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Pendergrass v. Sullivan

United States District Court, E.D. North Carolina, Western Division

December 2, 2014

JAMES K. PENDERGRASS, JR., Escrow Agent, Plaintiff,
DONALD SULLIVAN, also known as James D. Sullivan; and the UNITED STATES OF AMERICA Defendants.


LOUISE W. FLANAGAN, District Judge.

This interpleader action is before the court on two motions filed by defendant Donald Sullivan, a/k/a James D. Sullivan ("Sullivan"), specifically a motion to quash/dismiss counterclaim (DE 44), and motion for clarification (DE 49). Also pending before the court is a motion by defendant United States of America (the "United States") for summary judgment and for disbursement of funds (DE 45).


Plaintiff filed complaint in interpleader May 21, 2014, seeking to be allowed to pay escrowed funds into the custody of the clerk of court in the amount of $45, 000.00 (the "Escrowed Funds"). Plaintiff also sought to be absolved of any liability for the Escrowed Funds, to recover fees and costs, and to position defendants to assert whatever claims they may have to the Escrowed Funds. On July 16, 2014, the United States filed an answer to the complaint in interpleader, a cross-claim in interpleader against defendant Sullivan, and a counterclaim against plaintiff to foreclose on federal tax liens on the Escrowed Funds.

By orders entered July 17, 2014, and July 18, 2014, the court allowed plaintiff to deposit the Escrowed Funds into the custody of the clerk and relieved plaintiff of any liability upon that payment for the Escrowed Funds. The court held under advisement ruling on plaintiff's entitlement to recover costs, pending notice of abandonment of such claim. The court also denied several motions filed pro se by defendant Sullivan, including motion to quash, motion to dismiss, and motion for injunctive relief, premised upon lack of jurisdiction. The court directed defendant United States to serve its answer and counterclaim/crossclaim upon defendant Sullivan, and the court directed defendant Sullivan to serve a response within 21 days.

On July 22, 2014, noting plaintiff's abandonment of claim for costs, the court ordered that absent good cause shown within 14 days, the court would dismiss plaintiff with prejudice from the case, and the case would remain as between defendant United States and defendant Sullivan. On August 1, 2014, and on August 6, 2014, the court granted defendant Sullivan an extension of time to answer plaintiff's complaint. On August 18, 2014, the court denied defendant Sullivan's request to reconsider dismissal of plaintiff, and the court denied defendant Sullivan's motion for injunctive relief remaining. The court at that time allowed defendant Sullivan until September 10, 2014, to respond to the cross-claim by defendant United States.

Defendant Sullivan filed a motion to stay on August 28, 2014, seeking to stay all proceedings and discovery in this matter up to and including November 24, 2014, for health reasons and to allow further factual developments. On September 2, 2014, defendant Sullivan filed a motion to "quash/dismiss counterclaim" due to lack of jurisdiction, improper venue, and lack of standing. In the meantime, on September 5, 2014, defendant United States filed its motion for summary judgment and motion for disbursement of funds.

On September 8, 2014, the court entered the following text order:

TEXT ORDER regarding 43 MOTION to Stay filed by Donald Sullivan - Recently the court ordered that defendant Sullivan has up to and until September 10, 2014, absent further request for more time due to health considerations or for other reason, to respond to the USA's cross-claim against him. Defendant has now filed a motion seeking a further stay of proceedings up to and until November 24, 2014, due to health issues ongoing. Before ruling on same, defendant now has responded to said cross-claim. Accordingly, the court dismisses the motion to stay as MOOT.

On September 19, 2014, defendant Sullivan filed a motion for clarification regarding this text order. Defendant United States filed a response to the motion to quash/dismiss counterclaim that same date.


A. Motion for clarification

Defendant Sullivan seeks clarification regarding the court's September 8, 2014, order in several respects, which the court will address in turn.

First, defendant Sullivan seeks clarification on whether his motion to quash/dismiss counterclaim served as a responsive pleading to the cross claim of the United States. For purposes of clarification, the court confirms that it does so construe defendant Sullivan's motion to quash/dismiss. Although defendant Sullivan's motion to quash/dismiss is on its face directed at the counterclaim asserted by defendant United States, the counterclaim was rendered moot by the dismissal of Pendergrass and deposit of the Escrowed Funds into the court's register. (See Order, July 22, 2014); see Grubbs v. Gen. Elec. Credit Corp., 405 U.S. 699, 705 n. 2 (1972) ("[U]nder Federal Rule of Civil Procedure 22, a defendant seeking interpleader must frame his pleading either as a cross-claim seeking relief against a co-party already in the lawsuit, or as a counterclaim seeking relief against the ...

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