United States Court of Appeals
For the First Circuit
No. 02-1543
METROPOLITAN PROPERTY AND CASUALTY INSURANCE COMPANY,
Plaintiff, Appellee,
v.
SHAN TRAC, INC, d/b/a THRIFTY CAR RENTAL; DAIMLER CHRYSLER
CORPORATION; YURY SHKOLNIKOV, MARAT R. ROMANOVSKI, Individually and
as the surviving spouse of LEYA M. ROMANOVKSI; ELENA BROBRITSKY;
SVETLANA ROMANOVSKI; VERONICA ROMANOVSKI, a minor through her
father and next friend, MARAT P. ROMANOVSKI; SVETLANA SHKOLNIKOV,
Defendants.
and
ANNA N. KUTIKOVA, a/k/a ANNA YANKOVSKAYA, Individually and as the
surviving spouse of MARAT KUTIKOVA; MICHAEL ELKIN, Individually and
as the surviving spouse of SEYNA ELKIN; ELENA LEVINSON,
Administratrix of the estate of SEYNA ELKIN; MIKHAIL PEVTSOV,
Individually and as successor of his parents, ZYAMA PEVTSOV and
TSILYA PEVTSOV; ALEX PEVTSOV, Individually and as successor of his
parents ZYAMA PEVTSOV and TSILYA PEVTSOV; SERGEY RABOVSKY,
Individually and as the surviving spouse of ALLA ROBOVSKY; LUBA
LEVIN, as administrator of the estate of VITALY RABINOVICH and
MARIYA VILNER; MICHAEL RABINOVICH, as administrator of the Estate
of VITALY RABINOVICH and MARIYA VILNER,
Defendants, Appellants.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Reginald C. Lindsay, U.S. District Judge]
Before
Boudin, Chief Judge,
Farris,* Senior Circuit Judge,
and Torruella, Circuit Judge.
Marc S. Alpert with whom Marc S. Alpert P.C. was on brief for
defendants, appellants.
John P. Graceffa with whom Richard W. Jensen, William A.
Schneider and Morrison, Mahoney & Miller, LLP were on brief for
appellee.
March 31, 2003
*
Of the Ninth Circuit, sitting by designation.
BOUDIN, Chief Judge. On March 8, 2000, a large rental
van driven by Yury Shkolnikov crashed into a median barrier in
Clark County, Nevada. Eight of the van's thirteen passengers were
killed, and the other five, including Shkolnikov and his wife, were
seriously injured. Shkolnikov had a Massachusetts automobile
insurance policy issued by Metropolitan Property and Casualty
Company ("Metropolitan") that provided a maximum of $300,000 of
coverage per accident. Faced with the prospect of claims in excess
of the policy, Metropolitan commenced a statutory interpleader
action in the district court of Massachusetts on August 17, 2000.
28 U.S.C. § 1335 (2000).
In its complaint, Metropolitan named 16 parties as having
an interest in the proceeds of the automobile policy. These
parties included the injured passengers, the administrators of the
deceased passengers, dependents, and the renter and manufacturer of
the vehicle. Metropolitan paid $300,000 into the court registry
and filed a motion for summary judgment seeking inter alia to be
released from further liability and asking that the parties be
required to interplead their claims against the fund.
On March 11, 2002, the district judge conducted a summary
judgment hearing. At that hearing, counsel representing the
passengers, administrators and dependents named in the suit ("the
claimants") said that the parties had agreed to an eleven-way split
of the insurance proceeds in which each passenger (not including
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Shkolnikov or his wife) would receive a one-eleventh share
($27,272.27) of the proceeds.1 The parties agreed that any claims
by the dependants of a passenger would then come out of the share
attributed to the passenger. The parties also agreed that a party
would only be entitled to a share of the policy upon releasing
Shkolnikov from any future liability for bodily injury or wrongful
death stemming from the accident.
On this basis, the court issued a final judgment stating
that Metropolitan, having paid the full amount of the policy into
the court registry, was relieved of further liability. The
judgment, which we have reproduced in an addendum, further stated
that the parties could obtain a 1/11th share of the policy in
exchange for releasing Shkolnikov from any further claims of
liability arising from the accident. The judgment also said that
it precluded persons not a party to the action from "forever
mak[ing] [a] claim against Metropolitan" under the policy.
A number of the claimants appeal and challenge the
district court's judgment on several grounds. They first assert
that the district court lacked subject matter jurisdiction, an
objection that takes priority over all others. Steel Co. v.
Citizens for a Better Env't, 523 U.S. 83, 94-95 (1998). The
argument is that the claimants had among themselves agreed as to
1
Apparently neither the rental company nor the car
manufacturer sought to collect under the policy, and there is no
indication that Shkolnikov or his wife disputes the settlement.
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how to split the $300,000, were not seeking more than $300,000 from
the insurer, and were therefore not "adverse" to one another under
the terms of the interpleader statute. Our review on this
jurisdictional issue is de novo. E.g., Valentin v. Hosp. Bella
Vista, 254 F.3d 358, 365 (1st Cir. 2001).
The interpleader statute requires inter alia that the
stakeholder point to "two or more adverse claimants" who "are
claiming or may claim" the same money or property that the
stakeholder has deposited into court. 28 U.S.C. § 1335(a)(1). One
might wonder how any of the claimants (except Shkolnikov) could
have any claim against the insurance company. The gist of the
policy is to indemnify Shkolnikov for judgments against him and the
claimants do not assert that they are third-party beneficiaries.
See Keeton & Widiss, Insurance Law § 4.10(a) (1988).
The partial answer may be that while Massachusetts
apparently has no formal direct action statute, its law does
require good faith by insurers in the prompt settlement of
legitimate claims, Mass. Gen. Laws ch. 176D § 3(9) (2000), and that
statute has been read in some instances to allow bad-faith claims
against the insurer by injured third parties. See Clegg v. Butler,
676 N.E.2d 1134, 1138-39 (Mass. 1997). In addition, Metropolitan
probably hoped to escape the obligation to defend Shkolnikov in
suits against him now pending in state court in California; its
policy says that the insurer's duty to defend ends when the policy
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maximum has been paid "to a court of competent jurisdiction." Cf.
Keeton & Widiss, supra, § 9.4(c)(2).
In all events, the claimants' jurisdictional objection
fails. Long ago, in a somewhat comparable automobile accident
case, the Supreme Court brushed aside the Ninth Circuit's concern
that the claimants had no direct claim against the insurer. The
Court held instead that the federal interpleader embraced an
insurer's action against the insured's claimants. State Farm Fire
& Cas. Co. v. Tashire, 386 U.S. 523, 532-34 (1967). Whether or not
this practice reflects precisely the original theory of the
interpleader statute, it has the Court's approval and serves a
practical purpose in cases like this one.
Our own case is peculiar only in that the claimants have
agreed among themselves as to how to split the pot and do not now
say that they are entitled to more than a total of $300,000 from
Metropolitan. However, under the statute it is enough that there
"may" be adverse claims by the interpled parties against the
property or fund. 28 U.S.C. § 1335(a)(1). Until the district
court judgment, this certainly was a case in which adverse claims
exceeding the value of the policy could have been brought by these
very claimants. Indeed, the claimants own agreement appears to
have been tenuous: there were arguments over the release language
throughout the course of the suit and apparently even as late as
the summary judgment hearing.
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Although it has been said the stakeholder must have real
reason to fear "double liability or the vexation of conflicting
claims," Indianapolis Colts v. Baltimore, 741 F.2d 954, 957 (7th
Cir. 1984), cert. denied, 470 U.S. 1052 (1985), Metropolitan had
some basis for such a fear. This is not a case involving only
pseudo-adversity where, for example, the stakeholder actually
controls one of two claimants to a fund. Id. at 958. The same
practical considerations that persuaded the Supreme Court in
Tashire apply here with equal force. The potential adversity
presented here is entirely sufficient to meet the relatively
undemanding jurisdictional requirement. Equitable Life Assurance.
Soc. of the U.S. v. Porter-Englehart, 867 F.2d 79, 84 (1st Cir.
1989).
This brings us to the merits which concern several
disputed provisions of the judgment. At the close of the hearing
on summary judgment, the district court ruled that it would grant
relief to Metropolitan and asked the insurer's counsel to prepare
a draft judgment. This draft was submitted to claimants' counsel
who offered various objections by means of a letter to the district
court before the judgment was entered. This being an appeal for
summary judgment, preserved objections are subject to plenary
review. Lewry v. Town of Standish, 984 F.2d 25, 26-27 (1st Cir.
1993). Any objections newly minted for the appeal are subject only
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to plain error review. E.g., Chestnut v. City of Lowell, 305 F.3d
18, 20 (1st Cir. 2002) (en banc).
Claimants make four substantive attacks on the judgment
(two others were abandoned at oral argument). They say first that
the judgment does not make clear that claimants who seek payment
from the fund are entitled to an equal one-eleventh share. They
point to an ordering paragraph in the judgment that instructs only
that "each person or persons who claim any share" must present a
release. It is plain enough, however, from the immediately prior
paragraph in the judgment that division is to be based upon "an
equal, eleven way split" so that ambiguity is imaginary.
Second, and more persuasive, is the claim that the
judgment leaves it unclear how the claimants are to be grouped.
The problem is that there are more than eleven claimants named in
the complaint (e.g., multiple children of an individual decedent).
The agreement among the claimants, as described at the summary
judgment hearing, contemplates that those who claim under an
individual passenger will together get a single one-eleventh share.
However, the judgment does not so provide. Claimants simply want
the judgment to specify the individuals in each of the eleven
groups.
Metropolitan conspicuously does not respond to this
argument although it was clearly presented in the district court
and on appeal. If there is no dispute about the groupings, counsel
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should have handled this by a post-judgment stipulation. But in
its absence, the 16 claimants who are named parties--and who are
being subject to a judgment they do not want--are entitled to have
the judgment reflect accurately who gets what; in this instance
identifying the membership of the respective eleven groups (not the
split within each group) is all that is sought and can be easily
provided on remand.
This brings us to a more serious claim affecting the
present claimants, namely, that the release drafted by Metropolitan
and attached to judgment releases Yury Shkolnikov from all claims
arising out of the automobile accident in question. According to
claimants, this could in some jurisdictions constitute a release of
other potential defendants (e.g., the rental company and the car
manufacturer). E.g., Dougherty v. Cal. Kettleman Oil Royalties, 88
P.2d 690, 693 (Cal. 1939) (release of one of two or more joint tort
feasors operates as a release of all). Apparently, claimants have
in mind suits against these parties.
The issue may not be entirely straightforward. On the
one hand, some or all of the claimants may well have claims against
Shkolnikov that greatly exceed their share of insurance; and the
Supreme Court in Tashire said that an insurance interpleader action
like this one is not a means of resolving claims of potential
plaintiffs beyond their claims to the insurance. 386 U.S. at 535-
37. However, this does not settle the question whether the insurer
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might be entitled to a full discharge of the insured as part of the
negotiated settlement with the claimants. See Lazaris v. Metro.
Prop. & Cas. Ins. Co., 703 N.E.2d 205, 207 (Mass. 1997).2
Here, the claimants say nothing about further claims
against Shkolnikov himself; instead, they ask us to modify the
judgment to protect them against inadvertent discharge of claims
against other defendants. This claim of error has been forfeited
because not requested in the district court. Faigin v. Kelly, 184
F.3d 67, 82 (1st Cir. 2001). Relief might or might not still be
available, but not from us. See Fed. R. Civ. P. 60(b). The
district judge could consider such a Rule 60(b) request on the
remand otherwise required but that is not our business.
The most unusual passage in the judgment remains to be
addressed. In its second numbered paragraph, the judgment declares
that "all persons with claims against Metropolitan's insured" have
agreed to the equal, eleven-way split, and then continues: "Any
other persons who have or may have claims against Yury Shkolnikov
arising out of the March 8, 2000 accident are hereby bound by the
2
The judgment itself does not purport to release Shkolnikov
from anything: it provides that anyone claiming a share of the
policy will be entitled to it after presenting either a release in
the form attached to the judgment or a final judgment by a court of
competent jurisdiction against Shkolnikov. Thus, a claimant could
collect under the judgment by presenting a judgment, default or
otherwise, against Shkolnikov; and if instead the claimant chooses
to tender a release, conceivably this might be viewed as a
voluntary settlement.
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aforementioned split and no other persons may now or forever make
claim against Metropolitan under Part 5 of [the policy]."
Claimants' brief says that there are other heirs at law
and next of kin who are not parties to this case but are co-
plaintiffs in the state court litigation in California. The
claimants object, as they did in the district court, to any such
cut-off of rights of these non-parties. Metropolitan, which
proposed the language in the judgment, asserts that everyone who
could have a claim was served but it makes no effort to defend the
clause extending the judgment to non-parties. At oral argument it
conceded that the judgment does not bind non-parties who were never
served or given an authorized form of notice requiring them to
present their claims.
The objection to binding non-parties is clearly correct.
Interpleader actions are in personam, not in rem, see New York Life
Ins. Co. v. Dunlevy, 241 U.S. 518, 521 (1916), and cannot resolve
the rights of non-parties to anything. Even in in rem actions,
some form of notice (e.g., by publication) is ordinarily required
to cut off interests in property. E.g., Mullane v. Central Hanover
Bank & Trust Co. 339 U.S. 306, 314 (1950). Claimants' standing to
raise the issue may be doubtful, but we can and do correct such
mistakes even if not raised at all. Cf. Chestnut, 305 F.3d at 21.
On remand, the language in question purportedly to bind non-parties
should be deleted.
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Matters are somewhat different as to the judgment's
related finding that "all persons" with claims against Shkolnikov
arising out of the accident are parties to the agreement to split
the insurance eleven ways. Here, two different issues are
involved: one is the adequacy of service as to certain named
parties--an objection briefed by claimants--and the other is
whether anyone else, apart from named parties, has any potential
claim against Shkolnikov arising out of the accident. At oral
argument, claimants abandoned the first objection but persist as to
the second.
The difficulty is that claimants' brief does nothing to
show the state of the evidence in the district court as to whether
there are other potential claimants against Shkolnikov never named
in this case. It is not our job to sift unaided through the
transcript and filings in the district court to see whether a
finding now assailed on appeal had or lacked the requisite basis.
United States v. Zannino, 895 F.2d 1, 17 (1st Cir.), cert. denied,
494 U.S. 1082 (1990). Claimants do not say that the failure to
name all potential plaintiffs is a jurisdictional error. See 7
Wright, Miller & Kane, Federal Practice and Procedure § 1611, at
167 & n.20 (3d ed. 2001).
As it happens, the possible incorrectness of the finding
may not matter. If no one beyond the named claimants has a
potential claim, then the finding is correct. On the other hand,
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if there are other potential plaintiffs against Shkolnikov or
Metropolitan, they are likely not bound--being non-parties--by any
mistaken declaration that they do not exist. Metropolitan so
conceded at oral argument, omitting any reservation as to non-
parties in privity with claimants. Of course, under the policy
Metropolitan's payment of the policy maximum to some claimants may
well exhaust any obligations it has to others, but that is a
different matter.
The judgment of the district court is affirmed in part
and vacated in part and the matter is remanded for modifications
consistent with this decision, specifically, to identify the
membership of the eleven different groups and to delete the
existing language purporting to extend the judgment to non-parties.
No costs are awarded to either side.
It is so ordered.
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ADDENDUM
The judgment of the district court (attachments omitted)
reads as follows:
On motion made by the plaintiff, Metropolitan Property
and Casualty Insurance Company ("Metropolitan"), for summary
judgment, and this Court being satisfied that all interested
parties have had both notice and an opportunity to be heard
thereon, the Court hereby orders and declares as follows:
1. That Metropolitan, having paid three hundred thousand dollars
($300,000) into the registry of this Court, representing the
maximum limits of bodily injury to others coverage under policy
number 039-48-2552-1, effective November 5, 1999 to November 5,
2000, issued to Yury Shkolnikov, is hereby discharged of all its
liabilities, duties and obligations arising under or related to the
terms of Part 5. Optional Bodily Injury to Others, of the standard
Massachusetts (Personal) Automobile Insurance Policy, Sixth
Edition, with respect to any and all claims for bodily injury or
wrongful death arising out of the March 8, 2000 accident in Clark
County, Nevada.
2. That all persons with claims against Metropolitan's insured,
Yury Shkolnikov, arising out of the March 8, 2000 accident have
agreed to an equal, eleven way split of the $300,000 policy limits
available under Part 5 of policy number 039-48-2552-1, together
with any accumulated interest. Any other persons who have or may
have claims against Yury Shkolnikov arising out of the March 8,
2000 accident are hereby bound by the aforementioned split and no
other persons may now or forever make claim against Metropolitan
under Part 5 of policy number 039-48-2552-1.
3. That each person or persons who claim any share or part of
Metropolitan's $300,000 policy limit and any accumulated interest
will be entitled thereto, after presenting to Metropolitan either
a release of claims in the form attached hereto, against its
insured, Yury Shkolnikov, for personal injuries or wrongful death
arising out of the March 8, 2000 accident, or a final judgment
rendered by a court of competent jurisdiction against Yury
Shkolnikov for liability arising out of the March 8, 2000 accident.
4. Metropolitan shall, upon receipt of a release or final judgment
as described in the preceding paragraph, file with the Clerk of the
Court a "Notice of Claim" in the form attached to the Order and
Judgment, directing the Clerk to make payments from the $300,000
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previously paid by Metropolitan to the registry of the Court in
accordance with 28 U.S.C. § 1335.
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Metropolitan Property & Casualty Insurance v. Shan Trac, Inc.
Court: Court of Appeals for the First Circuit
Date filed: 2003-03-31
Citations: 324 F.3d 20
Copy CitationsCombined Opinion