Opinion ID: 414338
Heading Depth: 2
Heading Rank: 2

Heading: Extinguishment of Sterling's Other Claims

Text: 20 The June 16 judgment, however, affected more than just the various claims to the cash surrender value of the policies. It required Sterling to discontinue his state court action, which, in addition to claiming entitlement to the cash surrender value of the policies, also purported to allege tort causes of action for consequential damages resulting from New York Life's interference with Sterling's economic business relationships. The propriety of that part of the judgment which required Sterling to forgo these tort claims is not clear. 21 While we are of the view that it would have been within the district court's power and discretion to adjudicate Sterling's claims for consequential damages arising out of New York Life's allegedly tortious withholding of the cash surrender value of the insurance policies, see 28 U.S.C. Sec. 2361; Francis I. du Pont & Co. v. Sheen, 324 F.2d 3 (3d Cir.1963), and thereafter to enjoin permanently Sterling's prosecution of such claims, see Holcomb v. Aetna Life Ins. Co., 228 F.2d 75, 82-83 (10th Cir.1955), cert. denied, 350 U.S. 986, 76 S.Ct. 473, 100 L.Ed. 853 (1956), the district court made no such adjudication. Rather, it enjoined Sterling's pursuit of his tort claims on the basis that Sterling had consented to such an injunction. Such consent could justify an injunction, see Francis I. du Pont & Co. v. Sheen, supra, but Sterling's consent to the extinguishment of his tort claims is far from clear on the record before us. 22 The first paragraph of the judgment, quoted in Part I above, appears to attribute the consent to Owens's statements at the May 28 hearing and to interpret that consent as encompassing all of the relief sought by New York Life in the action. The transcript of the hearing, however, which is set out in pertinent part at note 2 supra, is not so descriptive. There was no reference during the hearing to New York Life's complaint or to its demand for a discharge of all liability. Nor was there any mention of Sterling's state court action or his tort claims. While Madden, New York Life's attorney, suggested that the parties might agree to discharge the matter, (Transcript at 3), the record does not indicate that there was any explication that the matter was intended to include Sterling's state court claims for consequential damages for tort. Rather, New York Life's interest in the matter was repeatedly described as only that of a stakeholder: 23 THE COURT: ... I don't believe, as far as you brought the matter here--I don't think you have an interest. Your interest was that you brought the insurance policy here, and you want a determination as to who gets the proceeds. 24 MR. MADDEN: Yes, your Honor. 25 .... 26 THE COURT: ... [T]he only reason New York Life is involved in this is because they are afraid they would pay it to you and then they would be placed in a position that Connecticut would sue them .... 27 Id. at 4-6. 28 These restrictive descriptions of the interest of New York Life were consistent with statements in the papers served and filed by New York Life in support of its injunction motion. The order to show cause leading to the hearing contained a temporary restraining order against Sterling's pursuit of his state action, and gave notice that New York Life sought a permanent injunction against any action which may affect the property on deposit, (Order To Show Cause dated May 25, 1982, at 2); but it did not state that New York Life sought a permanent injunction against Sterling's pursuit of his entire state court action or of his tort claims. Likewise, neither Madden's affirmation nor New York Life's memorandum of law in support of injunctive relief mentioned Sterling's tort claims. Indeed, the latter document stated that New York Life's interest in this matter is that of a stakeholder only. 29 Thus, while, as indicated in Part II.A. above, we think it plain that Sterling consented to the adjudication of rights to the cash surrender value of the policies, it is not apparent to us from the present record that Sterling consented at the hearing to the discontinuance of his state court tort claims. We are left to speculate whether the finding of consent was based on the events at the hearing or on some other basis. It appears, for example, that the court requested at the hearing that an appropriate order be submitted to it, and Madden stated that he would submit one. If the judgment signed by the court was submitted by New York Life on notice to Sterling and Sterling acquiesced, this might have provided a basis for a finding of consent. 7 Or, it may be that, in some manner of which we are not aware, Sterling consented that plaintiff be discharged from all liability, as New York Life demanded in the WHEREFORE clause of its complaint. 30 We therefore remand to the district court for clarification of the basis for the finding of Sterling's consent to the discontinuance of his tort claims, or for an indication by the court of such other action as it may deem appropriate in lieu of clarification, such as a supplementation of the record or the entertainment of a motion pursuant to Fed.R.Civ.P. 60(b)(1). Jurisdiction is retained in the Court of Appeals.