United States District Court, E.D. Arkansas, Jonesboro Division
CENTENNIAL BANK, Guardian of the Estate of Mary Moore Stiny PLAINTIFF
RENA WOOD DEFENDANT
MARSHALL JR. UNITED STATES DISTRICT JUDGE
Court notes the new dispute about Smith's evidentiary
deposition, Ns 231. The Court will address it soon.
There's no need for a hearing on Monday about privilege
issues related to Smith. But the Court prefers to convene at
1:30 p.m. Monday with counsel only to address exhibits, jury
instructions, and other remaining pretrial issues. We will
pick the jury Tuesday morning, and then open Tuesday
afternoon. Centennial should have one witness present for
late Tuesday afternoon in case things move quickly. Most of
the parties' proof, though, should be presented Wednesday
Whether the Bank is entitled to a jury trial in this
diversity case is a question of federal law. Simler v.
Conner, 372 U.S. 221, 222 (1963) (per curiam).
California law governs construction of the trust's
beneficial provisions, and the Stiny/Wood powers of attorney,
but not this issue. Compare Cal. Prob. Code §
16421 (1991). The Seventh Amendment requires a jury when one
is requested in a suit at common law where more than $20 is
at stake. Federal Rule of Civil Procedure 38(a) preserves the
parties' Seventh Amendment right "inviolate/'
Here, the amount in controversy is satisfied many times over.
In addition to the various kinds of equitable relief, the
Bank seeks damages for alleged conversion of survivor trust
income by Wood during her fiduciary relationships with Mrs.
general, a dispute about trust administration and alleged
violations of fiduciary duties would have been handled by a
court of equity. RESTATEMENT (SECOND) OF TRUSTS § 197
(1959). There was and is an exception. "If the trustee
is under a duty to pay money immediately and unconditionally
to the beneficiary, the beneficiary can maintain an action at
law against the trustee to enforce payment." Restatement
(Second) of Trusts § 198(1) (1959). This trust provides
that, after Mr. Stiny's death, "the Trustee shall
pay to or apply for the benefit of [Mrs. Stiny] the net
income of the Survivor's Trust in monthly or more
frequent installments[.]" Ns 37-2 at 8. This
provision supports a legal claim for immediate payment to
Mrs. Stiny or others for her benefit. The Bank has chosen to
make this legal claim in terms of conversion, which was
actionable at common law. Wood doesn't invoke the rule
against a conversion claim where the personal property
involved is money, perhaps because that rule has been
relaxed. E.g., Welco Electronics, Inc. v. Mora, 166
Cal.Rptr.3d 877, 881-82 (2014). As the Supreme Court noted in
Ross v. Bernhard, the Seventh Amendment entitles
"the parties to a jury trial in actions . . . for
conversion of personal property/7 396 U.S. 531, 533 (1970).
The Seventh Circuit's decision in favor of a jury trial
in similar circumstances is persuasive. Jefferson Nat.
Bank of Miami Beach v. Central Nat. Bank in Chicago, 700
F.2d 1143, 1148-50 (7th Cir. 1983).
Justice Holmes counseled, we must think things, not words.
Did Wood withhold survivor trust income wrongfully? Did she
spend it on herself and others, rather than for Mrs.
Stiny's benefit? This case is about those things. The
Bank's claim that Wood exercised her control over this
money improperly presents a legal claim that a jury should
resolve no matter whether that claim is labeled account,
debt, general assumpsit, or conversion. RESTATEMENT (SECOND)
OF TRUSTS § 198, comment b (1959). That the Bank could
have chosen to proceed entirely in equity on a breach of
fiduciary duty claim, and not invoke its Seventh Amendment
right, doesn't undermine its assertion of the claim at
law in this federal court.
equitable relief the Bank seeks beyond damages, and the trust
context, make this a mixed case. The Supreme Court has been
clear in these circumstances: the jury tries the legal claims
first; then the Court decides any equitable claims and any
equitable remedies, bound by the facts found by the jury.
Dairy Queen, Inc. v. Wood, 369 U.S. 469, 471-73
(1962); Beacon Theatres, Inc. v. Westover, 359 U.S.
500, 510-11 (1959).
Bank says conversion is its core claim. Wood's fiduciary
duties-under the powers of attorney, the delegation, and the
trust-are the context. Wood had some authority to control
survivor trust income. If a conversion beyond that authority
occurred, there was a breach of those duties-the two travel
together. The Court intends to instruct on fiduciary duty, as
well as whatever defenses are supported by the proof, such as
Mrs. Stiny's grants of authority, instructions, or
consent. The Court is working on ...