Complaint in Interpleader in New York

What Is a Complaint in Interpleader?

Background

New York state and federal courts have long recognized that persons having claims against a plaintiff may be joined as defendants and required to interplead when their claims are such that the plaintiff is or may be exposed to double or multiple liability. (Crane v. McDonald, 118 N.Y. 648, 654 [1890].) The plaintiff may deposit the fund that is subjected to competing claims with the court for a determination as to the parties’ respective rights and obligations. (Civ. Prac. Law & Rules, § 1006; Lincoln Life & Annuity Co. of N.Y. v. Caswell, 31 A.D.3d 1, 8 [1st Dept. 2006].)

How to Structure the Motion

Section 1006(a) of Civil Practice Law and Rules permits an otherwise disinterested holder of funds, who is or may be exposed to multiple liability as a result of adverse claims, to commence an action against the claimants to resolve the conflict. (Civ. Prac. Law & Rules, § 1006(a); Lincoln Life & Annuity Co. of N.Y. v. Caswell, 31 A.D.3d 1, 8 [1st Dept. 2006].) Section 1006(f) permits the court to discharge the stakeholder from liability upon payment into court of the subject matter of the action. (Civ. Prac. Law & Rules,§ 1006(f); Downe Communications, Inc. v. Aetna Casualty & Surety Co., 37 N.Y.2d 903, 904-05 [1975].)

The material allegations in a bill of interpleader are:

that two or more persons have made a claim against the complainant;
that they claim the same thing;
that the complainant has no beneficial interest in the thing claimed; and
that he cannot determine, without hazard to himself, to which of the defendants the thing belongs.

(Crane v. McDonald, 118 N.Y. 648, 654 [1890]; Brook v. Randolph, 201 A.D. 30 [N.Y. App. Div. 1922].)

The Court’s Decision

Interpleader is a procedural device to protect a stakeholder from double or multiple indemnity when faced with two or more claims, so related that the recovery of one claim will exclude in whole or in part the recovery of the other. (Isacowitz v. Isacowitz, 185 N.Y.S.2d 58 [1959].) Interpleader is permitted whenever recovery by one claimant excludes recovery by the other. (Braunstein v. 241 Fifth Ave., 155 N.Y.S.2d 98 [1956].)

A neutral stakeholder should not be required, at its peril, to decide the questions of law upon which the validity of the conflicting claims may depend; it should also not be called upon to ferret out the facts which lie behind a controversy. (Rosen v. Equitable Life Assurance Soc’y, 289 N.Y. 333, 338 [1942].)

Such a stakeholder with no beneficial interest in the disputed fund is entitled to relief discharging it from liability. (Sun Life Ins. & Annuity Co. of N.Y. v. Braslow, 38 A.D.3d 529, 530 [2nd Dept. 2007].) A stakeholder is properly discharged where it has demonstrated that “it was a neutral stakeholder with no interest in [the disputed funds].” (Mahon, Mahon, Kerins & O’Brien, LLC v. Moskoff, 85 A.D.3d 738, 739 [2nd Dept. 2011].)

Monetary Awards

The party filing an interpleader action is entitled to an award of its reasonable counsel fees and costs in bringing the action and creating the fund in court. (Civ. Prac. Law & Rules, § 1006(f).) The amount of the award being within the sound discretion of the court. (Id.)

New York courts have consistently made clear that the denial of a stakeholder’s request for attorneys’ fees and costs is “an improvident exercise of discretion.” (Republic Nat’l Bank of N.Y. v. Lup, 215 A.D.2d 467, 468 [2nd Dept. 1995].) If a neutral stakeholder “with no interest in the disputed accounts [is] forced to participate in a tortuous litigation,” it is entitled to be paid its attorneys’ fees equally by the defendants. (Id. at 468.)

Documents for Complaint in Interpleader in New York

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American Family Life Assurance Company Of New York v. William C Ryba Estate Of, Tara Ryba As Guardian For JR a minor document preview - page 1 of 8

COMPLAINT

FILED: NASSAU COUNTY CLERK 08/30/2023 10:25 AM INDEX NO. 613979/2023 NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 08/30/2023 SUPREME COURT OF THE STA…

Case Name American Family Life Assurance Company Of New York v. William C Ryba Estat…