When Interpleader Serves the Insurer More Than the Beneficiary: Court Denies MetLife Fees in ERISA Life Insurance Dispute

In Metropolitan Life Insurance Company v. Diane Cooper, et al., No. 1:25cv1161, 2026 WL 1346605 (M.D.N.C. May 14, 2026), a federal magistrate judge drew a clear line between interpleader as a legitimate procedural tool and interpleader as a cost-shifting mechanism. When an ERISA plan insurer faces competing claims to life insurance proceeds, it has that tool available: by depositing the contested funds with the court and stepping aside, the insurer can avoid the risk of paying the wrong claimant and being sued by the other. Courts have long recognized this as a legitimate mechanism. But it is not a blank check for insurers to extract attorney’s fees and litigation protections at beneficiaries’ expense. The court recommended that MetLife be discharged from the action and permitted to deposit the proceeds, while denying its request for fees and costs and rejecting its bid for injunctive relief.

What was this case about?

This case arose from a dispute over $124,000 in basic life insurance proceeds payable under an ERISA-governed employee welfare benefit plan sponsored by Daimler Trucks North America, LLC. The decedent, a Daimler employee, had originally designated his domestic partner as beneficiary in 2018 but changed the designation to his sister in October 2022. After his death in April 2025, both the domestic partner and the sister submitted competing claims. The sister had also assigned $6,030.65 of the proceeds to a funeral home to cover burial expenses. Unable to safely determine the correct payee, MetLife filed a Rule 22 interpleader action in December 2025 seeking to deposit the proceeds with the court, obtain a discharge from further liability, enjoin the defendants from suing it, and recover $3,686.36 in attorney’s fees and costs.

Did the court find interpleader proper?

The magistrate judge recommended granting MetLife’s request to deposit the funds and be dismissed from the action, finding that the Rule 22 interpleader requirements were satisfied. The court had diversity jurisdiction, a single fund was at issue, and no equitable concerns prevented use of interpleader. The court acknowledged that the third and fourth factors, requiring adverse claimants and a genuine threat of multiple liability, presented a closer question. The domestic partner’s unsworn letter was the only evidence supporting her claim, and other record evidence, including the decedent’s death certificate, a union benefits representative’s email confirming the decedent was mentally alert when he made the beneficiary change in 2022, and a written note from the domestic partner herself relinquishing responsibility for the decedent’s care just days before that change, appeared to seriously undermine the veracity of her challenge. Nonetheless, the court found that her status as a prior beneficiary and her written assertion of a claim were sufficient to satisfy those factors under the broad standard articulated in AmGuard Insurance Co. v. SG Patel & Sons II LLC, 999 F.3d 238 (4th Cir. 2021), which allows interpleader even where claimants may only potentially assert a claim in the future.

Why did the court recommend denying injunctive relief?

Because MetLife proceeded under Rule 22 rather than the federal interpleader statute, it was required to satisfy the standard four-factor test for permanent injunctive relief, including a showing of irreparable harm. MetLife made no attempt to address those factors in its briefing. The court also noted that money damages could ultimately compensate any injury MetLife might suffer, precluding a finding of irreparable harm.

Why did the court recommend denying attorney’s fees?

The court recommended denying MetLife’s request for attorney’s fees and costs on several grounds. Courts have discretion to award fees to an interpleading stakeholder, and the relevant considerations weigh against it here. The record reflected no explanation for MetLife’s four-month delay between receiving the sister’s counsel’s email and filing the interpleader complaint, and no indication that MetLife attempted to resolve the dispute without litigation in the interim. The court found that the domestic partner’s unsworn letter, standing alone and with no follow-up participation from her whatsoever, was an “incredibly slim reed” on which to disregard the decedent’s 2022 beneficiary designation, suggesting MetLife filed the interpleader primarily to protect itself rather than out of genuine uncertainty about a viable competing claim. The court also found that interpleader litigation of this type is a routine aspect of MetLife’s business, as evidenced by a nearly identical action filed the day after this one, a discounted panel counsel arrangement with its law firm reflecting the frequency of such litigation, and the formulaic nature of the filings across both cases. Finally, the court noted that MetLife’s decision to use process servers at a cost exceeding $700, rather than the less expensive certified mail or designated delivery service options available under the Federal and North Carolina Rules of Civil Procedure, unnecessarily inflated litigation costs.

Upon MetLife’s deposit of the proceeds and dismissal from the action, the court recommended realigning the parties with the sister and the funeral home as plaintiffs and the domestic partner as defendant, and entering default against the domestic partner for her failure to participate in the action.