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Unum Life Insurance Company of America v. Brookshire

United States District Court, D. South Carolina, Florence Division

July 7, 2016

Unum Life Insurance Company of America, Plaintiff/ Counter-Defendant,
v.
Donna Brookshire, Bryant Weaver, and Jennifer Weaver, Defendants/ Cross-Defendants, and S.W., a minor, Defendant / Counter-Claimant / Cross-Claimant.

          ORDER

          R. Bryan Harwell United States District Judge.

         This interpleader action concerns the disbursement of proceeds from a $170, 000 life insurance policy ("the Policy") issued by Unum Life Insurance Company of America ("Unum") to the decedent Clifford Weaver and governed by the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. The Policy designated Cross-Defendant Donna Brookshire, Cross-Defendant Bryant Weaver, and Cross-Claimant S.W;.[1] as the primary beneficiaries with respective interests of 50%, 25%, and 25%, ECF No. 1-2. Unum filed this case seeking interpleader relief pursuant to 29 U.S.C. § 1132 and Federal Rule of Procedure 22. See ECF No. 1. Unum filed a motion seeking (1) authorization to deposit the Policy proceeds into the Court's registry, (2) an award of attorney's fees in the amount of $2, 464.13, and (3) dismissal with prejudice from this action. See ECF No. 22. The Court granted Unum's motion in its entirety, [2] and Unum then deposited the Policy proceeds into the Court's registry. SeeECFNos. 72, 75, 91, & 94.

         On May 20, 2016, the matter came before the Court for review of a Report and Recommendation (R & R) issued by United States Magistrate Judge Kaymani D. West and made in accordance with 28 U.S.C. § 636(b)(1)(B) and Local Rule 73.02 for the District of South Carolina. See R & R, ECF No. 104. No parties filed objections to the R & R, and the Court adopted the R & R as modified.[3] See ECF No. 108. Pursuant to Federal Rule of Civil Procedure 56(f), the Court sua sponte granted summary judgment in favor of Cross-Defendant Donna Brookshire, Cross-Defendant Bryant Weaver, and Cross-Claimant S.W. Id. The Court ruled as follows in its May 20, 2016 order:

         The Court hereby ORDERS the following:

(1) The Court finds a special needs trust is appropriate for S.W. and therefore ORDERS the Guardian ad Litem (Candy Kern-Fuller) to assist Cross-Defendant Jennifer Weaver (S. W. 's mother) in the establishment of a special needs trust that names S.W. as the sole beneficiary and uses S.W.'s share of the Policy proceeds to fund the trust. Ms. Kern-Fuller shall contact an attorney experienced with creating special needs trusts and file a report with the Court within thirty days of the date of filing of this Order, at which time she shall also provide the Court a statement of the fees and/or costs associated with her own time in this case and a statement of the fees and/or costs associated with the establishment of a special*needs trust for S.W. Ms. Kern-Fuller shall further advise the Court as to any particular procedure that may be necessary to establish such a trust, such as whether the Policy proceeds should be disbursed to her trust account or whether they should be directly disbursed to S.W.'s special needs trust.
(2) Once the Court receives adequate proof that Ms. Weaver and the Guardian ad Litem can establish a special needs trust for S.W., the Clerk shall first PAY Unum attorney's fees in the amount of $2, 464.13 and then DISTRIBUTE the remaining Policy proceeds (and accrued interest) as follows: 50% to Cross-Defendant Donna Brookshire, 25% to Cross-Defendant Bryant Weaver, and 25% to Cross-Claimant S.W. S.W.'s portion of the Policy proceeds is subject to the fees and/or costs incurred by the Guardian ad Litem and the fees and/or costs associated with the establishment of the special needs trust.

ECF No. 108 at 3-4 (internal footnote omitted).

         On June 20, 2016, Ms. Kern-Fuller filed the required status report. ECF No. 111. She stated her current fees and costs were $3, 018.50, and she included a detailed invoice itemizing those fees and costs. See ECF No. 111-1. She further stated Daniel C. Staggers, a West Virginia attorney, would be retained to establish a special needs trust for S.W., and that Mr. Staggers would charge a $1, 500.00 fee to establish the trust along with a recommended reserve fund of $250.00 for any additional costs that might arise. Additionally, Ms. Kern-Fuller stated Mr. Staggers advised her that S.W.'s mother (Cross-Defendant Jennifer Weaver) "is the best candidate to set up the trust, " that Ms. Kern-Fuller will need to provide Mr. Staggers the contact information for Ms. Weaver, that Ms. Kern-Fuller will need to fund the trust out of her escrow account, that Ms. Weaver must sign off on the trust, and that Ms. Kern-Fuller will need to stay involved until the trust is set up and operating properly. Ms. Kern-Fuller stated, "No other special procedure appears necessary." On June 24, 2016, the Court issued a docket text order directing Ms. Kern-Fuller to contact Mr. Staggers and determine whether, in addition to the special needs trust, any conservatorship or guardianship (or other similar legal mechanism) would need to be established under West Virginia law for the supervision of S.W.'s portion of the insurance policy proceeds; and if so, how much Mr. Staggers estimated such a conservatorship or guardianship would cost. See ECF No. 112.

         On June 30, 2016, Ms. Kern-Fuller filed the required status report. ECF No. 116. She stated that after consulting with Mr. Staggers, "[a] Conservator and Guardian established in West Virginia would be appropriate, and likely a necessity. This would enable a State Circuit Court to monitor the financial activity and personal matters of the mother concerning the child." Ms. Kern-Fuller indicated that the court cost to file a guardian/conservator pleading is usually $110.00 and that the service cost is approximately $100.00 per person. She further stated Mr. Staggers would charge $1, 000.00 to establish a guardianship/conservatorship.

         Having reviewed Ms. Kem-Fuller's status reports, the Court finds Ms. Kern-Fuller has provided adequate proof that she and Ms. Weaver can establish a special needs trust for S. W. with the assistance of Mr. Staggers, who is a licensed West Virginia attorney. Accordingly, the Court ORDERS that the Policy proceeds be distributed as follows:

(1) Consistent with the Court's previous orders in this case, see ECF Nos. 91 & 108, the Clerk shall first PAY Unum attorney's fees in the amount of $2, 464.13, which is to be deducted from the total amount of the Policy proceeds currently held in the Court's registry.
(2) The Clerk shall then DISTRIBUTE the remaining Policy proceeds (and accrued interest) as follows: 50% to Cross-Defendant Donna Brookshire, 25% to Cross- Defendant Bryant Weaver, and 25% to the minor Cross-Claimant S.W. (whose name __)[4] and Attorney Candy Kern-Fuller Trust Account. S.W.'s portion of the Policy proceeds is subject to (1) the fees and costs incurred by Ms. Kern-Fuller and (2) the fees and costs associated with the establishment of the special needs trust and the related guardianship/conservatorship by Mr. Staggers.[5] Specifically, the Court approves the sum of $3, -018.50 in fees and costs incurred by Ms. Kem-Fuller for her representation in this matter, [6] the sum of $ 1, 500.00 and a reserve fund of up to $250.00 for the establishment of a special needs trust by Mr. Staggers, the sum of $1000.00 for the establishment of a guardianship/conservatorship by Mr. Staggers, the sum of $110.00 for the court costs to file a guardianship/conservatorship pleading, and the approximate sum of $100.00 per person for the service costs regarding the ' guardianship/conservatorship. Ms. Kern-Fuller shall use her trust account to distribute her approved fees and costs, to distribute Mr. Staggers's approved legal fees and costs, and to fund the special needs trust, Ms. Kem-Fuller and Ms. Weaver shall promptly coordinate with Mr. Staggers to ensure the proper establishment of the special needs trust. Ms. Kern-Fuller shall promptly coordinate with Mr. Staggers to ensure the proper establishment of the special needs trust and any necessary guardianship/conservatorship.

         The Court DIRECTS the Clerk to CLOSE this case once the Policy ...


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