United States District Court, D. Nebraska
MEMORANDUM AND ORDER
M. Gerrard Chief United States District Judge.
case presents a collision of federal interpleader, the
Bankruptcy Code, and Nebraska common law. The Court has
already allowed the interpleading plaintiff to deposit
disputed funds with the Court, so the plaintiff wants to be
dismissed-but, one of the interpleaded defendants wants to
counterclaim against the plaintiff, and another of the
interpleaded defendants is in Chapter 7 bankruptcy.
Court is faced with "who," "what," and
"where" questions: who should remain in the case,
what claims should be at issue, and in what court should they
be adjudicated? For the reasons explained below, the Court
concludes that the plaintiff may be dismissed, because the
claims against it shouldn't be permitted, and that the
remaining claims should be referred to the bankruptcy court.
Cass bought a $5 million life insurance policy from United of
Omaha in 2015. Filing 1 at 2. The policy insured Aaron's
life, and designated his company, ACASS Systems, as the owner
and beneficiary of the policy. Filing 1 at 2. Later that
year, Aaron executed an assignment naming BizCapital BIDCO 1,
LLC as the assignee of the policy. Filing 1 at 2.
August 2018, ACASS declared bankruptcy, and its Chapter 11
petition was filed in the U.S. Bankruptcy Court for the
District of Nebraska as no. 18-81299. In September 2018, Aaron
executed a form purporting to change ownership of the policy
from ACASS to himself. Filing 1 at 3. At the same time, he
completed a change of beneficiary naming his wife, Colleen
Cass, as sole beneficiary. Filing 1 at 3. But a few days
later, United notified ACASS it had been "unable to
proceed" with those changes. Filing 1 at 3.
committed suicide on March 29, 2019. Filing 1 at 3; filing 29
at 4. ACASS (represented by the Bankruptcy Trustee),
BizCapital, and Colleen dispute who should receive the
proceeds of the policy. Filing 1 at 3. United agrees that
someone should receive them, filed this complaint in
interpleader pursuant to Fed.R.Civ.P. 22 and 28 U.S.C. §
1335, and has deposited the funds with the Clerk of the Court
pursuant to Fed.R.Civ.P. 67. Filing 1 at 3; filing 30. The
interpleaded defendants have filed crossclaims against one
another. Filing 22; filing 29; filing 31.
begin with, the Trustee seeks a declaratory judgment that
Colleen and BizCapital have no right to the proceeds. Filing
29 at 6. The Trustee asserts that the purported changes in
beneficiary and ownership of the policy were ineffective.
See filing 29 at 5. Similarly, the Trustee contends
that the purported assignment to BizCapital was ineffective.
Filing 29 at 6. And, the Trustee alleges, any change in the
beneficiary or ownership of the policy that was accomplished
was a fraudulent transfer, avoidable pursuant to 11 U.S.C.
§ 548. Filing 29 at 6.
part, Colleen denies the Trustee's allegations. Filing 32
at 1. But she does agree with the Trustee (for different
reasons) that the purported assignment to BizCapital was
ineffective. Filing 32 at 1-2. So, she concludes that the
change of beneficiary was effective, entitling her
to the insurance proceeds. Filing 31 at 2.
BizCapital wants a declaration that it is entitled to the
insurance proceeds. Filing 22 at 3. And BizCapital is asking
for leave to counterclaim against United, alleging that it
relied on correspondence from United in accepting assignment
of the life insurance policy as partial collateral for a loan
to ACASS. Filing 36 at 5. So, BizCapital seeks damages from
United based on the alleged misrepresentations, asserting
that if the assignment proves ineffective, it's
United's fault BizCapital accepted it and made an
unsecured loan. See filing 36. United opposes
allowing BizCapital to plead any counterclaims, contending
that the proposed counterclaims would be futile. Filing 38.
parties also disagree about the appropriate forum to resolve
these disputes. Under this Court's rules, proceedings
arising under Title 11 of the U.S. Code, or related to a case
brought under Title 11, are referred to the bankruptcy court.
NEGenR 1.5(a). United, having deposited the insurance
proceeds with the Clerk of the Court, doesn't care where
the case is resolved: United just wants to go home, and
"the remaining parties can determine in what forum they
would prefer to litigate the interpleader." Filing 21 at
1. So, United moves to be dismissed from the action. Filing
33. Obviously, BizCapital opposes dismissing United. Filing
39. The Trustee and BizCapital want the pending crossclaims
(and nascent counterclaims) referred to bankruptcy court.
Filing 25; filing 26. Colleen opposes reference to bankruptcy
court. Filing 23.
up, there are three ...