Manley v. DeVazier
ORDER denying without prejudice 3 Motion for injunctive relief. The case will be dismissed without prejudice for want of jurisdiction. Signed by Judge D. P. Marshall Jr. on 5/5/2015. (jak)
IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF ARKANSAS
SHAWN DeVAZIER MANLEY, in her
capacities as Executrix of the Estate of the
Donna A. DeVazier and as Beneficiary of
the Donna A. DeVazier Irrevocable Inter
Vivos Trust No. 1 dated December 29, 2003
THOMAS BRADLEY DeVAZIER, as Trustee
of the Donna A. DeVazier Irrevocable Inter
Vivos Trust No.1 dated December 29, 2003
Among the limited categories of cases over which this Court has subject
matter jurisdiction are those" arising under the Constitution, laws, or treaties
of the United States." 28 U.S.C. §1331. Manley and DeVazier are sister and
brother. Both are Arkansawyers, so there's no diversity. They have a dispute
about who must pay some estate taxes, which are due in a few weeks. Their
mother's taxable estate includes some life insurance proceeds even through
though the money went to a trust. Their dispute, however, doesn't arise
under federal law.
First, federal law does not create a cause of action for Manley to recover
money for taxes due but not yet paid. All the statutes speak clearly: Manley
has a claim for "tax [that] has been paid ... [,]" not taxes that are owed. 26
U.S.C. § 2206, 26 U.S.C. § 2207, 26 U.S.C. § 2207B. Federal law therefore does
not" create the cause of action asserted." Gunn v. Minton, 133 S. Ct. 1059,
1064 (2013). Manley's authorities are about suits to recover estate taxes
already paid. Northern Trust Co. v. Baron, 377F. Supp. 666, 667 (N.D. Ill. 1974);
Owen v. Kronheim, 304 F.2d 957, 958 (D.C. Cir. 1962). Federal question
jurisdiction certainly exists in that situation, but not beforehand.
Second, the deeper issue is whether Manley's case is one of the
"extremely rare exceptions" where a federal question embedded in a
primarily state law case creates jurisdiction in federal court. Gunn, 133 S. Ct.
at 1064-65; see also Grable & Sons Metal Products, Inc. v. Darue Engineering &
Manufacturing, 545 U.S. 308, 312-14 (2005). It is not. Though the law's canvas
here looks like Jackson Pollock got hold of it first, 133 S. Ct. at 1065, at least
the borders of jurisdiction for this case are clear.
DeVazier got the life insurance money as trustee of their mother's trust.
Manley is executrix of their mother's estate-which owes the estate taxes
resulting from the proceeds. DeVazier has refused Manley's requests to
disburse trust funds to pay the taxes, and he is, she says, in breach of his
trustee obligations. Complaint, NQ 1at3-9. Manley seeks to make DeVazier
do right, as she sees it; among other things, she wants the trust to pay the
estate taxes, which are due in a few weeks. NQ 1 at 12-13.
Manley pleads Arkansas law claims for her brother's alleged
mishandling of the trust. "[F]ederal jurisdiction over a state law claim will lie
if a federal issue is: (1) necessarily raised, (2) actually disputed, (3) substantial,
and (4) capable of resolution in federal court without disrupting the federalstate balance approved by Congress." Gunn, 133 S. Ct. at 1059. Manley has
raised her and the estate's entitlement to a trust distribution before the estate
pays the taxes; DeVazier has (so far) not made the distribution. And though
he hasn't appeared or answered, its apparent that he disputes any trust
obligation to pay the taxes now. So requirements one and two are met.
Requirements three and four are not.
This family dispute is not substantial in the required sense. How to pay
the more than two million dollars of estate taxes owed is no doubt important
to these parties and this family. But this "who pays now" controversy is not
important to the federal system as a whole. The tax man wants his dollar, and
doesn't care, at this point, whose dollar it is. If the estate is out of pocket
wrongly, a federal cause of action will be available then. No conflict between
federal and state law is argued. Compare Riggs v. Del Drago, 317 U.S. 95, 102
(1842). This dispute is not substantial in a second sense. Manley's theory is
creative; but the Court is hard pressed to see how federal law is much help at
this point. Common and statutory law about a trustee's obligations in these
circumstances seem more promising, which leads to the last requirement.
Exercising jurisdiction would upset" the appropriate balance of federal
and state judicial responsibilities." Gunn, 133 S. Ct. at 1068. States have a
particularly strong interest in regulating trusts, which concern the property
of their citizens. E.g., Ark. Code Ann.§§ 28-73-101 et seq. At bottom, Manley
and DeVazier have fallen out about the proper administration of their
mother's life insurance trust. Resolving that dispute in federal court, in the
absence of diverse parties, would deprive Arkansas's courts of their properly
preeminent role in this matter involving a fiduciary, a trust, and trust
Manley's motion for injunctive relief, NQ 3, is denied without prejudice.
The case will be dismissed without prejudice for want of jurisdiction.
D.P. Marshall Jr.
United States District Judge
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