RELIANCE STANDARD LIFE INSURANCE COMPANY v. LYONS

In connection with the Bank's commercial lending relationship with John F. Lyons and related Settlement Agreement executed on or about December 15, 2008 by Mr. Lyons and the Bank, Mr. Lyons pledged and assigned to the Bank an interest in benefits payable from Policy No. 645290-A. We hereby notify Standard Life Insurance Company [sic] of the Bank's interest in said benefits and request that you contact us immediately upon receipt hereof to discuss with us additional information, if any, needed to ensure the Bank's interest is duly satisfied upon any distribution of benefits under the Policy.

(ECF No. 68-3 at 103.) On May 6, a Standard Insurance representative left a voice mail message with Attorney Anthony Stites, the benefits administrator with Barrett McNagny, asking if Barrett McNagny had received a beneficiary designation form naming Lake City Bank as a beneficiary under the Standard Insurance policy. Mr. Stites responded that Barrett McNagny did not have any beneficiary changes on file other than the original beneficiary designation previously submitted to Standard Insurance. In a letter dated May 6, 2009, to counsel for Lake City Bank, Standard Insurance indicated its receipt of the April 16, 2009, letter and its initial assessment that Lake City Bank has no claim because the policy prohibited assignment of the rights and benefits under the policy. Standard Insurance's May 6, 2009, letter also provided the relevant provisions of the policy that prohibited assignments and specified how to name a beneficiary, stated that it had confirmed with Barrett McNagny that it had received no beneficiary designation form, indicated that Barrett McNagny had provided a signed beneficiary form naming certain living individuals as beneficiaries, advised that it intended to release the benefits to the named beneficiaries, and directed the bank to notify Standard Insurance in writing of the basis for its claim and the appropriate legal authority.

On May 26, Standard Insurance received a letter dated May 21, 2009, from counsel for Lake City Bank that included as an enclosure a settlement agreement signed by Lake City Bank, J. Frederick Development, LLC, John F. Lyons, and others. Paragraph 5(b) of the settlement agreement provides, in relevant part, as follows:

Upon execution of this Agreement [John F.] Lyons shall execute certain Assignments of Life Insurance Policy (collectively, the "Assignments") in favor of Bank, assigning, transferring and setting over to Bank the following insurance policies, owned by and insuring the life of John Lyons, and the benefits payable therefrom, pursuant to the terms and conditions of each Assignment thereof:

(i) Policy No. 00645290 0001 issued by The Standard Insurance Company;

(ii) Policy No. GL136322 issued by Reliance Standard Insurance;

(iii) Policy No. SGM600231 issued by Cigna Group Insurance; and

(iv) Policy No. 21652545 issued by Lincoln Financial Group.

(ECF No. 68-3 at 54.) In the May 21, 2009, letter, counsel for Lake City Bank stated:

This office represents Lake City Bank of Warsaw, Indiana, which is asserting an equitable lien on the life insurance proceeds on the [Standard Insurance group policy]. I am enclosing with this letter a copy of the Settlement Agreement executed by Mr. Lyons on or about December 15, 2008. Under paragraph 5(b) of the Agreement, Mr. Lyons agreed to execute an Assignment of the above-referenced life insurance policy benefits to Lake City Bank. Mr. Lyons died before the written Assignment naming the Bank as the beneficiary could be executed.

. . .

By this letter, we are placing you on notice of Lake City Bank's equitable lien on the life insurance proceeds.

. . .

According to the Settlement Agreement executed by Mr. Lyons in December 2008, Lake City Bank is entitled to life insurance benefits not to exceed $500,000. Therefore, Lake City Bank is asserting its rights to the life insurance proceeds payable under your policy in an amount up to $500,000.

. . . Unless some agreement can be reached between all of the claimed beneficiaries to the life insurance proceeds, we believe the most prudent step for your company to take is to initiate an interpleader action in Fort Wayne, Indiana naming all of the claimed beneficiaries, including Lake City Bank, as defendants with the proceeds of the life insurance policy deposited with the Clerk of the Court. Should your company refuse to honor the lien or refuse to initiate an interpleader action, Lake City Bank intends to enforce its equitable lien directly against your company.

(ECF No. 68-3 at 47-49.) Counsel for Lake City Bank also sent a letter dated June 4, 2009, to Standard Insurance in which it spelled out its equitable lien claim to the proceeds of the Standard Insurance policy, encouraged Standard Insurance to initiate an interpleader action, and stated that if Standard Insurance refuses to honor Lake City Bank's equitable lien or refuses to initiate an interpleader action, Lake City Bank "[i]ntends to enforce its equitable lien directly against your company." (ECF No. 68-3 at 41.)

By a letter dated June 16, 2009, Standard Insurance informed counsel for Lake City Bank of its determination that no life insurance benefits are payable to Lake City Bank pursuant to ERISA and the terms of the Standard Insurance policy. In the June 16, 2009, determination letter, Standard Insurance advised Lake City Bank of the following basis for its determination that no benefits are payable to Lake City Bank under the policy:

ERISA requires us to pay the benefit to the named beneficiaries pursuant to the terms of the group policy. The settlement agreement executed by Mr. Lyons did not effect a beneficiary change under the terms of the Barrett McNagny, LLP Group Policy.

The settlement agreement does not operate as an assignment of the benefit. Even if Mr. Lyons had executed an assignment, the Barrett McNagny, LLP Group Policy does not permit assignments.

ERISA case law supports that the Barrett McNagny, LLP Group Policy's anti-assignment provision prevents the Bank from claiming the benefit as an assignee/beneficiary.

Finally, ERISA would preempt application of any state law equitable lien theory against payment of the benefit to the named beneficiaries.

Therefore, we intend to release the Life Insurance benefit to the named beneficiary(ies) of the Group Policy.

If you disagree with our decision, you must send us a written request within 15 days after you receive this letter. If we do not receive a response from you by July 6, 2009, we will proceed with releasing benefits to the named beneficiary(ies) of the policy at that time.

(ECF No. 68-3 at 27-28.)

On July 6, 2009, counsel for Lake City Bank provided Standard Insurance with a "courtesy copy" of its Third-Party Complaint. In the accompanying cover letter, counsel for Lake City Bank stated that "[t]he Third Party Complaint shall constitute the Bank's written opposition to The Standard's decision regarding the Bank's claim to the life insurance proceeds" under the Standard Insurance policy. (ECF No. 68-2 at 74.)

All administrative remedies have been exhausted and/or further administrative proceedings would be futile.

Lake City Bank has moved to strike evidence designated by Cynthia K. Lyons. Specifically, Lake City Bank asks the Court to strike copies of the Reliance Standard policy and the LINA policy that were submitted by Cynthia K. Lyons with her Motion for Summary Judgment because the documents were not properly authenticated and lack the necessary foundation. On January 15, 2010, Cynthia K. Lyons supplemented the record with an Affidavit of Peter Sailor, Assistant Vice President of Reliance Standard, which provides the foundation for the Reliance Standard policy. As for the LINA policy, she argues that circumstantial evidence is sufficient to establish the authenticity of the document and that there is a prima facie showing of genuineness.

In deciding a motion for summary judgment, the Court may consider "any material that would be admissible or usable at trial," including "properly authenticated and admissible documents or exhibits." Smith v. City of Chi., 242 F.3d 737, 741 (7th Cir. 2001) (citing Woods v. City of Chi., 234 F.3d 979, 988 (7th Cir. 2000)). Federal Rule of Evidence 901(a) provides that the "requirement of authentication or identification as a condition precedent to admissibility is satisfied by evidence sufficient to support a finding that the matter in question is what its proponent claims." This rule "requires only a prima facie showing of genuineness." United States v. Harvey, 117 F.3d 1044, 1049 (7th Cir. 1997). Evidence can be authenticated in various ways, including by affidavit and distinctive characteristics. See Fed.R.Evid. 901(b) (providing examples of authentication or identification by "way of illustration only, and not by way of

limitation").

The Court is satisfied that the copies of the policies put forward by Cynthia K. Lyons are what she claims they are. Earlier in this litigation, Cynthia K. Lyons attached copies of the three group life insurance policies to her pleadings filed on August 7, 2009, see Fed.R.Civ.Pro. 10(c) (stating that a "copy of a written instrument that is an exhibit to a pleading is a part of the pleading for all purposes"). In its Answer to Cynthia K. Lyons's Cross-Claim, Lake City Bank references the life insurance policies that Cynthia K. Lyons attached to her Cross-Claim, admits that the insurance companies insured John F. Lyons under specific policy numbers and in specific amounts, and states (as to each policy) that Lake City Bank "neither admits nor denies the [relevant] Exhibit, but indicates that [the] Exhibit [] speaks for itself." (ECF No. 46 at 2-3.) During the pleadings stage of this litigation, neither Lake City Bank nor any other party disputed the authenticity of the attached copies of the policies, and Reliance Standard and LINA were parties to this action when Cynthia K. Lyons submitted the copies of their policies along with her pleadings. Cynthia K. Lyons attached the same copies to her pleadings and her Motion for Summary Judgment. Even though Lake City Bank's Motion to Strike seeks to block consideration of the Reliance Standard policy and the LINA policy with a technical argument about lack of foundation and authenticity, it has not raised any genuine question as to the authenticity of the copies of the policies. Furthermore, in its Response to the summary judgment motions filed by the Lyons parties and Standard Insurance, Lake City Bank essentially concedes that the documents are what Cynthia K. Lyons claims that they are. Additionally, the copies of the policies on their face include signs of authenticity, such as insurance certificates, policy numbers, names of the respective insurance companies on the policies, and explicit links of the policies to the policyholder (Barrett McNagny). Consequently, Lake City Bank's Motion to Strike will be denied.

Standard Insurance has moved to strike the Affidavit of Michael E. Gavin submitted by Lake City Bank. Standard Insurance argues that this Affidavit is outside the administrative record. Standard Insurance is correct that this Court is limited to the administrative record in reviewing its decision. See Perlman v. Swiss Bank Corp. Comprehensive Disability Prot. Plan, 195 F.3d 975, 982 (7th Cir. 1999) (adopting the majority rule that "when review under ERISA is deferential, courts are limited to the information submitted to the plan's administrator"). However, as Lake City Bank points out, the bank has also asserted claims against the Lyons parties, and it uses the Affidavit to authenticate documents upon which such claims are founded. The Court will grant in part and deny in part Standard Insurance's Motion to Strike. The Motion will be granted as to the Court's review of Standard Insurance's determination of Lake City Bank's claim, but it will denied as to the Court's consideration of Lake City Bank's claims against the Lyons parties.

There is no dispute that the life insurance policies at issue in this case are employee welfare benefit plans governed by ERISA. The Lyons parties claim entitlement to the proceeds of the three life insurance policies because they are the designated beneficiaries and because John F. Lyons never changed the beneficiaries or executed any assignment. Standard Insurance's position is essentially aligned with that of the Lyons parties, but its policy is just one of the three involved in this litigation. Reliance Standard and LINA are no longer parties to this action, and the proceeds of the Reliance Standard policy and the LINA policy have already been deposited with the Clerk of this Court. Lake City Bank presents a rival claim to the proceeds of the three life insurance policies based upon an equitable lien theory under ERISA and an unjust enrichment theory under state law.

For Lake City Bank to prevail on its equitable lien claim under ERISA and recover proceeds from the group life insurance policies, the bank must have, at least, a colorable claim under ERISA. In its Memorandum in Support of its Motion for Summary Judgment, Lake City Bank references 29 U.S.C. §§ 1132(a)(1)(B) and 1132(a)(3) in claiming that it is a "beneficiary" under ERISA entitled to assert a claim to the life insurance proceeds.

ERISA § 502(a)(1)(B) authorizes a civil action to be brought "by a participant or beneficiary . . . to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan." 29 U.S.C. § 1132(a)(1)(B). ERISA § 502(a)(3) authorizes a civil action to be brought "by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provision of this subchapter or the terms of the plan." 29 U.S.C. § 1132(a)(3). "[B]ecause ERISA authorizes suits for plan benefits only by participants, beneficiaries, fiduciaries, or the Secretary of Labor, 29 U.S.C. § 1132(a), an assignee who does not come under one of these descriptions is ineligible to maintain the suit." Morlan v. Universal Guar. Life Ins. Co., 298 F.3d 609, 615 (7th Cir. 2002) (citation omitted).

In support of its claim of beneficiary status, Lake City Bank points to section 5(b) of the settlement agreement in which John F. Lyons agreed to execute assignments of the life insurance policies in favor of Lake City Bank. However, Lake City Bank concedes that John F. Lyons never signed or delivered assignments to Reliance Standard, LINA, or Standard Insurance. In other words, Lake City Bank has acknowledged that John F. Lyons did not assign the life insurance policies. Similarly, in its Memorandum in Support of its Motion for Summary Judgment, Lake City Bank recognizes that the language of the insurance policies "may require a written change of beneficiary form in order to effectuate an assignment of benefits" (ECF No. 73 at 7), but the bank comes forward with no evidence having the tendency to show that John F. Lyons executed any written change of beneficiary forms.

Under ERISA, a "beneficiary" is "a person designated by a participant, or by the terms of an employee benefit plan, who is or may become entitled to a benefit thereunder." 29 U.S.C. § 1002(8). A party "can demonstrate that it `may become entitled to a benefit,' and therefore be considered a `beneficiary' for jurisdictional purposes, only if it can show that at the time it filed suit it had a colorable claim to vested benefits." Neuma, Inc. v. AMP, Inc., 259 F.3d 864, 878 (7th Cir. 2001). The Seventh Circuit has differentiated between having a "colorable claim" for purposes of jurisdiction, which is not a stringent requirement, and having a claim on which the plaintiff ultimately succeeds. Id. "A plaintiff achieves status as a beneficiary if [it] ha[s] even an `arguable' claim: `[o]nly if the language of the plan is so clear that any claim as an assignee must be frivolous is jurisdiction lacking.'" Id. (quoting Kennedy v. Conn. Gen. Life Ins. Co., 924 F.2d 698, 700 (7th Cir. 1991). For a claim to be one for "vested benefits," the plaintiff "must have a colorable claim to benefits which the employer promised to provide pursuant to the employment relationship and which a non-frivolous argument suggests have accrued to the employee's benefit." Id. at 879 n. 11 (quotation marks and citation omitted).

The Court finds that, at the time Lake City Bank filed its Answer, Third Party Complaint, and Cross-Claim, it did not have a colorable claim to vested benefits. In its Memorandum in Support of its Motion for Summary Judgment, Lake City Bank cites no federal case that recognizes a claim analogous to its claim here. In the case it relies on for the colorable claim standard, Neuma, Inc., the former employee had assigned all of his right to his life insurance benefits to Neuma, Inc. Id., 259 F.3d at 867-68. However, in this case, John F. Lyons merely agreed to execute assignments, but he never actually assigned his rights or changed the beneficiaries of the life insurance policies. Because Lake City Bank had no colorable claim to vested benefits, it is not a beneficiary for jurisdictional purposes and has no claim as a beneficiary under 29 U.S.C. § 1132(a)(1)(B) or § 1132(a)(3). Lake City Bank presents no other authority or ground for a claim under ERISA. For these reasons, Lake City Bank's equitable lien claim under ERISA fails as a matter of law.

Reliance Standard and LINA proceeded in interpleader and deposited the proceeds of their life insurance policies with the Clerk of this Court. Considering that Lake City Bank is not a beneficiary and has no claim to the proceeds, that Reliance Standard and LINA have been dismissed from this case, and that the proceeds are being held by the Court, the Court determines the rightful beneficiaries of the life insurance policies by interpreting the ERISA plans and applying the federal common law rules of contract interpretation. See Kamler v. H/N Telecomm. Servs., Inc., 305 F.3d 672, 680 (7th Cir. 2002) (citing Neuma, Inc., 259 F.3d at 873). These rules require the Court to interpret the terms of an ERISA plan "in an ordinary and popular sense as would a person of average intelligence and experience." Id. (quotation marks and citation omitted). The Court must determine whether the terms of the document governing the ERISA plan are ambiguous, and if there is no ambiguity, the Court will not look beyond the four corners of the plan to interpret its meaning. See id.

The terms of the Reliance Standard policy are not ambiguous. It provides for payment to the named beneficiaries, and Cynthia K. Lyons, John E. Lyons, and Michael B. Lyons are the named beneficiaries of the Reliance Standard policy. The policy designated 33 and 1/3% of the proceeds to each beneficiary. Consequently, Cynthia K. Lyons, John E. Lyons, and Michael B. Lyons are each entitled to receive 33 and 1/3% of the proceeds of the Reliance Standard life insurance policy.

Likewise, the terms of the LINA policy are not ambiguous. It provides for payment of the life insurance benefit to the named beneficiaries, and Cynthia K. Lyons, John E. Lyons, and Michael B. Lyons are the named beneficiaries of the LINA policy. The policy designates 50% of the proceeds to Cynthia K. Lyons, 25% of the proceeds to John E. Lyons, and 25% of the proceeds to Michael B. Lyons. Consequently, Cynthia K. Lyons is entitled to receive 50% of the proceeds of the LINA life insurance policy, and John E. Lyons and Michael B. Lyons are each entitled to receive 25% of the proceeds of the LINA life insurance policy.

The Standard Insurance policy grants Standard Insurance broad discretion to control and manage the policy, administer claims, interpret the policy, and resolve all questions arising in the administration, interpretation, and application of the policy. This discretion includes the right to resolve all matters when a review has been requested, the right to establish and enforce rules and procedures for the administration of the policy and any claim under it, and the right to determine entitlement to benefits, amount of benefits payable, and sufficiency and amount of information reasonably required to make these determinations.

When an ERISA insurance plan grants an administrator discretion to construe terms and determine coverage under the policy, which the Standard Insurance policy clearly does, a reviewing court may not overturn the administrator's interpretation unless the administrator's determination was arbitrary or capricious. Ruttenberg v. U.S. Life Ins. Co., 413 F.3d 652, 659 (7th Cir. 2005); see also Davis v. Unum Life Ins. Co. of Am., 444 F.3d 569, 575 (7th Cir. 2006) (stating, in a case arising under 29 U.S.C. § 1132(a)(1)(B), that benefit determinations are reviewed under the arbitrary or capricious standard when the terms of the employee benefit plan afford the plan administrator broad discretion to interpret the plan and determine benefit eligibility); Sisto v. Ameritech Sickness Accident Disability Benefit Plan, 429 F.3d 698, 700 (7th Cir. 2005) (same). Under this standard, so long as the administrator "makes an informed judgment and articulates an explanation for it that is satisfactory in light of the relevant facts," then the administrator's determination is to be upheld. Exbom v. Cent. States, Se. and Sw. Areas Health Welfare Fund, 900 F.2d 1138, 1143 (7th Cir. 1990); see also Russo v. Health, Welfare Pension Fund, 984 F.2d 763, 765 (7th Cir. 1993). Under the arbitrary or capricious standard, the reviewing court "do[es] not ask whether the administrator reached the correct conclusion or even whether it relied on the proper authority." Kobs v. United Wis. Ins. Co., 400 F.3d 1036, 1039 (7th Cir. 2005). Rather, the question before a reviewing court is whether the administrator's "decision has `rational support in the record.'" Davis, 444 F.3d at 576 (quoting Leipzig v. AIG Life Ins. Co., 362 F.3d 406, 409 (7th Cir. 2004)). "Put simply, an administrator's decision will not be overturned unless it is downright unreasonable." Id. (quotation marks and citation omitted).

The Court finds that Standard Insurance's decision to deny Lake City Bank's claim based upon its determination that no life insurance benefits are payable to the bank pursuant to ERISA and the terms of the policy was an informed judgment that has rational support in the record. The Court also finds that in its determination letter dated June 16, 2009, to counsel for Lake City Bank, Standard Insurance provided a satisfactory explanation in light of the facts. The record before the Court shows that Standard Insurance received and considered the claim presented by Lake City Bank, inquired of Barrett McNagny regarding beneficiary forms, requested additional information, evaluated the information provided by the bank, and reviewed the applicable policy terms and relevant legal authority. Standard Insurance reasonably determined that the bank was not designated as a beneficiary of the policy. The record before the Court includes a copy of the beneficiary designation form executed by John F. Lyons, and there is no evidence that John F. Lyons executed or delivered a beneficiary change to Barrett McNagny or Standard Insurance consistent with the specific requirements for changing beneficiaries under the Standard Insurance policy. Standard Insurance also reasonably concluded that the settlement agreement does not operate as an assignment of the benefit and that the policy prohibited assignments rendering the bank unable to claim a right to the proceeds under the settlement agreement. In the settlement agreement, which is part of the administrative record, John F. Lyons agreed to executed assignments, but he never actually did. Additionally, the Standard Insurance policy provides in clear terms that rights and benefits under the policy cannot be assigned and that the benefit payable under the policy is to be paid to the named beneficiary. For these reasons, the Court finds that Standard Insurance's determination was neither arbitrary nor capricious.

Lake City Bank asserts a claim of unjust enrichment in its Cross-Claim against the Lyons parties. In its Memorandum in Support of its Motion for Summary Judgment, the bank characterizes this claim as a state law claim against the Lyons parties for unjust enrichment. To the extent that this unjust enrichment claim can be construed as a state-law claim to the life insurance benefits under the life insurance policies, this claim is preempted by ERISA, and as the Court has already determined, Lake City Bank is not a beneficiary and has no claim to the proceeds under ERISA.

To the extent that Lake City Bank is asserting a claim under state law that it is inequitable or unjust for the Lyons parties to retain money they rightfully receive as the designated beneficiaries of the life insurance policies, the basis for the Court's subject-matter jurisdiction is supplemental jurisdiction under 28 U.S.C. § 1367(a) (extending federal district court jurisdiction to all claims that are so related to a claim within the court's original jurisdiction that they form part of the same case or controversy within the meaning of Article III of the Constitution). Section 1367(a) authorizes federal courts to exercise supplemental jurisdiction over state-law claims, but district courts have discretion to decline to exercise jurisdiction over supplemental state-law claims for several reasons that are enumerated in § 1367(c). Subsection (c)(3) states that a court may decline to exercise supplemental jurisdiction when the court "has dismissed all claims over which it has original jurisdiction." 28 U.S.C. § 1367(c)(3). "[T]he general rule is that, when all federal claims are dismissed before trial, the district court should relinquish jurisdiction over pendent state-law claims rather than resolving them on the merits." Wright v. Assoc. Ins. Cos., 29 F.3d 1244, 1251 (7th Cir. 1994). The Seventh Circuit has identified three situations where a court should retain jurisdiction over supplemental claims even though the federal claims have dropped out: where the statute of limitations would bar the refiling of the supplemental claims in state court; where substantial federal judicial resources have already been expended on the resolution of the supplemental claims; and where it is obvious how the claims should be decided. Williams Elecs. Games, Inc. v. Garrity, 479 F.3d 904, 906-07 (7th Cir. 2007) (citing Wright, 29 F.3d at 1251-52).

In this case, it does not appear that the statute of limitations would bar the refiling of Lake City Bank's state-law unjust enrichment claim in state court. Furthermore, substantial federal judicial resources have not been expended on the resolution of the supplemental state-law claim. In fact, the parties agreed that no discovery was necessary before they filed and briefed their summary judgment motions. Additionally, it is not obvious how Lake City Bank's unjust enrichment claim should be decided, and it appears that, to the extent Lake City Bank has a claim against the Lyons parties, such a claim would require reference to the settlement agreement and the notes, not the life insurance policies. Therefore, now that all claims over

which the Court had original jurisdiction have dropped out, the Court declines to exercise supplemental jurisdiction over Lake City Bank's state-law unjust enrichment claim, and it will be dismissed.

In their Motions for Summary Judgment and supporting materials, the Lyons parties and Standard Insurance have asked the Court to award attorney's fees and costs against Lake City Bank. Lake City Bank responds that its claim was made in good faith based upon the settlement agreement signed by John F. Lyons. Lake City Bank also asserts that the request for attorney's fees and costs under 29 U.S.C. § 1132(g)(1) is premature, but the Lyons parties and Standard Insurance believe otherwise.

Under ERISA's fee-shifting statutory provision, 29 U.S.C. § 1132(g)(1), this Court has discretion to allow reasonable attorney's fees and costs to either party. Under Seventh Circuit precedent, there is a modest, rebuttable presumption in favor of awarding fees to the prevailing party. Senese v. Chi. Area I.B. of T. Pension Fund, 237 F.3d 819, 826 (7th Cir. 2001). "An award of fees to a successful defendant may be denied if the plaintiff's position was both `substantially justified' — meaning something more than non-frivolous, but something less than meritorious — and taken in good faith, or if special circumstances make an award unjust." Id.

This case presents fairly unusual circumstances. John F. Lyons entered into a settlement agreement with Lake City Bank related to financial obligations he owed the bank, and he promised to execute assignments of his group life insurance policies to Lake City Bank, but he never executed any assignments or changed the beneficiaries before he died. The settlement agreement and the promise of John F. Lyons (the participant in the welfare benefit plan) to execute assignments provide some justification for the bank's position. Additionally, two insurance companies recognized the conflicting claims to the life insurance proceeds and, by way of interpleader, deposited the proceeds and were dismissed from this case. It was not Lake City Bank but one of these now-dismissed insurance company parties that instituted this lawsuit, albeit after the bank claimed a right to the proceeds and suggested an interpleader action. The unusual circumstances of this case suggest that there is little by way of deterrent effect to be gained from awarding a fee in this case. Although the Court has found that Lake City Bank has no colorable claim as a beneficiary under ERISA and the policies, nothing in the record suggests that Lake City Bank acted in bad faith or that Lake City Bank was simply out to harass the other parties. For these reasons, the Court denies the requests of the Lyons parties and Standard Insurance for attorney's fees and costs under 29 U.S.C. § 1132(g)(1).

For the foregoing reasons, the Court GRANTS Cynthia K. Lyons's Motion for Summary Judgment [ECF No. 69], John E. Lyons and Michael B. Lyons's Joint Motion for Summary Judgment [ECF No. 75], and Standard Insurance's Motion for Summary Judgment [ECF No. 77]. The Court DENIES Lake City Bank's Motion for Summary Judgment [ECF No. 72]. The Court DENIES Lake City Bank's Motion to Strike Designated Evidence of Cynthia K. Lyons [ECF No. 85] and GRANTS IN PART and DENIES IN PART Standard Insurance's Motion to Strike the Affidavit of Michael E. Gavin [ECF No. 86]. The Court DENIES the requests of the Lyons parties and Standard Insurance for attorney's fees and costs under 29 U.S.C. § 1132(g)(1). The Court SETS this matter for a telephonic status conference on January 20, 2011, at 10:30 a.m. to address the entry of judgment and the distribution of funds. The Court will initiate the call.