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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND

FIDELITY & GUARANTY LIFE INSURANCE COMPANY

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v.

CIVIL NO. Y-98-1382

JOHN H. FREEMAN, ET AL.

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FIDELITY & GUARANTY LIFE INSURANCE COMPANY

v.

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CIVIL NO. Y-98-1383 (Cons.) *

KATHY J. SHANNON, ET AL.

Stephen H. Kaufman, Esquire, Baltimore, Maryland, counsel for Fidelity and Guaranty Life Insurance Company. H. Mark Stichel, Esquire, Baltimore, Maryland, counsel for United States Fidelity and Guaranty Company. Price O. Gielen, Esquire, Baltimore, Maryland, and Paul McDonald, Esquire, Cape Elizabeth, Maine, for J.G. Wentworth, S.S.C., Limited Partnership. YOUNG, Joseph H., Senior United States District Judge Date: April ___, 2000

MEMORANDUM OPINION I.

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These consolidated cases are before the Court on a Motion to reconsider or vacate the Court's January 7, 2000, Order dismissing the cases without prejudice. Both cases are

interpleader actions initiated by Fidelity and Guaranty Life Insurance Co. ["F & G Life"] to resolve the distribution of certain annuity funds. After the Court dismissed the cases

for failure to serve process on two claimants, F & G Life filed a motion asking the Court to reconsider or vacate the dismissal. The United States Fidelity and Guaranty Company The current

["USF&G"] filed a supporting memorandum.

Plaintiff, J.G. Wentworth, S.S.C., L.P. ["Wentworth"], does not oppose reopening the case to allow additional time to serve process on the claimants, but it argues that additional attempts at personal service would be futile.

II. For reasons that are unrelated, USF&G became obligated to pay Kathy J. Shannon a guaranteed monthly payment of $630 from November 1, 1996, to July 1, 2001, and John H. Freeman a monthly payment of $400 from 1984 until his death. To meet

these obligation, USF&G purchased two annuities from F & G Life. The annuities are owned by USF&G and allegedly do not

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allow Shannon or Freeman, respectively, to assign the payments to another party. In 1997, however, Shannon and Freeman each assigned the annuity payments to Wentworth in return for cash. Wentworth

received consent judgments against both Shannon and Freeman, filed garnishment actions against F & G Life in the Court of Common Pleas of Philadelphia County, Pennsylvania, and subsequently attempted to transfer the judgments to Maryland. The Court ordered interpleader in both cases on May 19, 1998. Summons were issued to Shannon and Freeman on April 30, The Court granted F &

1998, and reissued on August 19, 1998.

G Life's Motion to Permit Alternative Service to Shannon via the U.S. Marshals on September 17, 1998, and to Freeman via the U.S. Marshals on January 8, 1999, and by private process in March 1999. Process was never served and the Court

dismissed both cases without prejudice by an Order dated January 7, 2000. F & G Life and USF&G argue that the Court should either extend the time to serve process on Freeman and Shannon, or appoint guardians ad litem to protect their interests. They

contend that if the Court does not reinstate these cases, the annuity funds will be in "permanent limbo" and F & G Life will

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be left with uncertainty as to whom it should pay.

Wentworth

does not oppose the Motion insofar as it seeks to reopen the case and permit alternate service on Freeman and Shannon. Wentworth, however, opposes additional attempts at personal service, which it claims would be futile. Instead, Wentworth

recommends that the Court enter an order pursuant to 28 U.S.C.

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