Lucas et al v. Acheson et al
MEMORANDUM OPINION, as set out, re defendant/cross defendant David Acheson's Motion to Dismiss or, in the Alternative, Motion to Abstain, (doc. 14), and Motion to Dismiss Crossclaim, (doc. 18). An Order will be entered contemporaneously with this Memorandum Opinion. Signed by Judge Sharon Lovelace Blackburn on 2/18/15. (CTS, )
2015 Feb-18 PM 01:47
U.S. DISTRICT COURT
N.D. OF ALABAMA
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ALABAMA
A. JOHN LUCAS; GEORGE M.
TAYLOR, III, as Designated CoTrustee of the Thomas M. Acheson
Revocable Trust; THE THOMAS M.
ACHESON REVOCABLE TRUST,
DAVID J. ACHESON; SHEREE N.
SHEREE N. ACHESON,
DAVID J. ACHESON,
CASE NO. 2:14-CV-0856-SLB
This case is presently pending before the court on defendant/cross defendant David
Acheson’s Motion to Dismiss or, in the Alternative, Motion to Abstain, (doc. 14),1 and
Motion to Dismiss Crossclaim, (doc. 18). Plaintiffs, A. John Lucas, George M. Taylor, III,
and the Thomas M. Acheson Revocable Trust, filed the instant interpleader and declaratory
Reference to a document number, [“Doc. ___”], refers to the number assigned to each
document as it is filed in the court’s record.
judgment action seeking to determine the amount of David Acheson’s share of the Thomas
M. Acheson Revocable Trust [“Revocable Trust”] following the death of Thomas Acheson.2
Defendant/cross claimant Sheree Acheson has filed a cross claim based on outstanding
promissory notes payable by David Acheson to Thomas and Sheree Acheson. Upon
consideration of the record, the submissions of the parties, the arguments of counsel, and the
relevant law, the court is of the opinion that David Acheson’s Motions to Dismiss, (docs. 14,
18), are due to be denied and his Motion to Abstain (doc. 14), is due to be denied.
I. STATEMENT OF FACTS
Plaintiffs’ Complaint in Interpleader and for Declaratory and Equitable Relief contains
the following factual allegations, which the court assumes are true for purposes of deciding
David Acheson’s Motions:
5. Plaintiff A. John Lucas is an individual resident-citizen of Jefferson
County, Alabama. He is a successor trustee of The Thomas M. Acheson
Revocable Trust (the “Revocable Trust”). Mr. Lucas has served as Mr.
Thomas Acheson’s companies’ Secretary/Treasurer and Controller for over 30
years and has extensive knowledge of the Acheson companies’ financial
6. Plaintiff George M. Taylor, III, is an individual resident-citizen of
Jefferson County, Alabama. He is a successor trustee of the Revocable Trust.
Mr. Taylor has served as Mr. Acheson’s general counsel and trusted legal
advisor for over 20 years.
The court notes that, upon the death of Thomas M. Acheson the Revocable Trust
became irrevocable. However, for purposes of this Memorandum Opinion, the court will
refer to it as the Revocable Trust, as the parties do.
7. Plaintiff The Thomas M. Acheson Revocable Trust is a trust created
by Thomas M. Acheson on October 10, 2000. It was amended several times
during Mr. Acheson’s lifetime, with the last such amendment occurring on
May 6, 2010 (the “Sixth Amendment and Restatement of The Thomas M.
Acheson Revocable Trust” . . .). The Revocable Trust is currently being
administered by plaintiffs Lucas and Taylor.
8. Both Lucas and Taylor became the successor trustees of the
Revocable Trust upon the death of the settlor of that Trust, Thomas M.
Acheson. Mr. Acheson died on January 14, 2014. Since then, Lucas and
Taylor have accepted their roles as trustees of the Revocable Trust and have
performed various acts in their roles as trustees of that trust.
9. Defendant David J. Acheson is a resident-citizen of Ft. Myers,
located in Lee County, Florida. He is a qualified beneficiary under the
Revocable Trust. David Acheson is the son of Thomas M. Acheson and, upon
information and belief, was estranged from his father at the time of his
10. Defendant Sheree N. Acheson is a resident-citizen of Vestavia
Hills, located in Jefferson County, Alabama. She is a qualified beneficiary
under the Revocable Trust. She was married to Thomas M. Acheson at the
time of his death.
A. CREATION OF THE REVOCABLE TRUST
11. Over several decades, Thomas M. Acheson successfully owned and
operated several automobile dealerships in Hoover, Alabama, Memphis,
Tennessee, Jackson, Mississippi, and Daphne, Alabama. For more than a
decade, Mr. Acheson undertook a long and evolving process of planning his
significant estate. His desire was to provide some money to his two children,
David and Cameron Acheson, and his grandchild, Paige Acheson. Mr.
Acheson, however, desired that the bulk of his assets and money go to his
current wife, Sheree N. Acheson, to whom he was married for the last sixteen
12. Throughout his life, Mr. Acheson remained in charge of his
business empire and made major strategic decisions with respect to each of his
businesses, including decisions as to borrowing and investment of funds, the
sale and purchase of dealerships, hiring and firing of employees, and
relationships with manufacturers. Mr. Acheson remained active in his
business and in charge of major decisions with respect to them until his death.
13. During his lifetime, Mr. Acheson established several inter vivos
trusts in the course of implementing his estate plan. Mr. Acheson sought the
advice of several estate planning professionals with respect to the creation,
maintenance, and funding of these trusts. While several trusts were created,
they all were part of a comprehensive estate plan that Mr. Acheson, with the
assistance of his professional advisors, designed, implemented, and altered
14. Mr. Acheson exercised a meticulous degree of control over the
planning and drafting process for his estate plan. Planning was based both on
his desires for distribution of his assets after his death and also on his desire
to minimize tax consequences to the trusts and the beneficiaries.
15. Mr. Acheson created the Revocable Trust on October 10, 2000. He
conveyed substantial assets to the Revocable Trust over a period of years,
beginning in 2006. During the latter part of 2010 and in 2012, shares of stock
owned by Mr. Acheson in automotive dealerships operating in Hoover,
Memphis, Jackson, and Daphne were conveyed to the Revocable Trust. These
transfers were done with prior approval of each of the manufacturers whose
vehicles are sold by those dealerships, as required by existing Dealer Sales and
Service Agreements. Each of the manufacturers duly approved the transfer of
the shares and none has questioned the validity of the Revocable Trust, or the
capacity of Mr. Acheson to establish the Revocable Trust or to convey the
shares to the Revocable Trust. The position of Mr. Acheson as “dealer
“principal” of each of the dealerships was critical to the business relationship
between the dealerships and the manufacturers, and Mr. Acheson at all times
prior to his death maintained good relations with the manufacturers, none of
whom questioned his capacity or skill in acting as the chief executive officer
of each dealership.
B. APPOINTMENT OF THE TRUSTEES
16. Mr. Acheson initially appointed himself as trustee of the Revocable
Trust. Pursuant to Section 3 of the trust agreement, Mr. Acheson reserved the
right to amend, modify, or revoke the trust. Mr. Acheson exercised his
prerogative under Section 3 by amending the Revocable Trust six times during
his lifetime. Upon Mr. Acheson’s death, the trust became irrevocable and is
not subject to further amendment or revocation by anyone.
17. Pursuant to Section 17(c) of the Revocable Trust, upon the death
of Mr. Acheson, A. John Lucas and George M. Taylor, III, were appointed by
Mr. Acheson to serve as successor trustees and to exercise all powers granted
to the trustees under the Revocable Trust.
18. Mr. Acheson died on January 14, 2014. A. John Lucas and George
M. Taylor, III, thereafter accepted the position of successor trustees of the
Revocable Trust and have taken actions in their capacity as successor trustees
under that trust.
C. BENEFICIARIES OF THE REVOCABLE TRUST
19. The Revocable Trust had two principal beneficiaries. Sheree
Acheson, as Mr. Acheson’s wife, was the primary beneficiary. His son, David
Acheson, was also provided for in the Revocable Trust.
20. Essentially, the [Revocable] Trust provides for the distribution of
an amount to be made to David Acheson, which was described in the
[Revocable] Trust as the “David Acheson Share.” After distributing the David
Acheson Share, the rest of the trust estate in the Revocable Trust is to be
administered by the trustees for the benefit of Sheree Acheson.
D. THE PROMISSORY NOTES
21. Over the course of the past seven (7) years, David Acheson
attempted to pursue various business ventures, and to do so he frequently
borrowed money from Mr. Acheson and his wife, Sheree. A large portion of
the money borrowed by David Acheson was used to acquire and run a
restaurant in Destin, Florida, which operated under several different names.
The restaurant lost hundreds of thousands of dollars and eventually went out
22. The indebtedness of David Acheson to Mr. Acheson and his wife,
Sheree, was evidenced by a series of promissory notes (the “David Acheson
Notes”). . . .
23. Each of the David Acheson Notes was made payable to “Thomas
M. Acheson and Sheree N. Acheson” and each included a specified interest
rate. Several of the notes . . . were made payable in fifteen (15) annual
installments. Two notes . . . were payable on demand.
24. Upon information and belief, not a single payment was ever made
under any of the David Acheson Notes and they remain unpaid and
outstanding, except that Mr. Acheson and his wife, Sheree, forgave certain
amounts of indebtedness due, as set forth below:
September 22, 2006
December 31, 2007
September 22, 2006
December 31, 2008
September 22, 2006
September 15, 2009
As of the end of April 2014, the current amount in principal and interest owed
under the David Acheson Notes was approximately $2,923,944.
25. The Revocable Trust addresses the David Acheson Notes in
Section 6(a)(i). This section directs the trustee to set aside the David Acheson
Share, with such share “valued at $3,000,000 plus all promissory notes and
other indebtedness owed by David J. Acheson to Grantor [Thomas M.
Acheson] at the time of Grantor’s death.” The Revocable Trust further
provides in Section 9 that the David Acheson Share is to be transferred, paid
over and distributed to defendant David Acheson by the Trustees.
(Doc. 1 ¶¶ 5-25.)
On April 4, 2014, David and Cameron Acheson filed a Petition for Declaratory
Judgment and Other Relief in the Probate Court in Jefferson County, Alabama. (See doc. 117.) This Petition did not seek any specific relief or declaration regarding the David Acheson
Share. It sought, inter alia, a determination of beneficiaries under the Revocable Trust and
enforcement of certain rights under Alabama trust law to copies of trust documents and
reports from the Trustees.
The instant action was filed on May 7, 2014, depositing $3,000,000 in the court’s
registry and asking the court to decide the issue of the David Acheson Share and to enjoin
state-court proceedings pending that determination.3 On May 27, 2014, David and Cameron
Acheson filed an Amended and Restated Declaratory Judgment Petition and Other Relief in
the Probate Court of Jefferson County, Alabama. (Doc. 14-1.) This pleading sought, inter
alia, a declaratory judgment invalidating the Revocable Trust, including the Sixth
Amendment and Restatement, based on Thomas Acheson’s lack of mental and physical
capacity and/or undue influence.
Sheree Acheson filed her Answer and Cross Claim against David Acheson in this
court on May 30, 2014. (Doc. 13.) On that same day, David Acheson filed his Motion to
Federal law provides:
In any civil action of interpleader or in the nature of interpleader under section
1335 of this title, a district court may issue its process for all claimants and
enter its order restraining them from instituting or prosecuting any proceeding
in any State or United States court affecting the property, instrument or
obligation involved in the interpleader action until further order of the court.
Such district court shall hear and determine the case, and may discharge the
plaintiff from further liability, make the injunction permanent, and make all
appropriate orders to enforce its judgment.
28 U.S.C. § 2361.
Dismiss or, in the alternative, Motion to Abstain, (doc. 14); he filed his Motion to Dismiss
the Cross Claim on June 13, 2014, (doc. 18).
A. INTERPLEADER JURISDICTION – 28 U.S.C. § 1335
The court has subject-matter jurisdiction over interpleader actions pursuant to 28
U.S.C. § 1335, which states in pertinent part –
(a) The district courts shall have original jurisdiction of any civil action
of interpleader or in the nature of interpleader filed by any person . . . having
in his or its custody or possession money or property of the value of $500 or
more . . ., if
(1) Two or more adverse claimants, of diverse citizenship as defined
in subsection (a) or (d) of section 1332 of this title, are claiming or may
claim to be entitled to such money or property . . .; and if (2) the
plaintiff has deposited such money or property . . . into the registry of
the court, there to abide the judgment of the court . . . .
28 U.S.C. § 1335(a).
Plaintiffs have deposited $ 3,000,000, which represents part of the David Acheson
Share. The alleged adverse claimants to the David Acheson Share are David Acheson, a
resident of Florida, and Sheree Acheson, a resident of Alabama. Each claims to be entitled
to the so-called David Acheson Share – in whole or in part. David Acheson contends that
Sheree Acheson does not claim any part of the $3 million deposited by plaintiffs with the
court. (Doc. 14 at 5.) However, “[Sheree] Acheson maintains that neither the full
$3,000,000 that has been interplead into court nor any additional monies are due to be paid
to David Acheson.” (Doc. 22 at 16.) This dispute as to the payment of the David Acheson
Share from the res of the Revocable Trust is sufficient to establish the conflicting claims
required by § 1335. Therefore, the court finds that it has jurisdiction pursuant to the
David Acheson’s Motion to Dismiss based on a lack of jurisdiction under § 1335 is
due to be dismissed.
B. ALABAMA’S ABATEMENT STATUTE – ALA. CODE § 6-5-440
David Acheson alleges that the instant action is due to be dismissed based on
Alabama’s abatement statute, Ala. Code § 6-5-440,4 because plaintiffs’ claims are
compulsory counterclaims that must be filed in the probate court and plaintiffs cannot
maintain their action in two courts in Alabama at the same time. (Doc. 14 ¶ 14.) In response,
plaintiffs argue, inter alia, that “an Alabama procedural rule has no field of operation in the
federal interpleader context. ‘Questions of jurisdiction and procedure [in] federal court
interpleader actions are determined by federal law.’” (Doc. 21 at 13-14 [quoting Orseck,
P.A. v. Servicios Legales De Mesoamerica S. De R.L., 699 F. Supp. 2d 1344, 1348 n.3 (S.D.
The court agrees that Alabama’s abatement statute, Ala. Code § 6-5-440, “should not
play any role in the decision whether to retain or dispose of litigation.” American Cas. Co.
“No plaintiff is entitled to prosecute two actions in the courts of this state at the same
time for the same cause and against the same party. In such a case, the defendant may
require the plaintiff to elect which he will prosecute, if commenced simultaneously, and the
pendency of the former is a good defense to the latter if commenced at different times.” Ala.
Code § 6-5-440.
of Reading v. Skilstaf, Inc., 695 F. Supp. 2d 1256, 1260 (M.D. Ala. 2010)(internal quotations,
citation, and footnote omitted).
Questions of jurisdiction and procedure of a federal court interpleader
actions are determined by federal law. Coastal Air Lines, Inc. v. Dockery, 180
F.2d 874 (8th Cir. 1950). As to matters of substantive law and choice of law
questions in actions premised on diversity jurisdiction, the federal court must
apply the law of the forum state. Griffin v. McCoach, 313 U.S. 498, 61 S. Ct.
1023, 85 L. Ed. 1481 (1941). Thus, the federal interpleader statute is merely
a special brand of diversity jurisdiction and the determination of who had the
right to an interpleader fund is made under the law of the forum state.
Metropolitan Life Ins. Co. v. O'Ferrall Ochart, 635 F. Supp. 119 (D.C. Puerto
Wachovia Bank, N.A. v. Tien, 534 F. Supp. 2d 1267, 1284 (S.D. Fla. 2007).
Therefore, the court finds that the Alabama abatement statute, a procedural rule, does
not apply to this matter. Rather, any issue regarding abatement based on the pending probate
proceeding is properly addressed pursuant to federal abstention doctrines.
C. PROBATE EXCEPTION
The Supreme Court has “recognized a ‘probate exception’ . . . to otherwise proper
federal jurisdiction.” Marshall v. Marshall, 547 U.S. 293, 308 (2006)(citations omitted).
“[T]he probate exception reserves to state probate courts the probate or annulment of a will
and the administration of a decedent’s estate; it also precludes federal courts from
endeavoring to dispose of property that is in the custody of a state probate court. But it does
not bar federal courts from adjudicating matters outside those confines and otherwise within
federal jurisdiction.” Id. at 311-12.
“Property properly conveyed to a trust, even a revocable trust, is not part of the
settlor’s ‘estate.’” Baldwin v. Estate of Baldwin, 875 So. 2d 1138, 1141 (Ala. 2003)(citing
Russell v. Russell, 758 So. 2d 533, 538-39 (Ala. 1999)). “As a threshold matter, the probate
exception only applies if the dispute concerns property within the custody of a state court,”
and, “Assets placed in an inter vivos trust generally avoid probate, since such assets are
owned by the trust, not the decedent, and therefore are not part of the decedent’s estate.”
Curtis v. Brunsting, 704 F.3d 406, 409-10 (5th Cir. 2013)(footnote omitted). “In other
words, because the assets in a living or inter vivos trust are not property of the estate at the
time of the decedent’s death, having been transferred to the trust years before, the trust is not
in the custody of the probate court and[,] as such[,] the probate exception is inapplicable to
disputes concerning administration of the trust.” Id. at 510.
The court finds that the probate exception to diversity jurisdiction does not deprive
the court of jurisdiction to determine the rights of David Acheson and Sheree Acheson to the
interpleaded funds. Therefore, David Acheson’s Motion to Dismiss the interpleader action
based on a lack of jurisdiction will be denied.
The Supreme Court has held:
“It is most true that this Court will not take jurisdiction if it should not,”
Chief Justice Marshall famously wrote, “but it is equally true, that it must take
jurisdiction if it should . . . . We have no more right to decline the exercise of
jurisdiction which is given, than to usurp that which is not given.” Cohens v.
Virginia, 6 Wheat. 264, 404, 5 L. Ed. 257 (1821); see Marshall v. Marshall,
547 U.S. 293, 298-299, 126 S. Ct. 1735, 164 L. Ed. 2d 480 (2006). While
Chief Justice Marshall’s statement bears “fine tuning,” there is surely a starting
presumption that when jurisdiction is conferred, a court may not decline to
exercise it. See R. Fallon, J. Manning, D. Meltzer, & D. Shapiro, Hart &
Wechsler's The Federal Courts and the Federal System 1061-1062 (6th ed.
Union Pacific R. Co. v. Brotherhood of Locomotive Engineers and Trainmen General
Committee of Adjustment, Cent. Region, 558 U.S. 67, 71 (2009).
Recently, the Supreme Court held:
Federal courts, it was early and famously said, have “no more right to
decline the exercise of jurisdiction which is given, than to usurp that which is
not given.” Cohens v. Virginia, 6 Wheat. 264, 404, 5 L. Ed. 257 (1821).
Jurisdiction existing, this Court has cautioned, a federal court’s “obligation”
to hear and decide a case is “virtually unflagging.” Colorado River Water
Conservation Dist. v. United States, 424 U.S. 800, 817, 96 S. Ct. 1236, 47 L.
Ed. 2d 483 (1976). Parallel state-court proceedings do not detract from that
obligation. See ibid.
Sprint Communications, Inc. v. Jacobs, 134 S. Ct. 584, 590-591 (2013). “Concurrent state
and federal proceedings are generally tolerated. Furthermore, to complain of the costs arising
out of concurrent litigation in separate jurisdictions is to complain generally of federalism,
which suffers inefficiencies and multiplicity for its own sake.” Provenza v. Stamps, No.
1:09cv191-LG-RHW, 2011 WL 356604, *3 (S.D. Miss. Feb. 1, 2011)(quoting Carpenter v.
Wichita Falls Indep. Sch. Dist., 44 F.3d 362, 371 (5th Cir. 1995)(“Furthermore, although we
recognize that concurrent state and federal proceedings are generally tolerated, the federal
court may, in the exceptional case, dismiss its proceedings because of a pending state action.”
(citing Colorado River Water Conservation Dist. v. United States, 424 U.S. 800 (1976);
Moses H. Cone Memorial Hospital v. Mercury Const. Corp., 460 U.S. 1 (1983))))(internal
citations and quotations omitted).
1. Wilton/Brillhart Abstention
David Acheson contends that this case should be dismissed based upon
Wilton/Brillhart5 abstention. However, the Wilton/Brillhart doctrine has only been applied
when the district court has discretion to decline to hear a case, such as pursuant to the
Declaratory Judgment Act, 28 U.S.C. § 2201. The Eleventh Circuit has held:
The Declaratory Judgment Act is an enabling Act, which confers a
discretion on courts rather than an absolute right upon the litigant. It only
gives the federal courts competence to make a declaration of rights; it does not
impose a duty to do so. In fact . . ., the Supreme Court has expressed that it
would be uneconomical as well as vexatious for a federal court to proceed in
a declaratory judgment suit where another suit is pending in a state court
presenting the same issues, not governed by federal law, between the same
parties. The Supreme Court has warned that gratuitous interference with the
orderly and comprehensive disposition of a state court litigation should be
avoided. This warning should be heeded.
Ameritas Variable Life Ins. Co. v. Roach, 411 F.3d 1328, 1330-31 (11th Cir. 2005)(quoting
Wilton, 515 U.S. at 287; citing and quoting Brillhart, 316 U.S. at 494-95)(internal citations
and quotations omitted; emphasis added). The interpleader statute, unlike declaratory
judgment, does not confer discretion on this court to decline to exercise jurisdiction.
Therefore, defendant’s Motions to Dismiss or Abstain based on Wilton/Brillhart
doctrine is due to be denied.
Wilton v. Seven Falls Co., 515 U.S. 277 (1995); Brillhart v. Excess Ins. Co., 316 U.S.
In the alternative, David Acheson contends that plaintiffs’ claim for a declaratory
judgment in Count II of their Complaint “dwarfs and dominates the Plaintiffs’ interpleader
claim and the outcome of the interpleader claim hinges on the outcome of the declaratory
judgment claim.” (Doc. 24 at 6.) Therefore, he contends, “This Court should abstain from
hearing Plaintiffs’ declaratory judgment claim and stay consideration of the interpleader
claim and Sheree’s Crossclaim until after the Probate Court has decided the parallel state
court action.” (Id. at 6.)
The court finds that whether to dismiss or abstain from deciding plaintiffs’ declaratory
judgment claim turns on whether the court has supplemental jurisdiction of the declaratory
judgment claim and whether that claim falls within the category of claims for which the court
has supplemental jurisdiction but may decline to exercise it.
Section 1367 provides:
(a) Except as provided in subsections (b) and (c) or as expressly provided
otherwise by Federal statute, in any civil action of which the district courts
have original jurisdiction, the district courts shall have supplemental
jurisdiction over all other claims that are so related to claims in the action
within such original jurisdiction that they form part of the same case or
controversy under Article III of the United States Constitution. Such
supplemental jurisdiction shall include claims that involve the joinder or
intervention of additional parties.
(c) The district courts may decline to exercise supplemental jurisdiction over
a claim under subsection (a) if –
(1) the claim raises a novel or complex issue of State law,
(2) the claim substantially predominates over the claim or claims over
which the district court has original jurisdiction,
(3) the district court has dismissed all claims over which it has original
(4) in exceptional circumstances, there are other compelling reasons
for declining jurisdiction.
28 U.S.C. 1367(a), (c).
The court finds that plaintiffs’ declaratory judgment claim – seeking a determination
that the Sixth Amendment and Restatement of the Thomas M. Acheson Revocable Trust is
valid and asking the court to interpret its meaning – is “so related to [the interpleader claim,
the claim] within [the court’s] original jurisdiction that [it] form[s] part of the same case or
controversy under Article III of the United States Constitution.” See 28 U.S.C. § 1367(a).
Therefore, the court has supplemental jurisdiction over the declaratory judgment claim.
David Acheson contends that the declaratory judgment claim predominates over the
interpleader claim. “A district court may decline to exercise supplemental jurisdiction over
a state claim if it ‘substantially predominates over the claim or claims over which the district
court has original jurisdiction.’” Morgan v. Christensen, No. 14-10922, 2014 WL 4402063,
*1 (11th Cir. Sept. 8, 2014)(quoting 28 U.S.C. § 1367(c)(2))(unpublished).6 “Substantial
predominance exists ‘when it appears that a state claim constitutes the real body of a case,
Eleventh Circuit Rule 36-2 provides, in pertinent part, “An opinion shall be
unpublished unless a majority of the panel decides to publish it. Unpublished opinions are
not considered binding precedent, but they may be cited as persuasive authority.” 11th Cir.
R. 36-2 (emphasis added).
to which the federal claim is only an appendage.’” Id. (quoting Parker v. Scrap Metal
Processors, Inc., 468 F.3d 733, 744 (11th Cir.2006)). Although the declaratory judgment
claim is an important part of the relief sought by plaintiffs, it is not more important than the
interpleader claim. Therefore, the court finds that the declaratory judgment claim does not
predominate over the interpleader claim.
Because this case contains claims for declaratory relief and interpleader relief, the
Colorado River doctrine applies to determine whether the court should abstain in favor of
the state probate court proceedings. See Mega Life and Health Ins. Co. v. Tordion, 399 F.
Supp. 2d 1366, 1369-70 (S.D. Fla. 2005).7
In Tordion, the district court held:
A federal court does not have such broad discretion [as described by the
Wilton/Brillhart doctrine], however, when a plaintiff seeks coercive relief,
such as rescission, in addition to a declaration under the Declaratory Judgment
Act. See Occidental Life Ins. Co. v. Nichols, 216 F.2d 839, 842 (5th Cir.
1954)(district court erred in dismissing life insurer’s suit to rescind and declare
policy void for insured’s misrepresentations concerning his medical history
where inter alia case “was not merely for a declaratory judgment, but also for
rescission”); PPG Industries, Inc. v. Continental Oil Co., 478 F.2d 674, 679
(5th Cir. 1973) (court has broad discretionary power to dismiss a suit under
Brillhart only when the plaintiff exclusively seeks a declaratory judgment);
Gov’t Employees Ins. Co. v. Dizol, 133 F.3d 1220, 1225 (9th Cir.
1998)(“[W]hen other claims are joined in an action for declaratory relief (e.g.,
. . . rescission . . .) the district court should not, as a general rule, remand or
decline to entertain the claim for declaratory relief.”); Southwind Aviation, Inc.
v. Bergen Aviation, Inc., 23 F.3d 948, 951 (5th Cir. 1994)(inclusion of
“coercive remedies indisputably removes this suit from the ambit of a
declaratory judgment action”); Village of Westfield v. Welch’s, 170 F.3d 116,
124, n.5 (2nd Cir. 1999)(Wilton’s discretionary standard only applies where the
federal action seeks purely declaratory relief).
2. Colorado River Abstention
Regarding Colorado River abstention, the Eleventh Circuit has held:
In Colorado River Water Conservation District v. United States, the
Supreme Court held that a federal court could abstain from a case if (1) a
parallel lawsuit was proceeding in state court, and (2) judicial-administration
reasons so demanded abstention. 424 U.S. 800, 818-20, 96 S. Ct. 1236, 47 L.
Ed.2d 483 (1976). Since the general rule is that “the pendency of an action in
the state court is no bar to proceedings concerning the same matter” in federal
court, and since the federal courts have a virtually unflagging obligation to
exercise their jurisdiction, Colorado River abstention applies in exceptional
circumstances. Id. at 817-18, 96 S. Ct. 1236 (internal quotation marks
omitted). “Only the clearest of justifications” merits abstention. Id. at 819, 96
S. Ct. 1236. As the Supreme Court explained, and as this Court has repeatedly
cautioned, abstention “is an extraordinary and narrow exception to the duty of
a District Court to adjudicate a controversy properly before it.” Id. at 813, 96
S. Ct. 1236 (quoting Cnty. of Allegheny v. Frank Mashuda Co., 360 U.S. 185,
188-89, 79 S. Ct. 1060, 3 L. Ed. 2d 1163 (1959)); Ambrosia Coal & Constr.
Co. v. Pagés Morales, 368 F.3d 1320, 1331 (11th Cir. 2004); see also Met.
Life v. Lockette, 155 F.3d 1339, 1341 (11th Cir. 1998)(“Abstention from the
exercise of federal jurisdiction is the exception, not the rule.”). And while
abstention as a general matter is rare, Colorado River abstention is particularly
rare, “permissible in fewer circumstances than are the other abstention
doctrines.” Ambrosia Coal, 368 F.3d at 1331. Thus, we have cautioned that
Rather, the stricter requirements embodied in Colorado River Water
Conservation Dist. v. United States, 424 U.S. 800, 96 S. Ct. 1236, 47 L. Ed.
2d 483 (1976), must be satisfied in order for a federal district court to dismiss
a suit seeking declaratory relief and rescission in light of a parallel state court
case. See Kelly Inv. Inc. v. Continental Common Corp., 315 F.3d 494, 497 n.4
(5th Cir. 2002)(“[W]hen an action contains any claim for coercive relief, the
Colorado River abstention doctrine is ordinarily applicable.”)(citing Black Sea
Inv., Ltd. v. United Heritage Corp., 204 F.3d 647, 652 (5th Cir. 2000));
Southwind Aviation, Inc., 23 F.3d at 948 (“When actions involve coercive
relief the trial court must apply the standards enunciated by the Court in
Colorado River . . .”).
Tordion, 399 F. Supp. 2d at 1369-70.
“dismissal of an action in deference to parallel state proceedings is an
extraordinary step that should not be undertaken absent a danger of a serious
waste of judicial resources.” Noonan S., Inc. v. Cnty. of Volusia, 841 F.2d
380, 383 (11th Cir. 1988); see also First Franklin Fin. Corp. v. McCollum,
144 F.3d 1362, 1364 (11th Cir. 1998)(per curiam)(“[D]ismissal is warranted
in light of a concurrent state court action only when a balancing of relevant
factors, heavily weighted in favor of the exercise of jurisdiction, shows the
case to be exceptional.” (internal quotation marks omitted)).
Where there are parallel federal and state proceedings, abstention under
the Colorado River doctrine is still only warranted in exceptional
circumstances. Federal courts must consider six factors in determining
whether Colorado River abstention is appropriate:
(1) the order in which the courts assumed jurisdiction over property; (2)
the relative inconvenience of the fora; (3) the order in which
jurisdiction was obtained and the relative progress of the two actions;
(4) the desire to avoid piecemeal litigation; (5) whether federal law
provides the rule of decision; and (6) whether the state court will
adequately protect the rights of all parties.
TranSouth [Financial Corp. v. Bell], 149 F.3d [1292,] 1294-95 [(11th Cir.
1988)]. No single factor is dispositive, and we are required to weigh the
factors with a heavy bias favoring the federal courts’ obligation to exercise the
jurisdiction that Congress has given them. See Lockette, 155 F.3d at 1341; Am.
Bankers Ins. Co. of Fla. v. First State Ins. Co., 891 F.2d 882, 884-85 (11th Cir.
1990). Finally, we apply these factors flexibly and pragmatically, not
mechanically. Ambrosia Coal, 368 F.3d at 1332.
Jackson-Platts v. General Elec. Capital Corp., 727 F.3d 1127, 1140-41 (11th Cir. 2013).
For the reasons set forth below, the court finds that the Colorado River factors favor
this court’s exercise of jurisdiction.
Factor 1: The Order in Which the Courts Assumed Jurisdiction over Property
This factor favors retention of jurisdiction in this court. Plaintiffs have deposited
$3,000,000 into the court’s registry. Nothing in the record indicates that the probate court
has assumed jurisdiction over any of the property in the Revocable Trust.
Factor 2: The Relative Inconvenience of the Fora
This factor favors this court’s exercise of jurisdiction. The focus of this factor is “on
the physical proximity of the federal forum to the evidence and the witnesses.” JacksonPlatts, 727 F.3d at 1141 (citation omitted). The federal forum and the state probate court are
both located in Birmingham, Alabama. Because “the federal forum and the state forum are
equally convenient[,] this factor . . . cuts against abstention.” Id. (citations omitted).
Factor 3: The Order in Which Jurisdiction Was Obtained and the Relative
Progress of the Two Actions
This factor favors the court’s exercise of jurisdiction. David Acheson and his sister
filed a lawsuit in the probate court before the plaintiffs filed the instant action. However, no
significant progress in that action has occurred. Indeed, the probate court may be waiting for
this court to rule on David Acheson’s Motions before proceeding.
Factor 4: The Desire to Avoid Piecemeal Litigation
This factor favors abstention. Certainly the probate court could entertain plaintiffs’
claims and, thus, avoid piecemeal litigation.
Factor 5: Whether Federal Law Provides the Rule of Decision
This factor favors the court’s exercise of jurisdiction. Alabama law will apply to
determine the interests of the parties under the terms of the Revocable Trust. However, “this
factor favors abstention only where the applicable state law is particularly complex or best
left for state courts to resolve. Id. at 1143. Interpretation of the terms of the Trust raises no
“thorny and difficult state law questions.” Id.
Factor 6: Whether the State Court Will Adequately Protect the Rights of All
This court finds no reason to assume that either the probate court or this court will not
adequately protect the rights of all parties. Therefore, this factor is neutral. Id. at 1143.
Based on the foregoing, David Acheson’s Motion to Abstain based on the Colorado
River factors will be denied.
E. MOTION FOR DISMISS COUNTERCLAIM FOR FAILURE TO JOIN AN
David Acheson contends that Sheree Acheson’s counterclaim is due to be dismissed
because she did not join the estate of Thomas Acheson, which he contends is an
indispensable party. (Doc. 18 ¶ 4.) The court notes that plaintiffs have filed a Motion to
Amend that seeks to add the Estate of Thomas M. Acheson. (Doc. 29.) The Motion to
Amend will be granted and, therefore, the court will deny David Acheson’s Motion to
Dismiss, (doc. 18), as moot.
For the foregoing reasons, the court is of the opinion that it has jurisdiction to decide
the federal interpleader claims and Sheree Acheson cross claim and that abstention is not
warranted. An Order denying David Acheson’s Motion to Dismiss, or, in the alternative,
Motion to Abstain, (doc. 14), and his Motion to Dismiss Crossclaim, (doc. 18), will be
entered contemporaneously with this Memorandum Opinion.
DONE this 18th day of February, 2015.
SHARON LOVELACE BLACKBURN
UNITED STATES DISTRICT JUDGE
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