other party had no conflicting

claim of ownership); Francis I. duPont & Co. v. O’Keefe, 365

F.2d 141, 142-43 (7th Cir. 1966) (noting that interpleader

was properly denied where the appellant faced no risk of

conflicting claims because an estate’s administrator was

vested with exclusive title to indebtedness appellant owed

to the decedent).

III. Attorneys’ Fees

Scott also argues that the district court erred by granting

Merrill Lynch attorneys’ fees. She objects to the timing of

the award and to the award being taken from the interpleader stake, but she does not contest the amount of fees

awarded. We review the district court’s grant of attorneys’

fees for abuse of discretion. Cintas Corp. v. Perry, 517 F.3d

459, 469 (7th Cir. 2008).

Scott objects to the timing of the award because the

court’s order occurred while Scott’s appeal was pending.

Generally, a party’s filing of a notice of appeal divests the

district court of jurisdiction over those aspects of the case
Nos. 07-4004 & 08-2020 17

involved in the appeal. May v. Sheahan, 226 F.3d 876, 879

(7th Cir. 2000). Although district courts commonly award

attorneys’ fees while an appeal is pending, Apostol v.

Gallion, 870 F.2d 1335, 1337 (7th Cir. 1989), Scott contends

that the court should not have granted fees out of the

interpleader stake because her appeal turned on whether

interpleader should have been granted. Because interpleader was proper, Scott’s concern is moot.

The parties do not disagree with the standard used by

the district court to award attorneys’ fees—a court may

award attorneys’ fees and costs to a prevailing stakeholder

in an interpleader action if the costs are determined to be

reasonable and the stakeholder’s efforts are not part of its

normal course of business. See Union Cent. Life Ins. Co. v.

Hamilton Steel Prods., Inc., 493 F.2d 76, 79 (7th Cir. 1974);

Travelers Indem. Co. v. Israel, 354 F.2d 488, 490 (2d Cir. 1965).

The district court found that Merrill Lynch was a disinterested stakeholder whose efforts were not part of its normal

course of business. It also found that the case was complex

and involved extensive discovery and motions practice,

Merrill Lynch did nothing improper to prolong the proceedings, was not responsible for “the filing of multiple

lawsuits in multiple jurisdictions,” and acted in good faith

and with diligence throughout the federal litigation. The

court’s findings support its conclusion to award Merrill

Lynch attorneys’ fees.

The parties also agree that courts often award attorneys’

fees from the interpleader stake. First Trust Corp. v. Bryant,

410 F.3d 842, 856 (6th Cir. 2005) (“Despite the lack of

explicit statutory authorization, modern federal practice
18 Nos. 07-4004 & 08-2020

follows the traditional equity rule that gives the trial court

discretion to allow a disinterested stakeholder to recover

attorney’s fees and costs from the stake itself.” (internal

quotation marks omitted)). Scott contends that the court

had the discretion to—and should—make Aaron “pay the

freight.” The key word is “discretion,” and the court

properly exercised it. This argument, too, is without merit.

IV. Conclusion

We AFFIRM the district court’s grant of summary judgment on the interpleader claims to Merrill Lynch, as well

as the award of attorneys’ fees.

12-18-08