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MACKEY v. MACKEY

March 22, 2004.

F. JOSEPH MACKEY, Plaintiff
v.
WENDY MACKEY and NICHOLAS KEOGH, Defendants



The opinion of the court was delivered by: JOAN H. LEFKOW, District Judge

MEMORANDUM OPINION AND ORDER

Plaintiff, F. Joseph Mackey ("Joseph"), brings this law suit against Wendy Mackey and her son Nicholas Keogh (collectively referred to as "Wendy" or "Defendants") alleging that defendants wrongfully detained his property (Count I) and converted his property (Count II) in violation of Illinois common law. Plaintiff invokes the diversity jurisdiction of the court under 28 U.S.C. § 1332. Before the court is a motion by Wendy under Rule 12(b)(1) of the Federal Rules of Civil Procedure to dismiss both counts of the Amended Complaint for lack of subject matter jurisdiction. For the reasons set forth below, the court grants the motion.

STANDARDS FOR A MOTION TO DISMISS

  A motion to dismiss under Rule 12(b)(1) challenges the court's jurisdiction over the subject matter. U.S.C.S. Fed Rules Civ Proc R 12. The party seeking a federal forum bears the burden of establishing that jurisdiction is proper. NLFC, Inc. v. Devcom Mid-America, Inc., 45 F.3d 231, 237 (7th Cir. 1995). When considering a motion to dismiss for lack of subject matter jurisdiction, all well-pleaded factual allegations of the complaint ARB accepted as true and any reasonable inference from those allegations shall be construed in the Plaintiff's favor. United Page 2 Transportation Union v. Western Railway Co., 78 F.3d 1208, 1210 (7th Cir. 1996). The court may also look beyond the jurisdictional allegations of the complaint and view whatever evidence has been submitted on the issue. Capitol Leasing Co. v. Federal Deposit Insurance Corp., 999 F.2d 188, 191 (7th Cir. 1993). Indeed, where the defendant challenges the Plaintiff's factual allegations regarding federal jurisdiction, the plaintiff must support its assertion with "competent proof." Rexford Rand Corp. v. Ancel, 58 F.3d 1215, 1218 (7th Cir. 1995). Competent proof has been interpreted to mean a preponderance of the evidence or proof to a reasonable probability that jurisdiction exists. NLFC, Inc., 45 F.3d at 237.

  ALLEGATIONS OF THE COMPLAINT

  According to Joseph's Amended Complaint, which is taken as true for the purpose of this motion, on January 15, 2002, Mary Mackey, the mother of Joseph and Wendy, made a gift of all tangible property located in her California home to Joseph. (Am.Compl. ¶ 8.) On April 30, 2002, Mary Mackey died and via two trusts, she bequeathed to Joseph the California home and the Toyota and Jaguar automobiles (the "Toyota" and "Jaguar") located at the California home. (Id. ¶ 7, 9.) At all times relevant to this action, defendants resided at the California home and did not vacate the home until June, 2003. (Id. ¶ 10, 11.) Joseph's counsel instructed Wendy by letter dated May 30, 2003, that she was not to remove any of the tangible personal property from that home and that Joseph would let her keep the Jaguar only if she left the Toyota at the California house when she vacated the house in June, 2003. (Id. ¶ 11.) Despite this letter, Wendy sold or otherwise disposed of the Toyota without Joseph's authorization. (Id. ¶ 12.) When defendants left the California home, they took many items of tangible personal property as well as the Jaguar. (Id. ¶ 13.) Page 3

  DISCUSSION

  Wendy moves to dismiss Joseph's complaint on three grounds. First, Wendy contends that the court lacks subject matter jurisdiction because the case falls within the probate exception to federal diversity jurisdiction. Second, Wendy contends that the amount in controversy fails to satisfy the requirements for diversity jurisdiction. Third, Wendy requests that the court dismiss the complaint under the doctrine of abstention. Because the court dismisses the compliant against Wendy with prejudice based on the probate exception to federal diversity jurisdiction, it does not consider the other two grounds for dismissal.

  Under the probate exception, a federal court lacks diversity jurisdiction over cases involving probate matters. Storm v Storm, 328 F.3d 941, 943 (7th Cir. 2003). The probate exception is a judicial creation that is a well-established feature of the federal court system. Dragan v. Miller, 679 F.2d 712, 713 (7th Cir. 1982). The precise scope of the probate exception has not been clearly defined but courts have traditionally construed the exception narrowly. Georges v. Glick, 856 F.2d 971, 973 (7th Cir. 1988).

  The probate exception is rather easily applied to matters directly related to probate. Storm, 328 F.3d at 943. It has long been settled that "a federal court has no jurisdiction to probate a will or administer an estate." Markham v. Allen, 326 U.S. 490, 494 (1946) In this case, neither party contends that the court is being asked to directly probate the will or administer the estate of Mary Mackey and therefore the probate exception does not apply in this regard. The application of the probate exception is more difficult in matters that ARB indirectly related to probate. Storm, 328 F.3d at 943. Federal court diversity jurisdiction over probate related matters is proper "so long as the federal court does not interfere with the probate proceedings or assume Page 4 general jurisdiction of the probate or control of the property in the custody of the state court." Markham, 326 U.S. at 494 (emphasis added).

  The question presented here is whether the court, by maintaining jurisdiction over this case, is effectively interfering with the state probate proceeding, Wendy contends that the court will interfere with the probate proceedings because the court must construe Mary Mackey's trusts to reach a final judgment in this case and that judgment will have a direct effect on the distribution of the residue of her estate. Mary Mackey's Trust No. l provides for the residue of her estate to be disbursed equally among the beneficiaries, taking into account all property previously disbursed by gift or by trust. A final judgment in this case will determine the value of certain gift and trust property which will in turn affect how the probate court distributes the residue of Mary Mackey's estate to Wendy and Joseph.

  Joseph contends that the court will not interfere with the probate proceedings because a final judgment in this case will leave Mary Mackey's estate undisturbed. In other words, if the court finds in favor of Joseph, then property will pass from Wendy to Joseph. If the court finds in favor of Wendy, then she will retain her property. Under either scenario, the estate of Mary Mackey will not be affected.

  The Seventh Circuit has established that a federal court interferes with a probate proceeding if the case before it is deemed to be "ancillary" to that proceeding. Rice v. Rice, 610 F.2d 471, 475-76 (7th Cir. 1979). To determine if a particular case is ancillary to a probate proceeding, the court must consider whether, by allowing the case to be maintained in federal court, the policies that form the bases for the probate exception would be impaired. Storm, 328 F.3d at 944; Dragan 679 F.3d at 715-16. Page 5

  One policy underlying the probate exception is the promotion of judicial economy. Storm, 328 F.3d at 944, If the probate proceeding begins in state court, judicial economy argues for keeping it there until it is concluded. Id. This prevents federal courts from duplicating the work of state ...


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