United States Court of Appeals

For the First Circuit

No. 02-1543

METROPOLITAN PROPERTY AND CASUALTY INSURANCE COMPANY,

Plaintiff, Appellee,

v.

SHAN TRAC, INC, d/b/a THRIFTY CAR RENTAL; DAIMLER CHRYSLER

CORPORATION; YURY SHKOLNIKOV, MARAT R. ROMANOVSKI, Individually and

as the surviving spouse of LEYA M. ROMANOVKSI; ELENA BROBRITSKY;

SVETLANA ROMANOVSKI; VERONICA ROMANOVSKI, a minor through her

father and next friend, MARAT P. ROMANOVSKI; SVETLANA SHKOLNIKOV,

Defendants.

and

ANNA N. KUTIKOVA, a/k/a ANNA YANKOVSKAYA, Individually and as the

surviving spouse of MARAT KUTIKOVA; MICHAEL ELKIN, Individually and

as the surviving spouse of SEYNA ELKIN; ELENA LEVINSON,

Administratrix of the estate of SEYNA ELKIN; MIKHAIL PEVTSOV,

Individually and as successor of his parents, ZYAMA PEVTSOV and

TSILYA PEVTSOV; ALEX PEVTSOV, Individually and as successor of his

parents ZYAMA PEVTSOV and TSILYA PEVTSOV; SERGEY RABOVSKY,

Individually and as the surviving spouse of ALLA ROBOVSKY; LUBA

LEVIN, as administrator of the estate of VITALY RABINOVICH and

MARIYA VILNER; MICHAEL RABINOVICH, as administrator of the Estate

of VITALY RABINOVICH and MARIYA VILNER,

Defendants, Appellants.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Reginald C. Lindsay, U.S. District Judge]
*Of the Ninth Circuit, sitting by designation.

Before

 Boudin, Chief Judge,

Farris,* Senior Circuit Judge,

and Torruella, Circuit Judge.

Marc S. Alpert with whom Marc S. Alpert P.C. was on brief for

defendants, appellants.

John P. Graceffa with whom Richard W. Jensen, William A.

Schneider and Morrison, Mahoney & Miller, LLP were on brief for

appellee. 

March 31, 2003
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BOUDIN, Chief Judge. On March 8, 2000, a large rental

van driven by Yury Shkolnikov crashed into a median barrier in

Clark County, Nevada. Eight of the van's thirteen passengers were

killed, and the other five, including Shkolnikov and his wife, were

seriously injured. Shkolnikov had a Massachusetts automobile

insurance policy issued by Metropolitan Property and Casualty

Company ("Metropolitan") that provided a maximum of $300,000 of

coverage per accident. Faced with the prospect of claims in excess

of the policy, Metropolitan commenced a statutory interpleader

action in the district court of Massachusetts on August 17, 2000.

28 U.S.C. § 1335 (2000). 

In its complaint, Metropolitan named 16 parties as having

an interest in the proceeds of the automobile policy. These

parties included the injured passengers, the administrators of the

deceased passengers, dependents, and the renter and manufacturer of

the vehicle. Metropolitan paid $300,000 into the court registry

and filed a motion for summary judgment seeking inter alia to be

released from further liability and asking that the parties be

required to interplead their claims against the fund. 

On March 11, 2002, the district judge conducted a summary

judgment hearing. At that hearing, counsel representing the

passengers, administrators and dependents named in the suit ("the

claimants") said that the parties had agreed to an eleven-way split

of the insurance proceeds in which each passenger (not including
1Apparently neither the rental company nor the car

manufacturer sought to collect under the policy, and there is no

indication that Shkolnikov or his wife disputes the settlement. 

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Shkolnikov or his wife) would receive a one-eleventh share

($27,272.27) of the proceeds.1 The parties agreed that any claims

by the dependants of a passenger would then come out of the share

attributed to the passenger. The parties also agreed that a party

would only be entitled to a share of the policy upon releasing

Shkolnikov from any future liability for bodily injury or wrongful

death stemming from the accident.

On this basis, the court issued a final judgment stating

that Metropolitan, having paid the full amount of the policy into

the court registry, was relieved of further liability. The

judgment, which we have reproduced in an addendum, further stated

that the parties could obtain a 1/11th share of the policy in

exchange for releasing Shkolnikov from any further claims of

liability arising from the accident. The judgment also said that

it precluded persons not a party to the action from "forever

mak[ing] [a] claim against Metropolitan" under the policy.

A number of the claimants appeal and challenge the

district court's judgment on several grounds. They first assert

that the district court lacked subject matter jurisdiction, an

objection that takes priority over all others. Steel Co. v.

Citizens for a Better Env't, 523 U.S. 83, 94-95 (1998). The

argument is that the claimants had among themselves agreed as to
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how to split the $300,000, were not seeking more than $300,000 from

the insurer, and were therefore not "adverse" to one another under

the terms of the interpleader statute. Our review on this

jurisdictional issue is de novo. E.g., Valentin v. Hosp. Bella

Vista, 254 F.3d 358, 365 (1st Cir. 2001).

The interpleader statute requires inter alia that the

stakeholder point to "two or more adverse claimants" who "are

claiming or may claim" the same money or property that the

stakeholder has deposited into court. 28 U.S.C. § 1335(a)(1). One

might wonder how any of the claimants (except Shkolnikov) could

have any claim against the insurance company. The gist of the

policy is to indemnify Shkolnikov for judgments against him and the

claimants do not assert that they are third-party beneficiaries.

See Keeton & Widiss, Insurance Law § 4.10(a) (1988).

The partial answer may be that while Massachusetts

apparently has no formal direct action statute, its law does

require good faith by insurers in the prompt settlement of

legitimate claims, Mass. Gen. Laws ch. 176D § 3(9) (2000), and that

statute has been read in some instances to allow bad-faith claims

against the insurer by injured third parties. See Clegg v. Butler,

676 N.E.2d 1134, 1138-39 (Mass. 1997). In addition, Metropolitan

probably hoped to escape the obligation to defend Shkolnikov in

suits against him now pending in state court in California; its

policy says that the insurer's duty to defend ends when the policy
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maximum has been paid "to a court of competent jurisdiction." Cf.

Keeton & Widiss, supra, § 9.4(c)(2). 

In all events, the claimants' jurisdictional objection

fails. Long ago, in a somewhat comparable automobile accident

case, the Supreme Court brushed aside the Ninth Circuit's concern

that the claimants had no direct claim against the insurer. The

Court held instead that the federal interpleader embraced an

insurer's action against the insured's claimants. State Farm Fire

& Cas. Co. v. Tashire, 386 U.S. 523, 532-34 (1967). Whether or not

this practice reflects precisely the original theory of the

interpleader statute, it has the Court's approval and serves a

practical purpose in cases like this one. 

Our own case is peculiar only in that the claimants have

agreed among themselves as to how to split the pot and do not now

say that they are entitled to more than a total of $300,000 from

Metropolitan. However, under the statute it is enough that there

"may" be adverse claims by the interpled parties against the

property or fund. 28 U.S.C. § 1335(a)(1). Until the district

court judgment, this certainly was a case in which adverse claims

exceeding the value of the policy could have been brought by these

very claimants. Indeed, the claimants own agreement appears to

have been tenuous: there were arguments over the release language

throughout the course of the suit and apparently even as late as

the summary judgment hearing.
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Although it has been said the stakeholder must have real

reason to fear "double liability or the vexation of conflicting

claims," Indianapolis Colts v. Baltimore, 741 F.2d 954, 957 (7th

Cir. 1984), cert. denied, 470 U.S. 1052 (1985), Metropolitan had

some basis for such a fear. This is not a case involving only

pseudo-adversity where, for example, the stakeholder actually

controls one of two claimants to a fund. Id. at 958. The same

practical considerations that persuaded the Supreme Court in

Tashire apply here with equal force. The potential adversity

presented here is entirely sufficient to meet the relatively

undemanding jurisdictional requirement. Equitable Life Assurance.

Soc. of the U.S. v. Porter-Englehart, 867 F.2d 79, 84 (1st Cir.

1989).

This brings us to the merits which concern several

disputed provisions of the judgment. At the close of the hearing

on summary judgment, the district court ruled that it would grant

relief to Metropolitan and asked the insurer's counsel to prepare

a draft judgment. This draft was submitted to claimants' counsel

who offered various objections by means of a letter to the district

court before the judgment was entered. This being an appeal for

summary judgment, preserved objections are subject to plenary

review. Lewry v. Town of Standish, 984 F.2d 25, 26-27 (1st Cir.

1993). Any objections newly minted for the appeal are subject only
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to plain error review. E.g., Chestnut v. City of Lowell, 305 F.3d

18, 20 (1st Cir. 2002) (en banc). 

Claimants make four substantive attacks on the judgment

(two others were abandoned at oral argument). They say first that

the judgment does not make clear that claimants who seek payment

from the fund are entitled to an equal one-eleventh share. They

point to an ordering paragraph in the judgment that instructs only

that "each person or persons who claim any share" must present a

release. It is plain enough, however, from the immediately prior

paragraph in the judgment that division is to be based upon "an

equal, eleven way split" so that ambiguity is imaginary.

Second, and more persuasive, is the claim that the

judgment leaves it unclear how the claimants are to be grouped.

The problem is that there are more than eleven claimants named in

the complaint (e.g., multiple children of an individual decedent).

The agreement among the claimants, as described at the summary

judgment hearing, contemplates that those who claim under an

individual passenger will together get a single one-eleventh share.

However, the judgment does not so provide. Claimants simply want

the judgment to specify the individuals in each of the eleven

groups.

Metropolitan conspicuously does not respond to this

argument although it was clearly presented in the district court

and on appeal. If there is no dispute about the groupings, counsel
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should have handled this by a post-judgment stipulation. But in

its absence, the 16 claimants who are named parties--and who are

being subject to a judgment they do not want--are entitled to have

the judgment reflect accurately who gets what; in this instance

identifying the membership of the respective eleven groups (not the

split within each group) is all that is sought and can be easily

provided on remand. 

This brings us to a more serious claim affecting the

present claimants, namely, that the release drafted by Metropolitan

and attached to judgment releases Yury Shkolnikov from all claims

arising out of the automobile accident in question. According to

claimants, this could in some jurisdictions constitute a release of

other potential defendants (e.g., the rental company and the car

manufacturer). E.g., Dougherty v. Cal. Kettleman Oil Royalties, 88

P.2d 690, 693 (Cal. 1939) (release of one of two or more joint tort

feasors operates as a release of all). Apparently, claimants have

in mind suits against these parties. 

The issue may not be entirely straightforward. On the

one hand, some or all of the claimants may well have claims against

Shkolnikov that greatly exceed their share of insurance; and the

Supreme Court in Tashire said that an insurance interpleader action

like this one is not a means of resolving claims of potential

plaintiffs beyond their claims to the insurance. 386 U.S. at 535-

37. However, this does not settle the question whether the insurer
2The judgment itself does not purport to release Shkolnikov

from anything: it provides that anyone claiming a share of the

policy will be entitled to it after presenting either a release in

the form attached to the judgment or a final judgment by a court of

competent jurisdiction against Shkolnikov. Thus, a claimant could

collect under the judgment by presenting a judgment, default or

otherwise, against Shkolnikov; and if instead the claimant chooses

to tender a release, conceivably this might be viewed as a

voluntary settlement.

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might be entitled to a full discharge of the insured as part of the

negotiated settlement with the claimants. See Lazaris v. Metro.

Prop. & Cas. Ins. Co., 703 N.E.2d 205, 207 (Mass. 1997).2

Here, the claimants say nothing about further claims

against Shkolnikov himself; instead, they ask us to modify the

judgment to protect them against inadvertent discharge of claims

against other defendants. This claim of error has been forfeited

because not requested in the district court. Faigin v. Kelly, 184

F.3d 67, 82 (1st Cir. 2001). Relief might or might not still be

available, but not from us. See Fed. R. Civ. P. 60(b). The

district judge could consider such a Rule 60(b) request on the

remand otherwise required but that is not our business.

The most unusual passage in the judgment remains to be

addressed. In its second numbered paragraph, the judgment declares

that "all persons with claims against Metropolitan's insured" have

agreed to the equal, eleven-way split, and then continues: "Any

other persons who have or may have claims against Yury Shkolnikov

arising out of the March 8, 2000 accident are hereby bound by the
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aforementioned split and no other persons may now or forever make

claim against Metropolitan under Part 5 of [the policy]." 

Claimants' brief says that there are other heirs at law

and next of kin who are not parties to this case but are coplaintiffs in the state court litigation in California. The

claimants object, as they did in the district court, to any such

cut-off of rights of these non-parties. Metropolitan, which

proposed the language in the judgment, asserts that everyone who

could have a claim was served but it makes no effort to defend the

clause extending the judgment to non-parties. At oral argument it

conceded that the judgment does not bind non-parties who were never

served or given an authorized form of notice requiring them to

present their claims. 

The objection to binding non-parties is clearly correct.

Interpleader actions are in personam, not in rem, see New York Life

Ins. Co. v. Dunlevy, 241 U.S. 518, 521 (1916), and cannot resolve

the rights of non-parties to anything. Even in in rem actions,

some form of notice (e.g., by publication) is ordinarily required

to cut off interests in property. E.g., Mullane v. Central Hanover

Bank & Trust Co. 339 U.S. 306, 314 (1950). Claimants' standing to

raise the issue may be doubtful, but we can and do correct such

mistakes even if not raised at all. Cf. Chestnut, 305 F.3d at 21.

On remand, the language in question purportedly to bind non-parties

should be deleted. 
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Matters are somewhat different as to the judgment's

related finding that "all persons" with claims against Shkolnikov

arising out of the accident are parties to the agreement to split

the insurance eleven ways. Here, two different issues are

involved: one is the adequacy of service as to certain named

parties--an objection briefed by claimants--and the other is

whether anyone else, apart from named parties, has any potential

claim against Shkolnikov arising out of the accident. At oral

argument, claimants abandoned the first objection but persist as to

the second.

The difficulty is that claimants' brief does nothing to

show the state of the evidence in the district court as to whether

there are other potential claimants against Shkolnikov never named

in this case. It is not our job to sift unaided through the

transcript and filings in the district court to see whether a

finding now assailed on appeal had or lacked the requisite basis.

United States v. Zannino, 895 F.2d 1, 17 (1st Cir.), cert. denied,

494 U.S. 1082 (1990). Claimants do not say that the failure to

name all potential plaintiffs is a jurisdictional error. See 7

Wright, Miller & Kane, Federal Practice and Procedure § 1611, at

167 & n.20 (3d ed. 2001).

As it happens, the possible incorrectness of the finding

may not matter. If no one beyond the named claimants has a

potential claim, then the finding is correct. On the other hand,
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if there are other potential plaintiffs against Shkolnikov or

Metropolitan, they are likely not bound--being non-parties--by any

mistaken declaration that they do not exist. Metropolitan so

conceded at oral argument, omitting any reservation as to nonparties in privity with claimants. Of course, under the policy

Metropolitan's payment of the policy maximum to some claimants may

well exhaust any obligations it has to others, but that is a

different matter.

The judgment of the district court is affirmed in part

and vacated in part and the matter is remanded for modifications

consistent with this decision, specifically, to identify the

membership of the eleven different groups and to delete the

existing language purporting to extend the judgment to non-parties.

No costs are awarded to either side.

It is so ordered.
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ADDENDUM

The judgment of the district court (attachments omitted)

reads as follows:

On motion made by the plaintiff, Metropolitan Property

and Casualty Insurance Company ("Metropolitan"), for summary

judgment, and this Court being satisfied that all interested

parties have had both notice and an opportunity to be heard

thereon, the Court hereby orders and declares as follows:

1. That Metropolitan, having paid three hundred thousand dollars

($300,000) into the registry of this Court, representing the

maximum limits of bodily injury to others coverage under policy

number 039-48-2552-1, effective November 5, 1999 to November 5,

2000, issued to Yury Shkolnikov, is hereby discharged of all its

liabilities, duties and obligations arising under or related to the

terms of Part 5. Optional Bodily Injury to Others, of the standard

Massachusetts (Personal) Automobile Insurance Policy, Sixth

Edition, with respect to any and all claims for bodily injury or

wrongful death arising out of the March 8, 2000 accident in Clark

County, Nevada. 

2. That all persons with claims against Metropolitan's insured,

Yury Shkolnikov, arising out of the March 8, 2000 accident have

agreed to an equal, eleven way split of the $300,000 policy limits

available under Part 5 of policy number 039-48-2552-1, together

with any accumulated interest. Any other persons who have or may

have claims against Yury Shkolnikov arising out of the March 8,

2000 accident are hereby bound by the aforementioned split and no

other persons may now or forever make claim against Metropolitan

under Part 5 of policy number 039-48-2552-1. 

3. That each person or persons who claim any share or part of

Metropolitan's $300,000 policy limit and any accumulated interest

will be entitled thereto, after presenting to Metropolitan either

a release of claims in the form attached hereto, against its

insured, Yury Shkolnikov, for personal injuries or wrongful death

arising out of the March 8, 2000 accident, or a final judgment

rendered by a court of competent jurisdiction against Yury

Shkolnikov for liability arising out of the March 8, 2000 accident.

4. Metropolitan shall, upon receipt of a release or final judgment

as described in the preceding paragraph, file with the Clerk of the

Court a "Notice of Claim" in the form attached to the Order and

Judgment, directing the Clerk to make payments from the $300,000
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previously paid by Metropolitan to the registry of the Court in

accordance with 28 U.S.C. § 1335.