Think Before Interpleading.

Action involves dispute over proceeds from a life insurance policy. The insurance company interpleaded the funds and the claimants settled their dispute. But a negligence cause of action against the insurance company alleging the whole dispute was caused by the company’s carelessness in administering the policy had been plead. The trial court dismissed the claim and the Ninth Circuit reversed, holding the federal interpleader remedy does not shield the company from a negligence claim.  The court stated a disinterested stakeholder may not be subjected to liability for its failure to resolve the controversy over entitlement to the stake in one claimant’s favor, but there may be liability if an alleged tort caused the controversy.  Lee v. West Coast Life Ins. Co.  (Ninth Cir.; July 31, 2012) (Case No. 11-55026).