United States District Court, C.D. Illinois, Springfield Division
MYERSCOUGH UNITED STATES DISTRICT JUDGE
cause is before the Court on the Motion to Dismiss for Lack
of Subject Matter Jurisdiction (d/e 16) filed by Defendant
George W. Tinkham. Because the Court's subject matter
jurisdiction is secure, the Motion to Dismiss is DENIED.
October 2017, Mark S. Miller and Steven Clark Davison, as
administrator of the Estate of Jonathan Allen Miller, filed a
complaint against George W. Tinkham in the Circuit Court of
the Seventh Judicial Circuit, Sangamon County, Illinois, No.
2017-L-233 (the Underlying Lawsuit). In February 2018, Plaintiff
Wesco Insurance Company filed in this Court a Complaint for
Declaratory Judgment against Tinkham, Mark Miller, and
Davison, administrator of the Estate of Jonathan Allen
Miller. Mark Miller and Davison are named as defendants
solely to bind them to the judgment. Compl. ¶¶ 3,
Complaint for Declaratory Judgment alleges that Plaintiff
issued a Lawyers Professional Liability Policy to Tinkham,
which was in effect from July 25, 2017 through July 25, 2018,
with an endorsed Retroactive Date of July 25, 2008. Tinkham
qualifies as an “insured” on the Policy. Compl.
seeks a declaratory judgment that Plaintiff owes no duty to
defend or indemnify Tinkham from the Underlying Lawsuit. The
Complaint alleges that the beneficiary exclusion bars
coverage, no damages as defined in the Policy are sought in
the underlying complaint, and there is no coverage because
the insuring agreement provision was not satisfied. The
Complaint specifically alleges that the underlying complaint
does not seek the recovery of compensatory monetary damages.
Compl. ¶ 13.
complaint in the Underlying Lawsuit contains claims for
breach of fiduciary duty, punitive damages, constructive
trust, and unjust enrichment. Specifically, the underlying
complaint alleges that Tinkham, an attorney, performed legal
services for the Millers and managed their farm property.
Mark Miller suffers from numerous functional deficiencies,
although he has average to above average intelligence.
Jonathan had intellectual and behavioral problems.
August 2008, Tinkham created two trusts, naming himself as
trustee and giving himself a remainder interest in the
trusts. Jonathan Miller deeded his portion of the farm
property to Tinkham as trustee (the First Trust) and Mark
Miller deeded his portion of the farm property to Tinkham as
trustee (the Second Trust). Tinkham did not advise the
Millers to obtain independent legal counsel before executing
the trust agreements, and they did not know they were
conveying to Tinkham their respective interests in the
property upon their deaths. The Millers did not intend to
confer a remainder interest upon Tinkham.
Miller died in October 2013. Mark Miller continued to receive
a portion of the farm income through distributions in 2013
and 2014. In December 2014, Mark Miller asked Tinkham why his
distribution had not doubled after Jonathan passed away, as
Mark was the only heir of Jonathan. Tinkham advised Mark that
Tinkham was now the owner of Jonathan's one-half interest
in the farm property. The underlying complaint further
alleges that Tinkham managed all affairs for the farm
property from no later than August 15, 2008 but did not
provide an accounting to and did not discuss the operations
with the Millers.
breach of fiduciary duty counts in the Underlying Lawsuit
seek an accounting; complete records to trace disbursement
and distribution of funds; a constructive trust on the farm
property and all property of Tinkham arising from the
unaccounted payments from the farm property; attorney's
fees and costs to restore legal title to the property to Mark
Miller; the appointment of a replacement trustee; and
judgment in the amount of all unaccounted funds. The punitive
damages counts seek not less than $500, 000. The constructive
trust counts seek the imposition of a constructive trust upon
the farm property and on all property of Tinkham arising from
unaccounted payments from the farm property. The unjust
enrichment counts seek a declaration that Tinkham was
unjustly enriched by creating the First Trust and that Miller
and Davison are entitled to the full interest in the property
conveyed by the First Trust.
21, 2018, Tinkham filed a Motion to Dismiss for Lack of
Subject Matter Jurisdiction (d/e 16) pursuant to Federal Rule
of Civil Procedure 12(b)(1). Tinkham argues that (1) the
$500, 000 in punitive damages does not count toward the
jurisdictional amount; (2) Plaintiff failed to provide proof
of the actual value in the remainder interest in the land;
and (3) Plaintiff's basis for jurisdiction is in direct
contradiction to Plaintiff's assertion that the
underlying complaint does not seek any relief that
constitutes “damages” as that term is defined in
to Federal Rule of Civil Procedure 12(b)(1), a defendant may
move for dismissal of a claim for lack of subject matter
jurisdiction. Fed.R.Civ.P. 12(b)(1). When considering a Rule
12(b)(1) motion, the Court accepts as true all well-pleaded
factual allegations and draws all reasonable inferences in
favor of the plaintiff. Alicea-Hernandez v. Catholic
Bishop of Chi., 320 F.3d 698, 701 (7th Cir. 2003).
“The court may look beyond the jurisdictional
allegations of the complaint and view whatever evidence has
been submitted on the issue to determine whether in fact
subject matter jurisdiction exists.” Id.
the defendant challenges the plaintiff's allegations
regarding the amount in controversy, the plaintiff must
support the allegations with competent proof. Meridian
Sec. Ins. Co. v. Sadowski, 441 F.3d 536, 543 (7th Cir.
2006). The plaintiff must prove the jurisdictional facts by a
preponderance of the evidence. Id. Dismissal is
appropriate only ...