ReliaStar Life Insurance Company v. Altberg et al

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Magistrate Judge Maritza Dominguez Braswell
Civil Action No. 24–cv–00076–NYW–MDB
RELIASTAR LIFE INSURANCE COMPANY,
Plaintiff,
v.
MARLENE ALTBERG,
PATRICIA TARSI, and
DEBRA SORENSEN, as Executrix of the Estate of Raymond Altberg,
Defendants.
RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE
Magistrate Judge Maritza Dominguez Braswell
This matter is before the Court on the Joint Motion for Default Judgment, Interpleader
Relief, and Disbursement of Funds from the Registry of the Court. ([“Motion”], Doc. No. 22.)
After careful review, the Court RECOMMENDS that the Motion be GRANTED.
PRO SE SUMMARY
The Court recommends granting the Motion. First, the Court recommends granting the
request for default judgment because Defendants Tarsi and Sorensen have failed to answer. Next,
the Court recommends dismissing ReliaStar from this action and discharging it from further
liability. Finally, the Court recommends that the death benefit funds be divided between
Defendant Marlene Altberg and ReliaStar as outlined in the Motion. This is only a high-level
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summary of the Court’s Recommendation. The full Recommendation, including information
about all parties’ right to object to it, is set forth below.
BACKGROUND
This action involves competing claims to a death benefit due under a group life insurance
policy issued by Plaintiff ReliaStar, to Ball Corporation. (Doc. No. 1 at ¶ 8.) The decedent,
Raymond Altberg, was a retiree of Ball Corporation. (Id. at ¶ 9.) At the time of his death, Mr.
Altberg was enrolled for coverage in the amount of $10,000 (the “Death Benefit”). (Id.) The
primary beneficiary of the policy was Mr. Altberg’s then-spouse, Marlene Altberg. (Id. at ¶ 11.)
Mr. Altberg and Ms. Altberg divorced before his death. (Id. at ¶ 12.) After Mr. Altberg’s death,
Ms. Altberg filed a claim to the Death Benefit with ReliaStar. (Id. at ¶ 15.) Patricia Tarsi, Mr.
Altberg’s daughter, and Debra Sorensen, the executor of Mr. Altberg’s estate, then submitted
competing claims to ReliaStar, asserting Ms. Altberg should be revoked as a beneficiary based
on the divorce. (Id. at ¶ 16.) They also claimed Mr. Altberg intended to leave the Death Benefit
to his children, but was not able to change the beneficiary before his death. (Id.)
ReliaStar filed this interpleader action on January 10, 2024. (Id.) The next day, the Court
granted a motion by ReliaStar to deposit funds into the Court registry in the amount of $10,000,
plus interest accrued. (Doc. No. 8.) On February 8, 2024, ReliaStar deposited $10,109.22 into the
Court registry. (Doc. No. 12.) Interest on the funds has accrued daily since then. And though Ms.
Tarsi and Ms. Sorensen returned waivers of service, neither filed an answer to the interpleader
complaint. (See Docs. No. 10; 11.) Thus, on April 3, 2024, ReliaStar filed a motion for entry of
default against Ms. Tarsi and Ms. Sorensen pursuant to Fed. R. Civ. P. 55(a). (Doc. No. 17.)
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Soon thereafter, the Clerk of Court entered default against Defendants Tarsi and Sorensen. (Doc.
No. 18.)
ReliaStar and Ms. Altberg represent that “[t]he Parties have now agreed to resolve all
claims and disputes relating to this interpleader action, the Policy, and the Death Benefit, and
request that the Court enter their Agreed Order.” (Doc. No. 22 at 2.) It is unclear whether any
such resolution involves the defaulting Defendants, but elsewhere in the Motion, ReliaStar and
Ms. Altberg define the term “Parties,” to include ReliaStar and Defendant Altberg, only. (Id. at
1.) Thus, the Court assumes the resolution was reached between ReliaStar and Defendant
Altberg, only.
In any event, the Motion asks the Court to (1) enter default judgment against Ms. Tarsi
and Ms. Sorensen; (2) award ReliaStar the relief requested in its interpleader complaint; (3)
dismiss ReliaStar with prejudice from this action; and (4) distribute the Death Benefit between
Ms. Altberg and ReliaStar.1 (Id.) These requests are appropriate in light of the Clerk’s entry of
default, and the Court will therefore consider each request in turn. See USAA Life Ins. Co. v.
Stauch, No. 23-cv-00413-PAB-MDB, 2024 WL 1177931, at *2 (D. Colo. Mar. 19, 2024).
ANALYSIS
I. Default Judgment
To obtain a judgment by default, a party must follow the two-step process described in
Fed. R. Civ. P. 55. First, the party must seek an entry of default from the Clerk of the Court
under Rule 55(a). Second, after default has been entered by the Clerk and unless the claim is for
1 The Motion requests that $9,109.22 be deposited to Ms. Altberg and $1,000 to ReliaStar, to
cover its reasonable attorney’s fees and costs. (See Doc. No. 22 at ¶ 6f.)
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a “sum certain,” the party must seek judgment from the Court under Rule 55(b). See Williams v.
Smithson, 57 F.3d 1081, 1995 WL 365988, at *1 (10th Cir. June 20, 1995) (unpublished table
decision) (citing Meehan v. Snow, 652 F.2d 274, 276 (2d Cir. 1981)).
The decision to enter default judgment is “committed to the district court’s sound
discretion.” Olcott v. Del. Flood Co., 327 F.3d 1115, 1124 (10th Cir. 2003) (citation omitted). In
exercising that discretion, the Court considers that “[s]trong policies favor resolution of disputes
on their merits.” Ruplinger v. Rains, 946 F.2d 731, 732 (10th Cir. 1991) (quotation and citations
omitted). “The default judgment must normally be viewed as available only when the adversary
process has been halted because of an essentially unresponsive party.” Id. When “ruling on a
motion for default judgment, the court may rely on detailed affidavits or documentary evidence
to determine the appropriate sum for the default judgment.” Seme v. E&H Prof’l Sec. Co., Inc.,
No. 08-cv-01569-RPM-KMT, 2010 WL 1553786, at *11 (D. Colo. Mar. 19, 2010).
Before ruling on the motion for default judgment, the Court must first determine whether
it has subject matter jurisdiction over the case and personal jurisdiction over Ms. Tarsi and Ms.
Sorensen. See Dennis Garberg & Assocs., Inc. v. Pack-Tech Int’l Corp., 115 F.3d 767, 772 (10th
Cir. 1997) (holding that “a district court must determine whether it has jurisdiction over the
defendant before entering judgment by default against a party who has not appeared in the
case”).
A. The Court has subject matter jurisdiction
ReliaStar’s complaint asserts the Court has original jurisdiction over this action pursuant
to 28 U.S.C. § 1335. (Doc. No. 1 at ¶ 5.) Under § 1335, the Court has original jurisdiction over
any civil interpleader action filed by a corporation having issued a “policy of insurance . . . of
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$500 or more” if there are “[t]wo or more adverse claimants, of diverse citizenship” and the
plaintiff has deposited the value of the policy into the registry of the court. 28 U.S.C. § 1335(a).
Here, the Death Benefit under the life insurance policy ReliaStar issued to Ball Corporation is
$10,000. (Doc. No. 1 at ¶ 9.) In addition, ReliaStar alleges the following individuals may claim
to be entitled to the Death Benefit: (1) Ms. Altberg, a citizen of Colorado; (2) Ms. Tarsi, a citizen
of Connecticut; and (3) Ms. Sorensen, a citizen of Oklahoma. (Id. at ¶¶ 2-4.) Thus, ReliaStar has
alleged that two or more adverse claimants of diverse citizenship may claim to be entitled to the
Death Benefit. Finally, ReliaStar deposited the value of the policy, plus interest, into the Court
registry on February 8, 2024. (Doc. No. 12.) Therefore, the Court has subject matter jurisdiction
over this action under 28 U.S.C. § 1335.
B. There is personal jurisdiction over Defendants
In addition to subject matter jurisdiction, entry of a default judgment in a civil case
requires personal jurisdiction over the defendant. Bixler v. Foster, 596 F.3d 751, 761 (10th Cir.
2010). Where Congress has statutorily authorized nationwide service of process under a given
statute, proper service establishes personal jurisdiction over a defendant, provided the court’s
exercise of jurisdiction comports with the Fifth Amendment’s Due Process guarantee. See Peay
v. Bell South Med. Assistance Plan, 205 F.3d 1206, 1209 (10th Cir. 2000). To show the exercise
of personal jurisdiction does not comport with the Fifth Amendment, “[t]he burden is on the
defendant to show that the exercise of jurisdiction in the chosen forum will make litigation so
gravely difficult and inconvenient that [she] unfairly is at a severe disadvantage in comparison.”
Id. at 1212.
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The interpleader statute provides for nationwide service of process on all claimants. 28
U.S.C. § 2361. Further, under Rule 4(d), the Waivers of the Service of Summons signed by Ms.
Tarsi and Ms. Sorensen establishes proper service. Fed. R. Civ P. 4(d)(4). (See also Docs. No.
10; 11.) Finally, Ms. Tarsi and Ms. Sorensen have not argued that the exercise of personal
jurisdiction over them violates the Fifth Amendment’s guarantee of due process. Thus, the Court
finds there is personal jurisdiction over Ms. Tarsi and Ms. Sorensen. See Combined Ins. Co. of
Am. v. Glass, No. 14-cv-01458-KMT, 2015 WL 996172, at *8 (D. Colo. Mar. 3, 2015).
C. Default judgment is appropriate
Once the jurisdictional requirements are met, the Court must determine whether the well-
pleaded factual allegations in the complaint, along with any accompanying affidavits or exhibits,
support a judgment on the claims against the defendant. Villoldo v. Republic of Cuba, 659 F.
Supp. 3d 1158, 1168 (D. Colo. 2023); see also Bixler, 596 F.3d at 762 (“There must be a
sufficient basis in the pleadings for the judgment entered.”) (quotation omitted). Said another
way, default judgment is appropriate if the unchallenged facts in the pleadings establish a
legitimate cause of action. Reg’l Dist. Council v. Mile High Rodbusters, Inc., 82 F. Supp. 3d
1235, 1241 (D. Colo. 2015). The moving party enjoys deferential pleading interpretation. See
Olcott v. Del. Flood Co., 327 F.3d 1115, 1125 (10th Cir. 2003). Accordingly, the well-pled facts
of the complaint and undisputed facts presented in affidavits and exhibits are accepted as true. Id.
at 1242-43; United States v. Craighead, 176 F. App’x 922, 925 (10th Cir. 2006).
The court finds ReliaStar’s well-pleaded allegations demonstrate that Ms. Altberg is
entitled to the Death Benefit. ReliaStar alleges Ms. Altberg was the primary beneficiary of the
policy, the policy requires payment of the Death Benefit to the designated beneficiary, and Ms.
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Altberg submitted a claim for the Death Benefit. (Doc. No. 1 at ¶¶ 10-11; 15) And while the
Complaint also alleges that Ms. Tarsi and Ms. Sorensen submitted a competing claim to
ReliaStar because “[Mr. Altberg] intended to leave the Death Benefit to his children but was not
able to change the beneficiary” and “[Ms. Altberg] should be revoked as beneficiary,” (id. at ¶
16), Ms. Tarsi and Ms. Sorensen’s failure to “answer the interpleader complaint and assert a
claim to the res can be viewed as forfeiting any claim of entitlement that might have been
asserted.” Combined, 2015 WL 996172, at * 9 (alteration omitted) (quoting Amoco Prod. Co. v.
Aspen Grp., 59 F. Supp. 2d 1112, 1116 (D. Colo. 1999)); see also Metro. Life Ins. Co. v.
Johnson, No. 14-cv-00811-KLM, 2015 WL 1945398, at *4 (D. Colo. Apr. 29, 2015) (granting
default judgment where interpleader complaint alleges defendants’ competing claims, but
defendants did not answer).
The Court therefore recommends granting the motion for default judgment against Ms.
Tarsi and Ms. Sorensen.
II. Dismissal of ReliaStar
Next, the Motion requests dismissal with prejudice of ReliaStar, and asks that ReliaStar
be discharged from any further liability arising out of or relating to the Death Benefit. (Doc. No.
22 at ¶ 6d, h.)
Where an insurance company is a mere stakeholder and can contribute nothing
toward resolution of the issues between the other parties, its interpleader action is
properly filed, and no genuine issue exists as to its rights and liabilities, ‘it should
be discharged from any and all liability arising out of or based on the policies
involved, except to pay the proceeds of such policies to the party or parties
ultimately adjudge to be entitled thereto.’
Combined, 2015 WL 996172, at * 9 (quoting Am. Home Life Ins. Co. v. Barber, 2003 WL
21289986, at *2 (D. Kan. May 15, 2003)).
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As discussed above, ReliaStar properly filed this interpleader action under 28 U.S.C. §
1335. ReliaStar has no interest in the Death Benefit and admits liability to pay the Death Benefit
to the proper recipient. (Doc. No. 1 at ¶ 23.) Moreover, ReliaStar has deposited the amount of the
Death Benefit, plus interest, into the registry of the Court. (Doc. No. 12.) Thus, ReliaStar is a
disinterested stakeholder, with nothing to contribute toward resolution of the issues between and
among the Defendants. Therefore, the Court recommends dismissing it from this action, as well
as discharging it from liability arising out of or based on the Death Benefit.
The Motion also asks the Court to enjoin Defendants from instituting or prosecuting
further any proceeding against ReliaStar arising out of or relating to the Death Benefit. (Doc. No.
22 at ¶ 6c.) In any interpleader action under § 1335, a district court may enter a permanent
injunction “restraining [all claimants] from instituting or prosecuting any proceeding in any State
or United States court affecting the property, instrument or obligation involved in the
interpleader action.” 28 U.S.C. § 2361. And where a defendant fails to answer or otherwise
plead, courts enter such injunctions. See Stauch, 2024 WL 1177931, at *4. Thus, the Court
recommends entering such a permanent injunction here.
III. Disbursement of Funds
Finally, the Motion asks the Court to order the disbursement of the funds deposited into
the registry to Ms. Altberg in the amount of $9,109.22, plus interest accrued, and to ReliaStar in
the amount of $1,000 to cover attorney’s fees and costs. (Doc. No. 22 at ¶ 6g.) Although no rule
or statute specifically provides for attorney’s fees and costs in interpleader cases, “[f]ederal
practice . . . has followed the traditional equity rule that gives the trial court discretion to allow a
disinterested stakeholder to recover costs and attorney’s fees from the stake itself.” Life Investors
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Ins. Co. of Am. v. Childs, 209 F.Supp.2d 1255, 1256 (M.D.Ala. 2002) (quoting 4 J. Moore,
MOORE’S FEDERAL PRACTICE § 22.06 (3d ed. 2002)); see also U.S. Fidelity & Guar. Co. v.
Sidwell, 525 F.2d 472, 475 (10th Cir. 1975) (recognizing it is a “common practice” that the
deposited fund is chargeable with reasonable fees incurred). Moreover, ReliaStar’s request is
reasonable and appears to be based on an agreement between ReliaStar and Ms. Altberg. (See
Doc. No. 22 at ¶ 6f (noting the $1,000 represents a “negotiated, reduced amount”) (emphasis
added).) The Court sees no reason to interfere with such agreement, and recommends the
disbursement of $9,109.22, plus all interest accrued, to Ms. Altberg, and $1,000 to ReliaStar.
CONCLUSION
For the foregoing reasons, the Court respectfully RECOMMENDS that the Joint Motion
for Default Judgment, Interpleader Relief, and Disbursement of Funds from the Registry of the
Court. (Doc. No. 22) be GRANTED. It is further RECOMMENDED that
• Default Judgment be entered against Patricia Tarsi and Debra Sorensen;
• ReliaStar be dismissed from this action, and be fully and finally discharged from
any further liability arising out of or relating to the Death Benefit;
• Defendants be enjoined and restrained from instituting or prosecuting further any
proceeding in any state or United States court against ReliaStar arising out of or
relating to the Death Benefit;
• The Clerk of Court disburse all funds currently held in the Court registry in
connection with this case, including all interest accrued, less the registry fee
assessment, as follows: $9, 109.22, plus all interest accrued, to Marlene Altberg,
P.O. Box 536, Florence, CO 81226; and $1,000 to ReliaStar Life Insurance
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Company, c/o McDowell Hetherington LLP, 1000 Ballpark Way, Suite 209,
Arlington, TX 76011.
The Clerk of Court is directed to mail a copy of this Recommendation to Defendant:
Marlene Altberg
PO Box 536
Florence, CO 81226
ADVISEMENT TO THE PARTIES
Within fourteen days after service of a copy of the Recommendation, any party may
serve and file written objections to the Magistrate Judge’s proposed findings and
recommendations with the Clerk of the United States District Court for the District of Colorado.
28 U.S.C. ' 636(b)(1); Fed. R. Civ. P. 72(b); In re Griego, 64 F.3d 580, 583 (10th Cir. 1995). A
general objection that does not put the district court on notice of the basis for the objection will
not preserve the objection for de novo review. “[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. One Parcel of Real Prop.
Known As 2121 East 30th Street, Tulsa, Okla., 73 F.3d 1057, 1060 (10th Cir. 1996). Failure to
make timely objections may bar de novo review by the district judge of the magistrate judge’s
proposed findings and recommendations and will result in a waiver of the right to appeal from a
judgment of the district court based on the proposed findings and recommendations of the
magistrate judge. See Vega v. Suthers, 195 F.3d 573, 579-80 (10th Cir. 1999) (a district court’s
decision to review a magistrate judge’s recommendation de novo despite the lack of an objection
does not preclude application of the “firm waiver rule”); One Parcel of Real Prop., 73 F.3d at
1059-60 (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
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review); Int’l Surplus Lines Ins. Co. v. Wyo. Coal Ref. Sys., Inc., 52 F.3d 901, 904 (10th Cir.
1995) (by failing to object to certain portions of the magistrate judge’s order, cross-claimant had
waived its right to appeal those portions of the ruling); Ayala v. United States, 980 F.2d 1342,
1352 (10th Cir. 1992) (by their failure to file objections, plaintiffs waived their right to appeal
the magistrate judge’s ruling); but see, Morales-Fernandez v. INS, 418 F.3d 1116, 1122 (10th
Cir. 2005) (firm waiver rule does not apply when the interests of justice require review).
Dated this 31st day of January, 2025.
BY THE COURT:
___________________________
Maritza Dominguez Braswell
United States Magistrate Judge
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