Federated Mutual Ins. Co. v. Moody Station and Grocery, No. 14-3847 (8th Cir. 2016)
Annotate this CaseFederated Mutual, the insurer, filed an interpleader suit to determine the rights of Moody Station and the Big Store to insurance proceeds. The district court found Moody Station was not entitled to the full amount and awarded attorney fees to Federated. The court concluded that Moody Station is correct that there is no jurisdiction under 28 U.S.C. 1335’s interpleader because the two adverse claimants are both citizens of Missouri. The court determined that diversity jurisdiction exists in this case because there is diversity of citizenship and the amount in controversy is met. Although the district court did not explicitly find a partial loss, the district court implicitly rejected that a total loss occurred. In this case, the district court did not clearly err in determining the actual cash value of the destroyed property. The court concluded, however, that the district court clearly abused its discretion in ordering Moody Station to pay attorney fees to Federated where Federated has consistently opposed Moody Station’s attempts to collect on its policy and is not a disinterested stakeholder deserving attorney fees. Accordingly, the court affirmed in part, reversed in part, and remanded.
Court Description: Benton, Author, with Murphy and Kelly, Circuit Judges] Civil Case - interpleader action. Following a fire at insured property, insurer brought interpleader action to determine proper allocation of policy proceeds as between owner and tenant. No interpleader jurisdiction exists because adverse claimants were both Missouri citizens, but diversity jurisdiction exists and amount in controversy based on amount in dispute is met. After implicitly rejecting that a total loss occurred, district court did not clearly err in determining actual cash value of destroyed property. Because insurer was not a disinterested stakeholder in this interpleader action, the district court abused its discretion in ordering owner to pay attorney fees to insurer.
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