Primerica Life Insurance Co. v. Ila Reid, 975 F.3d 697

In 1986 Garvin Reid purchased a life insurance policy naming his then-wife Betty Jo as principal beneficiary; their children were contingent beneficiaries. Garvin divorced Betty Jo in 1992 and married Ila in 1993.
In 2002 Garvin and Ila returned a Primerica "Multipurpose Change Form" with entries for a name change and a beneficiary change; Primerica requested additional legal paperwork and never received a response, and Primerica did not process the change.
Garvin died in August 2016. Primerica initially reviewed the claim and briefly treated Ila and Betty Jo as the same person, then confirmed the 2002 form had not been processed and that Betty Jo remained the listed beneficiary.
Both Betty Jo and Ila submitted competing claims to the policy proceeds; Primerica filed a Rule 22 interpleader action naming both claimants.
The district court awarded the proceeds to Ila but granted Primerica summary judgment on Ila’s breach-of-contract counterclaim, holding that filing interpleader barred liability; Ila appealed only the dismissal of her counterclaim.
The Eighth Circuit remanded, directing the district court to determine whether Primerica was at fault (i.e., acted unfairly in creating the dispute) because an at-fault stakeholder cannot use interpleader as a shield against counterclaims.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Primerica's Rule 22 interpleader shields it from Ila's breach-of-contract counterclaim when the stakeholder may have caused the dispute	Primerica failed to process the 2002 form and thus acted unfairly, so it cannot use interpleader to avoid liability	Interpleader was proper because competing claims existed and Primerica sought clarification in 2002; its decision to interplead cannot create a breach claim	The court remanded for a factual determination of "fault"; if Primerica acted unfairly in creating the conflict, it may not invoke interpleader as a shield

Prudential Ins. Co. v. Hinkel, 121 F.3d 364 (8th Cir. 1997) (standard of review for summary judgment and view of facts for nonmovant)
Erie R. Co. v. Tompkins, 304 U.S. 64 (U.S. 1938) (federal courts apply state substantive law)
Great Am. Ins. Co. v. Bank of Bellevue, 366 F.2d 289 (8th Cir. 1966) (interpleader is equitable and governed by equitable principles)
Home Indem. Co. v. Moore, 499 F.2d 1202 (8th Cir. 1974) (courts condition interpleader relief on equitable doctrines)
Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 806 (U.S. 1945) (clean-hands doctrine requires fairness in the matters at hand)
Douglas-Guardian Warehouse Corp. v. Ramy Seed Co., 271 F.2d 24 (8th Cir. 1959) (interpleader should be permitted liberally)
Prudential Ins. Co. of Am. v. Hovis, 553 F.3d 258 (3d Cir. 2009) (stakeholder must be free from blame to obtain interpleader relief)
Lee v. W. Coast Life Ins. Co., 688 F.3d 1004 (9th Cir. 2012) (citing Hovis and holding interpleader doesn't shield an independently liable stakeholder)