United States District Court, D. Arizona
V. Wake Senior United States District Judge.
15, 2013, Society Insurance filed this action in interpleader
under 28 U.S.C. § 1335. The action will be dismissed for
two independent reasons: (1) the parties failed to make good
faith efforts to comply with their stipulation to resolve
this matter by agreement or state court adjudication, and (2)
the action was filed prematurely.
February 6, 2013, a motor vehicle collision occurred in Pinal
County, Arizona, involving James Sparish, who was driving a
truck insured by Society Insurance under a business auto
insurance policy issued to “James Sparish, Brian
Keeler, Kyle Kraine, Gregory Weaver dba J J S Auto Body
Clinic.” Society Insurance also provided a garage
business owners policy to “James Sparish, Brian Keeler,
Kyle Kraine, Gregory Weaver dba J J S Auto Body
Clinic.” Sparish is a Wisconsin resident.
Sparish was in Arizona, he ran a red light and collided with
a vehicle driven by Christine St. John. She and her two
passengers, Spencer St. John and S.S., are Arizona residents.
All three received medical treatment after the accident at
Mountain Vista Medical Center.
Nystrom and David DeGross were passengers in Sparish's
truck and were injured and hospitalized. DeGross died in the
hospital. Both were Wisconsin residents.
February 7, 2013, Society Insurance received notice of the
collision and shortly thereafter received communications from
attorneys representing some of those injured in the
collision. Society Insurance believed the claims could exceed
the $500, 000 bodily injury policy limit provided by a
business automobile policy that protected the truck driven by
Sparish. By letter to all of the claimants and potential
claimants, former counsel for Society Insurance offered to
“mediate the claim to divide up the $500, 000”
from the business automobile policy bodily injury limits and
stated that “if the parties did not agree to mediation,
then Society Insurance would interplead the funds leaving the
court to decide the division.” (Doc. 101 at 7.)
15, 2013, Society Insurance filed this action in
interpleader, seeking to deposit the business automobile
policy limits with the Court. Neither the initial Complaint
in Interpleader nor the First Amended Complaint in
Interpleader admitted that its insured is liable for the
damages caused by the February 6, 2013 collision or that the
business automobile policy provides coverage for the
collision. The following people were named as Defendants:
David DeGross's wife, Brenda DeGross, and his three sons,
Daniel DeGross, Darren DeGross, and Dean DeGross; Donna
Nystrom; Christine St. John, Spencer St. John, and S.S.; and
Mountain Vista Medical Center. State Farm Mutual Automobile
Insurance Company and Western General Insurance Company were
initially named as Defendants, but were dismissed upon
January 10, 2014, Society Insurance moved to vacate the
Scheduling Conference set for January 31, 2014, because the
parties had scheduled a global settlement conference before
an independent mediator on January 27, 2014. The Court
granted the motion and continued the Scheduling Conference to
February 28, 2014. On February 7, 2014, Society Insurance
filed a motion to stay proceedings because during the global
settlement conference a conflict arose between Society
Insurance and its insured, James Sparish, regarding coverage.
Because then-counsel for Society Insurance represented
Sparish for defense of claims made by the Defendants, it was
necessary to substitute new counsel for Society Insurance.
New counsel entered their appearance on February 21, 2014.
Scheduling Conference was held on March 13, 2014, during
which Defendants agreed to decide the allocation of the
business automobile policy limits by either agreement or
state court adjudication. On April 11, 2014, the parties
filed a stipulation to permit Society Insurance to interplead
the aggregate policy limits for bodily injury under the
business automobile policy (“Disputed Funds”) to
the registry of the Court, enjoin Defendants from bringing
suit against Society Insurance relating to the business
automobile policy or Disputed Funds, and discharge Society
Insurance from any further liability arising from the dispute
among the various Defendants relating to the business
automobile policy or Disputed Funds. (Doc. 66.) The parties
also stipulated that:
The parties will abide either (a) the agreement of the
parties of the allocation of the Disputed Funds or (b) the
adjudication of the state court system's allocation of
the Disputed Funds to the Defendants and agree that this
Court will pay the Disputed Funds to the Defendants according
to the agreement or allocation.
(Id.) There was no indication that the parties
intended for this Court to decide how the Disputed Funds
should be allocated.
stipulation also amended the First Amended Complaint in
Interpleader to correct the business automobile policy number
and to change the name of the insured under the policy from
“James Sparish” to “James Sparish, Brian
Keeler, Kyle Kraine, Gregory Weaver dba J J S Auto Body
Clinic.” The parties further agreed that the
stipulation did not bar or limit the Defendants from
“pursuing James Sparish personally as a result of the
automobile incident that occurred on or about February 6,
2013” and did not bar or limit Defendants'
“rights or claims to pursue other insurance policies
provided by Society Insurance for the automobile incident
that occurred on or about February 6, 2013.” (Doc. 66.)
April 24, 2014, the Court granted the parties'
stipulation. (Doc. 67.) On May 27, 2014, Plaintiff deposited
the sum of $500, 000 with the Court. (Doc. 68.) On July 29,
2014, pursuant to a second stipulation, Plaintiff was
dismissed from this action and discharged from any ...