Case 5:22-cv-00169-MEMF-MAR Document 32 Filed 06/21/22 Page 1 of 10 Page ID #:124

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9 UNITED STATES DISTRICT COURT

10 CENTRAL DISTRICT OF CALIFORNIA

11 Case No.: 5:22-cv-00169-MEMF (MARx) 12 HARTFORD LIFE AND ACCIDENT

INSURANCE COMPANY,

13 ORDER AND JUDGMENT GRANTING Plaintiff, PLAINTIFF’S MOT ION FOR DEFAULT 14 JUDGMENT [ECF NO. 25] AND JOINT v. STIPULATION FOR DISCHARGE AND 15 DISBURSEMENT OF INTERPLEADER

FUNDS [ECF NO. 27]

16 DANIEL NERI IBARRA CABRERA, et al.,

17 Defendants.

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20 Before the Court is Plaintiff Hartford Life and Acciden t Insurance Company’s Motion for 21 Default Judgment and Joint Stipulation for Discharge and Disbursement of Interpleader Funds. ECF 22 Nos. 25, 27. On June 16, 2022, the Court held a hearing on the Motion. 23 For the reasons stated herein, the Court grants the Motion for Default Judgment and Joint 24 Stipulation. 25

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2 BACKGROUND

3 I. Factual Background1

4 Plaintiff Hartford Life and Accident Insurance Company (“Hartford”) is a Connecticut

5 corporation with its principal place of business in Connecticut. Compl. ¶ 2. Hartford is authorized to

6 conduct and is lawfully conducting the business of insurance within the State of California, and

7 within this District. Id. Hartford filed this action in connection to an employee welfare benefit plan

8 that it issued to decedent, Cynthia Denise Ibarra Cabrera (“Cabrera”). Id. ¶ 8.

9 Cabrera was employed by Gap Inc. and was a participant in an employee welfare benefit plan

10 (the “Plan”) eligible for group life insurance benefits. Id. ¶ 9. Gap Inc. established and maintained

11 the Plan governed by the Employee Retirement Income Security Act of 1974 (“ERISA”) that

12 provides eligible participants with group life insurance benefits that were funded in part by a group

13 policy issued by Hartford (the “Policy”). Id. ¶ 8. Cabrera designated Defendant Edwin Omar

14 Cordova (“Cordova”) as the primary beneficiary of her group life insurance benefits under the

15 Policy. Id. ¶ 10. On March 19, 2021, Cabrera died from multiple stab wounds. Id. ¶ 11. Cordova was

16 taken into custody and charged with murder. Id. He remains in custody for Cabrera’s homicide. Id. ¶

17 12.

18 Defendant Daniel Neri Ibarra Cabrera, as Administrator of the Estate of Cynthia Denise

19 Ibarra Cabrera, submitted a claim for the life insurance benefits due under the Policy. Id. ¶ 13. He

20 informed Hartford that Cabrera did not have a surviving spouse or children, and that her surviving

21 parents are Evangelina Cabrera Hernandez and Felipe Ibarra Juarez. Id. 22 II. Procedural History 23 On January 27, 2022, Hartford filed an interpleader action against Defendants Daniel Neri 24 Ibarra Cabrera, Evangelina Cabrera Hernandez, Felipe Ibarra Juarez (collectively, the “Relative 25 Defendants”), and Cordova. See generally id. In the Complaint, Hartford seeks relief in the form of 26 27 1 Plaintiff Hartford Life and Accident Insurance Company sets forth the following factual allegations in its 28 Complaint. (“Compl.”), ECF No. 1. 2 Case 5:22-cv-00169-MEMF-MAR Document 32 Filed 06/21/22 Page 3 of 10 Page ID #:126

1 an order: (1) finding that the Court has jurisdiction over this matter and the parties; (2) restraining

2 the Relative Defendants and Cordova from instituting any action against Hartford for the recovery of

3 the amount of said Policy and/or Plan, or any part thereof; (3) requiring the Relative Defendants and

4 Cordova to interplead and settle among themselves their respective rights to the proceeds under the

5 Policy and/or Plan; (4) discharging Hartford from all liability to the Relative Defendants and

6 Cordova under said Policy and/or Plan; (5) awarding Hartford its reasonable costs and attorneys’

7 fees incurred in connection with this interpleader action, with such sums to be paid out of the amount

8 deposited by Hartford with this Court2; and (6) dismissing Hartford with prejudice from this action.

9 Compl. at Prayer.

10 The Relative Defendants filed waivers of service of summons. ECF Nos. 12, 15, 16. On May

11 11, 2022, the Relative Defendants and Hartford jointly filed a stipulation for discharge and

12 disbursement of the interpleader funds. (“Stip.”), ECF 27.

13 On February 23, 2022, Hartford filed a proof of service of the summons and Complaint on

14 Cordova. ECF No. 13. On March 15, 2022, Hartford filed a Request for the Clerk to enter default

15 against Cordova, which was granted on March 16, 2022, pursuant to Federal Rule of Civil Procedure

16 55(a). ECF Nos. 20, 21. On May 11, 2022, Hartford filed the instant Motion requesting default

17 judgment. (“Mot.”), ECF No. 25. On May 24, 2022, the Court ordered Hartford to provide notice to

18 Cordova of the June 16, 2022 hearing on this Motion and to file a proof of service indicating the

19 date, time, and manner of service no later than June 9, 2022. ECF No. 29. On May 27, 2022,

20 Hartford filed the Court’s requested proof of service. ECF No. 30. On June 16, 2022, the Court heard

21 oral argument on the Motion. Cordova did not appear at the June 16, 2022 hearing. 22 III. Legal Standard 23 Federal Rule of Civil Procedure 55(b) authorizes a district court to grant default judgment 24 after the Clerk of the Court enters default under Rule 55(a). Local Rule 55-1 requires the party 25 seeking default judgment to file a declaration establishing: (1) when and against what party the 26

27 2 The Court notes that Hartford attempted to deposit the proceeds plus interest with the Court, which did not accept the deposit absent a court order. Mot. at 5 n.1. The Court instructs Hartford to deposit the proceeds 28 following this Order. 3 Case 5:22-cv-00169-MEMF-MAR Document 32 Filed 06/21/22 Page 4 of 10 Page ID #:127

1 default was entered; (2) the pleading on which default was entered; (3) whether the defaulting party

2 is an infant or incompetent person, and if so, whether that person is represented by a general

3 guardian, committee, conservator, or other like fiduciary who has appeared; (4) that the

4 Servicemembers Civil Relief Act does not apply; and (5) that the defaulting party was properly

5 served with notice. C.D. CAL. L.R. 55-1.

6 Once default has been entered, the factual allegations in the complaint, except those

7 concerning damages, are deemed admitted by the non-responding party. See FED. R. CIV. PROC.

8 8(b)(6); TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917–18 (9th Cir. 1987). However, default

9 judgment is not automatic upon the Clerk’s entry of default; rather, it is left to the sound discretion

10 of the court. Aldabe v. Aldabe, 616 F.2d 1089, 1092–93 (9th Cir. 1980). When deciding whether to

11 enter default judgment, courts consider seven factors, commonly known as the Eitel factors:

12 (1) the possibility of prejudice to the plaintiff; (2) the merits of plaintiff’s substantive claim; (3) the sufficiency of the complaint; (4) the sum of money at stake in the action; 13 (5) the possibility of a dispute concerning material facts; (6) whether the default was due to excusable neglect; and (7) the strong policy underlying the Federal Rules of 14 Civil Procedure favoring decisions on the merits.

15 See Eitel v. McCool, 782 F.2d 1470, 1471–72 (9th Cir. 1986).

16 IV. Discussion

17 A. The Court Has Subject Matter Jurisdiction Over This Action

18 A party seeking to bring a federal interpleader action under Federal Rule of Civil Procedure

19 22 must establish statutory jurisdiction. See Aetna Life Ins. Co. v. Bayona, 223 F.3d 1030, 1033 (9th

20 Cir. 2000). Here, the Court has original jurisdiction over this matter because Hartford seeks

21 equitable relief under ERISA. See 29 U.S.C. § 1132(a)(3)(B)(ii), (e)(1); 28 U.S.C. § 1331; see also 22 Bayona, 223 F.3d at 1033. 23 B. The Court Has Personal Jurisdiction Over All Defendants 24 The Court also concludes that it has personal jurisdiction over Cordova. ERISA provides that 25 “where an action under this title is brought in a district court of the United States, it may be brought 26 in the district where the plan is administered, where the breach took place, or where a defendant 27 resides or may be found, and process may be served in any other district where a defendant resides 28 or may be found.” 29 U.S.C. § 1132(e)(2). Hartford alleges that Defendant Daniel Neri Ibarra 4 Case 5:22-cv-00169-MEMF-MAR Document 32 Filed 06/21/22 Page 5 of 10 Page ID #:128

1 Cabrera, Evangelina Cabrera, and Cordova are all citizens of the State of California and reside in the

2 County of Riverside, California. Compl. ¶ 6. Hartford further alleges that Defendant Felipe Ibarra

3 Juarez is a citizen of the State of California and resides in the County of San Diego, California.

4 Because all Defendants reside in California, the Court finds that it may exercise jurisdiction over this

5 matter and the parties.

6 C. Hartford Has Satisfied the Procedural Requirements of Local Rule 55-1

7 On March 16, 2022, the Clerk of the Court entered default against Cordova. ECF No. 21.

8 Cordova has not responded to the Complaint or otherwise defended the action. Pursuant to Local

9 Rule 55-1, Hartford submitted a declaration from counsel establishing that Cordova is not a

10 corporate entity and not a minor, infant, or otherwise incompetent person, and that the

11 Servicemembers Civil Relief Act does not apply. Declaration of Keiko K. Kojima (“Kojima Decl.”),

12 ECF No. 25-1 ¶ 13. Finally, Hartford served Cordova with a copy of this Motion. ECF 30. As such,

13 the Court finds Hartford has complied with the procedural requirements of Local Rule 55-1.

14 D. The Eitel Factors Weigh In Favor of Granting Default Judgment

15 i. Hartford Would Suffer Prejudice Without a Default Judgment

16 The first Eitel factor requires the Court to consider the harm to a plaintiff in the absence of

17 default judgment. See Eitel, 782 F.2d at 1471–72.

18 The first Eitel factor weighs in favor of granting Hartford’s Motion. Hartford filed proof of

19 service of the summons and Complaint on Cordova on February 23, 2022. ECF No. 13. He has not

20 answered the Complaint or otherwise appeared in this action. In view of his default, Hartford has no

21 alternative means by which to resolve its potential claim regarding Cabrera’s Policy and Plan. 22 Furthermore, Hartford alleges that if it is determined that Cordova is disqualified from 23 receipt of the life insurance proceeds due under the Policy pursuant to California Probate Code 24 section 252 or other applicable law, and Hartford had released the insurance proceeds to Cordova 25 then Hartford would be exposed to duplicate and/or multiple liability under the Policy. Compl. ¶ 15. 26 Taking the factual allegations as true—as this Court must, given that the Clerk has entered default— 27 Hartford will be prejudiced if the Court does not grant default judgment. Accordingly, the Court 28 finds that this factor weighs in favor of default judgment. 5 Case 5:22-cv-00169-MEMF-MAR Document 32 Filed 06/21/22 Page 6 of 10 Page ID #:129

1 ii. Hartford Has Demonstrated the Merits of Its Claims and Sufficiency of the

2 Complaint

3 The second and third Eitel factors consider the substantive merits and sufficiency of the

4 complaint. See Eitel, 782 F.2d at 1471–72. Notwithstanding the entry of default, the Court must still

5 determine if the facts alleged give rise to a legitimate cause of action because “claims [that] are

6 legally insufficient . . . are not established by default.” Cripps v. Life Ins. Co. of N. Am., 980 F.2d

7 1261, 1267 (9th Cir. 1992). Hartford maintains it is entitled to default judgment and the relief

8 requested in its Complaint. Mot. at 7–8.

9 An interpleader action serves two purposes: (1) protecting the stakeholder from problems

10 caused by multiple claimants to a single fund; and (2) limiting litigation expenses. See Mack v.

11 Kuckenmeister, 619 F.3d 1010, 1024 (9th Cir. 2010). Hartford asserts that because multiple parties

12 could be entitled to the insurance proceeds, it cannot distribute the proceeds without exposing itself

13 to liability or litigation. Mot. at 9; Compl. ¶ 15. Exposure to multiple claims for the proceeds of any

14 ERISA benefit plan is a type of action for which interpleader is appropriate. See Trs. of the Dirs.

15 Guild of America-Producer Pension Benefits Plan v. Tise, 234 F.3d 415, 426 (9th Cir. 2000)

16 (“Interpleader is a valuable procedural device for ERISA plans who are confronted with conflicting

17 multiple claims upon the proceeds of an individual’s benefit plan . . . Interpleader provides a way out

18 of this quandary, allowing the plan to petition the court to sort out the conflicting claims.”). The

19 Court finds that Hartford has properly stated a claim for interpleader and the Stipulation properly

20 protects the claims of the Relative Defendants. Accordingly, these factors weigh in favor of the entry

21 of default judgment. 22 iii. The Sum of Money at Stake Is a Neutral Factor 23 In evaluating this factor, the Court must balance the amount of money at stake in relation to 24 the seriousness of Defendant’s conduct. See Eitel, 782 F.2d at 1471–72. Generally, default judgment 25 is disfavored where the sum of money at stake is too large or unreasonable in relation to defendant’s 26 conduct. See, e.g., Kong v. Pulido, 2019 WL 1751843, at *2 (C.D. Cal. Mar. 18, 2019). 27 Here, Hartford does not assert a claim to the funds, and is instead attempting to distribute the 28 funds to the Relative Defendants entitled to the Policy benefits. Because Hartford is not asserting an 6 Case 5:22-cv-00169-MEMF-MAR Document 32 Filed 06/21/22 Page 7 of 10 Page ID #:130

1 interest in the interpleaded funds, nor seeking damages, the sum of money at stake is not dispositive.

2 Thus, this factor weighs neither in favor nor against the entry of default judgment.

3 iv. There is Little Possibility of Dispute

4 The fifth Eitel factor requires the Court to consider the possibility of dispute about material

5 facts in the case. See Eitel, 782 F.2d at 1471–72. Generally, where a complaint is well-pleaded and

6 the Cordova make no effort to respond, this favor weighs in favor of default judgment.

7 While Cordova has not responded to the action, there is no indication from the Complaint nor

8 Hartford’s motion that there are any facts in dispute. Upon entry of default, all well-pleaded facts in

9 the complaint are taken as true, except those relating to damages. TeleVideo Sys., Inc., 826 F.2d at

10 917–18. Having considered the low likelihood of disputed facts, the Court finds this factor to weigh

11 in favor of default judgment.

12 v. There is Little Possibility of Excusable Neglect

13 The sixth Eitel factor considers the possibility that the default resulted from excusable

14 neglect. See Eitel, 782 F.2d at 1472.

15 Here, Hartford alleges it has made numerous attempts to serve Cordova with the Complaint,

16 summons, and this motion for default judgment. See supra Section II. Absent any further

17 information, the Court is unable to conclude whether Cordova’s failure to respond is due to

18 excusable neglect.

19 vi. Policy Concerns Favor Resolution on the Merits

20 The Ninth Circuit’s “starting point is the general rule that default judgments are ordinarily

21 disfavored. Cases should be decided upon their merits whenever reasonably possible.” Eitel, 782 22 F.2d at 1472. Therefore, the policy favoring resolution on the merits weighs against granting default 23 judgment. 24 Based on the Eitel factors as whole, the Court finds in favor of granting default judgment 25 against Cordova. 26 V. The Court Grants Hartford’s Request for Equitable Relief 27 Hartford also seeks to be discharged from liability under the Policy and/or Plan and 28 dismissed from this action with prejudice. Mot at 8–9. Under 28 U.S.C. § 2361, in “any civil action 7 Case 5:22-cv-00169-MEMF-MAR Document 32 Filed 06/21/22 Page 8 of 10 Page ID #:131

1 of interpleader,” a district court may “issue its process for all claimants and enter its order restraining

2 them from instituting or prosecuting any proceeding,” “discharge the plaintiff from further liability,

3 make the injunction permanent, and make all appropriate orders to enforce its judgment. Courts have

4 found discharge proper where the interpleading plaintiff has no interest in the disputed funds. See

5 e.g., Conn. Gen. Life Ins. Co. v. Rapoza, No. C06-7427 TEH, 2007 WL 2141266, at *2 (N.D. Cal.

6 July 25, 2007); Sun Life Assur. Co. of Canada v. Chan's Estate, No. C-03-2205 SC, 2003 WL

7 22227881, at *2 (N.D. Cal. Sept. 22, 2003).

8 As discussed above, Hartford has properly shown that it is entitled to interpleader. Further,

9 Hartford does not contest its liability under the Policy and/or plan nor claim any entitlement to the

10 proceeds. Indeed, on May 11, 2022, Hartford and the Relative Defendants jointly filed a Stipulation

11 with the Court requesting that Hartford “be discharged from any liability to Defendants to the full

12 extent permitted by law.” Stip. ¶ 2. Therefore, Hartford has met its burden as a disinterested

13 stakeholder, and the Court discharges Hartford from any further liability under the Plan and/or

14 Policy and dismiss it from the present action with prejudice.

15 VI. The Court Grants Hartford’s Request for Attorneys’ Fees and Costs

16 Hartford requests that the Court award attorneys’ fees and costs in the amount of $5,500.00.

17 Mot. at 9–10. “[C]ourts have discretion to award attorney fees to a disinterested stakeholder in an

18 interpleader action.” Abex Corp. v. Ski’s Enterprises, Inc., 748 F.2d 513, 516 (9th Cir.1984). “[T]he

19 proper rule . . . in an action in the nature of interpleader, is that the plaintiff should be awarded

20 attorney fees for the services of his attorneys in interpleading.” Schirmer Stevedoring Co., Ltd. v.

21 Seaboard Stevedoring Corp., 306 F.2d 188, 194 (9th Cir.1962). The court has broad discretion to 22 award attorneys’ fees and costs: (1) against the losing claimants as costs to such claimants, (2) from 23 the fund payable to the winning claimants, or (3) by dividing the fees among the claimants. 24 Schirmer, 306 F.2d at 195. “In an interpleader action, the broad rule is reasonableness.” Trs. of Dirs. 25 Guild, 234 F.3d at 426. 26 In support of its request, Hartford described the work performed by counsel to include: 27 drafting the interpleader complaint, locating the defendants and serving the complaint, 28 corresponding and communicating with the remaining defendants in this action regarding 8 Case 5:22-cv-00169-MEMF-MAR Document 32 Filed 06/21/22 Page 9 of 10 Page ID #:132

1 information requests, court filings, preparing the stipulation for fund disbursement, and the instant

2 Motion. Kojima Decl. ¶ 4. Furthermore, the Relative Defendants stipulated to an attorneys’ fees

3 award of $5,500.00 to be retained by Hartford from the insurance proceeds payable due to the death

4 of Cabrera. Stip. ¶ 4. The Court finds that Hartford’s request for attorneys’ fees and costs is

5 reasonable in light of the work described and the Stipulation entered into by the parties.

6 For these reasons, the Court grants Hartford’s request for attorneys’ fees and costs in the

7 amount of $5,500.00.

8 VII. Conclusion

9 For the reasons stated above, the Court GRANTS Hartford’s Motion for Default Judgment

10 and Joint Stipulation and ORDERS as follows:

11 1. The Court finds that it has jurisdiction over this matter and the parties;

12 2. All Defendants shall be restrained from taking, or proceeding with or commencing

13 any action against Hartford or its present, former, and future officers, directors,

14 shareholders, employers, employees, parents, subsidiaries, affiliates, reinsurers,

15 insurers, administrators, agents, predecessors, successors, attorneys and assigns, for

16 or on account of any transaction, matter, happening or thing in any way arising out of

17 or relating to the rights and obligations of the parties with respect to the Policy and/or

18 the Plan, and/or with respect to benefits due under the Policy and/or the Plan.

19 3. All Defendants are required to interplead and settle among themselves their

20 respective rights to the proceeds under the Policy and/or Plan;

21 4. Hartford is discharged from all liability to Defendants under said Policy and/or Plan, 22 or otherwise; 23 5. Hartford is dismissed with prejudice from this action; 24 6. Hartford shall deposit the proceeds in the amount of $42,500.00, plus interest with the 25 Court; 26 7. Hartford shall be awarded its attorneys’ fees and costs in the amount of $5,500.00 to 27 be retained by Hartford from the insurance proceeds payable due to the death of 28 Cabrera; 9 Case 5:22-cv-00169-MEMF-MAR Document 32 Filed 06/21/22 Page 10 of 10 Page ID #:133

1 8. Following the $5,500 award in attorneys’ fees to Hartford, the remaining funds, plus

2 any accrued interest, shall be payable by Hartford to Evangelina Cabrera Hernandez

3 and Felipe Ibarra Juarez in equal 50%/50% shares;

4 9. Daniel Neri Ibarra Cabrera, Administrator of The Estate of Cynthia Denise Ibarra

5 Cabrera, does not seek entitlement to the insurance proceeds individually and

6 stipulates to the 50%/50% shares distributed to Evangelina Cabrera Hernandez and

7 Felipe Ibarra Juarez; and

8 10. This action shall be dismissed with prejudice.

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10 IT IS SO ORDERED.

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13 Dated: June 21, 2022 ___________________________________

14 MAAME EWUSI-MENSAH FRIMPONG

15 United States District Judge

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