United States District Court, E.D. Arkansas, Western Division
ESTATE OF NANCY ELIZABETH MILLER, Deceased; KATHERINE ANN STANTON and KAREN ELIZABETH PHILLIPS, as beneficiaries of the Lou & Liz Miller Joint Revocable Trust Dated February 16, 2011, PLAINTIFFS,
LOUIS T. MILLER, individually and as Trustee of the Lou & Liz Miller Joint Revocable Trust Dated February 16, 2011, DEFENDANTS
For Estate of Nancy Elizabeth Miller, Deceased other Nancy Elizabeth Miller, Katherine Ann Stanton, as beneficiary of the Lou & Liz Miller Joint Revocable Trust dated February 16, 2011, Karen Elizabeth Phillips, as beneficiary of the Lou & Liz Miller Joint Revocable Trust dated February 16, 2011, Plaintiffs: D. Scott Schrader, LEAD ATTORNEY, Winburn, Mano, Schrader, & Shram, PLLC, Little Rock, AR.
For Louis T Miller, Individually and as Trustee of the Lou & Liz Miller Joint Revocable Trust Dated February 16, 2011, Defendant: Judy P. McNeil, Matthew Byron Finch, LEAD ATTORNEYS, Gill Elrod Ragon Owen & Sherman, P.A., Metropolitan Tower, Little Rock, AR.
OPINION AND ORDER
J. LEON HOLMES, UNITED STATES DISTRICT JUDGE.
Katherine Ann Stanton and Karen Elizabeth Phillips are the daughters of Nancy Elizabeth Miller, deceased. They are also co-administrators of her estate. They commenced this action in the Circuit Court of Pulaski County, Arkansas, seeking
a declaration that a power of attorney that the decedent executed on April 16, 2006, is void ab initio ; that a joint trust and will executed on February 16, 2011, are void ab initio ; that a confidential relationship existed between Louis T. Miller and the decedent; and that Louis breached his fiduciary duties to her. In addition, the complaint sought recovery for conversion and fraudulent concealment. Louis removed the action to this Court based on diversity of citizenship. The Estate filed an amended complaint and moved to remand, arguing that the probate exception to federal jurisdiction precludes this Court from exercising jurisdiction over its claim for a declaratory judgment that the 2011 will was void ab initio and that the Court should abstain from exercising jurisdiction over the remaining claims pursuant to Colorado River Water Conservation District v. United States, 424 U.S. 800, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976). For the reasons explained below, the motion to remand is granted in part and denied in part.
In 1995, the decedent, Elizabeth Miller, married Louis T. Miller. The couple entered into a prenuptial agreement under which each retained the right to dispose of his or her separate property. In October 2005, Elizabeth began complaining of memory loss. She was diagnosed with Alzheimer's disease, and her condition progressively deteriorated until December 2011 when she was hospitalized. Upon her release, her doctor recommended 24-hour home supervision. Thereafter, Louis provided Elizabeth with 24-hour home supervision.
Four months later, on April 16, 2009, Elizabeth executed a power of attorney that designated her husband as her attorney-in-fact. On May 29, 2009, Elizabeth executed a deed by which her separately-owned residence was sold, and the proceeds were transferred into an account jointly held by the couple at the Bank of America. On February 16, 2011, Elizabeth and Louis executed a durable power of attorney, a living will declaration, HIPAA authorizations, a will, and a beneficiary deed conveying her and Lewis's jointly-owned residence to the joint trust upon the death of the second of the two. On May 11, 2011, the assets in an account held in Elizabeth's name were transferred to a USAA investment account held in her name. Those assets were subsequently transferred to a different USAA account held in the name of the trust. On June 4, 2011, a copy of the trust and a trustee certification form was delivered to the Hartford for an annuity. Although the beneficiary of the Hartford annuity had previously been the Estate, the beneficiary of the Hartford annuity was changed to Louis.
On June 4, 2012, Elizabeth died. Louis subsequently engaged in various other financial transactions. On February 11, 2013, Louis filed a petition to probate Elizabeth's will. In the petition he identified the value of the personal and real property of the Estate as $0. Then, on April 5, 2013, Louis withdrew his petition for probate of Elizabeth's will.
The face of the amended complaint shows that this action meets the requirements for original jurisdiction under 28 U.S.C. § 1332 based on a diversity of citizenship and the amount in controversy. See Document #15 at 2. However, even when all the prerequisites for federal diversity jurisdiction are otherwise present, federal courts are generally precluded from exercising jurisdiction in cases that challenge the validity of a will. Sianis v. Jensen,
294 F.3d 994, 997 (8th Cir. 2002). " Whether that is the case depends on the remedy available to [the plaintiff] under [state] law." Id. at 998.
Generally, where the dispute over the will would be cognizable only in a state probate court, a federal court is deprived of jurisdiction over the contest, and the aggrieved party must pursue the action in the probate court. Rienhardt v. Kelly, 164 F.3d 1296, 1300 (10th Cir. 1999); Moore v. Graybeal, 843 F.2d 706, 709 (3d Cir. 1988). But if state law authorizes a suit inter partes to annul a will or to set aside the probate of a will, and the suit is enforceable in a court of general jurisdiction within the state, a federal court may entertain jurisdiction over the will contest. Id.; see also Bassler v. Arrowood, 500 F.2d 138, 141 (8th Cir. 1974) (" Where the action is clearly in personam, federal courts have the power to adjudicate the controversy." ), cert. denied, 419 U.S. 1116, 95 S.Ct. 796, 42 L.Ed.2d 815 (1975). The action authorized by state law must not be incidental to, or an ancillary proceeding of, the prior probate action for federal jurisdiction to exist. Moore, 843 F.2d at 709.