MINNESOTA LIFE INSURANCE COMPANY v. ALEXANDER (2023)

ORDER

Pending before the Court are a Motion for Default Judgment Against Zion Malcolm Alexander (the “Motion”) (ECF No. 35) and an accompanying Memorandum in Support (ECF No. 36) by Plaintiff MINNESOTA LIFE INSURANCE COMPANY (“Minnesota Life”). For the following reasons, the Motion (ECF No. 35) is GRANTED in part and DENIED in part.

I. BACKGROUND

A. Findings of Fact

By defaulting, Defendant Zion Malcolm Alexander admits Plaintiff's well-pleaded allegations of fact, which will provide the basis for the judgment. See In re “Paysage Bords De Seine”, No. 1:13cv347, 2013 WL 12099660, at *1 (E.D. Va. July 29, 2013) (citing Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780 (4th Cir. 2001)). As such, the Court accepts Plaintiff's well-pleaded allegations as fact.

On May 16, 2022, Plaintiff Minnesota Life filed a Complaint against Defendants Melissa D. Alexander, Jare’ Peoples, Zion Malcolm Alexander, and Marcia Gayle to interplead benefits in excess of $500.00. Compl. ¶ 1, ECF No. 1. Plaintiff is incorporated in Minnesota and has its principal place of business in Minnesota. Id. ¶ 2. Defendants Melissa D. Alexander, Jare’ Peoples, and Zion Malcolm Alexander are citizens of Virginia, and Defendant Marica Gayle is a citizen of New York. Id. ¶¶ 3–4; Mem. Supp. Mot. Default J. at 6, ECF No. 36 (“Mem. Supp.”). The action involves life insurance benefits (the “Benefits”) payable as a result of the death of Gary L. Alexander (the “Insured”) under a Group Term Basic Life Insurance Policy, Policy No. 29413-G, that Minnesota Life issued to the Board of Trustees of the Virginia Retirement System (the “Group Policy”). Compl. ¶ 5, ECF No. 1. The Benefits total $114,000, plus applicable interest. Id.

The Group Policy provides, in part:

We will pay the death benefit upon due proof that an individual died while insured under this policy.

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Payment of the death benefit will extinguish our liability under the certificate for which the death benefit was paid.

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We will pay the death benefit to the beneficiary or beneficiaries. A beneficiary is named by an insured to receive the death benefit to be paid at the insured's death. The insured may name one or more beneficiaries.

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If there is more than one beneficiary, each will receive an equal share, unless the insured has requested another method in writing. To receive the death benefit, a beneficiary must survive the insured. In the event a beneficiary does not survive the insured, that beneficiary's portion of the death benefit shall be equally distributed to the remaining surviving beneficiaries.

Id. ¶ 10.

The Insured died on January 22, 2022 while residing in Chesapeake, Virginia. Id. ¶ 11. His Certificate of Death indicates that he was married to Defendant Melissa D. Alexander. Id. The death of the Insured entitles the right and proper beneficiary or beneficiaries under the Group Policy to the Benefits in the amount of $114,000, plus applicable interest. Id. ¶ 12. After it was notified of the Insured's death, Minnesota Life obtained from the Virginia Retirement System (the “VRS”) a copy of a New Member Enrollment Form (Exhibit 1 of the Complaint) by the Insured, dated March 17, 2000, in which he named his spouse, Defendant Melissa D. Alexander, as his sole primary beneficiary for any benefits due under the Group Policy because of his death. Id. ¶ 13.

Minnesota Life also obtained from the VRS a copy of a Designation of Beneficiary form (Exhibit 2 of the Complaint), dated September 3, 2020, purportedly signed by the Insured. Id. ¶ 14. This Designation of Beneficiary form did not expressly revoke his previous beneficiary designations for any benefits due under the Group Policy as a result of his death. Id. However, it purports to name Defendant Jare’ Peoples as a 25% beneficiary, Defendant Zion Malcolm Alexander as a 25% beneficiary, and Defendant Maria Gayle as a 50% beneficiary for any such benefits. Id. The Designation of Beneficiary form indicates that Defendant Maria Gayle is a primary beneficiary. Id. It does not describe Defendant Jare’ Peoples or Defendant Zion Malcolm Alexander as either primary or contingent beneficiaries. Id. Defendant Melissa D. Alexander is not included as a beneficiary on the form. Id.

On March 17, 2022, Defendant Melissa D. Alexander disputed the Designation of Beneficiary form by email. Id. ¶ 15. She asserted that the Insured had lost the capacity to make such beneficiary designation before September 3, 2020, the date on the document. Id. She also provided copies of certain pleadings, reports, and an order in a civil proceeding for the appointment of a guardian and conservator for the Insured in the Circuit Court of Chesapeake, Virginia, styled In re Gary Lee Alexander, Case No. CL20-4290. Id. Minnesota Life sent a letter dated April 11, 2022 to Defendants Melissa D. Alexander, Jare’ Peoples, Zion Malcolm Alexander, and Marcia Gayle to inquire if a voluntary settlement of the conflicting claims among them was possible. Id. ¶ 16. Minnesota Life has not received notice of any such settlement. Id.

B. Procedural History

On May 16, 2022, Plaintiff Minnesota Life filed a Complaint against Defendants Melissa D. Alexander, Jare’ Peoples, Zion Malcolm Alexander, and Marcia Gayle in this interpleader action. ECF No. 1. Pursuant to the Court's May 17, 2022 Order (ECF No. 6), Minnesota Life deposited the Benefits plus interest in the amount of $114,944.79 with the Court on May 24, 2022 (ECF No. 7). On August 25, 2022, Plaintiff Minnesota Life requested an entry of default as to Defendant Zion Malcolm Alexander after Mr. Alexander failed to file a responsive pleading to the Complaint by the required deadline. ECF No. 22. The Clerk filed an entry of default on the same day. ECF No. 23. On November 16, 2022, Plaintiff filed this Motion for Default Judgment as to Zion Malcolm Alexander. ECF No. 35. Mr. Alexander has not filed anything in response to the Motion, nor has he filed anything on the docket generally. The Court has determined that a hearing on the Motion is unnecessary, as the issues for decision are adequately presented in the briefs. See E.D. Va. Local Civ. R. 7(J). The Motion is ripe for adjudication.

II. LEGAL STANDARDS

A. Federal Rule of Civil Procedure 55

Federal Rule of Civil Procedure 55 provides a two-step process for obtaining a default judgment. Fed. R. Civ. P. 55. First, Rule 55(a) requires the clerk to enter a party's default when that party “has failed to file a responsive pleading ‘or otherwise defend’ the action within the applicable time limit.” Transp. Dist. Comm'n of Hampton Roads v. U.S. Workboats, Inc., No. 2:21cv181, 2021 WL 8445262, at *2 (E.D. Va. Sept. 17, 2021) (citing Fed. R. Civ. P. 55(a)). The entry of default prevents the defaulting party from answering or otherwise responding to the lawsuit unless the party can successfully set aside the default. Fed. R. Civ. P. 55(c).

Second, the party not in default must move for a default judgment. Fed. R. Civ. P. 55(b). Unlike an entry of default, which only recognizes a party's failure to plead or otherwise defend the action, a default judgment determines the parties’ rights and remedies. Rule 55(b)(1) provides that a clerk may enter a default judgment if the plaintiff's claim is “for a sum certain or a sum that can be made certain by computation.” Fed. R. Civ. P. 55(b)(1). A plaintiff's assertion of a sum in a complaint does not make the sum “certain” unless the plaintiff claims liquidated damages. Monge v. Portofino Ristorante, 751 F. Supp. 2d 789, 793–94 (D. Md. 2010). Rule 55(b)(2) provides that a party must apply to the court for a default judgment if the plaintiff's claim is not for a sum certain. Fed. R. Civ. P. 55(b)(2).

B. Default Judgment Standard

A court has discretion to decide whether to grant a motion for default judgment. See United States v. Moradi, 673 F.2d 725, 727 (4th Cir. 1982). After an entry of default, well-pleaded allegations of fact are construed as admitted. Ryan, 253 F.3d at 780. A court may grant default judgment when the well-pleaded allegations in the complaint support the relief sought by the plaintiff. Id. Although the Fourth Circuit has a “strong policy that cases be decided on the merits,” the court should grant default judgment “when the adversary process has been halted because of an essentially unresponsive party.” Alstom Power, Inc. v. Graham, No. 3:15cv174, 2016 WL 354754, at *1 (E.D. Va. Jan. 27, 2016) (internal quotation marks and citations omitted).

III. ANALYSIS

Plaintiff Minnesota Life has satisfied Rule 55(a)’s requirement for requesting an entry of default, and the Clerk of Court filed an entry of default for Defendant Zion Malcolm Alexander. ECF Nos. 22, 23. In the Motion for Default Judgment, Plaintiff requests that the Court enter default judgment against Defendant Zion Malcolm Alexander and provide the following relief: (1) enjoin Mr. Alexander from instituting or prosecuting any proceeding in any State or United States court affecting the Benefits; (2) discharge Minnesota Life from any further liability under the Group Policy; (3) award Minnesota Life a minimum of $13,568.88 in reimbursement for fees and costs; and (4) dismiss Minnesota Life with prejudice. Mem. Supp. at 14. The Court reviews the Complaint (ECF No. 1) to determine if the well-pleaded allegations support the relief sought.

A. The Court has personal jurisdiction over Defendant Zion Malcolm Alexander.

28 U.S.C. § 2361 provides that, in any interpleader action under 28 U.S.C. § 1335, a district court may issue its process for all claimants. 28 U.S.C. § 2361; see Minn. Life Ins. Co. v. Webb, No. 1:13cv1242, 2014 WL 1681688, at *2 (E.D. Va. Apr. 7, 2014), R. & R. adopted, No. 1:13cv1242, 2014 WL 1686812 (E.D. Va. Apr. 28, 2014). “Specifically, ‘28 U.S.C. § 1335, and the nationwide service of process provision of 28 U.S.C. § 2361, empowers federal district courts to entertain interpleader actions irrespective of an individual claimant's contacts (or lack of contacts) with the forum state.’ ” Webb, 2014 WL 1681688, at *2 (quoting McGuckin v. Metro. Life Ins. Co., No. 95–5584, 1996 WL 107406, at *1 (E.D. Pa. Mar. 4, 1996)). This Court thus has personal jurisdiction over Defendant Zion Malcolm Alexander.

B. Venue is proper in this matter.

28 U.S.C. § 1397 provides that “[a]ny civil action of interpleader or in the nature of interpleader under section 1335 of this title may be brought in the judicial district in which one or more of the claimants reside.” 28 U.S.C. § 1397. Defendants Zion Malcolm Alexander and Melissa D. Alexander reside in Chesapeake, Virginia, which is in this judicial district. See E.D. Va. Local Civ. R. 3(B)(3) (noting that the Norfolk Division includes Chesapeake, Virginia). The Court agrees with Minnesota Life that venue is proper under 28 U.S.C. § 1397.

C. Minnesota Life properly served Defendant Zion Malcolm Alexander.

The Court finds that Minnesota Life properly served Mr. Alexander. Federal Rule of Civil Procedure 4(e)(1) provides that an individual may be served in accordance with state law for serving a summons in an action brought in courts of general jurisdiction in the state where the district court is located. Fed. R. Civ. P. 4(e)(1). Under Virginia law, if the party to be served is not found at his usual place of abode, the individual may still be served by delivering a copy of such process and giving information of its purport to any person found there, who is a member of his family, other than a temporary sojourner or guest, and who is of the age of 16 years or older. Va. Code § 8.01-296(2)(a). Here, the Proof of Service indicates that Minnesota Life's process server left the summons and Complaint at Mr. Alexander's usual residence or place of abode with his mother, Melissa Alexander. See Proof of Service, ECF No. 14. Ms. Alexander is above the age of 16. See Compl. ¶ 13, ECF No. 1 (noting that the New Member Enrollment Form, dated March 17, 2000, named Ms. Alexander). As such, the Court concludes that Defendant Zion Malcolm Alexander was properly served in this matter.

D. The Court adopts in full its analysis from the Order on the Motion to Enjoin Defendants and to Discharge, Reimburse and Dismiss Plaintiff.

First, as discussed in the Court's separate Order on Plaintiff's Motion to Enjoin Defendants and to Discharge, Reimburse and Dismiss Plaintiff (ECF No. 37), issued contemporaneously with the instant Order, Minnesota Life properly brought the instant interpleader action. The Court has jurisdiction under 28 U.S.C. § 1335(a), and an interpleader action is appropriate due to the dispute between claimants Melissa D. Alexander and Marcia Gayle. Second, the Court's separate Order discharged Minnesota Life from this action, as permitted by 28 U.S.C. § 2361. No defendant objected to this portion of Minnesota Life's request. Third, Defendant Zion Malcolm Alexander shall be enjoined, pursuant to 28 U.S.C. § 2361, from filing any other lawsuit relating to the Benefits or the Group Policy in any state or federal court. Fourth, the Court declines to require Defendants, including Mr. Alexander, to reimburse Minnesota Life for costs and fees incurred in the ordinary course of business. The Court adopts in full the analysis and conclusions in that Order.

IV. CONCLUSION

For the foregoing reasons, the Motion for Default Judgment Against Defendant Zion Malcolm Alexander (ECF No. 35) is GRANTED in part and DENIED in part. It is ORDERED that Defendant Zion Malcolm Alexander is permanently restrained and enjoined from instituting or prosecuting any other proceeding in any State or United States court affecting the Insured's coverage under the Group Policy and/or the Benefits. It is FURTHER ORDERED that Defendant Zion Malcolm Alexander does not owe any costs or expenses to Plaintiff Minnesota Life. The Clerk is REQUESTED to please forward a copy of this Order to counsel for Plaintiff and to send a copy of this Order to Defendant Zion Malcolm Alexander at 905 Lingale Arch, Chesapeake, VA 23322.¹

IT IS SO ORDERED.

FOOTNOTES

1.   This is the address where Plaintiff served Defendant Zion Malcolm Alexander. See Proof of Service, ECF No. 14.

Arenda L. Wright Allen, United States District Judge