Geler v. National Westminister Bank USA

763 F. Supp. 722 (S.D.N.Y. 1991)

 

RULE:

For the purposes of both the interpleader statute and the general diversity jurisdiction statute, an administrator is treated as having the same citizenship as the decedent. 28 U.S.C.S. § 1332(c)(2). To be sure, § 1332(c)(2) merely provides that the legal representative of the estate of a decedent shall be deemed to be a citizen only of the same state as the decedent. It would be absurdly inconsistent, however, to treat the representative of a citizen's estate according to the decedent's citizenship, but to treat the representative of an alien's estate according to the representative's own citizenship. The most obvious and sensible meaning of § 1332(c)(2), which was clearly intended by Congress, is that the representative of a decedent's estate is treated as having the citizenship of the decedent. 

FACTS:

The bank issued a renewable CD to a decedent. After his death, the beneficiaries filed suit against the bank for the purpose of obtaining the CD. The widow's administrator filed a similar matter in a state court. The bank filed a third-party complaint in the beneficiaries' action. It also filed an interpleader action. The court consolidated the beneficiaries' and bank's actions. The Bank now seeks an injunction staying litigation of the state court action. 4 The Gelers, however, contend that this court lacks power to enjoin proceedings in the state court action. Furthermore, they object to the Bank's stalling and ask this court to decide their motion for summary judgment in the Geler action without further delay.

The court stated that it had jurisdiction over the bank's action if it was treated as one for rule interpleader, as opposed to statutory interpleader. Moreover, the "aid of jurisdiction" exception to the Anti-Injunction Act authorized a stay of state court proceedings in a rule interpleader action. The court, however, stated that principles of comity required the bank to first seek a stay in the state court and that its failure to do so meant that it had not established the irreparable harm needed for injunctive relief.

ISSUE:

Did the court have jurisdiction of the action under the interpleader statute?

ANSWER:

Yes.

CONCLUSION:

Although the court does not have jurisdiction under the interpleader statute, it has jurisdiction if the action is treated as an interpleader under Rule 22, F.R.Civ.P. Since the plaintiff (the Bank) is diverse in citizenship from all the defendants (Susana Ghitelman's administrator and the Gelers), and the amount in controversy exceeds $ 50,000, the court has subject-matter jurisdiction under the general diversity-jurisdiction statute. 

Allowing litigation to go forward on individual claims while a rule interpleader action is pending in federal court would defeat the entire purpose of the interpleader remedy, which is to avoid the possibility of multiple litigation leading to multiple liability. Concurrent suits on individual claims in state court during the pendency of a federal interpleader action thus uniquely impair the federal court's jurisdiction. Under such circumstances, the "aid of jurisdiction" exception to the Anti-Injunction Act is clearly applicable, and the Anti-Injunction Act poses no barrier to the court's  authority to issue an injunction against the state-court action.

Click here to view the full text case and earn your Daily Research Points.