Everlake Life Insurance Company v. Webb et al

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No. 25-cv-01283-PAB-KAS
EVERLAKE LIFE INSURANCE COMPANY,
Plaintiff,
v.
TIFFANY WEBB, individually,
JOAN RHODES MCHUGH, individually, and
ESTATE OF JEFFREY EDWARD WEBB, a Colorado decedent,
Defendants,
and
JOAN RHODES MCHUGH, individually
Cross Claimant,
v.
TIFFANY ANN WEBB, individually, and
ESTATE OF JEFFREY EDWARD WEBB, a Colorado decedent,
Cross Defendants.
_____________________________________________________________________
ORDER AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE
_____________________________________________________________________
ENTERED BY MAGISTRATE JUDGE KATHRYN A. STARNELLA
This matter is before the Court on Plaintiff’s Motion for Leave of Court to Deposit
Life Insurance Policy Proceeds and Interest with the Court [#43] (the “Motion”). The
Motion [#43] has been referred to the undersigned. See Memorandum [#44]. Defendants
did not file a response. The Court has considered the Motion [#43], the entire case, and
applicable law. For the foregoing reasons, the Court ORDERS that the Motion [#43] be
GRANTED in part to the extent it seeks leave to deposit insurance policy proceeds into
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the Court’s registry and RECOMMENDS that the Motion be GRANTED in part to the
extent it seeks Plaintiff’s dismissal upon deposit of funds.1
I. 	Background
On 	March 	13, 	1996, 	Plaintiff 	Everlake 	Life 	Insurance 	Company 	issued 	a
$100,000.00 life insurance policy, insuring the life of Jeffrey E. Webb (“Decedent”), Policy
No. 713577615B (the “Policy”). Compl. [#1] at 1. Decedent named Defendant Joan
McHugh (“McHugh”) as the sole beneficiary of the Policy, however, Decedent and
Defendant McHugh later divorced. Id. at 3. Decedent then married Defendant Tiffany
Webb (“Webb”). Id. at 4. According to Plaintiff, Decedent contacted his insurance agent
to request a change of beneficiary for the Policy. Id. On May 17, 2022, Decedent
completed the change of beneficiary form and named Defendant Webb as the sole
beneficiary of the Policy. Id. The insurance agent acknowledged receipt, but ultimately,
made no change to the Policy. Id.
On July 30, 2024, Decedent died. Id. at 2. Thereafter, Defendant Webb and
Defendant McHugh submitted competing claims for benefits under the Policy to recover
the policy proceeds. Id. at 4. Plaintiff alleges that it could face additional claims from the
Decedent’s Estate. Id. at 2. Plaintiff has been unable to determine the validity of the
competing claims and does not wish to risk facing liability should it distribute the Policy
proceeds to the incorrect party. Id. at 5. Resultingly, Plaintiff filed this interpleader action
seeking the Court’s determination of the proper beneficiary of the Policy proceeds. Id. at
1 Because Plaintiff’s dismissal request is dispositive in nature, the Court proceeds in part by
Recommendation as to that request. See Primerica Life Ins. Co. v. Palei, No. 2:24-cv-00272-
HCN-DBP, 2025 WL 2240716, at *2-3 (D. Utah. Aug. 6, 2025) (granting the plaintiff’s motion to
deposit funds but recognizing that its request for dismissal must be adjudicated by a district judge
pursuant to 28 U.S.C. § 636(b)(1)(A)).
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5-6. Through the instant Motion [#43], Plaintiff requests the Court’s permission to deposit
the Policy proceeds into the court registry so the Court may determine the proper
recipient. Motion [#43] at 3. In addition, Plaintiff requests that it be dismissed from this
action with prejudice and that the Court issue an order prohibiting Defendants from taking
any further action against Plaintiff with respect to the Policy. See id. at 4.
II. 	Applicable Law
“Interpleader is a statutory remedy that offers a party who fears being exposed to
the vexation of defending multiple claims to a limited fund or property that is under his
control a procedure to settle the controversy and satisfy his obligation in a single
proceeding.” In re Millennium Multiple Emp. Welfare Benefit Plan, 772 F.3d 634, 639 (10th
Cir. 2014) (internal quotations omitted). There are two types of interpleader: statutory
interpleader and rule interpleader. Statutory interpleader, governed by 28 U.S.C. § 1335,
is appropriate if the party possesses property valued at $500 or more to which “[t]wo or
more adverse claimants, of diverse citizenship . . . are claiming or may claim” ownership.
See 28 U.S.C. § 1335(a). The interpleader statute requires an interpleader plaintiff to
deposit the disputed funds into the court registry or, alternatively, post a bond with the
court. See Wells Fargo Bank, N.A. v. Mesh Suture, Inc., No. 19-CV-03218-PAB-GPG,
2020 WL 5821997, at *5 (D. Colo. June 1, 2020), report and recommendation adopted,
2021 WL 1207444 (D. Colo. Mar. 31, 2021). Once completed, “the court may then
discharge the interpleader plaintiff of any further liability.” Id. (citation omitted). Rule
interpleader, however, is governed by Federal Rule of Civil Procedure 22. This Rule
similarly provides that “[p]ersons with claims that may expose a plaintiff to double or
multiple liability may be joined as defendants and required to interplead.” FED. R. CIV. P.
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22. The two kinds of interpleader differ “primarily in their jurisdictional requirements.” Fid.
& Guar. Life Ins. Co. v. Shipman, No. 1:23-cv-00731-DHU-LF, 2024 WL 196426, at *1
(D.N.M. Jan. 18, 2024). Namely, a party invoking rule interpleader must satisfy the typical
diversity jurisdiction requirements set forth in 28 U.S.C. § 1332. See id. Courts follow a
two-step approach when resolving interpleader actions. First, “the court determines
whether the stakeholder has properly invoked interpleader, including whether the court
has jurisdiction over the suit, whether the stakeholder entity is actually threatened with
double or multiple liability, and whether any equitable concerns prevent the use of
interpleader[.]” Transamerica Life Ins. Co. v. Talley, No. 14-cv-01412-PAB-CBS, 2015
WL 5093206, at *6 (D. Colo. Aug. 31, 2015). Second, “the court determines the respective
rights of the claimants to the fund or property at stake via normal litigation processes[.]”
Id. Plaintiff's Motion [#43] asks the court to take only the first step.
III. 	Analysis
A. 	Interpleader Relief
Plaintiff makes two requests: (1) that the Court allow it to deposit the Policy
proceeds into the Court’s registry, and (2) that it “be discharged from all claims under the
governing instrument” and “be dismissed from the case with prejudice.” Motion [#43] at
3-4. Here, Plaintiff’s Motion [#43] seeks to invoke interpleader pursuant to Rule 22, i.e.,
“rule” interpleader. See Motion [#43] at 3-4.2 Therefore, the Court must first address
whether Plaintiff has properly invoked rule interpleader.
2 The Court recognizes that Plaintiff’s Civil Cover Sheet [#1-1] notes that this action was filed
pursuant to 28 U.S.C. § 1335. See Civil Cover Sheet [#1-1] at 1. Nevertheless, Plaintiff’s Motion
[#43] asserts it is entitled to interpleader pursuant to Rule 22. See Motion [#43] at 3-4. The Motion
[#43] does not address whether Plaintiff has satisfied the requirements of statutory interpleader.
Accordingly, the Court will adjudicate this Motion [#43] pursuant to the typical rule interpleader
analysis.
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1. 	Interpleader Jurisdiction
“Jurisdiction under rule interpleader is based on the general jurisdiction statutes
applicable to civil actions in the federal courts—that is, federal courts gain jurisdiction over
an action either due to the existence of a federal question or because the suit involves a
‘matter in controversy’ between ‘citizens of different states’ where the amount in
controversy exceeds the value of $75,000. See Clausen as Tr. of Brett M. Partridge Tr.
v. Protective Life Ins. Co., No. 2:22-cv-00757-TC-DAO, 2023 WL 4137370, at *2 (D. Utah
June 22, 2023) (internal citations omitted).
Here, the amount in controversy is the amount of the Policy proceeds, which is
$100,000.00. Motion [#43] at 4; Compl. [#1] at 1; Civil Cover Sheet [#1-1] at 1. Therefore,
the amount in controversy requirement is satisfied for diversity jurisdiction purposes. See
28 U.S.C. § 1332. The Court must next consider whether the parties satisfy the diversity
of citizenship requirement. Plaintiff has its principal place of business in Illinois and is
incorporated 	in 	Delaware. 	See 	Corp. 	Disclosure 	Statement 	[#7]. 	Accordingly, 	for
citizenship purposes, Plaintiff is a citizen of Illinois and Delaware. Defendants Webb,
McHugh, and the Estate are citizens of Colorado. See Compl. [#1] at 2-3. Resultingly,
Plaintiff, the disinterested stakeholder, and Defendants Webb, McHugh, and the Estate,
the adverse claimants, are diverse.
However, if the Court allows Plaintiff to deposit the Policy proceeds into the Court’s
registry and further dismisses it from this action, the only parties left are Defendant
McHugh and Defendant Webb. These parties are not diverse because they are Colorado
residents. See id. Therefore, the question presented is: May a court continue to entertain
an action premised on rule interpleader when adverse claimants are not diverse? The
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Tenth Circuit has yet to address this exact issue. In the context of statutory interpleader
scenarios, the Tenth Circuit has allowed the exercise of jurisdiction where there is
complete diversity of citizenship only between the stakeholder and adverse claimants.
See Wells Fargo Bank, N.A. v. Mesh Suture, Inc., 31 F.4th 1300, 1308 (10th Cir. 2022)
(“Jurisdiction is determined from the facts at the time of filing, and Mr. Schwartz’s later
disclaimer of interest and dismissal from the suit did not divest the district court of
jurisdiction.”). Further, in dicta, the court indicated that in rule interpleader cases, a court
needs only to look to the diversity of the stakeholder and the claimants. Id. at 1306 n.3
(noting, in the rule interpleader context, that “there must be complete diversity between
the stakeholder and the claimants[.]”). The Tenth Circuit has also clarified that in rule
interpleader cases where the stakeholder is an interested party, “interpleader may be
maintained under the general diversity statute, 28 U.S.C.A. § 1332 where there is
diversity of citizenship between a stakeholder and the claimants[.]” Brisacher v. Tracy-
Collins Tr. Co., 277 F.2d 519, 525 (10th Cir. 1960) (emphasis added).
Sister courts facing this issue have analyzed this jurisprudence and held that, so
long as the stakeholder and claimants are diverse at the time of filing the complaint, the
court may nonetheless retain jurisdiction over the case even after the stakeholder is
dismissed. See State Farm Life Ins. Co. v. Densmore, No. CIV-23-10-RAW-GLJ, 2023
WL 6534998, at *2 (E.D. Okla. Aug. 7, 2023); Clausen, 2023 WL 4137370, at *3. For
instance, the plaintiff insurance company in Densmore filed a Rule 22 interpleader action
regarding competing claims to certain life insurance proceeds. See Densmore, 2023 WL
6534998, at *1. The plaintiff insurance company was a citizen of Illinois, and the two
adverse claimants were citizens of Oklahoma. Id. at *2. That court opted to retain
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jurisdiction over the matter between the adverse claimants, focusing on the existence of
diversity at the time the complaint was filed. Id. The court in Clausen reached an identical
conclusion. See Clausen, 2023 WL 4137370, at *3 (“[T]he court finds that the weight of
judicial authority requires the court to exercise jurisdiction in Rule 22 actions where the
original stakeholder is diverse from the claimants, regardless of the citizenship of those
claimants.”).
This Court will follow suit. Here, at the time the Complaint [#1] was filed, Plaintiff
was a citizen of Illinois and Delaware, and Defendants McHugh, Webb, and the Estate
were citizens of Colorado. See Compl. [#1] at 2-3; Corp. Disclosure Statement [#7].
Diversity of citizenship therefore existed between the parties at the initiation of suit. See
28 U.S.C. § 1332(a)(1) (“The district courts shall have original jurisdiction of all civil
actions where the matter . . . is between . . . citizens of different States[.]”). Accordingly,
the Court is satisfied that it retains Rule 22 interpleader jurisdiction over this action.
2. 	Threat of Double or Multiple Liability
“The primary test for determining the propriety of interpleader is whether the
stakeholder legitimately fears multiple claims directed at a single fund.” Williston Basin
Interstate Pipeline Co. v. W. Gas Processors, Ltd., No. 88-A-612, 1988 WL 73310, at *2
(D. Colo. July 8, 1988) (internal quotations omitted). Plaintiff alleged that both Defendant
McHugh and Defendant Webb have claimed that they are beneficiaries under the Policy
and entitled to the $100,000.00 in Policy proceeds. Compl. [#1] at 4. Moreover,
Defendants McHugh and Webb have represented through this litigation that they are
entitled to the Policy proceeds, and Defendant Webb further asserts that, in the
alternative, the Estate is the proper beneficiary. See McHugh Answer [#27] at 4; Webb &
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the Estate Motion for Summary Judgment [#24] at 2, 5-7. Thus, Plaintiff reasonably feared
exposure to multiple claims from parties whose interests are directly adverse to one
another, and Plaintiff properly invoked interpleader pursuant to Rule 22. See Talley, 2015
WL 5093206, at *7 (finding plaintiff insurance company properly invoked interpleader
where 	adverse 	claimants 	asserted 	entitlement 	to 	the 	same 	life 	insurance 	policy
proceeds); see also Palei, 2025 WL 2240716, at *2 (finding stakeholder met the Rule 22
standard where adverse claimants made claims to the benefits of the same policy).
B. 	Deposit of Funds
“If interpleader is appropriate, the court may allow the plaintiff to deposit the funds
at issue into the registry of the court.” Metro. Life Ins. Co. v. Asbell, No. 21-CV-00332-
RAW, 2023 WL 1967299, at *3 (E.D. Okla. Feb. 13, 2023). “The court may then discharge
the plaintiff and enjoin the parties from prosecuting any other proceeding related to the
same subject matter[.]” Id. (internal brackets and quotations omitted). There is no
question that the Policy proceeds are genuinely in dispute and that Plaintiff does not
contest that it is liable to pay the Policy proceeds. This case must proceed to the “second
step” in an interpleader action for determination of the rightful recipient of the Polic
proceeds.
Having found that Plaintiff properly invoked Rule 22 interpleader, the Court orders
that Plaintiff’s request to deposit funds into the court registry be granted. The Court
recommends that Plaintiff, a disinterested stakeholder, be dismissed from this action
with no further liability to Defendants once the at-issue funds are deposited into the
Court’s registry.
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IV. 	Conclusion
Based on the foregoing,
IT IS HEREBY ORDERED that the Motion [#43] is GRANTED in part. Plaintiff
shall deposit the at-issue Policy proceeds ($100,000.00), including any accrued interest,
into the Court’s registry.
IT IS FURTHER RECOMMENDED that, upon proof of such deposit, the remainder
of the Motion [#43] be GRANTED and Plaintiff shall be dismissed from this action with
prejudice and Defendants shall be prohibited from taking further action on the Policy
against Plaintiff.
IT IS FURTHER ORDERED that any party may file objections within 14 days of
service of this Recommendation. In relevant part, Fed. R. Civ. P. 72(b)(2) provides that,
“within 14 days after being served with a copy of the recommended disposition, a party
may 	serve 	and 	file 	specific 	written 	objections 	to 	the 	proposed 	findings 	and
recommendations. A party may respond to another party’s objections within 14 days after
being served with a copy.” “[A] party’s objections to the magistrate judge’s report and
recommendation must be both timely and specific to preserve an issue for de novo review
by the district court or for appellate review.” United States v. 2121 E. 30th St., 73 F.3d
1057, 1060 (10th Cir. 1996). The objection must be “sufficiently specific to focus the
district court’s attention on the factual and legal issues that are truly in dispute.” Id. “[A]
party who fails to make a timely objection to the magistrate judge’s findings and
recommendations waives appellate review of both factual and legal questions.” Morales-
Fernandez v. I.N.S., 418 F.3d 1116, 1119 (10th Cir. 2005).
Dated: February 23, 2026 	BY THE COURT:
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Kathryn A. Starnella
United States Magistrate Judge
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