Davis et al v. Hall et al
OPINION AND ORDER granting 40 Motion to Transfer. All other pending motions are denied without prejudice. Signed by Judge J. Leon Holmes on 10/20/2015. (ks)
IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF ARKANSAS
RON DAVIS, Individually and as
Personal Representative of the Estate of
Page G. Schumacher, Deceased; and
SHARON DAVIS, BRADLEY P. DAVIS,
ALICYN HEFLEY, and JULIANA BROOK
DAVIS, as named beneficiaries of the
Page Schumacher Estate, Page Schumacher Trust
No. 4:15CV00079 JLH
REGIONS FINANCIAL CORPORATION;
REGIONS BANK; REGIONS TRUST;
RICHARD WIMMER; GREGORY FLANAGAN;
CONNIE DAVIS; CYNTHIA SIEGEL; REGINA TODD;
MICHAEL TODD; and RICHARD TODD
OPINION AND ORDER
This is a fraud case. The dispute concerns events related to a trust created by the Page G.
Schumacher, who resided in Branson, Missouri, before her death. Document #41 at 2. The
plaintiffs commenced this action in this district alleging five counts: (1) common law fraud, (2)
negligence and breach of fiduciary duty, (3) improper payments to Regina Todd, (4) civil
conspiracy, and (5) violation of the Racketeer Influenced and Corrupt Organizations Act (“RICO”),
18 U.S.C. § 1962 and § 1964. Before the Court are motions to dismiss on various grounds and, in
the alternative, a request to transfer the case to the Western District of Missouri. For reasons that
will be explained, the motion to transfer is granted.
On June 25, 1996, Schumacher created the Page G. Schumacher Trust naming herself as
trustee and Union Planters Bank of Southwest Missouri as the successor trustee. Document #27 at
4 ¶ 6. Regions Bank is the successor-in-interest to Union Planters Bank. Id. On April 16, 2008,
Regina Todd obtained a durable power of attorney appointing herself as attorney-in-fact for
Schumacher. Id. ¶ 7. Connie Davis, an employee of Regions Bank, drafted the durable power of
attorney and notarized Schumacher’s signature. Id. ¶ 8. The plaintiffs allege that the signature is
not Schumacher’s. Id. ¶ 7. The power of attorney was used on September 28, 2009, to resign
Schumacher as trustee of the Trust. Id. Regions Bank was named successor trustee, accepted the
appointment, and delegated Cynthia Siegel as the authorized signor for the Trust. Id. The plaintiffs
allege that the durable power of attorney is invalid for a number of reasons, one of which is that
Schumacher’s signature was forged. Id. at 5 ¶ 9.
At some point, using the power of attorney, Siegel, Connie Davis, Regina Todd, and Richard
Todd entered Schumacher’s safe deposit box and made an inventory of the assets located there. Id.
at ¶ 12. Sharon Davis requested and received from Regions Bank, via Siegel, that inventory. Id.
Another copy was provided to the Missouri Probate Court by Regina Todd. Id. According to the
plaintiffs, these documents differ in that one has the safe deposit box number, lists the people present
when the box was entered, and omits the date that the inventory was taken. Id. The second version
has the date the inventory was taken but not the other information. Id. The plaintiffs state that the
list provided by Regions Bank shows the entry date to the safe deposit box as August 26, 2009, but
Regions Bank was not appointed as successor trustee until September 28, 2009. Id. at 6-7 ¶ 12.
Additionally, the plaintiffs allege that Regions Bank began acting as successor trustee without
authority when Cynthia Siegel deposited checks into a Regions Bank Trust account payable to the
Trust on August 26, 2009 with the checks dated September 28, 2009. Id. at 7 ¶ 13.
The plaintiffs allege that Regions Bank failed to provide thirty days notice to the
beneficiaries of the resignation of Schumacher as trustee. Id. ¶ 14. They allege that the power of
attorney was illegally altered. Id. at 8 ¶ 16. They also allege the Trust terms were violated. Id. at
9-11 ¶¶ 18-21. And they allege other documents were forged or altered, some of which were used
by Regina Todd to take control of the Trust’s assets. Id. at 11 ¶ 22.
Regions Financial Corporation is a Delaware Corporation with its principal place of business
in Birmingham, Alabama. Document #37-4 at 1. It is a financial services holding company and
owns 100% of the stock of Regions Bank. Id. Regions Financial Corporation is registered with the
Arkansas Secretary of State, but it has no physical presence in Arkansas, conducts no retail,
commercial banking, trust or investment activity in Arkansas. Id. The amended complaint alleges
that through its employees, Richard Wimmer and Gregory Flanagan, Regions Financial Corporation
breached its duty to the beneficiaries of the Trust by converting the assets into risky forms of
investments unintended by the settlor and by them engaging in “churning.” Document #27 at 18.
Regions Bank is an Alabama state-chartered bank with its principal place of business in
Birmingham, Alabama. Document #37-4 at 2. Regions Bank is qualified to do business in Arkansas
as an “Out of State Bank” and conducts banking operations in Arkansas. Id. The amended
complaint alleges that Regions Bank has earned substantial fees due to fraudulent activities in
connection with the Trust. Document #27 at 16 ¶ 28. The amended complaint also alleges that
Regions Bank violated its fiduciary duty as trustee by not using reasonable care and skill in the
investing and handling of the trust assets. Id. at 17-19 ¶¶ 36-42.
The amended complaint alleges that Richard Wimmer and Gregory Flanagan breached their
fiduciary duty by investing trust assets in forms of investments that were riskier than intended by
Schumacher and that they engaged in “churning” the securities held by the Trust. Document #27
at 18 ¶¶ 37-38. The amended complaint further alleges that Wimmer and Flanagan used forged
documents in connection with the investment of trust funds. Id. at 21 ¶ 52. Neither is a resident of
Arkansas. Id. at 2 ¶ 3.
Cynthia Siegel is a vice president and trust advisor for Regions Private Wealth Management,
a division of Regions Bank. Document #37-2 at 1. She is responsible for the administration of the
Trust. Id. Siegel lives and works in Illinois, and she occasionally travels for work, but she has never
traveled to Arkansas. Id. Although Siegel has mailed correspondence and other materials to Ron
and Sharon Davis in Arkansas, she has not transacted business in Arkansas relating to the Trust. Id.
at 2. Siegel does not own real property in Arkansas, nor has she entered into any contracts in
Arkansas. Id. Siegel was the designated authorized signor of the Trust. Document #27 at 6 ¶ 10.
She allegedly participated in providing a fraudulently altered asset inventory list using the mail or
wire which crossed state lines. Id. ¶ 12. She also allegedly deposited checks into the Trust account
prior to being authorized to do so and entered into Schumacher’s safe deposit box without
authorization. Id. at 7 ¶ 13. Siegel sent copies of the power of attorney that the plaintiffs claim is
fraudulent to the Missouri Department of Health and Senior Services and to Sharon Davis in
Arkansas. Id. at 8 ¶ 16. The plaintiffs allege that Siegel participated in a conspiracy to commit
fraud, breached her fiduciary duty, made wrongful payments to Regina Todd, and committed
negligence, id. at 20-21 ¶¶ 47-51, and violated the RICO statute. Id. at 21-22 ¶¶ 52-58.
Connie Davis lives in Missouri and works for Regions Bank there. Document #37-3 at 1.
She does not own real property in Arkansas and has never traveled to or transacted business in
Arkansas related to the Page Schumacher Trust or any issues related to this lawsuit. Id. Davis
notarized the allegedly forged signature of Schumacher on the power of attorney. Document #27
at 4 ¶ 8. Davis was present when entry was made into Schumacher’s safe deposit box. Id. at 6 ¶ 12.
The amended complaint alleges that she participated in a civil conspiracy to commit fraud,
negligence, breached her fiduciary duty, and wrongful payments to Regina Todd, id. at 20-21 ¶¶ 4751, and violated the RICO statute. Id. at 21-22 ¶¶ 52-58.
Regions Trust is not a business entity or other legal entity. Document #37-4 at 2. The
nominal defendants, Michael Todd and Richard Todd, are residents of Iowa. Document #27 at 2 ¶ 2.
They are named as defendants because they are beneficiaries of the Trust, but the plaintiffs do not
allege that they engaged in the conduct giving rise to this lawsuit. Id.
Regina Todd is a resident of Iowa. Document #53-1 at 1. She has never worked in
Arkansas, does not own real property in Arkansas, and has transacted no business or entered into
any contracts in Arkansas. Id. She has traveled through Arkansas once, on a trip unrelated to the
events of this lawsuit. Id. The amended complaint alleges that Regina Todd participated in the
creation of a forged power of attorney that gave her control over Schumacher’s personal life and
financial affairs. Document #27 at 5 ¶ 9. She allegedly used the power of attorney to resign
Schumacher as trustee and appoint Regions Bank instead. Id. at 6 ¶ 10. She also allegedly received
improper payments that she knew to be improper. Id. at 19-20 ¶¶ 43-46. Finally, she is alleged to
have participated in the civil conspiracy with Davis and Siegel and violated the RICO statute. Id.
at 20-23 ¶¶ 47-58.
Several motions are pending. Regions Financial Corporation, Regions Trust, Cynthia Siegel,
Richard Wimmer, Gregory Flanagan, and Connie Davis filed a motion to dismiss the amended
complaint for lack of personal jurisdiction.1 Document #36. In the alternative, that motion seeks
dismissal of the amended complaint for failure to state a claim upon which relief may be granted.
These same defendants, plus Regions Bank, have filed a motion to dismiss the amended complaint
for improper venue, or to transfer the case to the Western District of Missouri, or to abstain.
Document #40. In addition, these defendants have filed a motion to dismiss the claims by Ron
Davis for lack of standing and to dismiss the amended complaint as to common law fraud, civil
conspiracy, and the civil RICO count because the plaintiffs have failed to plead with particularity
as required by rule of civil procedure 9(b). Documents #38 and #42.
Regina Todd has filed a motion to dismiss the amended complaint arguing that this Court
lacks personal jurisdiction over her because she is a resident of Iowa and has not had the necessary
contacts with Arkansas. Document #53.
DEFENDANTS’ MOTION FOR DISMISSAL FOR IMPROPER VENUE
As noted, the Regions Bank defendants have filed an alternative motion requesting this Court
dismiss the plaintiffs’ amended complaint for improper venue, transfer this action to the Western
District of Missouri, Southern Division, or abstain. Document #40. Even if this Court lacks
personal jurisdiction, the Court can transfer this action to a district where venue is proper. “The
language of § 1406(a) is amply broad enough to authorize the transfer of cases, however wrong the
plaintiff may have been in filing his case as to venue, whether the court in which it was filed had
personal jurisdiction over the defendants or not.” Goldlawr, Inc. v. Heiman, 369 U.S. 463, 466, 82
S. Ct. 913, 916, 8 L. Ed. 2d 39 (1962).
Regions Bank concedes that it is subject to personal jurisdiction in Arkansas, so it did not
join this motion.
Venue in a civil action is governed by 28 U.S.C. § 1391(b), which provides:
A civil action may be brought in –
(1) a judicial district in which any defendant resides, if all
defendants are residents of the State in which the district is located;
(2) a judicial district in which a substantial part of the events
or omissions giving rise to the claim occurred, or a substantial part of
the property that is the subject of the action is situated; or
(3) if there is no district in which an action may otherwise be
brought as provided in this section, any judicial district in which any
defendant is subject to the court’s personal jurisdiction with respect
to such action.
Here, subsection (b)(1) does not provide venue in this district, nor in any other district,
because the defendants are residents of different states. None of the allegedly wrong acts or
omissions occurred in the Eastern District of Arkansas, so subsection 1391(b)(2) does not authorize
venue here. Subsection (b)(2) does provide venue in the Western District of Missouri, because that
district is a judicial district in which a substantial part of the events giving rise to the claim occurred.
Branson, Missouri, is in the Western District of Missouri. Page Schumacher resided there and
banked there. The durable power of attorney with her allegedly forged signature was executed there.
Although not expressly stated, it appears that the entry into Schumacher’s safe deposit box occurred
there, the allegedly wrongful deposit of checks occurred there, and the allegedly wrongful payments
were drawn on an account located there. Thus, many, if not most, of the events alleged in the
amended complaint occurred there.
The plaintiffs argue that there is no district in which this action could otherwise be brought,
so venue would be proper in this district pursuant to subsection 1391(b)(3). But, as noted, venue
is proper in the Western District of Missouri, so that subsection does not apply.
The Court has discretion whether to dismiss the case or transfer it to the district where venue
is proper. 28 U.S.C. § 1406(a). In the interest of justice, this action will be transferred to the
Western District of Missouri. See Miller v. Hambrick, 905 F.2d 259, 262 (9th Cir. 1990) (“Normally
transfer will be in the interest of justice because . . . dismissal of an action that could be brought
elsewhere is ‘time-consuming and justice-defeating.’”).
The Regions Bank defendants’ motion to transfer to the Western District of Missouri is
GRANTED because a substantial part of the events giving rise to the lawsuit occurred there.
Document #40. All other pending motions are denied without prejudice.
IT IS SO ORDERED this 20th day of October, 2015.
J. LEON HOLMES
UNITED STATES DISTRICT JUDGE
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