Baruth v. Stellar Recovery, Inc.

          ORDER

          PHILIP A. BRIMMER CHIEF UNITED STATES DISTRICT JUDGE

         This matter is before the Court on intervenor Ameris Bank’s Motion for Summary Judgment of the Priority of its Interest in Interpleader Funds [Docket No. 125] and plaintiff Jacob Baruth’s Motion to Disburse Interpleader Funds [Docket No. 127].

         I. BACKGROUND

         At issue in this case is $42, 103.00 held by Comcast Cable Communications Management (“Comcast”) as an account receivable of defendant Stellar Recovery, Inc. (“Stellar”). Stellar, a Florida corporation, voluntarily dissolved at some point after February 2016. Docket No. 126 at 3, ¶ 8. Both plaintiff Jacob Baruth (“Baruth”) and intervenor Ameris Bank (“Ameris”) contend that they are entitled to the funds.

         On April 6, 2016, Baruth filed a complaint alleging that Stellar violated the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. (“FDCPA”), and the Telephone Consumer Protection Act, 47 U.S.C. § 227 et seq. (“TCPA”). Docket No. 1.^[1] On June 9, 2017, following an offer of judgment by Stellar pursuant to Fed.R.Civ.P. 68 and an acceptance by Baruth, see Docket Nos. 94 and 94-1, the Court entered judgment in favor of Baruth and against Stellar in the amount of $21, 000.00, plus Baruth’s costs and Baruth’s “reasonable attorney’s fees related solely to the Plaintiff’s FDCPA claim.” Docket No. 95 at 1. On March 19, 2018, the Court awarded Baruth $42, 033.00 in attorney’s fees. Docket No. 106.

         On February 5, 2016, Stellar, which was incorporated in Florida, signed a business loan agreement with The Jacksonville Bank (“TJB”). Docket No. 125 at 2, ¶¶ 3-4.^[2] In exchange for a $5, 000, 000.00 line of credit from TJB, Stellar executed a $5, 000, 000.00 promissory note. Id., ¶ 5. Stellar also signed a commercial security agreement, granting TJB a security interest in certain personal property of Stellar (the “personal property”), including its accounts receivable. Id. at 2-3, ¶ 6. On February 15, 2016, TJB recorded its interest in the personal property with the Florida Secretary of State in the Florida Secured Transaction Registry. Id. at 3, ¶ 7. On March 11, 2016, TJB merged with and into Ameris. Id., ¶ 8.

         After Stellar defaulted on the business loan agreement, Ameris filed suit against Stellar in Florida state court. Id. at 3-4, ¶ 10.^[3] On January 3, 2018, the Florida court entered final summary judgment in favor of Ameris and against Stellar. Id.^[4] As part of its order, the state court adjudged “the security interest of Ameris in and to the [c]ollateral is superior to any right, title, or interest of [Stellar]” and “any parties claiming by or through [Stellar].” Id. The “collateral” included Stellar’s accounts receivable. Id. On March 8, 2018, Ameris purchased the collateral at a judicial sale. Id. at 4, ¶ 11. On March 19, 2018, the Clerk of the Court issued a certificate of title confirming Ameris as owner of the collateral. Id.^[5]

         On April 3, 2018, Baruth obtained a Writ of Garnishment from the Court directed at Comcast, intending to collect the $42, 103.00 still owed to him by Stellar in this case. Docket No. 111. On May 17, 2018, Comcast filed a motion to deposit $42, 103.00 in interpleader funds (the “funds”) with the Court. Docket No. 116. In the motion, Comcast indicated the funds “may or may not be subject to the Writ of Garnishment because non-party Ameris Bank may be the rightful owner of the funds.” Id. at 2. Baruth did not file a response. The Court subsequently granted Comcast’s motion. Docket No. 118. On May 30, 2018, Ameris moved to intervene. Docket No. 119. Baruth did not file a response. On October 19, 2018, the Court granted Ameris’s motion to intervene. Docket No. 122. On December 7, 2018, Ameris filed a motion for summary judgment, asking the Court to hold that its interest in the interpleader funds is superior to Baruth’s interest and to release the funds to Ameris. Docket No. 125. On December 10, 2018, Baruth filed a “motion to disburse interpleader funds, ” asking the Court to release the funds to Baruth. Docket No. 127.

         II. LEGAL STANDARD

         Summary judgment is warranted under Federal Rule of Civil Procedure 56 when the “movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-50 (1986). A disputed fact is “material” if under the relevant substantive law it is essential to proper disposition of the claim. Wright v. Abbott Labs., Inc., 259 F.3d 1226, 1231-32 (10th Cir. 2001). Only disputes over material facts can create a genuine issue for trial and preclude summary judgment. Faustin v. City & Cty. of Denver, 423 F.3d 1192, 1198 (10th Cir. 2005). An issue is “genuine” if the evidence is such that it might lead a reasonable jury to return a verdict for the nonmoving party. Allen v. Muskogee, 119 F.3d 837, 839 (10th Cir. 1997).

         Where “the moving party does not bear the ultimate burden of persuasion at trial, it may satisfy its burden at the summary judgment stage by identifying a lack of evidence for the nonmovant on an essential element of the nonmovant’s claim.” Bausman v. Interstate Brands Corp., 252 F.3d 1111, 1115 (10th Cir. 2001) (internal quotation marks omitted) (quoting Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 671 (10th Cir. 1998)). “Once the moving party meets this burden, the burden shifts to the nonmoving party to demonstrate a genuine issue for trial on a material matter.” Concrete Works of Colo., Inc. v. City & Cty. of Denver, 36 F.3d 1513, 1518 (10th Cir. 1994). The nonmoving party may not rest solely on the allegations in the pleadings, but instead must designate “specific facts showing that there is a genuine issue for trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986) (internal quotation marks omitted). “To avoid summary judgment, the nonmovant must establish, at a minimum, an inference of the presence of each element essential to the case.” Bausman, 252 F.3d at 1115. When reviewing a motion for summary judgment, a court must view the evidence in the light most favorable to the non-moving party. Id.

         III. ANALYSIS

         A. Interpleader Generally

         “Interpleader is a form of joinder open to one who does not know to which of several claimants it is liable.” Amoco Prod. Co. v. Aspen Group, 59 F.Supp.2d 1112, 1114 (D. Colo. 1999) (citation omitted). “An interpleader action typically proceeds in two stages. During the first stage, the court determines whether the stakeholder has properly invoked interpleader, including whether the court has jurisdiction over the suit, whether the stakeholder is actually threatened with double or multiple liability, and whether any equitable concerns prevent the use of interpleader. . . . During the second stage, the court determines the respective rights of the claimants to the fund or property at stake via ...