United States District Court, N.D. Illinois
March 22, 2004.
F. JOSEPH MACKEY, Plaintiff
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
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
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.)
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
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.
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 courts and avoids the piecemeal or haphazard resolution of
a decedent's estate. Id.
Here, the policy of judicial economy would be impaired if the court
maintained federal diversity jurisdiction over the case for three
reasons. First, the court would be performing the same functions as the
probate court because, for Joseph to be successful on either of his
claims, this court must construe the trusts of Mary Mackey and find that
Joseph is the rightful owner of the Toyota and Jaguar automobiles.
Second, this case would cause a piecemeal resolution of Mary Mackey's
estate because the final judgment would in turn impact the probate
court's disbursement of the residue of her estate. The Fifth Amendment to
Trust No. 1 states,
the value of each shard will depend upon the value
of gifts received from and outside of Trust No. 1,
so that the beneficiary . . . of each shard will
receive total property of equal value from all
sources, by reason of my death.
If the court maintains jurisdiction over this case, it will have to
determine what was included in the gift of personal property in the
California home and the value of that gift. Subsequently, the state
probate court will have to take into consideration the final judgment in
this case in order to disburse the residue of Mary Mackey's estate in
accordance with her testamentary intent.
Third, Joseph has filed two additional lawsuits in state probate court
regarding the estate of Mary Mackey. One lawsuit seeks to determine the
ownership of a watch collection and has been filed against the very same
Defendants that appear in this case. The other lawsuit relates to the
proper apportionment of estate taxes. "Where state courts ARB already
familiar with the
litigation before the district court and the federal suit is intertwined
with state court proceedings, the district court may properly decline to
exercise its jurisdiction. Rice, 610 F.2d at 478. Here, the policy of
judicial economy would be impaired if the court maintained federal
diversity jurisdiction because the resources of the state and federal
court systems would not be properly preserved and Mary Mackey's estate
would be subjected to a piecemeal resolution.
Another policy bases for the probate exception has been referred to as
"relative expertness." Storm, 328 F.3d at 944. That is, state probate
court judges may have more experience in adjudicating probate matters due
to their nearly exclusive jurisdiction over probate matters. Id. In
Illinois, this line of reasoning is less significant because the state
courts ARB courts of general jurisdiction, see Dragan, 679 F.2d at 715.
However, when probate-like matters ARB at issue, state courts vested with
probate jurisdiction ARB much more familiar with the factual and legal
issues involved than ARB federal courts. Storm, 328 F.3d at 947. In this
case, determinations as to what property was included in the gift and
whether Joseph is the rightful owner of the automobiles ARB best left to
the probate court not only because of their greater experience with these
types of issues but also due to the other lawsuits that ARB pending
regarding similar disputes relating to the estate of Mary Mackey.
A final reason for the probate exception is the promotion of legal
certainty in regard to the probate of a decedent's will or administration
of a decedent's estate. Dragan, 679 F.2d at 714. The probate exception
helps ensure that the resolution of probate disputes will be consistent
by limiting their litigation to state courts. Storm, 328 F.3d at 944. In
pursuit of this goal, federal courts will look past the label of an action
and examine the practical effect the action would have if it succeeded.
Id. (citing Dragan, 679 F.2d at 715-16).
In this case, the claims of detinue and conversion can be brought in
either state or federal court. As noted above, for Joseph to be
successful on either of these claims the court must construe the trusts
of Mary Mackey and find that Joseph is the rightful owner of the
automobiles. The practical effect of Joseph filing these claims in
federal court is the circumvention of the state probate proceedings. To
promote legal certainty in the resolution of Mary Mackey's estate, these
claims should be filed in the state probate court along with the other
In opposition, Joseph relies in part on Markham, noting that the
Supreme Court upheld federal jurisdiction under circumstances that
related more directly to the probate proceedings than those of the
instant case. Markham involved a dispute between two parties claiming
legal right to the entire net estate of the decedent. Markham, 326 U.S.
at 492. The decedent's heirs-at-law, who received nothing under the
decedent's Will, petitioned in state court to prohibit the beneficiaries
under the Will from receiving the estate pursuant to a state statute
prohibiting intestate inheritance by alien, non-resident heirs. Id. The
successor-in-interest to the beneficiaries under the Will then filed a
federal action for a declaration that the heirs-in-law had no interest in
the estate. Id. The Supreme Court upheld the federal district court's
jurisdiction to render its judgment that the heirs-in-law had no rights
or interest in the estate and that the successor-in-interest to the Will
beneficiaries was entitled to receive the net estate upon completion of
probate administration. Id. at 493, 496. The Court reasoned that "the
effect of the judgment was to leave undisturbed the orderly
administration of decedent's estate in the state probate court and to
decree the petitioner's right in the property to be distributed after its
administration." Id. at 495.
Unlike Markham, this case requires the court to perform probate court
functions, namely construing Mary Mackey's trust. By the operation of
collateral estoppel and res judicata, any final determinations by this
court concerning Mary Mackey's trust would be binding on the state
probate court. The Second Circuit has interpreted Markham to support the
conclusion that a federal court interferes with a concurrent probate
proceedings if its judgment would supplant the functions of the state
probate court. Moser v. Pollin, 294 F.3d 335, 343 (2nd Cir. 2002).
Therefore, Markham supports the finding that the probate exception should
apply in this case.
In summary, this court finds that the policies that form the bases of
the probate exception would be impaired by maintaining jurisdiction over
this case. Therefore, the case is considered to be ancillary to the
probate proceedings and falls within the scope of the probate exception
to federal diversity jurisdiction.
For the reasons stated above, Defendants' motion to dismiss is granted
[# 8]. Wendy Mackey and Nicholas Keogh ARB dismissed from the complaint
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