American Family Mutual Ins. Co. v. Roche

Brief Fact Summary.

Plaintiff moved to interplead Defendants in federal court because the Defendants’ claims regarding an automobile accident were larger than the insurance policy.

Synopsis of Rule of Law.

Under 28 U.S.C. § 1335, a motion to interplead is proper when claimants are minimally diverse, without regard to the citizenship of the stakeholder.

Facts.

Roche (Claimant), a citizen of Wisconsin, was in an automobile accident with the Grimms (Claimants), four citizens of Illinois. Claimant Roche’s insurance policy with American Family Mutual Insurance Co. (Stakeholder) did not cover the Claimant Grimms’ claims, so the Stakeholder moved to interplead all Claimants in federal court under 28 U.S.C. § 1335. Claimants’ argued interpleader was not proper because they were not minimally diverse.

Issue.

Can the citizenship of an interested stakeholder create minimal diversity under 28 U.S.C. § 1335, for purposes of granting a motion to interplead?

Held.

No, the citizenship of an interested stakeholder cannot create minimal diversity under 28 U.S.C. § 1335.

Discussion.

The Court denied the motion to interplead under 28 U.S.C. § 1335 because the Claimants were not minimally diverse. Examining the language of the statute, the Court determined that the Stakeholder could not also be considered a claimant.