United States District Court, D. South Carolina, Florence Division
Margaret Rose C. Sims, as duly appointed representative of the Estate of David Lee Sims, Jr., Cross-Claimant,
Heather Sims, Cross-Defendant.
BRYAN HARWELL CHIEF UNITED STATES DISTRICT JUDGE
interpleader action is before the Court on motion [ECF No.
51] of Cross-Claimant Margaret Rose C. Sims, as duly
appointed representative of the Estate of David Lee Sims, Jr.
("the Estate"). The Estate moves to amend the
pleadings to realign the parties and re-frame the remaining
issue in this case, that is, whether Cross-Defendant Heather
Sims feloniously and intentionally killed David Lee Sims, Jr.
thus barring her from receiving any insurance benefits under
S.C. Code Ann. § 62-2-803. The Estate and Heather Sims
are both claimants on a $750, 000.00 life insurance policy
that insured the life of David Lee Sims, Jr.
Estate argues that it should be re-aligned as the plaintiff
and Heather Sims as the defendant. Heather Sims does not
dispute that the Estate would bear the burden of proving by a
preponderance of the evidence that she feloniously and
intentionally killed David Lee Sims, Jr., but she responds
that realignment in this case would destroy diversity
jurisdiction and this Court should decline to exercise
supplemental jurisdiction over this case under 28 U.S.C.
this action was originally filed, jurisdiction was based on
diversity of citizenship under 28 U.S.C. § 1332. On
February 1, 2016, the plaintiff stakeholder, Nationwide Life
and Annuity Insurance Company, was dismissed after depositing
$750, 000.00 in life insurance proceeds with the Court. [ECF
No. 16]. In a rule interpleader action, such as this,
dismissal of a stakeholder plaintiff does not destroy federal
jurisdiction as long as there was complete diversity of
citizenship between the plaintiff stakeholder and the
defendant claimants. See Leimbach v. Allen, 976 F.2d
912, 917 (4th Cir. 1992) (holding dismissal of stakeholder
does not destroy jurisdiction even though claimants are
non-diverse). Accordingly, Nationwide's dismissal from
this action does not destroy federal jurisdiction because
complete diversity of citizenship between the plaintiff
stakeholder and defendant claimants existed at the time this
case was filed.
the Court could exercise its discretion and realign the
parties, it is unnecessary at this stage. This "stage of
the interpleader involves the determination of the respective
rights of the claimants to the stake." 7 Charles A.
Wright et al., Federal Practice and Procedure § 1714 at
584-85 (1986). "[E]ach defendant occupies the position
of a plaintiff and must state his own claim and answer that
of the other." See, e.g. Wachovia Bank, N.A. v.
Tien, 534 F.Supp.2d 1267, 1284 (S.D. Fla. 2007);
Reconstruction Fin. Corp. v. Aquadro, 7 F.R.D. 406,
409 (W.D. Pa. 1947); 7 Charles A. Wright et al., Federal
Practice and Procedure § 1714 at 584-85 (1986). To the
extent realignment may be beneficial at trial to avoid
confusing jurors, the Court may revisit the issue at a later
time, but simply designating the Estate as cross-claimant
with the burden of proof seems sufficient at this time.
the Court at this time declines to formally realign the
parties, the Court recognizes the need for the Estate to file
an amended cross-claim to the funds and Heather Sims to file
an amended answer to the Estate's cross-claim. The Estate
must file an amended cross-claim to the interpleaded funds no
later than Tuesday, November 12, 2019. Any answer to the
Estate's amended cross-claim must be filed no later than
Monday, November 18, 2019.
pending is Defendant Heather Sims's [ECF No. 52] motion
to disburse life insurance proceeds. Heather Sims argues that
because her conviction for voluntary manslaughter was
reversed by the South Carolina Court of Appeals in State
v. Sims, 825 S.E.2d 731 (S.C. Ct. App. 2019), she is
automatically entitled to life insurance proceeds as the
named beneficiary on a life insurance policy on the life
of David Lee Sims, Jr.
Carolina Code Ann. § 62-2-803 provides in relevant part:
(c) A named beneficiary of a bond, life insurance policy,
retirement plan, annuity, or other contractual arrangement
who feloniously and intentionally kills the principal obligee
or the individual upon whose life the policy is issued is not
entitled to any benefit under the bond, policy, retirement
plan, annuity, or other contractual arrangement, and it
becomes payable as though the killer had predeceased the
(f) A final judgment by conviction, or guilty plea
establishing criminal accountability of felonious and
intentional killing the decedent conclusively establishes
that the convicted individual feloniously and intentionally
killed the decedent for purposes of this section. In the
absence of such final judgment the court, upon the petition
of an interested person, must determine whether, upon the
preponderance of the evidence standard, the individual would
be found responsible for the felonious and intentional
killing of the decedent. If the court determines that,
under that standard, the individual would be responsible for
the felonious and intentional killing of the decedent, the
determination conclusively establishes that individual as the
decedent's killer for purposes of this section.
Code Ann. § 62-2-803 (emphasis added). Pursuant to
subsection (f) above, the lack of a criminal conviction of
felonious and intentional killing is no bar to invocation of
this statute where the felonious and intentional killing can
still be proved by the preponderance of the evidence. See
Metropolitan Life Ins. Co. v. Fogle, 419 S.E.2d 825, 828
fn.1 (S.C. Ct. App. 1992) (stating "[t]he Reporter's
Comments to this section make clear that the lack of a
conviction of felonious and intentional killing is no bar to
invocation of this provision whether the killing is proved by
a preponderance of the evidence"). Therefore, even
though Heather Sims's conviction for voluntary
manslaughter was reversed by the South Carolina Court of
Appeals, there is nothing to prevent the Estate from
attempting to prove by a preponderance of the evidence that
Heather Sims feloniously and intentionally killed David Lee
Sims, Jr., and if so proved, the Estate's entitlement to
the $750, 000.00 of interpleaded funds. Heather Sims's
[ECF No. 52] motion to disburse life insurance proceeds is
conclusion, the Estate's [ECF No. 51] motion to amend the
pleadings to realign the parties and re-frame the remaining
issue is GRANTED in part and DENIED in part.
The Court declines to realign the parties, and will simply
remove Nationwide as the plaintiff, and designate the Estate
as the cross-claimant and Heather Sims as cross-defendant.
The Estate must file an amended cross-claim to the
interpleaded funds no later than Tuesday, ...