Morris v. Trust Company of Virginia et al
MEMORANDUM OPINION AND ORDER that: (1) Full faith and credit is GRANTED to the order and decree of the Circuit Court of Virginia Beach, Virginia, adjudging the 1998 Will of Amy Falcon Morris to be her last will and testament and recognizing Karen Lou lakis as executrix of Amy's Estate; (2) Full faith and credit is GRANTED to the monetary judgments of the Circuit Court of Virginia Beach, Virginia, entered against Thomas Morris and Sharon Duncan, jointly and severally, and in favor of Amy Falc on Morris ($1,125,222) and George Mason University Foundation, Inc. ($100,000); (3) Full faith and credit is DENIED to the order and decree of the Probate Court of Montgomery County, Alabama, adjudging the 2007 Will of Amy Falcon Morris to be her last will and testament and appointing Thomas W. Morris, as personal representative of Amy's Estate; (4) The Trust Company's and the Foundation's motions to dismiss Mr. Morris's amended complaint in the lead case (Lead Case Docs. # 34 , 37 ) are GRANTED for all of the reasons set out in this opinion; (5) The Foundation's cross motion for summary judgment in the member case (Member Case Doc. # 51) is GRANTED; and (6) Mr. Morris and Ms. Duncan's cross motions for summary judgment in the member case (Member Case Docs. # 48, 60) are DENIED; further ORDERED that the Foundation is DIRECTED to file, on or before 4/7/2015, a current calculation of principal and interest owed by Mr. Morris and Ms. Duncan on the unpaid Virginia judgments; An appropriate final judgment will be entered separately. Signed by Chief Judge William Keith Watkins on 3/31/2015. (wcl, )
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
THOMAS MORRIS, on behalf of
and as Executor of the Estate of
Amy F. Morris,
TRUST COMPANY OF VIRGINIA,
GEORGE MASON UNIVERSITY
THOMAS W. MORRIS, et al.,
CASE NO. 2:12-CV-1020-WKW
CASE NO. 2:13-CV-930-WKW
MEMORANDUM OPINION AND ORDER
The facts of these cases give new meaning – even double entendre – to the
tired cliché “where there’s a will, there’s a way.” And “the way” is a seemingly
endless trail of “nomadic controversies,” with litigants roving from one court to
another. First Tenn. Bank N.A. Memphis v. Smith, 766 F.2d 255, 259 (6th Cir.
1985). Why litigate perpetually across jurisdictions? Because “[t]he defense of res
judicata is universally respected, but actually not very well liked.” Riordan v.
Ferguson, 147 F.2d 983, 988 (2d Cir. 1945) (Clark, J., dissenting).
Decedent Amy Falcon Morris executed two wills – one in 1998, and another
The 1998 Will left almost everything to George Mason University
Foundation in Virginia. The 2007 Will left everything to Amy’s family. In 2008,
during her lifetime, a Virginia court ruled that Amy’s 2007 Will was null and void
because she lacked the capacity to execute it. When she died in Alabama in 2011,
her son, Thomas W. Morris, was undeterred by the Virginia Court’s ruling. He
successfully petitioned an Alabama court to probate the 2007 Will, which survived,
at least in Alabama, uncontested and unscathed. The Virginia court later probated
the 1998 will that was, in its view and according to its prior ruling, the only valid
These are but two cases in a series of legal proceedings in Virginia,
Alabama, and Maryland spanning eight years concerning Amy, her Estate, or her
children’s rights concerning the same. There are now competing state court orders,
estates, executors, and beneficiaries, and this is the seventh federal court opinion in
two districts. A large portion, if not all, of Amy’s Estate has been consumed in
attorneys’ and conservator’s fees, and the parties persist in litigation. Presently
their disputes are over the viability of two sorts of claims: actions to collect on
monetary judgments imposed by a Virginia state court against Amy’s children
during prior litigation, and tort claims by the children, Mr. Morris and his sister,
Sharon Duncan, against their opponents in that prior litigation.
First, George Mason University Foundation, Inc. (hereinafter “the
Foundation”) seeks to collect two separate Virginia monetary judgments against
Mr. Morris and Ms. Duncan arising directly out of Mr. Morris and Ms. Duncan’s
dealings with Amy’s assets during the pendency of the guardianship and
conservatorship proceedings in a Virginia Court. This is the basis of the member
case which originated in the Eastern District of Virginia.1
Second, Mr. Morris and Ms. Duncan raise tort claims against their long-time
legal nemeses – the Trust Company of Virginia (hereinafter “the Trust Company”),
which was appointed conservator of Amy’s estate during her last years, and the
Foundation, the named residual beneficiary under the 1998 Will.2 Mr. Morris
raises tort claims on behalf of Amy’s Estate in the lead case, but in the member
In this district’s parlance, “lead case” and “member case” are terms used to identify two
or more cases that have been consolidated by court order. A lead case is typically the older case
and is designated as the place where case filings continue to be docketed. A member case is a
non-lead case. Documents filed prior to consolidation remain on the docket of the member case.
Additional tort claims against Karen Loulakis – the attorney who drafted the 1998 Will,
advocated against Mr. Morris and Ms. Duncan during conservatorship and guardianship
proceedings in Virginia, and probated the 1998 Will after Amy died – have been dismissed due
to this court’s lack of personal jurisdiction over Ms. Loulakis. (See Lead Case Doc. # 71.)
case, Mr. Morris and Ms. Duncan, in their individual capacities, have lodged
counterclaims against the Foundation.3
There are four pending dispositive motions in the cases. Before the court in
the lead case are two motions to dismiss Mr. Morris’s Amended Complaint, filed
by the Trust Company and the Foundation. (Lead Case Docs. # 34, 37.) The
motions to dismiss have been fully briefed. (See Lead Case Docs. # 35, 38, 41, 45,
46.) Before the court in the member case are cross motions for summary judgment
between the Foundation (Member Case Docs. # 51, 52) and Mr. Morris and Ms.
Duncan (Member Case Docs. # 48, 55).
Each side responded to the other’s
motion. (Member Case Docs. # 54, 60.) The court has also received supplemental
briefing and submissions for the record to solidify the parties’ positions concerning
full faith and credit. (Lead Case Docs. # 86, 87, 89, 93, 94, 95, 97.)
I. JURISDICTION AND VENUE
Subject-matter jurisdiction is proper pursuant to 28 U.S.C. § 1332(a). The
amount in controversy exceeds $75,000, and there is complete diversity of
Mr. Morris and Ms. Duncan also attempted to implead tort claims against the Trust
Company in the member case, but those claims were dismissed as improperly impleaded under
Rule 14 of the Federal Rules of Civil Procedure. (See Lead Case Doc. # 72.)
citizenship between the opposing parties in each case.4 No party disputes personal
jurisdiction or venue.5
II. STANDARDS OF REVIEW
Motion to Dismiss for Failure to State a Claim
When evaluating a motion to dismiss pursuant to Federal Rule of Civil
Procedure 12(b)(6), the court must take the facts alleged in the complaint as true
and construe them in the light most favorable to the plaintiff. Resnick v. AvMed,
Inc., 693 F.3d 1317, 1321–22 (11th Cir. 2012). To survive Rule 12(b)(6) scrutiny,
“a complaint must contain sufficient factual matter, accepted as true, to ‘state a
claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “[F]acial
plausibility” exists “when the plaintiff pleads factual content that allows the court
to draw the reasonable inference that the defendant is liable for the misconduct
alleged.” Id. (citing Twombly, 550 U.S. at 556).
Mr. Morris is a citizen of Alabama; Ms. Duncan is a citizen of Maryland; and the Trust
Company and the Foundation are citizens of Virginia.
Ms. Duncan, who is a party in the member case only, is now represented by Mr. Landis
Sexton, Alabama counsel who has represented Mr. Morris in the lead case. When defending the
member case in Virginia, Ms. Duncan unsuccessfully requested transfer of the member case to
this court. (See Member Case Docs. # 5, 44.) And when the Trust Company of Virginia moved
again to transfer the case to this district, Ms. Duncan did not oppose the motion. (Member Case
Doc. # 91 (opposing a motion to dismiss but not an alternative motion to transfer to this
district).) Ms. Duncan has not objected, through Mr. Sexton or otherwise, to this court’s exercise
of personal jurisdiction over her.
A defendant may raise the plaintiff’s lack of capacity to sue under a Rule
12(b)(6) motion to dismiss. See Graca v. Rosebank Mar., Inc., No. 04-14302,
2005 WL 6458603, at *2 (11th Cir. Mar. 8, 2005); see also Klebanow v. N.Y.
Produce Exch., 344 F.2d 294, 296 n.1 (2d Cir. 1965) (“Although the defense of
lack of capacity is not expressly mentioned in rule 12(b), the practice has grown up
of examining it by a 12(b)(6) motion when the defect appears upon the face of the
complaint.”). Generally, when a district court “considers materials outside of the
complaint, [it] must convert the motion to dismiss into a summary judgment
motion,” but “[i]n ruling upon a motion to dismiss, the district court may consider
an extrinsic document if it is (1) central to the plaintiff’s claim, and (2) its
authenticity is not challenged.” SFM Holdings, Ltd. v. Banc of Am. Sec., LLC, 600
F.3d 1334, 1337 (11th Cir. 2010). A district court may thus take judicial notice of
documents in legal proceedings which are public records that are “not subject to
reasonable dispute” and “capable of accurate and ready determination by resort to
sources whose accuracy could not reasonably be questioned.” Horne v. Potter, 392
F. App’x 800, 802 (11th Cir. 2010) (quoting Fed. R. Evid. 201(b)).
Motion for Summary Judgment
To succeed on summary judgment, the movant must demonstrate “that there
is no genuine dispute as to any material fact and the movant is entitled to judgment
as a matter of law.” Fed. R. Civ. P. 56(a). The court must view the evidence and
the inferences from that evidence in the light most favorable to the nonmovant.
Jean-Baptiste v. Gutierrez, 627 F.3d 816, 820 (11th Cir. 2010).
The party moving for summary judgment “always bears the initial
responsibility of informing the district court of the basis for its motion.” Celotex
Corp. v. Catrett, 477 U.S. 317, 323 (1986).
This responsibility includes
identifying the portions of the record illustrating the absence of a genuine dispute
of material fact. Id. Or a movant who does not have a trial burden of production
can assert, without citing the record, that the nonmoving party “cannot produce
admissible evidence to support” a material fact. Fed. R. Civ. P. 56(c)(1)(B); see
also Fed. R. Civ. P. 56 advisory committee’s note (“Subdivision (c)(1)(B)
recognizes that a party need not always point to specific record materials. . . . [A]
party who does not have the trial burden of production may rely on a showing that
a party who does have the trial burden cannot produce admissible evidence to carry
its burden as to the fact.”). If the movant meets its burden, the burden shifts to the
nonmoving party to establish – with evidence beyond the pleadings – that a
genuine dispute material to each of its claims for relief exists. Celotex, 477 U.S.
A genuine dispute of material fact exists when the nonmoving party
produces evidence allowing a reasonable fact finder to return a verdict in its favor.
Waddell v. Valley Forge Dental Assocs., 276 F.3d 1275, 1279 (11th Cir. 2001).
This opinion is the court’s third and final one in a trilogy. Abbreviated facts
and procedural history have been set out in two prior opinions (Lead Case Docs.
# 71, 72), but a full account of the facts is necessary to give context to the
remaining claims and defenses. When considering the pending motions, the court
will view the allegations or evidence as required by the applicable standard of
review. When necessary, judicial notice will be taken of documents admitted,
allegations pleaded, and decisions rendered in prior court proceedings in various
Virginia and Alabama state and federal courts.6 These judicial facts are relevant to
the parties’ arguments concerning full faith and credit of state court orders and the
application of preclusion law.
Amy Falcon Morris died testate in Montgomery, Alabama, in March 2011.
Amy’s first will was prepared in 1998 by Ms. Loulakis, an attorney from Virginia,
while Amy lived in Virginia. No one disputes that Amy had the requisite mental
capacity to devise the 1998 Will. The 1998 Will named Ms. Loulakis as the
Executor of Amy’s Estate and named the Foundation as the residual beneficiary of
A court may take judicial notice of documents filed in another court not for the truth of
the matters asserted within the documents, but for the purpose of establishing the existence of
other litigation and the judicial actions undertaken in orders. See United States v. Jones, 29 F.3d
1549, 1553 (11th Cir. 1994).
the Estate. Mr. Morris and his family members were basically disinherited by their
mother in that will.7
On February 22, 2007, Amy was in a car wreck in Virginia Beach, Virginia.
Afterward, she was admitted to Chesapeake General Hospital. Shortly after the
accident, Mr. Morris and Ms. Duncan filed an action in the Circuit Court of
Virginia Beach, Virginia (hereinafter “the Virginia Court”), in which they sought
to be appointed as Amy’s guardians and conservators. In their amended petition
for appointment of guardian and conservator, filed April 10, 2007, Mr. Morris and
Ms. Duncan, with the assistance of counsel, represented to the Virginia Court that
Amy “suffers from dementia of Alzheimer’s type with psychosis. Her dementia
has progressed to the point that she does not recognize [Mr. Morris and Ms.
Duncan] and cannot communicate in complete sentences with them.” (Member
Case Doc. # 52-3, at ¶ 6.) Mr. Morris and Ms. Duncan further averred that Amy
was “physically and mentally incapacitated” and there was no indication that she
would recover from her disability. (Member Case Doc. # 52-3, at ¶ 7.)
On April 27, 2007, during the pendency of the guardianship and
conservatorship proceedings, Mr. Morris had Amy discharged from Chesapeake
General Hospital. On May 2, 2007, Mr. Morris moved Amy into a residential
nursing facility in Montgomery, Alabama. The Foundation represents that Mr.
The 1998 Will provides for a $1,000 gift to Ms. Duncan and a $20,000 gift to Mr.
Morris. (Member Case Doc. # 52-11, at 3.)
Morris and Ms. Duncan moved their mother without court approval and against the
advice of medical care providers, but Mr. Morris and Ms. Duncan say that Amy
wanted to move (see Member Case Doc. # 49, at 16, ¶ 9), that the court had notice
beforehand, and that the guardian ad litem appointed to represent Amy, Charles
Johnson, approved.8 Mr. Morris and Ms. Duncan further assert that a document
conferring power of attorney upon Mr. Morris was “located, validated[,] and filed”
with the Virginia Court. (Lead Case Doc. # 88, at 3.)
On April 27, 2007, Ms. Loulakis moved to intervene in the Virginia
guardianship and conservatorship proceedings and asserted that Amy’s interests
differed from Mr. Morris and Ms. Duncan’s interests. (Lead Case Doc. # 93-2,
at 29.) Allegedly at the prompting of Ms. Loulakis, the Foundation intervened on
or around May 20, 2007, based on its understanding that it would be the residual
beneficiary of Amy’s Estate under the 1998 Will. On May 23, 2007, Judge A.
Bonwill Shockley, the presiding judge in the Virginia Court proceedings,
appointed Ms. Loulakis as Amy’s counsel in the proceedings and permitted the
Foundation’s intervention in the case. (See Lead Case Docs. # 93-2, at 32–33.)
When Mr. Johnson approved of the move to Alabama is unclear. It is clear that by
October 2007, after visiting Montgomery, Mr. Johnson believed Amy’s placement in the facility
in Montgomery was “a good choice.” (Lead Case Doc. # 93-3, at 78.)
Ms. Loulakis’s appointment was distinct from the continued representation of Amy
by Mr. Johnson, the guardian ad litem.9
On May 5, 2007, shortly after arriving in Montgomery, Amy executed a
deed of gift transferring her Virginia Beach home, as well as her Smith Barney
stock accounts worth roughly $1.6 million, to Mr. Morris and Ms. Duncan.
Montgomery Attorney Mark Chambless witnessed and notarized the deed of gift.
Mr. Chambless reportedly referred Amy to another Montgomery law firm for the
drafting of a new will. Montgomery Attorney Lee Hamilton drafted a new will for
Amy, which Amy executed on May 25, 2007. The 2007 Will names Mr. Morris
the Executor of Amy’s Estate and makes Mr. Morris, Ms. Duncan, and their
families the beneficiaries of the Estate. Mr. Morris and Ms. Duncan represent that
the 2007 Will was drafted and executed according to Amy’s wishes. About the
same time, Mr. Morris and Ms. Duncan listed Amy’s Virginia Beach house for sale
because she would not be returning to Virginia.
Mr. Morris and Ms. Duncan filed a competing action in the Probate Court of
Montgomery County, Alabama (hereinafter the “Alabama Probate Court”) to be
appointed as Amy’s guardian and conservator. The Alabama Probate Court stayed
its proceedings pending the outcome of the Virginia Court guardianship and
Mr. Morris and Ms. Duncan have alleged that Judge Shockley is partial to the
Foundation because she is an alumna of George Mason University School of Law. They
requested that Judge Shockley recuse herself, but she declined. Judge Shockley continued to
preside over all of the Virginia Court proceedings described infra.
conservatorship proceedings, and it appears that the Alabama conservatorship and
guardianship proceedings never resumed.
In Virginia, Mr. Morris and Ms. Duncan filed a “Notice” declaring their
intent to move for a nonsuit or voluntary dismissal of their petition pursuant to
Virginia statute. (Lead Case Doc. # 93-3, at 113.) No formal motion for nonsuit
was filed. On May 30, 2007, the Foundation informed the Virginia Court that it
would oppose dismissal of the case and that it would file an answer, counterclaim,
and crossclaim. (Lead Case Doc. # 93-3 at 102–03, 115–23.) The Foundation’s
countersuit sought an accounting from Mr. Morris and Ms. Duncan. During a
hearing on June 8, 2007, the court ruled from the bench that Mr. Morris and Ms.
Duncan’s oral motion for nonsuit was denied. (Lead Case Doc. # 93-3, at 56.)
The same date, the court entered an order enjoining the parties from
transferring or disposing of any of Amy’s assets. (See Lead Case Doc. # 93-3
at 126 (prohibiting Mr. Morris and Ms. Duncan from “making any distributions, by
exercise of authority under any power of attorney or otherwise, out of [Amy’s]
assets other than distributions for those costs directly related to [her] care.”).) The
Foundation alleges that Mr. Morris and Ms. Duncan violated the Virginia Court’s
injunction by wrongfully transferring Amy’s property, including financial accounts
and her Virginia Beach home, to themselves. However, the June 8, 2007 order was
entered after the property transfers of May 5, 2007, and after the execution of the
will on May 25, 2007.
Ms. Loulakis, in her capacity as Amy’s appointed attorney, came to Amy’s
nursing home facility in Montgomery in July 2007, allegedly with a forged order
from Montgomery County Probate Judge Reese McKinney authorizing her visit to
Mr. Morris and Ms. Duncan claim that Amy was alert and
communicated her wishes that Ms. Loulakis and the Foundation cease meddling in
her affairs. According to Mr. Morris and Ms. Duncan, Ms. Loulakis lied to the
Virginia Court, saying that Amy was unresponsive to inquiries when Ms. Loulakis
tried to question her. Mr. Morris and Ms. Duncan claim further that Montgomery
Attorney Ed Parish witnessed Ms. Loulakis’s visit with Ms. Morris, but Judge
Shockley refused to hear Mr. Parish’s testimony.10 The Foundation has rebutted
Mr. Morris and Ms. Duncan’s representations by showing the transcript of Mr.
Parish’s limited testimony in Virginia. (Lead Case Doc. # 94-7.) The transcript
explains that the Virginia Court sustained the Foundation’s objection to Mr.
Parish’s testimony and restricted him from testifying against Ms. Loulakis because
he participated in the act of secretly and illegally taping a live conversation on July
28, 2007, involving Ms. Loulakis, without her awareness or consent.
Mr. Parish’s affidavit was presented later to the Circuit Court of Montgomery County
in a different proceeding. (Lead Case Doc. # 93-3, at 141–42.)
On February 29, 2008, after receiving testimony and evidence during a trial,
the Virginia Court entered orders retroactively declaring Amy to be an
incapacitated person as of February 22, 2007, appointing Mr. Morris as Amy’s
guardian only, and appointing the Trust Company as conservator of her property.
(Lead Case Doc. # 35-1, at 19–20, ¶¶ A, G.)11 The Virginia Court found that
Amy’s incapacity was perpetual and that she would not improve. (Lead Case Doc.
# 35-1, at 17, ¶ 7.) The Virginia Court also relieved Amy of her authority to
perform legal acts, and significantly, the order declared that the 2007 Alabama
Will was “invalid and of no effect.” (Lead Case Doc. # 35-1, at 20–21, ¶ L.) The
Virginia Court declared all transfers of Amy’s assets after February 22, 2007, void
ab initio and directed Mr. Morris and Ms. Duncan to convey to the Trust Company
Amy’s assets that they had transferred to themselves by power of attorney or other
documents executed by Amy in Alabama. (Lead Case Doc. # 35-1, at 22, ¶¶ Q–
On August 8, 2008, the Virginia Court held a hearing and found by clear and
convincing evidence that Mr. Morris and Ms. Duncan had “acted in bad faith since
the Feb. 29, 2008, final decree, and . . . deliberately failed to fully comply with the
The court and the parties sometimes have referred to this order as the “leap year order.”
The same critical document is in the member case record as Document # 52-4.
The Foundation represents that Mr. Morris and Ms. Duncan appealed the leap year
order to the Virginia Supreme Court, which denied their request for a writ and for rehearing.
(See Member Case Doc. # 41, at ¶¶ 22–23.)
June 8, 2007 injunction and order, and the Feb. 29, 2008 final decree, including,
but not limited to, failing to return the assets that they took from Amy . . . to the
Conservator.” (Lead Case Doc. # 93-2, at 38.) For that reason, the court found
Mr. Morris and Ms. Duncan in contempt and issued a capias order as to both of
them. (Lead Case Doc. # 93-2, at 38–41.) The capias order appears to still be in
On December 19, 2008, the Virginia Court entered a final judgment against
Mr. Morris and Ms. Duncan, jointly and severally, and in favor of the Trust
Company as Conservator for Amy in the amount of $1,125,222, plus interest.
(Lead Case Doc. # 35-1, at 38, ¶ 13.)13 The same order included a “separate final
judgment in the amount of $100,000” against Mr. Morris and Ms. Duncan, “jointly
and severally, in favor of the Foundation, with interest at the legal rate until paid,
as that portion of attorney’s fees and costs of the Foundation . . . attributable to”
Mr. Morris and Ms. Duncan’s contempt of court. (Lead Case Doc. # 35-1, at 38,
¶ 10(d).) It is undisputed that Virginia’s appellate courts denied Mr. Morris and
Ms. Duncan’s appeals of the judgments against them. (See Member Case Docs.
# 52-5, 52-7, 52-8 (letters from the Virginia Court of Appeals and the Virginia
Supreme Court).) Mr. Morris and Ms. Duncan complain that the judgment is
The final judgment against Mr. Morris and Ms. Duncan is in the record, attached to the
Foundation’s amended complaint as Doc. # 41-2 in the member case.
based on inflated and unaudited sums of assets, but it is a valid judgment
On January 9, 2009, the Trust Company filed the Virginia Court’s judgment
in the Circuit Court of Montgomery County, Alabama. The Foundation was joined
as an indispensable party. Mr. Morris responded by filing a motion for relief
pursuant to Rule 60(b)(4) of the Alabama Rules of Civil Procedure. (Lead Case
Doc. # 93-1.) In the motion, Mr. Morris asserted that the Foundation lacked
standing to intervene in the Virginia case once Amy executed her 2007 Will. Mr.
Morris argued the judgment was void because the Virginia Court lacked
jurisdiction over the Foundation’s claims and further that the Virginia Court lost
jurisdiction when he and Ms. Duncan exercised their statutory right to a nonsuit.
(Lead Case Doc. # 93-3, at 8–11.) On May 25, 2010, after receiving thorough
briefing, the Circuit Court of Montgomery County denied Mr. Morris’s Rule 60(b)
Mr. Morris complains that under the Virginia Court’s conservatorship
arrangement, the Trust Company ultimately received $990,000 in assets belonging
to Amy.15 Mr. Morris claims that $302,000 of that sum was spent on Amy’s care,
The Trust Company brings this to the court’s attention to show that many of Mr.
Morris’s jurisdictional objections have been raised, considered, and dismissed in previous
This sum apparently includes $154,441 transferred to the Trust Company from an IRA,
$290,840 from a Smith Barney account in Mr. Morris’s and Amy’s names, $168,690 from a
while the remainder was allegedly squandered, handled incompetently, or spent on
attorneys’ fees. Mr. Morris complains that the Trust Company failed to sell Amy’s
house for its full value and unnecessarily incurred large tax penalties by liquidating
an IRA.16 He also claims that the Foundation interfered with his attempt to sell
Amy’s home by wrongfully filing a lis pendens action against the property,
defeating a sale on terms more favorable to Amy than the contract the Trust
Company later negotiated.17 Mr. Morris alleges that the Trust Company and the
Foundation then “cover[ed] their tracks” by expending several hundreds of
thousands of dollars of Amy’s money, during her lifetime, on their attorneys’ fees.
(Lead Case Doc. # 29, at ¶ 40.)
In 2010, Mr. Morris, purportedly acting as Amy’s “attorney-in-fact,” filed a
satisfaction of judgment in Montgomery County Circuit Court, releasing himself
from liability on the $1,125,222 judgment. The Foundation moved to strike the
satisfaction in the pending suit to domesticate the Virginia judgment, but it appears
Smith Barney account in Ms. Duncan’s and Amy’s names, and $242,525 from the sale of Amy’s
house. (See Member Case Doc. # 49, at 22–24, ¶¶ 43, 46, 49, 50.) It is not completely clear
what other assets of Amy’s came under the Trust Company’s control.
The Trust Company represents that after petitioning the Virginia Court for “aid and
guidance” as conservator of Amy’s property, the court authorized the sale of Amy’s home. (See
Lead Case Doc. # 35-1, at 51 (April 8, 2010 order granting the Trust Company “the authority to
sell the Residence at such a price and on such terms as it determines will result in a sale of the
Residence as soon as practicable.”).)
Specifically, Mr. Morris and Ms. Duncan claim that they entered a contract to sell the
house in February 2008 for $319,000. The Trust Company later sold the house for $242,525.
that the motion was not decided.
Amy died on March 25, 2011, and the
domestication suit was dismissed. (See Member Case Doc. # 55-6.)
After Amy died, Mr. Morris initiated probate proceedings of the 2007 Will
in the Alabama Probate Court, notwithstanding the Virginia Court’s 2008
determination that Amy lacked the capacity to devise the 2007 Will. On April 7,
2011, the Alabama Probate Court probated Amy’s will and issued certified letters
testamentary to Mr. Morris as Executor of the Estate. (Lead Case Doc. # 41-1,
at 1.) Necessarily, the Alabama Probate Court found that Amy was an inhabitant
of Montgomery County, Alabama, at the time of her death, that she was “of . . .
sound mind and disposing memory and understanding” when she signed the will,
that the court was “satisfied as to its jurisdiction,” and that Thomas Morris was “in
no way disqualified from serving” as executor. (Lead Case Doc. # 97-1, at 11.)
None of the Virginia parties – Ms. Loulakis, the Foundation, or the Trust Company
– was given legal notice of the proceedings. Neither did any of those parties
appear on their own initiative in Alabama to contest the 2007 Will. On May 19,
2011, the Alabama Probate Court ordered the Trust Company to release to Mr.
Morris all funds belonging to Amy. (Lead Case Doc. # 41-1, at 3.) Mr. Morris
claims that when he contacted the Trust Company after Amy’s death, it refused to
relinquish the Estate’s funds to him unless he and Ms. Duncan released their
personal claims against it. The Trust Company allegedly told Mr. Morris that it
would consume the remainder of the Estate in litigation expenses if Mr. Morris did
not comply. (See Lead Case Doc. # 29, at ¶¶ 44–45; Member Case Doc. # 49,
at 27, ¶ 67.)
Mr. Morris never received the remainder of Amy’s Estate. Upon the Trust
Company’s petition for a writ of prohibition or other appropriate relief from the
Alabama Supreme Court, that court concluded that the Trust Company was never
properly served with process or provided adequate notice of the Alabama Probate
Court’s proceedings and that the Alabama Probate Court lacked personal
jurisdiction over the Trust Company. Ex parte Trust Co. of Va., 96 So. 3d 67, 68
(Ala. 2012). The Alabama Supreme Court directed the probate judge to vacate his
prior orders that required the Trust Company to transfer conservatorship assets to
Mr. Morris and that enjoined the Trust Company from disbursing assets without
court approval. Id. at 70.
By an order dated July 20, 2012, the Alabama Probate Court denied as moot
Mr. Morris’s “Second Petition to Compel Release of Trust Funds” because the
Trust Company had already distributed Amy’s assets pursuant to the orders of the
Virginia Court, and the Trust Company’s administration of the conservatorship of
Amy’s Estate was complete. (See Lead Case Doc. # 41-1, at 5.) Indeed, although
Mr. Morris had presented the 2007 Will for probate in Alabama, proceedings were
also ongoing in Virginia, where the Trust Company filed an interpleader action
concerning the disposition of about $106,000 held by it and remaining in Amy’s
Estate because of Mr. Morris’s and Ms. Loulakis’s competing claims to represent
The Virginia Court admitted the 1998 Will to probate in August 2011. The
Virginia Court found, based on its prior rulings in 2008, that Virginia remained
Amy’s legal domicile at the time of her death because she lacked the capacity to
change her domicile. (See Member Case Doc. # 52-12, at ¶¶ 3, 6.) It consequently
appointed Ms. Loulakis – not Mr. Morris – as the Executor of Amy’s Estate. (See
Member Case Doc. # 52-12, at ¶ C.) Mr. Morris and Ms. Duncan were parties to
the interpleader and probate proceedings in Virginia in 2011, along with the
Foundation and Ms. Loulakis, (Doc. # 52-12, at ¶ 1), and Mr. Morris and Ms.
Duncan did not appeal the Virginia court’s interpleader or probate orders.
Pursuant to an order of the Virginia Court on October 27, 2011, the Trust
Company assigned to Ms. Loulakis the December 19, 2008 judgment against Mr.
Morris and Ms. Duncan and in favor of Amy, and paid over or delivered all other
remaining assets in the Estate to Ms. Loulakis. On November 26, 2012, Ms.
Loulakis, in her capacity as Executor, executed an Instrument of Assignment
conveying to the Foundation all of the Estate’s interest in the December 19, 2008
judgment in the amount of $1,125,222 against Mr. Morris and Ms. Duncan. (See
Member Case Doc. # 41-3.)
Mr. Morris alleges that Ms. Loulakis failed to protect Amy’s assets, both
before and after Amy’s death, and that she and the Trust Company proceeded to
oppose Mr. Morris in the Virginia interpleader suit, in spite of their knowledge of
Mr. Morris’s first-in-time appointment as Executor of Amy’s Estate in the
Alabama Probate Court.
Lead Case Proceedings
Mr. Morris sued the Trust Company, the Foundation, and Ms. Loulakis in
the Circuit Court of Montgomery County, Alabama, on October 19, 2012. The
Trust Company removed the case to federal court. (Lead Case Doc. # 1.) Both the
Foundation and the Trust Company filed motions to dismiss the complaint for
failure to state claims against them. (Lead Case Docs. # 8, 9.)
The court entered a memorandum opinion and order granting in part and
denying in part the Trust Company and the Foundation’s motions to dismiss the
original complaint. (Lead Case Doc. # 28.) The court concluded that Mr. Morris
could not sue the three defendants for torts committed against Amy because the
torts did not survive her death, or for torts against himself because he abandoned
those claims by failing to respond to the motions to dismiss those claims. (Lead
Case Doc. # 28, at 5–7.) This left only the tort claims against Amy’s Estate, but
the original complaint failed to develop the facts adequately to give the lead case
defendants notice of which torts they allegedly committed against the Estate. (See
Lead Case Doc. # 28, at 7.) Consequently, the court struck the original complaint
and directed Mr. Morris to file an amended complaint. Mr. Morris complied on
May 27, 2013, but the amended pleading still blurs the lines and conflates alleged
torts against Amy with alleged torts against the Estate. (See Lead Case Doc. # 29.)
Mr. Morris’s amended complaint raises seven counts, of which the following
five remain before the court: (1) Count One against the Trust Company for breach
of fiduciary duty; (2) Count Two against the Trust Company for conversion;
(3) Count Three against the Foundation for interference with contractual relations;
(4) Count Four for conversion against the Foundation; (5) Count Seven against the
Trust Company and the Foundation for civil conspiracy.18 Before the court are
motions to dismiss the amended complaint in its entirety. (Lead Case Docs. # 34,
Member Case Proceedings
On December 21, 2011, the Foundation filed suit against Mr. Morris and
Ms. Duncan in the Eastern District of Virginia to enforce the Virginia Court’s
judgment in its favor for $100,000, plus interest. (Member Case Doc. # 1.) Mr.
Morris and Ms. Duncan sought to dismiss the case, or alternatively, to transfer the
Mr. Morris also raised three claims against Ms. Loulakis (Counts Five, Six, and
Seven), which have been dismissed for lack of personal jurisdiction.
case to this district. (Member Case Docs. # 5, 6.)19 The Eastern District of
Virginia denied their motions on April 11, 2012. (Member Case Doc. # 10.)20
On August 19, 2013, with leave of that court, the Foundation amended its
complaint to add a claim to enforce the $1,125,222, plus interest, judgment in favor
of Amy, which Ms. Loulakis, as Executor, assigned to the Foundation as the
beneficiary under the 1998 Will. (See Member Case Doc. # 41.) Again, Mr.
Morris and Ms. Duncan filed a motion to dismiss, or alternatively, to transfer the
case to this district. These motions were denied. Not long thereafter, Mr. Morris
and Ms. Duncan filed a motion for summary judgment on the Foundation’s claims,
which remains pending. (Member Case Doc. # 48.) The Foundation opposes the
motion. (Member Case Doc. # 54.)
Mr. Morris and Ms. Duncan then filed an answer to the amended complaint
with counterclaims against the Foundation. (Member Case Doc. # 49.)21 The
pending counterclaims of Mr. Morris and Ms. Duncan include:
(1) Count III
against the Foundation for conspiracy; (2) Count VI against the Foundation for
From the outset and until November 2013, Mr. Morris and Ms. Duncan represented
themselves in the member case without counsel.
Mr. Morris and Ms. Duncan appealed the denial of their motion to dismiss, and the
Fourth Circuit Court of Appeals dismissed their appeal for lack of jurisdiction. (See Member
Case Doc. # 16.)
The answer also lodged “crossclaims,” actually third-party claims, against the Trust
Company and Ms. Loulakis. Those claims have been dismissed. (See Lead Case Docs. # 71,
breach of fiduciary duty; (3) Count VII against the Foundation for wanton breach
of fiduciary duty; (4) Count VIII against the Foundation for conversion; (5)
Count IX against the Foundation for abuse of process; and (6) Count X against the
Foundation for tortious interference with expectancy of inheritance. Mr. Morris
and Ms. Duncan seek millions of dollars in compensatory and punitive damages.
(Member Case Doc. # 49, at 41.)22
On October 3, 2013, the Foundation filed a motion for summary judgment
on its two claims against Mr. Morris and Ms. Duncan and on all counterclaims
against it (i.e., Counts III, VI, VII, VIII, IX, and X). (Member Case Doc. # 51, 52)
Mr. Morris and Ms. Duncan oppose the motion and request summary judgment in
their favor on the six counterclaims. (Member Case Doc. # 60.) Their opposition
The tort claims pending in the lead case are not identical to the tort claims pending in
the member case. At this juncture in the lead case, Mr. Morris stands only “on behalf of and as
Executor for the Estate of Amy F. Morris.” (Lead Case Doc. # 36, at 1.) Even if Mr. Morris had
not re-pleaded his amended complaint as he did, the court dismissed the claims he filed on behalf
of himself as abandoned or as failing to state a claim under Alabama law. (See Lead Case Doc. #
28, at 6–7 & n.4.) In the member case, which this court has yet to address, Mr. Morris and Ms.
Duncan raise their counterclaims “in [their] individual capacit[ies].” (Member Case Doc. # 49.)
Mr. Morris and Ms. Duncan assert that their member case counterclaims should be allowed to
proceed in the consolidated action because Ms. Duncan is new to the Alabama litigation, and
further, because “Mr. Morris and Ms. Duncan could not have known and could not have
asserted” their counterclaims “until [the Foundation] made its judgment claims against Mr.
Morris and Ms. Duncan individually.” (Lead Case Doc. # 52, at 2–3.) It is true that this court
has yet to consider Ms. Duncan’s claims against the Foundation, but it is false that Mr. Morris
was unable to raise personal counterclaims until the Foundation amended the member case
complaint and added a count to collect the $1,125,222 judgment against him. Mr. Morris’s
counterclaims are based on the same facts on which Mr. Morris based his lead case individual
capacity claims in 2012. However, the court will not belabor the issue because the resolution of
the counterclaims turns on the Foundation’s defenses of res judicata and collateral estoppel. See
infra Part IV.C.4.
brief contains a request for judgment in their favor on their counterclaims. The
parties’ cross motions for summary judgment remain pending.
Transfer to the Middle District of Alabama and Consolidation
On November 15, 2013, the Trust Company filed a motion to dismiss the
third-party claims against them, or alternatively, to transfer venue to this district.
(See Member Case Docs. 86, 87, 88, 89.) Mr. Morris and Ms. Duncan opposed the
Trust Company’s motion to dismiss. (Member Case Doc. # 91.) The Eastern
District of Virginia granted the Trust Company’s Motion to Transfer Venue to this
court on December 9, 2013, pursuant to 28 U.S.C. § 1404(a), without ruling on the
alternative motion to dismiss.23 (See Member Case Docs. # 92, 93.) After the
Eastern District of Virginia transferred the member case to this district, the two
actions were consolidated on January 30, 2014, upon the Trust Company’s motion
and after finding that consolidation was the simplest and most expeditious way of
resolving these proceedings. (See Lead Case Doc. # 57.)
The court asked the parties to disclose any other pending cases concerning
the underlying judgment, decrees, or claims. It learned that an action to collect one
or both judgments against Ms. Duncan is pending in the Circuit Court for Harford
County, Maryland, case number 12-cv-09-088. (See Lead Case Docs. # 52, 54, 55,
The transferring court did not receive briefing from all of the other parties before
transferring the action, and Ms. Loulakis in particular was unable to assert her opposition to
transfer on the grounds that Alabama’s courts lack personal jurisdiction over her.
56.) Ms. Duncan and the Trust Company were the original parties to that case, but
the Trust Company says it is no longer a party because, on December 20, 2012, the
Maryland Court of Special Appeals substituted Ms. Loulakis for the Trust
Company. (See Lead Case Doc. # 56-1.) Ms. Loulakis is apparently no longer a
party either. (Lead Case Doc. # 54.) The court deduces that the action is now
being litigated by the Foundation, as Ms. Loulakis’s assignee of the $1,125,222
judgment. (Lead Case Doc. # 55.) Mr. Morris and Ms. Duncan represent that the
Maryland case has been stayed pending resolution of this litigation. (Lead Case
Doc. # 52, at 3.) As will be discussed infra, Mr. Morris attempted to satisfy the
domesticated Maryland judgment against his sister, but the satisfaction was set
On September 26, 2014, the court dismissed all claims in both cases against
Ms. Loulakis for lack of personal jurisdiction. (Lead Case Doc. # 71.) The same
day, the court granted the Trust Company’s motion to dismiss all third-party claims
of Mr. Morris and Ms. Duncan in the member case. (Lead Case Doc. # 72.) The
court ordered additional briefing from the parties concerning the Virginia Court’s
authority to invalidate Amy’s 2007 Will during her lifetime, the full faith and
credit due to Virginia’s order appointing Ms. Loulakis as executor of Amy’s
Estate, and the abatement of any breach of fiduciary duty claims against the Trust
(Lead Case Doc. # 73.)
The parties responded by submitting
supplemental briefing. (Lead Case Docs. # 86, 87, 89.) On December 2, 2014,
oral argument was held on the pending dispositive motions, (see Lead Case Doc.
# 92), and per the court’s requests, second supplemental briefs, court documents,
and evidence have been filed. (Lead Case Docs. # 93, 94, 95, 97.)
The claims before the court cannot be resolved by recognizing both Mr.
Morris and Ms. Loulakis’s rights to serve as the representative of Amy’s Estate.
Hence, the discussion will begin with an inquiry into whether Alabama or
Virginia’s probate proceedings are entitled to full faith and credit. All other
arguments supporting the parties’ pending motions to dismiss and for summary
judgment, which are necessary to the resolution of the issues in the cases, will then
Mr. Morris’s Capacity to Sue and to Defend Suit as Executor or
Beneficiary Under the 2007 Will
The court is mindful of the “well-settled proposition that a federal court will
not assume jurisdiction over a petition whose object is to avoid a will or set aside
its probate.” Moore v. Graybeal, 670 F. Supp. 130, 131 (D. Del. 1987) aff’d, 843
F.2d 706 (3d Cir. 1988). “[A] federal court has no jurisdiction to probate a will or
administer an estate,” and must 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 v. Allen, 326 U.S. 490, 494 (1946). In the present
scenario, wills have been proven and probate administrations in each state are
completed. There is no estate property left (save the $1,125,222, judgment, which
has been assigned to the Foundation) over which to assume control. No party to
these cases has come to court seeking equitable or declaratory relief – for instance,
asking for a judicial determination of which of two wills, admitted to probate in
Alabama and Virginia, is the true last will and testament of Amy. Cf. Eyber v.
Dominion Nat’l Bank of Bristol Office, 249 F. Supp. 531 (W.D. Va. 1966)
(refusing to exercise jurisdiction where complaint sought declaratory relief).
While it could be argued that this court is being asked, in effect, to set aside the
probate of one of Amy’s two wills, the court has before it several non-probate,
legal claims and defenses that require the court to grant or deny full faith and credit
to prior probate orders. Even if the claims and defenses before this court had been
brought in a state court, a state court would be pressed to resolve the question of
full faith and credit.
A fundamental ground for dismissal of Mr. Morris’s amended complaint in
the lead case is his alleged lack of capacity as Executor to sue on behalf of Amy’s
Estate. The issue of capacity is also pertinent to resolving the Foundation’s second
claim for $1,125,222 in the member case. The quandary created by the probate of
competing wills was acknowledged prior to the transfer of the member case from
the Eastern District of Virginia. (See Member Case Doc. # 58, at 15 (“[T]he
jurisdiction of the Virginia Beach Circuit Court to probate [Amy]’s 1998 Will is in
question in light [of] collateral proceedings in the state of Alabama. Alabama and
Virginia state courts each appear to have recognized different Executors to
[Amy]’s [E]state under separate wills. As such, there is a question as to which
state court should be accorded full faith and credit regarding their jurisdictional
findings and probate of [Amy]’s respective wills.”).)
The Foundation argues that because the Virginia Court ruled before Amy
died that Amy’s 2007 Will was invalid, and because the Virginia Court also ruled,
after Amy’s death, that Ms. Loulakis – not Mr. Morris – is the Executor of Amy’s
Estate, Mr. Morris lacks the capacity to sue on behalf of Amy’s Estate. (See Lead
Case Docs. # 36, at 13–14 (arguing that Mr. Morris lacks standing), 22–23
(requesting that full faith and credit be given to the Virginia Court’s rulings); # 38,
at 7 (adopting the same arguments).) The argument is really Ms. Loulakis’s, but
the Foundation has adopted it as its own. The Trust Company never has taken a
position on which will is valid,24 but agrees that if the 2007 Will is invalid, Mr.
Morris lacks the capacity to sue. (Lead Case Doc. # 35, at 3 n.1.) The parties
denominate this as an issue of whether Mr. Morris has “standing” to sue, but there
is no discussion of Article III standing. This appears actually to be a question of
In its words, it “ha[s] a duty of impartiality regarding the disposition of [Amy’s]
assets.” (Lead Case Doc. # 87, at 3.)
Mr. Morris’s “capacity” to sue. See State v. Property at 2018 Rainbow Drive, 740
So. 2d 1025, 1027–28 (Ala. 1999) (discussing differences between the principles
of “real party in interest” and “standing”); see also Ex parte Tyson Foods, Inc., 146
So. 3d 1041, 1049 (Ala. 2013) (Shaw, J., concurring) (“‘Standing’ and ‘capacity’
are two distinct issues . . . .”).
The Foundation is correct that “[a]n action filed on behalf of an estate must
be brought by the executors.” Douglass v. Jones, 628 So. 2d 940, 941 (Ala. Civ.
App. 1993); see also Ala. Code § 43-2-833(c) (“Except as to proceedings which do
not survive the death of the decedent, a personal representative of a decedent
domiciled in this state at death has the same standing to sue and be sued in the
courts of this state and the courts of any other jurisdiction as the decedent had
immediately prior to death.”). But deciding whether Mr. Morris is an executor
with the capacity to bring this action is complicated by the existence of orders of
Alabama and Virginia courts that recognize different executors of Amy’s Estate.
Mr. Morris acknowledges the conundrum. (Lead Case Doc. # 41, at 4–5.)
In the October 17, 2014 Order requesting supplemental briefing, this court
asked the parties to offer legal arguments why it must refuse to recognize either
order appointing Mr. Morris or Ms. Loulakis as executor or executrix. (Lead Case
Doc. # 73.) The Trust Company remains neutral, but the Foundation and Mr.
Proffered Reasons to Deny Full Faith and Credit
Federal courts are bound by statute to extend full faith and credit to “[t]he
records and judicial proceedings of any [state] court.” 28 U.S.C. § 1738. The
Foundation and Mr. Morris each contend that the probate order relied upon by the
other should be denied full faith and credit. Their arguments focus on undermining
the subject-matter jurisdiction of the Virginia or Alabama courts because a state
court’s judgment “relied upon as the basis of a claim or defense in a later action in
another forum may be avoided” if the state court rendering the judgment lacked
subject-matter jurisdiction. Restatement (Second) of Judgments § 81 (1982); see
also Restatement (Second) of Conflict of Laws §§ 104, 105 (1971); Underwriters
Nat’l Assur. Co. v. N.C. Life & Acc. & Health Ins. Guar. Ass’n, 455 U.S. 691,
704–05 (1982) (“[A] judgment of a court in one State is conclusive upon the merits
in a court in another State only if the court in the first State had power to pass on
the merits – had jurisdiction, that is, to render the judgment. Consequently, before
a court is bound by the judgment rendered in another State, it may inquire into the
jurisdictional basis of the foreign court’s decree.
If that court did not have
jurisdiction over the subject matter or the relevant parties, full faith and credit need
not be given.” (internal citation and quotation marks omitted)). This court should
resolve the jurisdictional basis for the relevant prior orders. See Harbuck v. Marsh
Block & Co., 896 F.2d 1327, 1329 (11th Cir. 1990) (“Federal courts must inquire
into the jurisdictional basis of a state court judgment before according it full faith
Mr. Morris’s Opposition to Virginia’s Jurisdiction
Mr. Morris offers two reasons for refusing to extend full faith and credit to
the Virginia Court’s order appointing Ms. Loulakis as executrix.
Improper Denial of Nonsuit
The ultimate outcome in Virginia in 2011 – i.e., the probate of the 1998 Will
– depended upon the Virginia Court’s proper exercise of subject-matter jurisdiction
over proceedings initiated in 2007. Mr. Morris contends that the Virginia Court
lacked authority to proceed with the guardianship and conservatorship proceedings
in 2007 because he and Ms. Duncan petitioned for a nonsuit under Va. Code Ann.
§ 8.01-380, which is similar to Rule 41(a)(1)(A)(i)’s provision for the plaintiff’s
voluntary dismissal of an action prior to the defendant’s service of an answer or
motion for summary judgment. See Fed. R. Civ. P. 41(a)(1)(A)(i). Section 8.01380(D) provides that
[a] party shall not be allowed to nonsuit a cause of action, without the
consent of the adverse party who has filed a counterclaim, cross claim
or third-party claim which arises out of the same transaction or
occurrence as the claim of the party desiring to nonsuit unless the
counterclaim, cross claim or third-party claim can remain pending for
independent adjudication by the court.
Virginia case law states that “a plaintiff has an absolute right to one nonsuit” that
“neither the trial court nor opposing counsel can prevent him from” obtaining.
Nash v. Jewell, 315 S.E.2d 825, 829 (Va. 1984). Further, after a party exercises
the right to a nonsuit, the court is deprived of jurisdiction over the matter. Lewis v.
Culpeper Cnty. Dep’t of Soc. Servs., 647 S.E.2d 511, 515 (Va. 2007) overruled on
other grounds by Davis v. Cnty. of Fairfax, 710 S.E.2d 466 (Va. 2011). Hence,
Mr. Morris contends that the Virginia Court lacked authority to invalidate the 2007
Will, recognize the 1998 Will notwithstanding the 2007 Will, and appoint Ms.
Loulakis as Executrix.
Records confirm that the Foundation filed an answer, counterclaim, and
crossclaim on May 30, 2007. (Lead Case Doc. # 93-3, at 115–123.) Five days
earlier on May 25, 2007, Mr. Morris and Ms. Duncan’s counsel mailed the
Virginia Court a “notice” that they intended to petition for nonsuit (Lead Case
Docs. # 93-3, at 113; 95-1, at 6–7), but there is no record that they actually filed a
motion until they did so orally in court in June 2007. The Virginia Court did not
document receipt of the notice until May 30, 2007, the same day that the
Foundation formally filed its answer and counterclaim.
The Virginia Court
summarily denied nonsuit.
Mr. Morris and Ms. Duncan represent that they petitioned a Virginia
appellate court for mandamus concerning Judge Shockley’s denial of the nonsuit
(Lead Case Doc. # 88, at 5), but they apparently were denied relief. The record
reflects that the allegedly wrongful denial of a nonsuit was raised as an argument
on appeal, (Lead Case Doc. # 94-1, at 5), and it is undisputed that Mr. Morris and
Ms. Duncan did not prevail in that appeal.25 Thus, Mr. Morris fails to show the
untimely filing of his motion for nonsuit deprived the Virginia Court of jurisdiction
to continue with the guardianship and conservatorship proceedings that he and Ms.
Duncan initiated in 2007. The nonsuit argument is a non-starter.
Lack of Jurisdiction in 2008 to Invalidate the 2007 Will
Mr. Morris also asserts that this court should refuse to extend full faith and
credit to the Virginia Court’s orders because that court lacked jurisdiction in 2008
to invalidate the 2007 Will during Amy’s lifetime. 26 Under Virginia law – and
probably every other state’s law – a will has no effect until the death of the testator.
See Timberlake v. State-Planters Bank of Commerce & Trusts, 115 S.E.2d 39, 44
(Va. 1960) (“A will is an ambulatory instrument, not intended or allowed to take
effect until the death of the maker. It may be changed during life as often as the
mind and purpose of the testator change. While he lives his written will has no life
The Circuit Court of Montgomery County also denied Mr. Morris’s motion for relief
from the enrollment of the Virginia Court judgment that was based on the same argument. (See
Lead Case Doc. # 93-4, at 2.)
The court raised this issue in its order requesting supplemental briefing, but Mr. Morris
and Ms. Duncan first raised it themselves, pro se, in the member case. (See Member Case Docs.
# 60, at 3 (“It is widely accepted . . . pursuant to the Uni[form] Probate Code that a [w]ill has no
legal effect until it is probated.”); # 44, at 7 (“Judge Shockley had neither the authority nor
jurisdiction to make such a declaration since Amy . . . was still living” in 2008.).) A judgment is
entitled to full faith and credit even when the court rendering the judgment committed a mistake
of law; any error alleged must undermine jurisdiction. Milliken v. Meyer, 311 U.S. 457, 462
(1940). To be clear, Mr. Morris and Ms. Duncan contend that the Virginia Court had no
jurisdiction to determine the validity of any will prior to Amy’s death.
or force, and is not operative or effective for any purpose.”).27 Moreover, in
Virginia, “[t]he issue of whether or not a testator had mental capacity to make a
particular will can be rendered res judicata in a probate proceeding and in no other
proceeding.” Eyber, 249 F. Supp. at 533.
In defense of the Virginia Court’s action, the Foundation has alluded to
several “broad powers” that justified the Virginia Court’s action, including its
general statutory authority to conduct guardianship and conservatorship
proceedings and the equitable doctrine of parens patriae, which obliged the court
to look after Amy’s interests. (See Lead Case Doc. # 89, at 8–14.) But the
Foundation is unable to produce statutory authorization or case law precedent for
the Virginia Court’s action because, unsurprisingly, neither exists. The Foundation
argues that this court must abide by the Virginia Supreme Court’s “interpretation”
of Virginia law, (Lead Case Doc. # 89, at 10), but this court has no “interpretation”
from the Virginia Supreme Court that authorizes the invalidation of a will during
the testator’s life.28 The Virginia Court’s “invalidation” of an ambulatory will was
This is basic first year – even first century – law. Indeed, the irony that death breathes
life into a last will and testament may be universally understood. Hebrews 9:16–17 (King
James) puts it this way, albeit in an entirely different context: “For where a testament is, there
must also of necessity be the death of the testator. For a testament is of force after men are dead:
otherwise it is of no strength at all while the testator liveth.”
The record evidence does not clearly show that Mr. Morris and Ms. Duncan raised the
ambulatory will issue to the Virginia Supreme Court on appeal or that the Virginia Supreme
Court ever actually reviewed that issue. (See Lead Case Docs. # 94-1, 94-2, 94-3; Member Case
Docs. # 52-7, 52-8.)
improper, on par with a court awarding a party title to the North Pole. It is not to
be recognized as preclusive of anything.29
The Foundation’s best argument is its “so what?” position articulated during
oral argument in this action. (See Lead Case Doc. # 92, at 19–23.) There, the
Foundation asserted that even if the Virginia Court lacked jurisdiction to invalidate
the 2007 Will in its order on February 29, 2008, the Virginia Court had
jurisdiction, when probating the 1998 Will on August 12, 2011, to rely on its
previous factual finding that Amy was incapacitated in 2007 and therefore
incapable of executing a valid will in May 2007. In other words, the Virginia
Court had jurisdiction in 2011 to determine the validity of the 2007 Will when the
Virginia Court rejected it, along with Mr. Morris’s Alabama appointment as
executor, during the 2011 Virginia probate proceedings. (See Member Doc. # 5212 at ¶ 6.)
Mr. Morris responds in his second supplemental brief that Virginia law does
not permit a court conducting probate proceedings to adopt or apply findings from
non-probate proceedings. (Lead Case Doc. # 95, at 6–7 (citing Tate v. Chumbley,
57 S.E.2d 151 (Va. 1950)).) In Tate, the Supreme Court of Virginia considered the
The intervention in conservatorship proceedings of a potential beneficiary under an
ambulatory will is also irregular, as is the process by which confidential communications
between Ms. Loulakis and Amy regarding the 1998 Will were divulged to the Virginia Court by
Ms. Loulakis. But those issues were not presented in this case.
effect upon a will contest of the testatrix’s former adjudication of insanity. The
proponents of an earlier will pleaded res judicata, contending that the testatrix had
been legally adjudged insane by different tribunals prior to the date that she
executed a second will.
Id. at 156.
The court reasoned that the courts that
adjudicated the testatrix insane “lacked the power and jurisdiction to determine
whether or not this testatrix then or at any other time had testamentary capacity,”
“[n]or did they undertake so to decide.” Id. at 157 (emphasis added). Because
“neither tribunal was concerned with whether [the testatrix] enjoyed periods of
normalcy or lucid intervals of greater or less duration,” no prior adjudication of
insanity could “as a matter of law, be used to estop [the proponent of the second
will] from offering the will for probate.” Id.
The Tate court then declared that
an interested party may have the actual mental capacity of a testator to
make a will factually decided . . . , and that right cannot be foreclosed
by estoppel of record or rendered res adjudicata in any judicial or
quasi-judicial proceeding to which such interested person may be a
party other than by one of probate. The issue of whether or not a
testator had mental capacity to make a particular will can be
rendered res adjudicata in a probate proceeding and none other.
Id. (emphasis added); see also Eyber, 249 F. Supp. at 533.
Focusing on the
emphasized sentence, Mr. Morris argues that “[t]he Virginia Court could not
properly use its prior order in the conservatorship as a basis for its . . . order
appointing Ms. Loulakis executrix, because Virginia does not permit non-probate
proceedings to have res judicata effect on probate proceedings.” (Lead Case Doc.
# 95, at 7.)
The quotation omits additional context. The point of the cited passage of
Tate is to affirm the right of a will contestant to have the testator’s mental capacity
factually decided at the time of probate when the court is presented with two wills.
The rule announced is that unless there has been a prior probate adjudication of the
testator’s mental capacity, no other determination of mental capacity can be used to
preclude factual inquiry of testamentary capacity. But, according to Tate, such
prior non-probate adjudications of insanity “constitute and must be regarded as
prima facie evidence of testamentary incapacity of the party adjudged insane.” 57
S.E.2d at 158 (emphasis added). The prior adjudication, even in the face of a lack
of jurisdiction to decide the issue in the prior proceedings vis-à-vis an ambulatory
will, is evidence sufficient to establish a presumption of testamentary incapacity,
but is insufficient to be conclusive.
The contestant must overcome that
presumption of incapacity. Id.
Hence, Tate did not forbid the Virginia Court from considering its prior
judicial determination of incapacity made in non-probate proceedings when
rejecting the 2007 Will on the grounds of incapacity in the 2011 probate
proceedings. Tate only bars a court from giving preclusive effect to the issue of
testamentary capacity. It would be legal error if the Virginia Court conclusively
precluded in its 2008 order any future probate challenge to or discussion of the
issue of Amy’s testamentary capacity. However, the legal error (i.e., giving the
2008 decree preclusive effect in 2011, if that is in fact what the Virginia Court did
in the 2011 probate proceeding) would not undercut the Virginia Court’s probate
jurisdiction. See Milliken, 311 U.S. at 462. Importantly, Mr. Morris makes no
argument that the Virginia Court lacked jurisdiction in 2011 to probate the 1998
Will and to appoint Ms. Loulakis as executrix.
There can be little doubt the Virginia Court was looking after the
Foundation’s interests, but there is considerable doubt as to whether Amy’s
interests mattered at all. The Virginia Court overreached – perhaps wittingly – on
February 29, 2008, by attempting to preemptively crush a future will contest.
Unfortunately, the Virginia Court, rather than clarifying the rights of the parties
before it, fostered confusion and distrust. Nevertheless, it falls on this court to
bring finality to the dispute. Accordingly, the court accepts the Foundation’s “so
what” argument and finds that however wrong the Virginia Court was in 2008 or
2011, those errors had no impact upon the Virginia Court’s jurisdiction to probate
the 1998 Will and to in effect reject the 2007 Will and its executor in August 2011.
The lack of success on appeal of the February 29, 2008 ruling in Virginia further
solidifies the preclusive effect of the Virginia proceedings.
Lack of Integrity or Fairness of the Virginia Courts
Mr. Morris and Ms. Duncan say that the Virginia Court denied them “a fair
opportunity to litigate [their] rights and defenses . . . prior to the judgment being
assessed” against them, “thereby warranting equitable relief” from the monetary
judgment against them. (Member Case Doc. # 48, at 3.)30 They assert this court
has the discretion to refuse to recognize a judgment “rendered in circumstances
that raise substantial doubt about the integrity of the rendering court.” (Member
Case Doc. # 60, at 2.) They propose that the court may refuse to extend full faith
and credit to a judgment where the judgment was tainted by “partiality, bribery, or
lack of fairness.” (Member Case Doc. # 60, at 3.) Additionally, Mr. Morris and
Ms. Duncan assert that Virginia’s appellate courts never heard the merits of their
appeal of the Virginia Court’s judgment. (Member Case Doc. # 60, at 4.)
Mr. Morris and Ms. Duncan cite no authority in support of their arguments
that this court can refuse to give full faith and credit because of alleged unfairness
or corruption in the Virginia Court. A federal court should not give preclusive
effect to a state court judgment “when the party against whom the earlier decision
is asserted did not have a full and fair opportunity to litigate [a] claim or issue.”
Kremer v. Chem. Const. Corp., 456 U.S. 461, 480–81 (1982) (internal quotation
Unlike the prior two arguments, Mr. Morris and Ms. Duncan raised this argument pro
se in the member case briefing at summary judgment, rather than with the assistance of counsel
in response to the court’s requests for supplemental briefing in October and December 2014.
marks omitted). “Redetermination of issues is warranted if there is reason to doubt
the quality, extensiveness, or fairness of procedures followed in prior litigation,”
but “state proceedings need do no more than satisfy the minimum procedural
requirements of the Fourteenth Amendment’s Due Process Clause in order to
qualify for the full faith and credit guaranteed by federal law.” Id. at 481.
In Walker v. R.J. Reynolds Tobacco Co., 734 F.3d 1278, 1286 (11th Cir.
2013), the Eleventh Circuit noted that the inquiry allowed by Kremer is narrow –
i.e., to decide only whether giving a state court decision preclusive effect would
deprive the objecting party of due process. Id. at 1287. The Walker panel noted
that a federal court’s task is not to decide whether the state court decision was
correct as a matter of state law. Id. (citing Am. Ry. Express Co. v. Kentucky, 273
U.S. 269, 273 (1927)). A “full and fair opportunity” is simply an opportunity to be
heard and to contest liability. Id. at 1288 (citing Richards v. Jefferson Cnty., Ala.,
517 U.S. 793, 797 n.4 (1996)).
In accordance with that standard, the court finds that Mr. Morris and Ms.
Duncan had the opportunity to be heard in Virginia Court during the guardianship
and conservatorship proceedings that they themselves initiated. Mr. Morris and
Ms. Duncan likewise had the opportunity to contest their culpability for contempt
of court and the amount of assets belonging to Amy that they failed to return to
Amy’s conservatorship estate. Before both the February 29, 2008 order finding
Mr. Morris and Ms. Duncan liable to the Foundation and before its entry of final
judgment on December 19, 2008, the Virginia Court conducted a hearing and
entertained arguments of counsel, including counsel for Mr. Morris and Ms.
Duncan. The Virginia Court found Mr. Morris and Ms. Duncan in contempt of the
court and its orders, and imposed a $100,000 judgment, with interest, against them
and in favor of the Foundation for its fees and costs incurred. (Member Case Doc.
# 52-6, at ¶ 10(d).) The court also found that Mr. Morris and Ms. Duncan were
liable to Amy for $1,125,222, which was the amount of any shortfall of Amy’s
assets not turned over to the Trust Company. (Member Case Docs. # 52-6, at ¶ 13;
52-4, at ¶ R.3.)
As for Mr. Morris and Ms. Duncan’s contention that Virginia appellate
courts did not consider the merits of their appeals of the final judgment, there is no
denying that Mr. Morris and Ms. Duncan were given the opportunity to appeal. To
the extent that the merits of their appeal were not heard, they do not dispute that
their opening brief with the Virginia Court of Appeals was untimely filed, or that
they did not identify any error in the Virginia Court of Appeals’ ruling dismissing
their appeal. (Member Case Doc. # 52-7, 52-8 (letters from the Clerk of the Court
of Appeals of Virginia and the Virginia Supreme Court explaining the reasons the
appeals were denied without opinions).)
Mr. Morris and Ms. Duncan have not offered a legitimate reason for this
court to refuse to extend full faith and credit to the Virginia court’s order
appointing Ms. Loulakis as Executrix of Amy’s Estate or the Virginia court’s
monetary judgments against Mr. Morris and Ms. Duncan.
The Foundation’s Opposition to Alabama’s Jurisdiction
Like Mr. Morris and Ms. Duncan, the Foundation has its own legal
obstacles. It faces the potential preclusive effect of a facially valid will probate in
Alabama which preceded the Virginia probate proceedings. The Foundation offers
two reasons why the Alabama Probate Court’s 2011 order appointing Mr. Morris
executor, entered prior to the probate of the 1998 Will in Virginia, should be
denied full faith and credit by this court.
The Foundation Not a Party to Alabama Proceedings
The Foundation first asserts that it was not a party to the Alabama probate
proceedings and is “thus not bound by that court’s ex parte orders.” (Lead Case
Doc. # 89, at 15.) The Foundation offers Riley v. New York Trust Company, 315
U.S. 343, 353–54 (1942), in support of its proposition that “parties are bound by
the results of litigation to which they are parties, and are not bound by litigation to
which they are not.” (Lead Case Doc. # 89, at 16.)31
The Foundation also relies on Overby v. Gordon, 177 U.S. 214 (1900), and National
Savings & Trust Co. v. Herrick, 112 So. 2d 191 (Ala. 1958), in support of the same principle.
In contrast to the Foundation’s lack of notice of the Alabama probate
proceedings, Mr. Morris and Ms. Duncan were parties to both the guardianship
proceedings in 2008 in which the Virginia Court determined that Amy lacked
mental capacity and to the probate proceedings in 2011 that relied upon the 2008
(See Member Case Doc. # 52-12, at ¶ 1.)
The Foundation further
represents that Mr. Morris and Ms. Duncan failed to inform the Alabama Probate
Court of the Virginia Court’s prior adjudication of Amy’s permanent incapacity or
of the substantial judgment entered against them and in favor of Amy, facts which
the Foundation says likely would have influenced the outcome in the Alabama
Under Alabama law, interested parties may contest the probate of a will
during probate proceedings in the probate court or within six months after probate
by filing a complaint in circuit court. See Ala. Code §§ 43-8-190, 43-8-199.
Alabama law did not require Mr. Morris to provide notice to the Foundation or Ms.
Loulakis that he petitioned to probate the 2007 Will in Alabama. Cf. Ala. Code
§§ 43-8-164–166 (requiring notice to surviving spouse and next of kin only).
Alabama law did require Mr. Morris to give notice of his appointment to “all
persons having claims against the estate” by first class mail and by publication, id.
§§ 43-2-60–43-2-61, but the Foundation was not a creditor of Amy’s Estate.
Therefore, the Foundation’s argument that it was entitled to notice as an “interested
party” (Lead Case Doc. # 94, at 7–8) lacks support in the Alabama statute.
Mr. Morris does not deny that he did not provide formal notice to the
Foundation before the 2007 Will was probated.
Instead, he claims that the
Foundation knew about the Alabama probate estate through the legal grapevine –
especially, through separate interpleader proceedings in Virginia – and chose not to
appear in Alabama to contest the 2007 Will.
Mr. Morris contends that the
Foundation knew about Mr. Morris’s appointment as executor no later than the
date it was served with notice of the Virginia Interpleader suit, which was
occasioned by the competing claims to the remainder of Amy’s money.32 Mr.
Morris also offers Attorney Ed Parish’s affidavit testimony that he communicated
to counsel for the Foundation that Amy’s Estate had been probated in Alabama.
(Lead Case Doc. # 95-2.)33
The opinion of the Alabama Supreme Court cites April 28, 2011, as the date that the
Trust Company filed the interpleader complaint. Ex parte Trust Co. of Virginia, 96 So. 3d at 68.
The record shows that the amended complaint for interpleader was filed on August 23, 2011 and
named as a defendant Mr. Morris individually and as the personal representative of Amy’s
Estate. (Lead Case Doc. # 9-6.) Both dates were well within six months of Mr. Morris’s
appointment as Executor.
There is a dispute as to whether the Foundation had informal notice of Alabama’s
probate proceedings. Mr. Parish represents that the Foundation had notice of the probate of the
2007 Will in Alabama because the Trust Company filed a motion to vacate the Alabama Probate
Court’s order compelling the Trust Company to release the Estate’s funds to Mr. Morris. (Lead
Case Doc. # 95-2, at ¶¶ 3–4.) Mr. Parish also attests that he “personally communicated on
multiple occasions with [c]ounsel [for the Foundation and the Trust Company,] and [he] can
swear to this [c]ourt that they were aware than an Estate for Amy F. Morris had been
In Riley, the case upon which the Foundation relies, the Supreme Court
affirmed the Delaware Supreme Court’s holding that a Delaware court could
determine a testatrix’s domicile anew, notwithstanding a Georgia court’s prior
resolution that the testatrix was a domiciliary of Georgia. 315 U.S. at 347, 355.34
Riley originated when Coca Cola filed an interpleader suit in Delaware, the situs of
Coca Cola stock belonging to the testatrix, seeking a ruling as to whether a New
York-appointed administrator or two Georgia-appointed executors were entitled to
possess the certificates of stock. Id. at 345–47. Before the Supreme Court, the
Georgia executors asserted that Georgia’s prior “judgment on domicile
conclusively establishe[d] the right of the Georgia executors to demand delivery”
of the stock certificates. Id. at 348.
The Supreme Court disagreed, citing the New York administrator’s nonjoinder as a party in the Georgia proceedings. The Court announced that “[t]he full
faith and credit clause allows [one state] in disposing of local assets to determine
the question of domicile anew for any interested party who is not bound by
participation in [another state’s] proceeding.” Id. at 349–50. The Court reasoned
that “if the effect of a probate decree in Georgia in personam was to bar a stranger
established” in Alabama. (Lead Case Doc. # 95-2, at ¶ 4.) The Foundation disputes that it had
notice. The resolution of this case does not depend upon resolving this disputed fact.
A thorough discussion of the legal import of domicile follows infra. For now, it is
enough to say that a testator’s domicile typically determines which state’s court will probate his
or her will.
to the decree from later asserting his rights, such a holding would deny procedural
Id. at 354.
The Court “admitted that this [allowance for]
reexamination may result in conflicting decisions upon domicile, but that is an
inevitable consequence of the existing federal system . . . .” Id. at 350.
Other courts have interpreted Riley as instructing that a state court’s
judgment is to be deemed inconclusive as to a testator’s domicile where an
interested party’s rights were not represented in the state court’s probate
proceedings. See, e.g., In re Estate of Nye, 299 N.E.2d 854, 859 (Ind. Ct. App.
1973). The Foundation asks this court to further infer from Riley a rule requiring a
court to favor inter partes probate proceedings to ex parte probate proceedings
when faced with competing and conflicting probate orders. (Lead Case Doc. # 89,
at 19.) Riley does advise that the Virginia Court was entitled to decide facts anew
because Ms. Loulakis and the Foundation were not parties to the Alabama Probate
action – a different issue discussed infra. However, Riley simply does not instruct
a federal forum to decline to extend full faith and credit to a state court probate
order (here, the Alabama probate of the 2007 Alabama Will) simply because not
everyone in the federal dispute was a party to the contested probate proceeding.
Further, it matters to this court that the Foundation chose not to challenge
Mr. Morris’s appointment as executor in Alabama, thereby spawning conflicting
probate orders in two states (and the need for this opinion). Even though the
Foundation was not given formal legal notice of the Alabama petition, it is credibly
disputed by Mr. Morris that the Foundation (and Ms. Loulakis) knew, during the
six months following Mr. Morris’s appointment as executor, about his Alabama
appointment under the 2007 Will. They chose not to challenge it, probably for
strategic reasons. For that additional reason, the court cannot agree that Riley
requires it to favor Virginia’s order over Alabama’s. Cf. Miniafee v. United States,
17 Cl. Ct. 571, 576–77 (Fed. Cl. 1989) (distinguishing Riley factually for the
reason that “the parties in Riley . . . did not have the opportunity to join or appeal
the probate judgment” and rejecting the United States’s argument that it was not
bound by state probate proceedings to which it was not a party where the United
States had notice and the opportunity to join but failed to do so).
Amy’s Lack of Capacity to Change Her Domicile
As a second ground for declining full faith and credit, the Foundation asserts
that the Alabama Probate Court lacked jurisdiction to probate the 2007 Will
because Amy’s incapacity from 2007 forward rendered her legally incapable of
changing her domicile from Virginia to Alabama. (Lead Case Doc. # 94, at 5–7.)
On this point, the Foundation gains traction.
A will is ordinarily probated in the state and county of the testator’s
domicile; this is the “primary” probate of a will. See 95 C.J.S. Wills § 550. But
the presence of the testator’s assets within some other state also furnishes that
state’s courts with in rem jurisdiction over the property. Where the testator is
domiciled in State A but dies leaving property located within State B, the usual
method of establishing jurisdiction in State B would be by “ancillary” probate
proceedings, i.e., asking State B to recognize the probate proceedings in State A.
See 95 C.J.S. Wills § 542.
Mr. Morris and Ms. Duncan allege that Amy changed her domicile from
Virginia Beach to Montgomery when she consented to moving to Alabama in May
2007, (See Member Case Doc. # 49, at 16–17, ¶¶ 9, 12),35 but the Foundation
contends that Amy lacked the mental capacity to make that change and therefore
never became domiciled in Alabama. Amy’s maintenance of a Virginia domicile
was one of the Virginia Court’s stated grounds for not affording full faith and
credit to Alabama’s Probate Court order when it probated the 1998 Will and
appointed Ms. Loulakis executrix of Amy’s Estate. (Member Case Doc. # 52-12,
at ¶ 6(b)(i).) If the Foundation and the Virginia Court are correct, the Alabama
2007 Will should have been probated in Virginia, not Alabama.
Mr. Morris and Ms. Duncan also assert, in their pro se brief and counterclaim in the
member case, that Amy “paid Alabama state income taxes” “for the last four years of her life.”
(Member Case Doc. # 60, at 2; see also Member Case Doc. # 49, at 26, ¶ 62.) Mr. Morris and
Ms. Duncan cite a Supreme Court case, Clay v. Sun Insurance Office, Ltd., 377 U.S. 179 (1964),
for its purported support that “the rules of the new domicile apply,” but that language is not in the
Clay opinion, and Mr. Morris and Ms. Duncan offer no further explanation of their position. Further,
Clay does not advise or even suggest that the payment of state income taxes proves a change in
For the Alabama Probate Court to accept the 2007 Will, Amy needed to be
an Alabama domiciliary. Alabama law permits the probate of a will “in the
probate court of such county” where “the testator, at the time of his death, was an
inhabitant.” Ala. Code § 43-8-162(1).36 Jurisdiction in Alabama’s probate courts
must be based on one of the five statutory provisions. If a probate court lacks
subject-matter jurisdiction, its orders are void, Ingram v. Van Dall, 70 So. 3d 1191,
1197 (Ala. 2011), and can be set aside on direct appeal or on collateral attack, Ex
parte James, 713 So. 2d 869, 878 (Ala. 1997).
The Alabama Supreme Court historically has interpreted the statutory term
“inhabitant” as having the same meaning as domiciliary. See, e.g., Merrill’s Heirs
v. Morrissett, 76 Ala. 433, 437 (Ala. 1884) (“The word inhabitant has been defined
to be one who has his domicil in a place, – one who has an actual fixed residence
Alternatively, wills may be “proved” in Alabama’s probate courts as follows:
(2) When the testator, not being an inhabitant of the state, dies in the county,
leaving assets therein, in the probate court of such county.
(3) When the testator, not being an inhabitant of the state, dies out of the county,
leaving assets therein, in the probate [court] of the county in which such assets, or
any part thereof, are.
(4) When the testator, not being an inhabitant of the state, dies, not leaving assets
therein, and assets thereafter come into any county, in the probate court of any
county into which such assets are brought.
(5) In the probate court of the county designated by testator in the will if the
testator owns property in such county at the time of his death.
Ala. Code § 43-8-162(2)–(5).
in a place.”) (internal quotation marks and citation omitted); Ambrose v.
Vandeford, 167 So. 2d 149, 150 (Ala. 1964) (“The word ‘inhabitant’ in the sense
of this [probate] codal provision is synonymous with ‘domiciliary.’”); Taylor v.
Estate of Harper, ___ So. 3d ____, ____, 2014 WL 4798781, at *2 (Ala. 2014)
(“This Court has equated the term ‘inhabitant’ with the word ‘domiciliary,’ and a
domicile consists of a residence at a particular place accompanied by an intent to
remain there permanently or for an indefinite length of time.”). If Amy was not an
Alabama domiciliary, then the Alabama Probate Court lacked jurisdiction to
probate the 2007 Will on the basis of § 43-8-162(1), the provision conferring
jurisdiction where the testator dies an “inhabitant” of an Alabama county.
The Foundation represents that under both Virginia and Alabama law,
changing one’s domicile requires not only a change in physical presence but also
the specific intent to change domicile. See Ex parte Weissinger, 22 So. 2d 510,
514 (Ala. 1945) (“A person’s domicile is that place in which his habitation is fixed,
without any present intention of removing, and it embraces (1) the fact of residence
and (2) the intention to remain.”); State-Planters Bank & Trust Co. of Richmond v.
Commonwealth, 6 S.E.2d 629, 631 (Va. 1940) (“Domicile means more than
residence. Domicile is residence at a particular place, accompanied by intention to
remain there for an unlimited time. Both residence and intention to remain there
must concur to constitute domicile.”). A person can have only one domicile. Ex
parte Coley, 942 So. 2d 349, 352 (Ala. 2006). Therefore, Amy either was or was
not a domiciliary of Virginia when she died. Either the Virginia Court or the
Alabama Probate Court was wrong about her intent to establish an Alabama
domicile. See Nora v. Nora, 494 So. 2d 16, 18 (Ala. 1986) (“In determining
whether or not there has been a change in domicile the intention of the person
whose domicile is in question is usually the controlling consideration.”).
The Foundation contends that in accordance with the Virginia Court’s ruling
in 2008 that Amy suffered, from the time of her 2007 accident, “complete mental
incapacity” that was “perpetual and w[ould] not improve,” (Lead Case Doc. # 351, at 16–17, ¶¶ 5–7), and further, that Amy had been “relieved of all authority and
power to manage and perform legal acts with respect to her person and property,”
(Lead Case Doc. # 35-1, at 20, ¶ L), Amy lacked the mental capacity to change her
domicile from Virginia to Alabama.
The Virginia Court’s findings are supported by Virginia law. See Va. Code
Ann. § 64.2-443 (“Where any person has become, either voluntarily or
involuntarily, a patient in a nursing home, convalescent home, or similar institution
due to advanced age or impaired health, the place of legal residence of the person
shall be rebuttably presumed to be the same as it was before he became a
patient.”); see also Commonwealth v. Kernochan, 106 S.E. 367, 369 (Va. 1921)
(holding that a person adjudicated insane and incompetent maintained the New
York domicile that she had prior to her incompetency adjudication,
notwithstanding her subsequent, court-approved, physical relocation to Virginia).
The Kernochan court explained that an incompetent person’s domicile could not be
changed during her incapacity except by “some competent agency and authority” –
specifically, “her committee [that is, her guardian] and the courts having
jurisdiction of her person and estate.” Id. The court held that “a guardian or
committee, other than one occupying the position of a parent, has no power to
change his ward’s domicile from one state to another” because “[s]uch a change
. . . might materially impair or affect some of the substantial personal or property
rights of the insane person, as well as the right of succession at his death.” Id.
There are examples of cases outside Virginia that followed the rule articulated in
Kernochan. In Brown v. Brown, 381 N.Y.S.2d 803, 805 (N.Y. Sup. Ct. 1976), the trial court
concluded that a woman could not change her incompetent adult son’s domicile simply by
physically removing him from California to New York without receiving both a judicial
appointment as his guardian and the approval of the California court that assumed jurisdiction
over him and declared him incompetent. Similarly, in In re Kassler, 19 N.Y.S.2d 266, 269 (N.Y.
Sup. Ct. 1940), the court, citing Kernochan, held that
the guardian of the person and property of an individual [declared insane or
incompetent] has the right, if acting in good faith on behalf of the [incompetent
person], permanently to remove his or her ward to another jurisdiction. That
right, of course, is subject to the paramount supervision of the particular court
which exercises an initial control over the incompetent person.
(Emphasis added). The Kassler court reasoned that the judge originally exercising jurisdiction
over the incompetent person’s affairs had the discretion to deny a change of domicile – even
where the incompetent person expressed a desire to relocate. “Irrespective of the wishes of the
guardian, and even of the incompetent where there is some capacity for the expression of a
choice, the court may nevertheless forbid and restrain a removal if it appear prejudicial to the
welfare and interests of the afflicted person.” Id. [continued on next page]
Whether Alabama law is in harmony with Kernochan is less clear. In Nora,
Alabama Supreme Court Justice Beatty recognized that
an adult person who has become a mental imbecile, or who has been
judicially declared insane, is incapable of a voluntary change of
domicile, and therefore retains the domicile which he had when he
became insane, unless it is changed by some competent or authorized
person or tribunal, or until the restoration of his sanity.
494 So. 2d at 18 (Beatty, J., dissenting) (quoting 28 C.J.S. Domicile § 12(e) at 27
(1941)) (emphasis added). By comparison, a person of “partially unsound mind”
potentially could establish a new domicile. Id. The cited portion of the dissenting
opinion did not contradict the majority holding in Nora. Justice Beatty merely
quoted it to emphasize that the person whose domicile was at issue in Nora was
“never judicially declared insane.” Id. The court has found no other opinion of the
Of course, in this case, the Virginia Court lacked confidence in Mr. Morris and Ms.
Duncan, particularly because they participated in the transfer of substantial assets from Amy to
themselves while under the Virginia Court’s jurisdiction and without that court’s approval. (See
Lead Case Doc. # 35-1, at 17, ¶ 8 (“Thomas W. Morris and Sharon Duncan have acted in a
manner contrary to the best interests of [Amy] . . . .”).) Mr. Morris requested the court to change
Amy’s legal domicile once, which was denied. (See Lead Case Doc. # 35-1, at 35, ¶ 3 (denying,
on December 19, 2008, a pending motion to transfer the guardianship and to change Amy’s
“residence”).) The Virginia Court stated that its ruling did not preclude a future change in
Amy’s residence by agreement of the conservator and guardian ad litem, or by an order of a
court of competent jurisdiction. (Lead Case Doc. # 35-1, at 35, ¶ 3.) If Mr. Morris had
requested permission again from the Virginia Court to change Amy’s legal domicile, the request
most likely would have been opposed by the Trust Company and denied, but at any rate, he
never received permission from the Virginia Court or any other court of competent jurisdiction.
Under Virginia law, as pronounced in Kernochan, Mr. Morris lacked authority to change Amy’s
domicile without the endorsement of the Virginia Court that duly declared Amy incompetent in
the guardianship and conservatorship proceedings.
Alabama Supreme Court addressing the issue of whether and how the domicile of a
mentally incapacitated person may be changed properly.38
At this court’s directive, Mr. Morris has supplemented the record with
documents from the Montgomery County Probate Court proceedings.39 In his
petition to probate the 2007 Will, Mr. Morris represented to the Probate Court that
Amy “was at the time of her death, an inhabitant of [Montgomery] County” who
died “leaving assets in this State.” (Lead Case Doc. # 97-1, at 7.) In the Probate
Court’s “Decree Admitting Will to Probate and Granting Letters Testamentary,”
the Probate Court identified Amy as “an inhabitant of Montgomery County” and
The general rule set out in Corpus Juris Secundum, cited by Justice Beatty, is similar
today. It states that “[w]hether a person of partially unsound mind is precluded from establishing
a domicile depends on the degree of mental impairment.” 28 C.J.S. Domicile § 31 (emphasis
added). But in Amy’s case, the Virginia Court decreed that her mental incapacity was
“complete” and “perpetual”; Amy was never restored to competency, and there were no
subsequent orders amending the February 29, 2008 decree.
The Restatement (Second) of Conflicts of Laws also addresses the issue of an
incompetent person’s ability to change his or her domicile. It states that a guardian’s “authority
to move [an] incompetent to a new home and domicil in another state, and hence beyond the
effective control of the original court, is not . . . easily inferred.” Restatement (Second) of
Conflict of Laws § 23 cmt. f (1971). “It will usually be held under these circumstances that the
guardian was acting within his authority, and that the incompetent’s domicil shifted to another
state if this shift of domicil would be in the best interests of the incompetent and was not made to
achieve some selfish purpose of the guardian.” Id.
Here, it could be inferred that Amy’s relocation to a facility in Alabama, near her son,
was in her best interests; after all, the Virginia Court ultimately permitted the move, after it was
accomplished. But it cannot be inferred that there were no selfish purposes of her guardian. Mr.
Morris benefits from the 2007 Will, and the will’s legitimacy, as probated in Alabama, hinges on
Amy’s domicile in Alabama.
Specifically, Mr. Morris was directed to furnish any transcript or order “showing the
Probate Court’s finding(s) in support of venue in Montgomery County, Alabama, pursuant to
Alabama Code § 43-8-162.” (Lead Case Doc. # 96, at 2.)
found that the court was “satisfied as to its jurisdiction.” (Lead Case Doc. # 97-1,
at 11.) The decree makes no reference to the presence of any of Amy’s assets in
Alabama. (See Lead Case Doc. # 97-1, at 11.) Indeed, all of Amy’s substantial
assets had been entrusted to the Trust Company as conservator, and those assets
remained in Virginia. Thus, the record shows that the Alabama Probate Court
based its exercise of jurisdiction on Amy’s status as an inhabitant of Montgomery
County, per § 43-8-162(1).40
“[A] state court’s final judgment determining its own jurisdiction ordinarily
qualifies for full faith and credit, so long as the jurisdictional issue was fully and
fairly litigated in the court that rendered the judgment.” Marshall v. Marshall,
547 U.S. 293, 314 (2006) (citing Durfee v. Duke, 375 U.S. 106, 111 (1963))
(second emphasis added).
Nothing in the records of the Alabama probate
proceedings indicates that the Probate Court considered Amy’s prior adjudication
of incapacity and resulting need for a court-appointed guardian and conservator or
the import of those facts upon the issue of Amy’s domicile.
Alabama Probate Court found that Amy had the capacity to execute the 2007 Will
– otherwise, the will would not have been probated. (See Lead Case Doc. # 97-1,
at 11 (stating that the 2007 Will’s two subscribing witnesses’ written testimony
Jurisdiction based alternatively upon § 43-8-162(2) would require a finding that Amy
died in Montgomery County, Alabama, while domiciled elsewhere, “leaving assets” in
Montgomery County, Alabama, but that was expressly not the finding of the Alabama Probate
had been produced for the court, and finding that Amy “at the time of signing [the
2007 Will] was of full age and sound mind and disposing memory and
understanding”).) Because the Probate Court found that Amy had testamentary
capacity, it implicitly found that Amy had the capacity and requisite intent to
establish an Alabama domicile.
But was such a finding supporting Amy’s
domicile in Alabama proper in view of Amy’s adjudication of incapacity in
Virginia and the Virginia Court’s non-approval of a legal change in domicile? The
answer is no.
Conclusions on Full Faith and Credit
This court concludes that Amy was not domiciled in Alabama at the time of
her death because (1) as a person who had been adjudicated completely mentally
incapacitated, Amy was legally incapable of changing her domicile from Virginia
to Alabama, and (2) the Virginia Court which declared Amy mentally
incapacitated did not approve the legal act of changing Amy’s domicile from
Virginia to Alabama.
For that reason, the Alabama Probate Court lacked
jurisdiction to probate the 2007 Will or to exercise jurisdiction over Amy’s Estate.
The Virginia Court had the authority and a valid reason to deny full faith and credit
to the Alabama Probate Court’s decree and to proceed to probate the 1998 Will.41
In addition to its authority to consider the Alabama Probate Court’s want of
jurisdiction, the Virginia Court properly considered Amy’s domicile anew because all of the
On similar authority and for similar reasons, this court likewise declines to attach
full faith and credit to the decree and orders of the Alabama Probate Court
probating the 2007 Will and appointing Mr. Morris as executor of Amy’s Estate.
Full faith and credit is extended to Virginia’s order probating the 1998 Will and
naming Ms. Loulakis as executrix of Amy’s Estate, and that order is entitled to the
preclusive effect that Virginia’s law of res judicata affords it.
Additionally, there is authority, uncited by the parties, for attaching full faith
and credit to Virginia’s order instead of Alabama’s order. Mr. Morris has argued
that this court should recognize him because he was appointed executor first-intime. (See Lead Case Doc. # 88, at 17.) However, “[w]hen conflicting state court
judgments are entered in two states, each of which would otherwise be entitled to
full faith and credit in federal court, it is the judgment entered last in time that must
control.” 50 C.J.S. Judgments § 1316. See also Restatement (Second) of Conflict
of Laws § 114 (1971) (“A judgment rendered in a State . . . will not be recognized
or enforced in sister States if an inconsistent, but valid, judgment is subsequently
rendered in another action between the parties and if the earlier judgment is
superseded by the later judgment under the local law of the State where the later
judgment was rendered.”); Restatement (Second) of Judgments § 15 (1982)
(“When in two actions inconsistent final judgments are rendered, it is the later, not
parties before the Virginia Court had not been heard in the Alabama proceedings. See Riley, 315
U.S at 349–50, 354.
the earlier, judgment that is accorded conclusive effect in a third action under the
rules of res judicata.”). This is commonly known as the “last-in-time” rule.
“This ‘last-in-time’ rule is based not only upon principles of comity and the
need for finality, but upon the obligation of the litigants to exercise all due
diligence in the full and forthright presentation of their controversy.” First Tenn.,
766 F.2d at 259. Although the rule’s application makes the most sense where
identical parties litigate the same claim or issue in successive forums, see, e.g.,
Robi v. Five Platters, Inc., 838 F.2d 318 (9th Cir. 1988), at least one court has
followed the rule even where some of the relevant parties, all joined in the third
action, were absent from proceedings in either of the first or second forums, see
First Tenn., 766 F.2d at 259.
Like this court, a federal court in First Tennessee was pressed to decide
“which of two consecutive and conflicting state court decisions [wa]s entitled to
full faith and credit and preclusive effect in subsequent federal litigation.” Id.
at 256. A testatrix died a domiciliary of Arkansas, leaving hundreds of acres of
land in Mississippi to beneficiaries there and a sizeable amount of personal
property to different beneficiaries in Arkansas. She named First National Bank as
executor. Arkansas and Mississippi law diverged with respect to how her estate
taxes should be paid (i.e., from residual personalty first, with last resort to realty
(Mississippi), or from all beneficiaries and property types on a pro rata basis
(Arkansas)). Against the advice of counsel, the Bank proceeded to initiate primary
probate proceedings in Mississippi, and later, ancillary proceedings in Arkansas.
The Bank eventually petitioned the Mississippi probate court to permit the
withdrawal of the will for transfer to Arkansas, but the court denied the motion,
retained jurisdiction, and entered an order directing that estate taxes be paid from
the testatrix’s personalty. The Mississippi Supreme Court affirmed on appeal, and
the Bank paid the estate taxes.
The Arkansas beneficiaries petitioned an Arkansas probate court for a final
accounting by the Bank as executor. Once the bank submitted its accounting, the
beneficiaries objected to the $229,000 sum claimed for payment of estate taxes.
The Bank argued that the Arkansas court should give full faith and credit and res
judicata effect to the Mississippi Supreme Court’s ruling, but the Arkansas probate
court rejected that argument because the Bank, in its capacity as the executor of the
Arkansas estate, had not been a party to the Mississippi proceedings and because
the corpus of the Arkansas estate was not subject to Mississippi’s jurisdiction. The
Arkansas court directed that the estate be distributed according to Arkansas law,
and the Bank’s credit of $229,000 be denied.
The Arkansas Supreme Court
affirmed, affording full faith and credit to Mississippi’s ruling only as to the
Mississippi real estate. The United States Supreme Court denied a petition for
certiorari. The Bank paid a judgment with interest to the Arkansas beneficiaries.
The Bank filed an action in the United States District Court for the Western
District of Tennessee, stating that it was faced with conflicting judgments of the
highest courts of Mississippi and Arkansas. The Bank was, however, challenging
the Arkansas ruling subjecting it to liability. As the Sixth Circuit put it, “the
appellant Bank seeks a second and collateral federal review, on its claim of error
by the Supreme Court of the State of Arkansas . . . , and a ruling here that the
Arkansas judgment is invalid for having erroneously denied full faith and credit to
a prior Mississippi judgment.” Id. at 258. The district court denied the Bank that
relief, and the Sixth Circuit affirmed the judgment of the district court.
To resolve First Tennessee, the Sixth Circuit relied exclusively on the “lastin-time” rule. The Bank asserted that the case was distinguishable from case
precedents following the rule because the Mississippi beneficiaries were not
participants in the Arkansas litigation.42 The court answered that objection by
noting that “neither were all parties present in the first forum, to which the Bank
claims Arkansas erroneously failed to accord full faith and credit.” Id. at 259. The
fact remained that there were two conflicting state court judgments concerning the
Bank’s liability for the payment of estate taxes.
The Sixth Circuit surveyed four Supreme Court cases where the Court used
the last-in-time rule and explained that “[t]he thread uniting [First Tennessee] with
Similarly, in this case, all parties were before the Virginia Court’s probate proceedings,
but were not before the Alabama Probate Court.
the entire line of nomadic controversies which were terminated, if not resolved, by
attachment of full faith and credit to the last judgment in time, is the failure of [a]
dissatisfied contestant to fully litigate its position in a forum which has provided
that opportunity.” Id. The court then attributed blame to the Bank for failing to
obtain jurisdiction over all interested parties before litigating issues to judgment in
The principle supporting the “last-in-time” rule, as identified by the Sixth
Circuit, applies in this case, too. All parties (i.e., the Foundation, Ms. Loulakis,
Mr. Morris, and Ms. Duncan) were joined to the Virginia probate proceedings and
are bound by the Virginia Court’s final orders. Mr. Morris never marshaled all the
parties together in an Alabama proceeding that was tried to a final disposition in
his favor. By failing to do so, he has deprived himself of the advantages of
pleading res judicata in support of his authority to proceed as executor or
beneficiary of Amy’s Estate.
Furthermore, Mr. Morris and Ms. Duncan cannot complain about Virginia’s
refusal to acknowledge Mr. Morris’s prior appointment as executor when he did
not appeal to Virginia’s Supreme Court the trial court’s alleged error of not giving
full faith and credit to the decree of the Alabama Probate Court. See Treinies v.
Sunshine Mining Co., 308 U.S. 66, 77 (1939) (applying the last-in-time rule and
faulting the party who lost in the second action for not seeking full appellate state
court review of the alleged error of the second court); see also Robi, 838 F.2d
at 323 (encouraging parties “to appeal an inconsistent judgment directly rather than
attack it collaterally before another court”); Eyber, 249 F. Supp. at 534 (same).
Mr. Morris now bears the consequences of his choices in prior litigation.
Finally, an advantage of following the last-in-time rule in a case like this one
is that it “ends the chain of relitigation by stopping it where it stands after entry of
the most recent court’s judgment, and thereby discourages relitigation in yet
another court.” Robi, 838 F.2d at 323 (internal quotation marks and alterations
omitted). Whether that advantage will be realized remains to be seen.
In sum, the court declines to attach full faith and credit to any order or
decree of the Alabama Probate Court recognizing the 2007 Will as Amy’s last will
and testament or conferring authority upon Mr. Morris to represent Amy’s Estate.
For that reason, Mr. Morris lacks the capacity to bring his tort claims on behalf of
the Estate in the lead case against the Trust Company and the Foundation.
Additionally, any defense by Mr. Morris and Ms. Duncan to the Foundation’s
claim to collect the $1,125,222 judgment based on Mr. Morris’s status as executor
or Mr. Morris and Ms. Duncan’s status as beneficiaries and owners of the same
judgment must be rejected.
Lead Case Motions to Dismiss – 12(b)(6) Grounds
Even if Mr. Morris were to be recognized as the proper representative of
Amy’s Estate, all but one of his tort claims would fail to survive the Rule 12(b)(6)
motions. The Trust Company and the Foundation offer several arguments in
support of their motions to dismiss Mr. Morris’s Amended Complaint.
discussion proceeds under the alternative assumption that Mr. Morris has capacity
to bring claims on behalf of Amy’s Estate.
Abatement of Claims
A common argument is that nearly all of Mr. Morris’s claims abated upon
Amy’s death in 2011. (See Lead Case Docs. # 35, at 3–7; # 38, at 8–10.) Indeed,
with few exceptions, Mr. Morris fails to raise claims that did not abate upon Amy’s
death. He has pleaded possibly four claims arising after Amy’s death, and only
three of those four claims are against the Trust Company and the Foundation:
(1) Count One’s claim that the Trust Company breached its fiduciary duty to the
Estate by wrongfully refusing to pay the remaining $106,000 of Amy’s property to
Mr. Morris, upon his demand (Lead Case Doc. # 29, at ¶ 50); (2) Count Two’s
claim that the Trust Company converted the remaining $106,000 by incurring
litigation expenses (Lead Case Doc. # 29, at ¶ 54); and (3) Count Seven’s
allegation that the Trust Company and Ms. Loulakis conspired to deplete the
remaining $106,000 in assets in litigation expenses, in spite of their knowledge of
Mr. Morris’s appointment as Executor by the Alabama Probate Court (Lead Case
Doc. # 29, at ¶¶ 44–45, 82).43
All other alleged torts occurred during Amy’s life and thus are not wrongs
committed against her Estate.
The Trust Company and the Foundation seek
dismissal of every claim that has been extinguished by Amy’s death. (See Lead
Case Docs. # 35, at 3–7; # 38, at 8–10.) By prior order, the court informed Mr.
Morris that “[w]hatever tort claims [Amy] might have had or maintained during
her life died when she did.” (Lead Case Doc. # 28, at 5–6 (citing Ala. Code § 6-5462 and Robbins v. Sanders, 890 So. 2d 998, 1011 (Ala. 2004) (holding that tort
claims not pending at the time of decedent’s death are extinguished by decedent’s
Nonetheless, Mr. Morris contends that Alabama law should not allow tort
claims committed against Amy during her period of incompetency to abate upon
her death. In support, he cites Estate of Gilliam ex rel. Waldroup v. City of
Prattville, 639 F.3d 1041 (11th Cir. 2011), a case that actually undermines his
position. There, the Eleventh Circuit found that Alabama’s survivorship statute
must be applied to abate § 1983 excessive force claims. Id. at 1050. The district
The fourth cause of action potentially based on events following Amy’s death is Count
Six’s allegation that Ms. Loulakis violated Alabama’s Legal Services Liability Act in her actions
as attorney after Amy died. (Lead Case Doc. # 29, at ¶ 74.) That claim is not discussed because
this court lacks personal jurisdiction over Ms. Loulakis. The Foundation correctly notes that Mr.
Morris’s amended complaint does not implicate it in any conspiracy following Amy’s death.
(See Lead Case Doc. # 38, at 10–11 (citing Lead Case Doc. # 29, at ¶¶ 44–45).)
court had reached the opposite conclusion. Id. at 1044. Mr. Morris proposes that
because Gilliam included a substantial dissent that agreed with the district court’s
ruling, it is not frivolous for him to ask this court to decline to apply Alabama’s
survivorship statute in this suit. (See Lead Case Doc. # 41, at 8–9.) He further
asserts that “[t]here was a period of nearly [two] years when [Amy] had no
Guardian at all and was represented only by [the Trust Company as] conservator,”
(Lead Case Doc. # 41, at 10), and even when Mr. Morris was her guardian, he
lacked the authority to bring claims on her behalf.
Without citing any legal authority, Mr. Morris suggests that Amy’s
incompetency and former representation by a conservator with allegedly adverse
interests to Amy’s requires the court to permit untimely claims because they could
not have been raised sooner. Mr. Morris argues in his first supplemental brief that
the abatement statute should not be applied because only the conservator could
have pursued the claims on Amy’s behalf during her lifetime, against itself, which
would have been futile and nonsensical. (Lead Case Doc. # 88, at 22–24.) He
further likens Amy’s situation to that of incompetency due to minority and asserts
that the law should excuse the late filing of Amy’s claims because she could not
raise them during her period of incompetency.
Mr. Morris’s arguments are without merit. There is no authority under
Gilliam or any other case to shelve § 6-5-462, even where the decedent lacked
capacity to bring the suit against the tortfeasor during her lifetime. The court is
unaware of any authorities endorsing Mr. Morris’s position, and he offers none.
Accordingly, Counts Three, Four, and Seven against the Foundation are
therefore due to be dismissed because these claims were extinguished by Amy’s
death in 2011 and because Mr. Morris has alleged no tortious conduct attributable
to the Foundation since Amy’s death.
To the extent that Counts One, Two, and
Seven implicate the Trust Company for tortious conduct during Amy’s life, Counts
One, Two, and Seven are likewise due to be dismissed pursuant to Alabama’s
Remaining are the Trust Company’s other defenses that are applicable to
Mr. Morris’s claims that arose after Amy’s death.
Preclusive Effect of Virginia Interpleader Suit
The Trust Company argues that “critical proceedings” in the Virginia Court
and their res judicata effect preclude Mr. Morris’s claims. (Lead Case Doc. # 35,
at 8.) Regarding the allegedly wrongful conduct following Amy’s death, the Trust
Company claims that it instituted an interpleader action one month after Amy’s
death to resolve the competing claims to Amy’s remaining property (i.e., the
$106,000) and to request that the Virginia Court retain jurisdiction over the
Because the Trust Company’s abatement of claims argument is meritorious, it is
unnecessary to consider its argument that most of the breach of fiduciary tort claim is barred by a
statute of limitations. (See Lead Case Doc. # 35, at 13–14.)
complete administration of the conservatorship estate. (See Lead Case Doc. # 9-6
(Trust Company’s Am. Compl. in the interpleader suit).) Mr. Morris actively
participated in that action, filing motions to dismiss the interpleader complaint and
objections to the Trust Company’s Accounting. (See Lead Case Docs. # 9-8, 9-9,
9-10, 9-11, 9-12.) As discussed supra, the Virginia Court ruled that Ms. Loulakis
was the Executor of Amy’s Estate, and thus, the remainder of Amy’s assets in the
Trust Company’s possession were to be paid to Ms. Loulakis, not Mr. Morris.
After admitting evidence, ruling on objections, and holding a hearing, the Virginia
Court approved the Trust Company’s accountings, request for attorney’s fees, and
costs for administration as conservator. (See Lead Case Doc. # 35-2.)45 The Trust
Company reiterates its stance in its first supplemental brief. (Lead Case Doc. # 87,
In response to the Trust Company’s argument in favor of res judicata, Mr.
Morris argues that his opponents request the court to apply only Virginia’s rulings
in the Trust Company’s favor but not Alabama’s orders in his favor. (Lead Case
Doc. # 41, at 5.) But there is no competing Alabama court judgment finding that
the Trust Company improperly distributed the remainder of Amy’s property to Ms.
The Trust Company also represents that Mr. Morris was an interested party to its
“Petition for Aid and Guidance” concerning the sale of Amy’s home in 2010. There is no need
to explore the preclusive effect of any ruling arising from that petition because any cause of
action arising from the sale of Amy’s home has abated pursuant to Alabama law. See supra
Loulakis, mismanaged the administration of the conservatorship estate after Amy’s
death, or converted property for its own litigation and administrative expenses.
Identifying an Alabama court that acknowledges Mr. Morris as Executor of Amy’s
Estate is not enough. The similar action in Alabama Probate Court to compel the
Trust Company to transfer conservatorship property to Mr. Morris ended in the
Trust Company’s favor when the Alabama Supreme Court required the Alabama
Probate Court to vacate its order. See Ex parte Trust Co. of Va., 96 So. 3d at 69.
There is no Alabama judgment on the issue of the Trust Company’s management
of the conservatorship property upon which to apply res judicata principles.
Mr. Morris further argues that res judicata is inapplicable because the parties
in the Virginia interpleader proceedings are not substantially identical to the parties
before this court. That is, Mr. Morris acknowledges that he sues as the Executor of
Amy’s Estate in this litigation, but that he was not involved in the relevant Virginia
Court proceedings in that capacity. That is simply not true with respect to the
interpleader suit. The Trust Company filed the interpleader action after Amy’s
death to resolve “competing claims to the conservatorship estate” by “different
persons and entities . . . purporting to be [Amy’s] successor in interest . . . .” (Lead
Case Doc. # 35-2, at 5, ¶¶ I–J.) Mr. Morris litigated in that interpleader action
under the authority granted by the Alabama probate court to act as Amy’s personal
representative. Even if Virginia declined to credit Mr. Morris’s authority to litigate
as the executor, it acknowledged the fact that the Alabama Probate Court had
Although Mr. Morris’s objections to res judicata are without merit, the
discussion is not over. When deciding whether to give res judicata effect to a state
court judgment, federal courts apply the law of the state from which the judgment
emerged. Kremer, 456 U.S. at 482; Allen v. McCurry, 449 U.S. 90, 96 (1980).
Hence, Virginia law applies.46 Virginia’s res judicata doctrine has been formalized
as a rule that became effective for all Virginia judgments entered in civil actions
commenced after July 1, 2006. It states:
A party whose claim for relief arising from identified conduct, a
transaction, or an occurrence, is decided on the merits by a final
judgment, shall be forever barred from prosecuting any second or
subsequent civil action against the same opposing party or parties on
any claim or cause of action that arises from that same conduct,
transaction or occurrence, whether or not the legal theory or rights
asserted in the second or subsequent action were raised in the prior
lawsuit, and regardless of the legal elements or the evidence upon
which any claims in the prior proceeding depended, or the particular
Caperton v. A.T. Massey Coal Co., 740 S.E.2d 1, 8 n.3 (Va. 2013) (quoting Va.
Sup. Ct. R. 1:6(a)). Rule 1:6 is a broad “transactional test” meant to supplant
Virginia’s previous adherence to a more narrow “same evidence test.”
Imports, Ltd. v. Kirin Brewery of Am., LLC, 650 S.E.2d 554, 561 n.6 (Va. Ct. App.
It is noted, however, that the Trust Company cites Alabama law on res judicata in its
supplemental brief. (Lead Case Doc. # 87, at 8 (citing Lott v. Toomey, 477 So. 2d 316, 319 (Ala.
2007); see also Rhoten v. Commonwealth, 750 S.E.2d 110, 113–14 (Va. 2013).
Under either standard, the “effect of a final decree is not only to conclude the
parties as to every question actually raised and decided, but as to every claim
which properly belonged to the subject of litigation and which the parties, by the
exercise of reasonable diligence, might have raised at the time.” Va. Imports, 650
S.E.2d at 561 n.6 (quoting Smith v. Holland, 98 S.E. 676, 676 (Va. 1919)
Applying Rule 1:6, there was a prior judgment on the merits rendered by a
court of competent jurisdiction in the Virginia interpleader case, and the identity of
the same parties has been noted. The remaining question is whether the Trust
Company demonstrates that Mr. Morris’s causes of action might have been
litigated in the Virginia interpleader suit.47 Mr. Morris could have asserted breach
of fiduciary duty, conversion, and civil conspiracy as counterclaims against the
Trust Company at that time.
In its original briefing, (Lead Case Doc. # 35, at 12), the Trust Company
cites Winchester Neurological Consultants, Inc. v. Landrio, 74 Va. Cir. 480 (Va.
Cir. Ct. Jan. 30, 2008), for its proposition that res judicata bars “issues that could
have been litigated, might have been litigated, or should have been litigated” in an
Mr. Morris did not raise tort claims against the Trust Company in the Virginia
interpleader suit; he merely asserted objections and arguments in support of dismissal of the
interpleader complaint. (See Lead Case Docs. # 9-8, 9-9, 9-10, 9-11, 9-12.)
earlier proceeding. Id. at *3. One might assume that “could have,” “might have,”
or “should have” would cover Mr. Morris’s claims. But the Winchester opinion
recognizes that “Virginia does not have mandatory counterclaims,” and thus, there
is an “exception to the bar of res judicata.” Id. at *7. The Winchester court
advised plainly that “the failure to assert a counterclaim does not bar a later action
on the counterclaim.” Id. (citing Restatement (Second) of Judgments § 22; 47 Am.
Jur. 2d Judgments § 504); see also Gray Diversified Asset Mgmt., Inc., 77 Va. Cir.
187, at *2 (Va. Cir. Ct. Oct. 7, 2008). Hence, Mr. Morris arguably could have
made a counterclaim in the interpleader suit in Virginia, but he did not have to do
Therefore, following Virginia law, the Trust Company is not entitled to the
benefit of res judicata as a defense to any unabated tort claims because those
claims did not have to be litigated by Mr. Morris in the Virginia interpleader suit.
The Virginia Court’s approval of the Trust Company’s management of the
conservatorship assets and entitlement to attorney’s fees does not preclude Mr.
Morris from bringing his related claims for breach of fiduciary duty, conversion,
Failure to State Claims Against Amy’s Estate
The Trust Company also argues for dismissal under Rule 12(b)(6) based on
Mr. Morris’s failure to plead claims upon which relief can be granted.
Count One – Breach of Fiduciary Duty
The Trust Company argues that its refusal to pay conservatorship funds to
Mr. Morris and its decision to file the Virginia interpleader action after Amy’s
death cannot be deemed tortious conduct because the Trust Company had no
choice but to seek a judicial resolution of competing claims for the $106,000, and
because it acted according to its authority as the court-appointed conservator under
Virginia law. The Trust Company asserts that the amended complaint fails to
allege how its refusal to disburse funds to Mr. Morris, in view of competing
probate proceedings, amounts to a breach of duty owed to the Estate, or further,
how interpleading conservatorship funds could constitute conversion. (See Lead
Case Doc. # 35, at 14–17.)48 The elements of breach of fiduciary duty are (1) a
relationship establishing a fiduciary duty owed to the plaintiff, (2) a breach of the
duty, and (3) damages. Regions Bank v. Lowrey, 101 So. 3d 210, 219 (Ala. 2012).
The amended complaint alleges that the Trust Company “refused to
relinquish [Amy’s E]state’s funds” and threatened to “consume the remaining
$106,000 in litigation” unless Mr. Morris and Ms. Duncan released their personal
claims against the Trust Company. (Lead Case Doc. # 29, at ¶¶ 44–45; 50.) It also
alleges that the Trust Company “paid Karen Loulakis a portion of the remaining
Mr. Morris makes no response to these specific arguments. Nonetheless, with the
Trust Company’s arguments in mind, the court reviews the allegations in the amended complaint
to see whether there are facts plausibly supporting cognizable tort claims in Counts One and
Two. See Boyd v. Peet, 249 F. App’x 155, 157 (11th Cir. 2007).
$106,000, perhaps $16,000 . . . .” (Lead Case Doc. # 29, at ¶ 45.) The reason for
that $16,000 payment to Ms. Loulakis is not clearly pleaded, but it appears that Mr.
Morris is referring to the amount left in the Estate after the payment of fees to
attorneys and to the Trust Company as conservator. (See Lead Case Doc. # 35-2,
at 12, ¶ G (directing the Trust Company to “pay over and deliver the judgment and
all remaining assets of the conservatorship estate to [Ms.] Loulakis. . . .”).)
It was not unlawful for the Trust Company to initiate the interpleader action
in response to competing claims to the remainder of the conservatorship estate.
But Mr. Morris has alleged that the Trust Company put its own interests ahead of
the Estate’s by threatening to litigate and consume the property through incurring
legal expenses if Mr. Morris and Ms. Duncan did not “release[ ] their personal
claims” against the Trust Company. (Lead Case Doc. # 29 at ¶ 44, 50.) The
breach of fiduciary duty claim is not based on the filing of the interpleader
litigation by itself, as the Trust Company asserts, but on the threat of filing
litigation and consuming assets in litigation if personal claims were not forfeited.
At the motion-to-dismiss stage, the court is obligated to accept factual allegations
as true. The amended complaint sets out allegations that, if proven to be true, may
entitle the Estate to relief for breach of fiduciary duty. The Trust Company’s
motion to dismiss the remnant of Count One on Rule 12(b)(6) grounds would be
due to be denied, but the court’s decision to decline full faith and credit to
Alabama’s Probate Court orders prevents Mr. Morris from proceeding with this
Count Two – Conversion
The Trust Company similarly argues that “because [it] interpled [Amy’s]
assets in the Virginia [C]ourt in accordance with its duties as conservator, it cannot
be found to have wrongfully converted those funds.” (Lead Case Doc. # 35, at 17.)
Conversion requires a showing that defendant wrongfully took, wrongfully
detained, interfered with, illegally assumed ownership over, illegally used, or
misused property “in exclusion or defiance of a plaintiff’s rights, where [the]
plaintiff has general or specific title to the property or the immediate right to
possession.” Ott v. Fox, 362 So. 2d 836, 839 (Ala. 1978). The Trust Company
argues that its interpleading the funds was not a wrongful detention or misuse of
assets, and neither was its receipt of court-sanctioned attorney’s fees and costs a
misappropriation of the Estate’s property. Again, Mr. Morris has not responded to
these specific contentions.
Looking to the pleading, Mr. Morris alleges that the Trust Company “used
[Amy’s] assets to fund extensive litigation.” (Lead Case Doc. # 29, at ¶ 52.)
Absent the Trust Company’s use of the funds, these assets “would otherwise have
been a portion of the [E]state.” (Lead Case Doc. # 29, at ¶¶ 53–54.) Count Two
also incorporates by reference facts alleged in Count One, and specifically
paragraph 50. Paragraph 50, in turn, cites paragraphs 44 and 45. It thus appears
that the gist of Count Two is that the Trust Company litigated and thereby “spent
the rest [of the money] on its lawyers.” (Lead Case Doc. # 29, at ¶ 45.)
However, absent any allegation that the Trust Company appropriated, on its
own initiative, some or all of the $106,000 for its own benefit, Mr. Morris’s claim
for relief for conversion is not plausible on its face. The interpleader of the
Estate’s funds may have been contrary to Mr. Morris’s wishes, but it was not
wrongful or illegal. Further, the Trust Company did not misuse the Estate’s funds
when the Virginia Court awarded attorney’s fees and administrative expenses and
directed the Trust Company to pay the fees and costs from Amy’s property. (See
Lead Case Doc. # 35-2, at 6–9.) Mr. Morris’s conversion claim is thus baseless,
and the Trust Company’s Rule 12(b)(6) motion to dismiss what remains of Count
Two is due to be granted.
Count Seven – Conspiracy
The Trust Company asserts that under Alabama law, civil conspiracy is not
an independent cause of action, and because Mr. Morris’s other underlying tort
claims fail, so also, Count Seven must fail. (Lead Case Doc. # 35, at 18–19.) Mr.
Morris has not rebutted this argument.
The Trust Company’s position, of course, does not account for the potential,
surviving tort claim for breach of fiduciary duty. Nevertheless, the amended
complaint contains no allegations connecting Ms. Loulakis or the Foundation to
the Trust Company’s alleged tortious act of threatening to deplete conservatorship
estate funds if Mr. Morris and Ms. Duncan refused to release any personal claims
against the Trust Company. A civil conspiracy necessarily involves more than one
actor. See Eidson v. Olin Corp., 527 So. 2d 1283, 1285 (Ala. 1988) (“Civil
conspiracy is a combination of two or more persons . . . .”). Hence, the remaining
fraction of Mr. Morris’s underlying breach of fiduciary duty tort claim is
insufficient to function as the requisite tort supporting the civil conspiracy. See
Funliner of Ala., L.L.C. v. Pickard, 873 So. 2d 198, 211 (Ala. 2003) (“A civil
conspiracy is not an independent cause of action.”).
Accordingly, the Trust
Company’s motion to dismiss Count Seven for failure to state a claim is due to be
Summary on Motions to Dismiss
If this court were to recognize Mr. Morris as having the capacity to sue on
behalf of Amy’s Estate, the only unabated, cognizable tort claim that would
survive the motions to dismiss would be the claim that the Trust Company
breached its fiduciary duties by allegedly bargaining with Mr. Morris over the
$106,000 remaining in the Estate after Amy died.
However, the court has
concluded that the breach of fiduciary duty claim is due to be dismissed on the
threshold defense of Mr. Morris’s lack of capacity to sue on behalf of Amy’s
Estate. The Foundation and the Trust Company’s motions to dismiss are due to be
Member Case Motions for Summary Judgment
Cross Motions for Summary Judgment on the Foundation’s Claims
The Foundation and Mr. Morris and Ms. Duncan have submitted cross
motions for summary judgment on Counts I and II of the Foundation’s amended
complaint. In Count I, the Foundation seeks to collect the $100,000 monetary
judgment imposed by the Virginia Court against Mr. Morris and Ms. Duncan and
in favor of the Foundation for its attorney’s fees and costs attributable to Mr.
Morris and Ms. Duncan’s contempt of court orders. In Count II, the Foundation
seeks to collect the $1,125,222 monetary judgment entered by the Virginia Court
against Mr. Morris and Ms. Duncan and in favor of Amy, which became an asset
of Amy’s Estate that Ms. Loulakis assigned to the Foundation as beneficiary of the
The Foundation asserts that there is no genuine dispute that: (1) the Virginia
Court entered two monetary judgments in the amounts of $100,000 and $1,125,222
against Mr. Morris and Ms. Duncan; (2) Mr. Morris and Ms. Duncan were afforded
no relief from these judgments on appeal; and (3) the judgments have not been
satisfied. (See Member Case Doc. # 52-9, 52-10 (Affidavits of David A. Roe,
President of the Foundation, and William M. Hutchins, Trust Officer for the Trust
The Foundation further argues that principles of preclusion law
support the entry of summary judgment. (See Member Case Doc. # 52, at 8 (citing
Restatement (Second) of Judgments § 17 (“If the judgment is in favor of the
plaintiff, the claim is extinguished and merged in the judgment and a new claim
may arise on the judgment.”); Restatement (Second) of Judgments § 18(2) (“In an
action upon the judgment, the defendant cannot avail himself of defenses he might
have interposed, or did interpose, in the first action.”).) The Foundation urges the
court to give preclusive effect to each of the Virginia Court judgments.
Virginia’s law of claim and issue preclusion applies to judgments rendered
by Virginia’s courts, see Kremer, 456 U.S. at 482, and Virginia law requires this
court to give res judicata effect to the Virginia Court’s judgments against Mr.
Morris and Ms. Duncan.
When [a] second suit is between the same parties as the first, and on
the same cause of action, the judgment in the former is conclusive of
the latter, not only as to every question which was decided, but also as
to every other matter which the parties might have litigated and had
determined, within the issues as they were made or tendered by the
pleadings, or as incident to or essentially connected with the subject
matter of the litigation, whether the same, as a matter of fact, were or
were not considered.
Lofton Ridge, LLC v. Norfolk S. Ry. Co., 601 S.E.2d 648, 650 (Va. 2004). Lofton
describes the “‘could-have-litigated-should-have-litigated” requirement discussed
supra in Part IV.B.2. See Brock v. Voith Siemens Hydro Power Generation, 716
S.E.2d 485, 488 (Va. 2011); see also Va. Sup. Ct. R. 1:6(a). Issue preclusion, or
collateral estoppel, bars “successive litigation of an issue of fact or law actually
litigated and resolved in a valid court determination essential to [a] prior judgment,
even if the issue recurs in the context of a different claim.” Brock, 716 S.E.2d
at 487 (internal quotation marks and citation omitted).
Despite Mr. Morris and Ms. Duncan’s contentions to the contrary, the
Virginia Court had jurisdiction over the guardianship and conservatorship
proceedings, and later, the interpleader and probate proceedings. Further, Mr.
Morris and Ms. Duncan cannot dispute that they, along with the Foundation, were
parties to those actions, which resulted in a final judgment against them on
December 18, 2008, and a final probate decree on August 12, 2011 – neither of
which was disturbed by a direct appeal. Hence, res judicata doctrine bars all of
Mr. Morris and Ms. Duncan’s defenses that were raised or that could have been
raised in the litigation before the Virginia Court.
Opposition to Summary Judgment on the Foundation’s Claims
Nevertheless, Mr. Morris and Ms. Duncan raise objections to the entry of
summary judgment in favor of the Foundation on Counts I and II, all of which
arise based on matters independent of the Virginia Court proceedings.
Member Case Docs. # 48, 60.)
Mr. Morris and Ms. Duncan insist that conflicting probate orders prohibit the
Foundation from collecting on the judgment. (Member Case Doc. # 60, at 2.) Mr.
Morris and Ms. Duncan contend that Mr. Morris, not Ms. Loulakis, is the Executor
of Amy’s Estate, that they, not the Foundation, are beneficiaries of Amy’s Estate,
and therefore, that the Foundation has no right to enforce the $1,125,222 judgment.
However, in accordance with this court’s conclusion concerning full faith and
credit, see supra Part IV.A., the conflicting probate orders are resolved in favor of
the Virginia probate proceedings and the decree of the Alabama Probate Court is
not afforded full faith and credit.
Res Judicata Effect of Dismissal of the Montgomery County
Circuit Court Suit
Mr. Morris asserts that an action to domesticate the $1,125,222 judgment in
Alabama, to which the Foundation was joined as an “indispensable party,” (see
Member Case Doc. # 55-5) terminated in his favor and was not appealed. (See
Member Case Doc. # 60, at ¶¶ 1–2 (citing a “Circuit Court” order dismissing an
action to domesticate the $1,125,222 judgment).)
Additionally, in their
counterclaim pleading, Mr. Morris and Ms. Duncan assert that this same
Montgomery County Circuit Court order also dismissed the Foundation’s attempt
to domesticate the $100,000 judgment. (Member Case Doc. # 49, at 28, ¶ 73.) Mr.
Morris and Ms. Duncan reference the following order signed by Circuit Judge
William Shashy on June 23, 2011:
On May 3, 2011 came the parties, The Trust Company of
Virginia, conservator, Thomas W. Morris, Sharon L. Duncan, and
George Mason University Foundation, Inc., by their respective
counsel, and it appearing to the Court that this case was initiated by
The Trust Company of Virginia as conservator for Amy Falcon
Morris to domesticate and enforce a judgment rendered in favor of
Amy Falcon Morris; that Amy Falcon Morris died on March 27, 2011;
that as a result of the death of Amy Falcon Morris, further
proceedings in this case are unnecessary.
It therefore is ORDERED that any order not otherwise ruled
upon is DENIED and this case is hereby dismissed, costs taxed as
(Member Case Doc. # 55-6.)
Judge Shashy’s order does not foreclose the Foundation’s claims in this
First, the order makes no reference to any action to domesticate the
$100,000 judgment in favor of the Foundation, which is distinct from the larger
judgment in favor of Amy. Second, the language of the order reflects that the
Trust Company’s action to domesticate the $1,125,222 judgment did not terminate
upon a final judgment on the merits of any claim or defense. Rather, the case
terminated because Amy died, rendering “further proceedings . . . unnecessary.”
(Member Case Doc. # 55-6.)
There was no ruling for or against any party.
Additionally, the Eastern District of Virginia already rejected Mr. Morris and Ms.
Duncan’s argument when they raised it in their motion to dismiss the Foundation’s
Amended Complaint. (See Member Case Doc. # 58, at 12 (“Defendants . . . have
not proffered any evidence conclusively showing that the Alabama Circuit Court
decided the case on the merits.”).)
For these reasons, Mr. Morris and Ms.
Duncan’s res judicata reliance on Judge Shashy’s order is unavailing.
Satisfaction of the Judgment in favor of Amy
Mr. Morris and Ms. Duncan also argue that the $1,125,222 judgment has
been satisfied in both Alabama and Maryland and that they each have been
released from any obligation to pay it.
Purported Alabama Satisfaction
On September 21, 2010, Mr. Morris, acting as Amy’s “attorney-in-fact,”
filed a “Satisfaction of Judgment” with the Montgomery County Circuit Court and
recorded a “Cancellation and Release” with the Montgomery County Probate
Court releasing himself from liability for the judgment previously recorded in
Alabama. (Member Case Doc. # 55-1, at 2–4.) Mr. Morris and Ms. Duncan claim
that the Satisfaction of Judgment was “upheld by court Order,” (Member Case
Doc. # 60, at 5), but they do not clearly identify an order upholding or otherwise
validating the satisfaction of judgment. Their counterclaim sheds some light,
alleging that the Foundation filed a motion to strike the purported satisfaction in
the Montgomery County Circuit Court action to domesticate the judgment,
discussed supra. (See Member Case Doc. # 49, at 28, ¶ 73.) Mr. Morris and Ms.
Duncan’s counterclaim suggests, but does not aver with clarity, that the motion to
strike the satisfaction was denied by Judge Shashy as an outstanding pending
motion when the entire domestication suit was dismissed after Amy’s death. If
that is the case, Judge Shashy’s order did not rule on the motion to strike.
Purported Maryland Satisfaction
On July 29, 2011, after Mr. Morris was granted letters testamentary in
Alabama, Mr. Morris filed a “Satisfaction of Judgment” in the Circuit Court for
Harford County, Maryland stating that the judgment indexed there against Ms.
Duncan and him was “fully waived and considered satisfied.” (Member Case Doc.
# 55-1, at 6.) The Clerk of the Circuit Court for Harford County entered a “Notice
of Modification of Judgment” on August 2, 2011, acknowledging that the
judgment had been satisfied. (Member Case Doc. # 55-1, at 7.) The case number
identified on Member Case Document 55-1 is that of the Maryland case that the
parties represent has been stayed pending a resolution to these proceedings. (See
Lead Case Docs. # 52, 55, 56.) However, Mr. Morris and Ms. Duncan represent
that the Trust Company “ultimately managed to reverse the satisfaction of
judgment entered in Ms. Duncan’s favor.” (Lead Case Doc. # 52, at 3.)
Satisfaction Not a Defense
The Foundation generally asserts that the satisfactions of judgment filed in
Alabama and Maryland courts by Mr. Morris are fraudulent. (Member Case Doc.
# 52, at 2.) It contends that Mr. Morris and Ms. Duncan’s reliance on these
satisfactions is premised on Mr. Morris’s authority to act as executor, and that res
judicata and collateral estoppel bar him from being recognized in that capacity.
(Member Case Doc. # 52, at 10.)
Actually, the satisfaction filed in Alabama
depends on Mr. Morris’s authority as Amy’s attorney-in-fact, and the satisfaction
filed in Maryland depends on his authority as executor.
Mr. Morris lacked authority to act as Amy’s attorney in fact in 2010. Amy
had been adjudicated incapacitated and lacked the capacity to authorize Mr. Morris
to act on her behalf by power of attorney, and any prior powers of attorney had
been “revoked completely and permanently” by the Virginia Court on February 29,
2008. (See Lead Case Doc. # 35-1, at 20–21, ¶¶ L, O.) Moreover, the judgment
was technically Amy’s property and was under the administration of her
conservator. The Trust Company did not authorize the filing of the purported
satisfaction. Hence, the satisfaction and release filed in Alabama are invalid.
With respect to the satisfaction and release filed in Maryland in 2011, this
court has declined to recognize Mr. Morris’s capacity to act as executor due to the
Alabama Probate Court’s lack of jurisdiction over Amy’s Estate.
therefore declines to recognize the satisfaction of judgment filed in Maryland as
having any legal effect. Moreover, by Mr. Morris and Ms. Duncan’s admission,
the Maryland satisfaction was “reversed.” In sum, satisfaction is no defense to the
Judgment Not a Reported Asset of the Estate
Mr. Morris and Ms. Duncan assert that Ms. Loulakis did not report the
judgment as an asset of Amy’s Estate when Ms. Loulakis filed a probate tax return
on August 12, 2011. (Member Case Doc. # 55-3). Document 55-3 is a form
entitled “Probate Tax Return: Fiduciary Appointment,” signed by Ms. Loulakis, as
Executrix, and filed with the Virginia Beach Circuit Court Clerk’s Office. It states
that the value of Amy’s probate estate was $100,000 in personal property. Even if
an uncollected $1,125,222 judgment was supposed to have been reported on the
form – and it is not clear that it should have been – that is no defense to the
Foundation’s effort to enforce the judgment against Mr. Morris and Ms. Duncan
Statute of Limitations Defense
In the concluding paragraph of their relatively simple pro se motion, Mr.
Morris and Ms. Duncan request summary judgment in their favor on the basis of
“applicable statutes of limitation and repose.” (Member Case Doc. # 48, at 3–4.)
There is no substantive argument in Member Case Documents 48 or 60 in support
of a statute of limitations defense, and further, Alabama law does not support such
a defense. See Davis Int’l, Inc. ex rel. Patel v. Berryman, 730 So. 2d 242, 244
(Ala. Civ. App. 1999) (“The statute of limitations for reviving a judgment is 20
years from the date the judgment was entered.”).
Conclusions on the Foundation’s Claims
In sum, Mr. Morris and Ms. Duncan fail to persuade that the judgment
entered against them by the Virginia Court is unenforceable or that there is any
other reason that they are entitled to summary judgment. The Foundation has met
its burden under Rule 56 and is entitled to summary judgment on Counts I and II of
its Amended Complaint in the member case.49
Cross Motions for Summary Judgment on Mr. Morris and Ms.
The Foundation and Mr. Morris and Ms. Duncan have submitted cross
motions for summary judgment on Mr. Morris and Ms. Duncan’s counterclaims
against the Foundation (Counts III, VI, VII, VIII, IX, and X). (See Member Case
Docs. # 52, 60.) Document 48 contains only Mr. Morris and Ms. Duncan’s motion
for summary judgment on the Foundation’s claims, but Mr. Morris and Ms.
Duncan’s response in opposition to the Foundation’s motion for summary
judgment includes a cross motion for summary judgment on their counterclaims.
The Foundation’s motion for summary judgment was submitted before the Eastern
District of Virginia nearly eighteen months ago. At the time the motion was filed, the
Foundation represented that the amount owed on the outstanding judgments, including postjudgment interest owed through October 3, 2013, was $1,574,851.34. (Member Case Doc. # 52,
at 16.) The Foundation will be directed to update its demand for judgment prior to the court’s
entry of final judgment.
(See Member Case Doc. # 60, at 5–6 (requesting a joint and several monetary
judgment against the Foundation, Ms. Loulakis, and the Trust Company).)
However, Mr. Morris and Ms. Duncan do not meet their burden under Rule 56(a)
as movants, and their cross motion for summary judgment on their counterclaims is
due to be denied for that reason alone.
On the other side, the Foundation argues that Mr. Morris and Ms. Duncan’s
counterclaims “all rely on the central legal contention that [Mr. Morris and Ms.
Duncan] are the proper beneficiaries of Ms. Morris’s Estate pursuant to the 2007
Will,” but Mr. Morris and Ms. Duncan “are barred by the doctrines of res judicata
and collateral estoppel from asserting any such rights” as “purported beneficiaries”
under the 2007 Will. (Member Case Doc. # 52, at 15–16.)50
Upon review of Mr. Morris and Ms. Duncan’s personal counterclaims
against the Foundation, it is clear that none can survive summary judgment. First,
most of the complained-of conduct51 has been overseen and sanctioned by order of
The Foundation also opposes the counterclaims as untimely asserted, but does not cite
a scheduling order or other rule from the Eastern District of Virginia to support the objection.
No other defenses to the counterclaims have been argued, although many others (e.g., lack of
standing, failure to state a claim, etc.) could be conceived.
Specifically, the Foundation’s individual or concerted actions to “defraud” Mr. Morris
and Ms. Duncan through the instigation or continuation of litigation, to seize Amy’s assets, to
halt the sale of Amy’s home, to assist the Trust Company in “covering up” the allegedly inept
handling of Amy’s resources, to waste Amy’s assets through litigation expense, and to disregard
the Alabama’s Probate Court’s orders appointing Mr. Morris as executor by pursuing or
participating in the Virginia probate proceeding and this litigation to collect the unpaid
judgments. (See generally Member Case Doc. # 49 (Counterclaims).)
the Virginia Court in various prior proceedings for conservatorship during Amy’s
life and for interpleader and probate after Amy’s death. For instance, the Virginia
Court permitted the Foundation’s intervention, directed the payment of the
Foundation’s litigation expenses from Amy’s assets, and approved the Trust
Company’s management of the conservatorship estate. These prior proceedings
included the Foundation, Mr. Morris, and Ms. Duncan as parties and culminated in
final decrees, orders, or judgments to which Mr. Morris and Ms. Duncan had the
opportunity to object and to appeal. Consequently, Mr. Morris and Ms. Duncan’s
counterclaims are mostly predicated on allegations that are precluded by the
doctrine of collateral estoppel. See Whitley v. Commonwealth, 538 S.E.2d 296,
299 (Va. 2000) (requiring a defendant pleading collateral estoppel to prove that
“(1) the parties to the two proceedings [are] the same; (2) the factual issue sought
to be litigated [was] actually litigated in the prior proceeding; (3) the factual issue
[was] essential to the judgment rendered in the prior proceeding; and (4) the prior
proceeding . . . resulted in a valid, final judgment against the party to whom the
doctrine is sought to be applied”).
Second and more significantly, the Foundation is correct that each of Mr.
Morris and Ms. Duncan’s counterclaims presumes this court’s recognition of their
status as beneficiaries under the 2007 Will and their personal interest in Amy’s
Estate, but this court joins the Virginia Court in declining to give full faith and
credit to the Alabama Probate Court’s probate of the 2007 Will. Because the court
gives full faith and credit and res judicata effect to the order of the Virginia Court
probating the 1998 Will, the Foundation is entitled to summary judgment on all of
In accordance with the foregoing analysis, it is ORDERED that:
Full faith and credit is GRANTED to the order and decree of the
Circuit Court of Virginia Beach, Virginia, adjudging the 1998 Will of
Amy Falcon Morris to be her last will and testament and recognizing
Karen Loulakis as executrix of Amy’s Estate;
Full faith and credit is GRANTED to the monetary judgments of the
Circuit Court of Virginia Beach, Virginia, entered against Thomas
Morris and Sharon Duncan, jointly and severally, and in favor of Amy
Foundation, Inc. ($100,000);
Full faith and credit is DENIED to the order and decree of the Probate
Court of Montgomery County, Alabama, adjudging the 2007 Will of
Amy Falcon Morris to be her last will and testament and appointing
Thomas W. Morris, as personal representative of Amy’s Estate;
The Trust Company’s and the Foundation’s motions to dismiss Mr.
Morris’s amended complaint in the lead case (Lead Case Docs. # 34,
37) are GRANTED for all of the reasons set out in this opinion;
The Foundation’s cross motion for summary judgment in the member
case (Member Case Doc. # 51) is GRANTED; and
Mr. Morris and Ms. Duncan’s cross motions for summary judgment in
the member case (Member Case Docs. # 48, 60) are DENIED;
It is further ORDERED that the Foundation is DIRECTED to file, on or
before April 7, 2015, a current calculation of principal and interest owed by Mr.
Morris and Ms. Duncan on the unpaid Virginia judgments.
An appropriate final judgment will be entered separately.
DONE this 31st day of March, 2015.
/s/ W. Keith Watkins
CHIEF UNITED STATES DISTRICT JUDGE
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