United States Life Insurance Company v. Marshall et al
ORDER DISMISSING CASE for lack of jurisdiction. See the attached Memorandum of Decision. The Clerk is directed to close this case. Signed by Judge Vanessa L. Bryant on 5/16/14. (Ives, D)
UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
UNITED STATES LIFE INSURANCE
COMPANY and UNION CENTRAL LIFE
ERIKA MARSHALL, WYLLY MARSHALL,
VIRGINIA MARSHALL, JANINE MARSHALL :
(individually and as legal guardian of L.M.), :
LEANNE HUDSON (individually and as
legal guardian of L.D.), and CHRISTOPHER :
CIVIL ACTION NO.
May 16, 2014
MEMORANDUM OF DECISION DISMISSING CASE FOR LACK OF SUBJECT
Before the Court are two consolidated interpleader actions arising out of
several competing claims to two life insurance policies purchased by and
insuring the life of William Marshall. United States Life Insurance Company (“U.S.
Life”) and Union Central Life Insurance Company (“Union Central”) originally filed
two separate actions for interpleader relief pursuant to Federal Rule of Civil
Procedure 22 against Defendants Erika Marshall, Wylly Marshall, Virginia
Marshall, Janine Marshall (individually and as legal guardian of L.M., a minor
child), Leanne Hudson (individually and as legal guardian of L.D., a minor child),
and Christopher Kenney, to whom these insurance companies have been unable
to distribute the proceeds of two life insurance policies based on various
competing claims. See civil action nos. 3:13-CV-00380 and 3:13-CV-00919. U.S.
Life and Union Central have also invoked this Court’s diversity jurisdiction. The
Court consolidated the two actions under the present docket number in October
2013. [Dkt. # 69].
While interpleader pursuant to Rule 22 is appropriate in this case, this
Court lacks jurisdiction to hear the defendants’ claims pursuant to both the
Rooker-Feldman doctrine and the domestic relations exception to federal
jurisdiction. Thus, the Court dismisses this action sua sponte for lack of subject
The following facts are taken from U.S. Life’s and Union Central’s
complaints, and from the Defendants’ Statements of Claims.
In 1993 William Marshall applied for and was issued a renewable ten-year
term life insurance policy from U.S. Life, policy number 1074918, with a face value
of $1 million and an expiration date of September 27, 2003. Mr. Marshall
designated as primary beneficiary his then-wife, Erika Marshall, and his two thenminor daughters, Wylly and Virginia Marshall, as equal contingent beneficiaries.
[Dkt. 1, U.S. Life Comp. ¶¶10, 11]. Mr. Marshall renewed this policy at its expiry in
2003. [Id. at ¶¶12-14]. In 1993 William Marshall also applied for and was issued a
whole life level term life insurance policy from Union Central, policy number
03039988 and issue date September 13, 1993, with a face value of $500,000. Mr.
Marshall designated Erika Marshall as primary beneficiary and “the children of
this marriage,” Wylly and Virginia Marshall, as equal contingent beneficiaries.
[Dkt. 81, Union Central Compl. ¶¶10, 11].
On June 18, 2002 William and Erika Marshall entered into a Separation
Agreement which was incorporated into a divorce decree issued by the
Connecticut Superior Court for the Judicial Ddistrict of Stamford. [Dkt. 53, Erika
Marshall Claim, ¶3; dkt. 1-1, Erika Ag., ecf. p.16]. Pursuant to paragraph 5.1 of the
Separation Agreement, “[f]or so long as the Husband has an alimony obligation,”
William Marshall was obligated to name Erika Marshall and their children “as the
irrevocable beneficiaries of the insurance on his life in the amounts and under the
policies listed on Schedule B,” which included both the Union Central and U.S.
Life policies. [Dkt. 53, Erika Marshall Claim, ¶3; dkt. 1-1, Erika Ag., ecf. p.20 ¶5.1,
p.38 Sched. B]. Pursuant to paragraph 3.1 of the Separation Agreement, Mr.
Marshall’s alimony obligation to Erika Marshall was to terminate upon the earlier
of the death of either party, Erika Marshall’s marriage, or June 1, 2012. [Dkt. 1-1,
Erika Ag., ecf. p.19 ¶3.1]. On December 4, 2010 the Connecticut Superior Court
modified the June 1, 2012 date to December 1, 2013. [Dkt. 68, J. Marshall & C.
Kenney Special Defenses, ¶13]. Paragraph 5.2 of the Separation Agreement
further provided that William Marshall’s “obligation to provide life insurance for
the minor children shall terminate as to each child as the Husband’s obligation to
support each child ends.” [Dkt. 1-1, Erika Ag., ecf. p.20 ¶5.2].
After his divorce from Erika, William Marshall married Janine Marshall.
Seven years after his divorce from Erika, on July 29, 2009, William Marshall
entered into a Separation Agreement1 with Janine which was incorporated into a
divorce decree issued by the Connecticut Superior Court for the Judicial District
of Stamford. [Dkt. 68, J. Marshall & C. Kenney Special Defenses, ¶16]. Janine
Marshall represents that this Agreement required William Marshall to designate
and maintain Janine as the beneficiary of $750,000 in life insurance death benefits
by naming her beneficiary of the both the Union Central and U.S. Life policies, for
so long as William Marshall was obligated to make alimony payments to Janine.
[Dkt. 68, J. Marshall & C. Kenney Special Defenses, ¶¶18-20]. There is no
evidence or claim that the superior court order that William Marshall designate
his first wife and children beneficiaries until December 1, 2013 was vacated or
William Marshall was further obligated to pay alimony to Janine “until her
death, remarriage or cohabitation.” [Id. at ¶17]. Further, Janine Marshall
represents that “[b]etween the execution of [her] Separation Agreement as an
order of the superior court and the time of his death on December 27, 2012, the
Decedent represented to Janine Marshall and the superior court that Janine
Marshall was a beneficiary under the Policies set forth in Janine’s Separation
Agreement.” [Id. at ¶21]. She further represents that the purpose of the life
insurance clauses in this Agreement were to provide for her support and
maintenance and that of L.M., her and William Marshall’s minor daughter. [Id. at
¶24]. The document in which Janine Marshall makes these claims is not verified
and the transcript of the proceeding is not attached as an exhibit to her pleading.
The parties have not provided the Court with a copy of the Separation
Agreement between Janine and William Marshall.
On August 4, 2009, U.S. Life received a written request from William
Marshall to change the beneficiaries of the U.S. Life policy to Wylly Marshall
($200,000), Virginia Marshall ($150,000), L.M. ($150,000), Leanne Hudson
($250,000), L.D. ($50,000), and Christopher Kenney ($200,000). [Dkt. 1, U.S. Life
Comp. ¶17]. On August 6, 2009 U.S. Life confirmed the change of primary
beneficiaries of the U.S. Life policy. [Dkt. 1, U.S. Life Comp. ¶18]. On or about
August 6, 2009, Union Central also received a written request from William
Marshall to change the beneficiaries of the Union Central policy to Wylly Marshall
(7.5%), Virginia Marshall (5%), L.M. (2.5%), Leanne Hudson (7.5%), L.D. (0.5%),
Christopher Kenney (2%), and Janine Marshall (75% until August 1, 2014), which
request Union Central honored. [Dkt. 81, Union Central Compl. ¶12].
William Marshall died on December 27, 2012. [Dkt. 1, U.S. Life Comp. ¶19].
By letter dated January 3, 2013 to Erika Marshall, U.S. Life confirmed notice of the
death of the decedent and enclosed the claim forms and instructions for
submitting a claim. [Id. at ¶21]. Union Central provided Erika Marshall with the
claim forms and instructions for submitting a claim on the Union Central policy
by letter dated December 28, 2012. [Dkt. 81, Union Central Compl. ¶ 15].
Thereafter, Erika Marshall – who was no longer a listed beneficiary on either
policy – informed both U.S. Life and Union Central by letters dated January 22,
2013 that she "was supposed to be the irrevocable beneficiary" of the policies in
accordance with the terms of the 2002 Separation Agreement between her and
William Marshall, which she enclosed, and that the letters should be considered
formal claims against the policies. [Dkt. 1, U.S. Life Comp. ¶22; dkt. 81, Union
Central Compl. ¶22]. Pursuant to the Separation Agreement between Mr. Marshall
and first wife Erika Marshall, Mr. Marshall’s alimony obligation to Erika terminated
upon his death. [Dkt. 53, Erika Marshall Claim, ¶5; dkt. 1-1, Erika Ag., ¶3.1].
Erika Marshall argues that she is entitled to the proceeds of both policies
based on the explicit terms of her 2002 Separation Agreement with William
Marshall. [Dkt. 53, Erika Marshall Claim]. Janine Marshall and Christopher
Kenney, however, argue that “it is unfair, inequitable and unconscionable for
Erika to have the benefit of all of the proceeds of [the life insurance policies]” for
reasons including that Janine Marshall is under fifty years of age while Erika
Marshall is over fifty; Erika Marshall is “a person of independent wealth and
means” while Janine is not wealthy and is underemployed as a result of her
obligations as a mother to L.M., which also prevents her from seeking more
gainful employment; L.M. is a minor while Wylly and Virginia Marshall have
reached the age of majority; William Marshall “never intended to provide a death
benefit to Erika except to secure his obligation to pay alimony;” at the time of Mr.
Marshall’s death he owed alimony to Erika constituting only approximately twenty
percent of the available proceeds of all of his life insurance policies; and because
“[i]t was clearly the intention of the Decedent to provide for the family members
that most needed the financial support.” [Dkt. 68, J. Marshall & C. Kenney
Special Defenses, ¶¶25, 27]. Janine Marshall also claims that pursuant to her
own Separation Agreement with William Marshall she was entitled to $750,000 of
life insurance proceeds immediately upon William Marshall’s death. [Dkt. 68, J.
Marshall & C. Kenney Special Defenses, ¶29].
“Jurisdiction is essentially the authority conferred by Congress to decide a
given type of case one way or the other.” Hagans v. Lavine, 415 U.S. 528, 538
(1974). Jurisdiction must be established as a “threshold matter,” a requirement
that “spring[s] from the nature and limits of the judicial power of the United
States and is inflexible and without exception.” Steel Co. v. Citizens for a Better
Env't, 523 U.S. 83, 94-95 (1998) (internal quotation marks and citation omitted).
Unlike state courts, which are courts of general jurisdiction, federal courts are
courts of limited jurisdiction possessing only that power authorized by the
Constitution and by statute. Mims v. Arrow Fin. Servs, LLC, 132 S. Ct. 740, 747
(2012); Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375, 377 (1994);
U.S. CONST. art. III, § 2. “It is a fundamental precept that federal courts are
courts of limited jurisdiction and lack the power to disregard such limits as have
been imposed by the Constitution or Congress.” Hamilton v. Hamilton-Grinols,
363 F. App'x 767, 768 (2d Cir. 2010) (internal quotation marks and citations
omitted). “It is to be presumed that a cause lies outside this limited jurisdiction,
and the burden of establishing the contrary rests upon the party asserting
jurisdiction.” Kokkonen, 511 U.S. at 377 (internal citations omitted).
Lack of subject matter jurisdiction may be raised at any time by a party or
by the court sua sponte. Gonzalez v. Thaler, 132 S. Ct. 641, 648 (2012) (“When a
requirement goes to subject-matter jurisdiction, courts are obligated to consider
sua sponte issues that the parties have disclaimed or have not presented.
Subject-matter jurisdiction can never be waived or forfeited.”) (internal citations
omitted); Henderson ex rel. Henderson v. Shinseki, 131 S. Ct. 1197, 1202 (2011)
(“Courts do not usually raise claims or arguments on their own. But federal
courts have an independent obligation to ensure that they do not exceed the
scope of their jurisdiction, and therefore they must raise and decide jurisdictional
questions that the parties either overlook or elect not to press.”). “If the court
determines at any time that it lacks subject-matter jurisdiction, the court must
dismiss the action.” Fed. R. Civ. P. 12(h)(3).
a. The Rooker-Feldman Doctrine
The Court first concludes that it does not possess subject matter
jurisdiction over this action pursuant to the Rooker-Feldman doctrine because
the Plaintiffs challenge the validity and or equity of and seek an order of this
court abrogating the terms of the superior court final order dissolving the
marriage of Erika and William Marshall.
The United States Supreme Court is the only federal court that has
jurisdiction to review state court decisions. See District of Columbia Court of
Appeals v. Feldman, 460 U.S. 462, 486 (1983) (“Review of [state court] decisions
may be had only in this Court.”); Johnson v. Smithsonian Inst., 189 F.3d 180, 185
(2d Cir. 1999) (pursuant to the Rooker-Feldman doctrine, “among federal courts,
only the Supreme Court has subject matter jurisdiction to review state court
judgments”). Pursuant to the so-called Rooker-Feldman doctrine, a United States
district court “has no authority to review final judgments of a state court in
judicial proceedings.” Feldman, 460 U.S. at 482; see also Rooker v. Fidelity Trust
Co., 263 U.S. 413, 416 (1923) (noting that “no court of the United States other than
[the Supreme Court] could entertain a proceeding to reverse or modify [a state
court's] judgment for errors”); Russo v. GMAC Mortgage, LLC, 549 F. App’x 8, 9
(2d Cir. 2013) (the Rooker-Feldman doctrine dictates that district courts lack
subject matter jurisdiction “over claims that effectively challenge state court
judgments.”). In other words, “federal district courts do not have jurisdiction
over claims that have already been decided, or that are ‘inextricably intertwined’
with issues that have already been decided, by a state court.” Bridgewater
Operating Corp. v. Feldstein, 346 F.3d 27, 29 (2d Cir. 2003).
Both Janine Marshall and Christopher Kenney explicitly seek review and
modification of the Separation Agreement between decedent William Marshall
and ex-wife Erika Marshall, which was incorporated into the divorce decree
issued by the Connecticut Superior Court and which the claimants agree deemed
Erika Marshall the primary beneficiary of both of decedent’s life insurance
policies at the time of William Marshall’s death. Essentially, Janine and
Christopher beseech this Court to either wholly or partially invalidate the
Separation Agreement between Erika and the decedent in favor of their own
claims to the proceeds of the decedent’s policies, and based upon William
Marshall’s beneficiary elections modified without leave of the Connecticut
Superior Court. To consider the relief these defendants seek and to assert
jurisdiction in this circumstance would constitute “an exercise of appellate
jurisdiction” with which this Court has not been vested. Rooker, 263 U.S. at 416.
It would be impossible for this Court to consider Janine’s (or, for that
matter, Christopher’s, L.M.’s, L.D.’s, or Leanne Hudson’s) claims to a portion of
William Marshall’s life insurance benefits without engaging in direct review of the
two divorce decrees rendered by the Connecticut state courts, the first of which
names Erika Marshall as the primary beneficiary of William Marshall’s life
insurance policies, and the Court could not rule in Janine’s favor without
effectively reversing or contradicting the state court decree as to Erika and
William’s divorce. Such a review is not permissible under Rooker-Feldman. As
courts in this circuit have often held in cases involving matrimonial and custody
disputes, well-settled jurisdictional restrictions bar this Court from adjudicating
this dispute. See, e.g., Elmasri v. England, 111 F. Supp. 2d 212 (E.D.N.Y. 2000)
(Rooker-Feldman doctrine barred district court’s review of complaint alleging a
conspiracy to lie to state court justice handling plaintiff's divorce and custody
proceedings, as complaint was an attempt to overturn, at least in part, decision of
the state court regarding custody of plaintiff's children); Puletti v. Patel, 05 CV
2293 (SJ), 2006 WL 2010809 (E.D.N.Y. July 14, 2006) (plaintiff’s claims were barred
under Rooker-Feldman as they sought to have the district court overturn the state
court stipulation concerning the custody arrangement of plaintiff’s son).
Accordingly, this case is barred by the Rooker-Feldman doctrine and must
b. The Domestic Relations Exception to Federal Jurisdiction
The domestic relations exception to federal jurisdiction also bars this
Court’s review of this action.
The United States Supreme Court has long recognized that “the whole
subject of the domestic relations of husband and wife, parent and child, belongs
to the laws of the States and not to the laws of the United States.” In re Burrus,
136 U.S. 586, 593–94 (1890). Thus, the domestic relations exception to federal
jurisdiction “divests the federal courts of power to issue divorce, alimony, and
child custody decrees.” Ankenbrandt v. Richards, 504 U.S. 689, 703 (1992).
Federal courts “should further abstain from exercising jurisdiction over cases ‘on
the verge’ of being matrimonial in nature.” Hamilton v. Hamilton-Grinols, 363 F.
App’x 767, 769 (2d Cir. 2010) (citing Am. Airlines, Inc. v. Block, 905 F.2d 12, 14 (2d
Cir. 1990)). This exception is rooted in policy considerations recognizing both
the “special proficiency developed by state tribunals over the past century and a
half in handling issues that arise in the granting of such decrees” and that “state
courts are more eminently suited to work of this type than are federal courts,
which lack the close association with state and local government organizations
dedicated to handling issues that arise out of conflicts over divorce, alimony, and
child custody decrees.” Ankenbrandt, 504 U.S. at 704. Correlatively, the Second
Circuit has held that because interpleader is an equitable remedy, “a federal court
may abstain from deciding an interpleader action if another action could
adequately redress the threat that the stakeholder might be held doubly liable.”
Am. Airlines, Inc. v. Block, 905 F.2d at 14.
Here, Janine Marshall recognizes the existence of the Separation
Agreement between Erika and William Marshall, including the term that names
Erika as the primary beneficiary of the U.S. Life and Union Central life insurance
policies. Nonetheless, Janine beseeches this Court to either wholly disregard
this Separation Agreement in favor of her own, or to determine the appropriate
allocation of the proceeds of both the U.S. Life and Union Central policies based
on equity. Such a review would require the Court to make a determination as to
an appropriate allocation of monetary support and maintenance for both Janine
Marshall, the decedent’s second ex-wife, and their minor child, L.M., and to inject
itself into child and spousal support principles which are beyond the ken of this
Court and squarely within the expertise of the Connecticut Superior Court. This
is exactly the “matrimonial in nature” situation in which the domestic relations
exception to this Court’s jurisdiction applies.
Further, as discussed previously, Janine Marshall is asking this Court to
effectively modify the divorce decree issued by the Connecticut superior court as
to the marriage between Erika and William Marshall which explicitly names Erika
Marshall the primary beneficiary of Mr. Marshall’s life insurance policies. The
remaining defendants, with the exception of Erika Marshall, have effectively
asked this Court to do the same. In addition to being barred by the RookerFeldman doctrine, this claim is barred by the domestic relations exception. See
Williams v. Lambert, 46 F.3d 1275, 1283 (2d Cir. 1995) (recognizing that
Ankenbrandt found the domestic relations exception to be “very narrow” and
does not “strip the federal courts of authority to hear cases arising from the
domestic relations of persons unless they seek the granting or modification of a
divorce or alimony decree” or a child custody decree).
The modification of a divorce decree is a creature of state statute. Conn.
Gen. Stat. § 46b-86. That section provides in pertinent part that:
Unless and to the extent that the decree precludes
modification, any final order for the periodic payment of
permanent alimony or support, an order for alimony or support
pendente lite or an order requiring either party to maintain life
insurance for the other party or a minor child of the parties
may, at any time thereafter, be continued, set aside, altered or
modified by the court upon a showing of a substantial change
in the circumstances of either party or upon a showing that the
final order for child support substantially deviates from the
child support guidelines established pursuant to section 46b215a, unless there was a specific finding on the record that the
application of the guidelines would be inequitable or
inappropriate. There shall be a rebuttable presumption that
any deviation of less than fifteen per cent from the child
support guidelines is not substantial and any deviation of
fifteen per cent or more from the guidelines is substantial.
Conn. Gen. Stat. § 46b-86(a). The Connecticut Appellate Court recently reiterated
the long standing rule of law that to obtain a modification of alimony or child
support, the moving party must demonstrate that circumstances have changed
since the last court order such that it would be unjust or inequitable to hold either
party to it. O'Donnell v. Bozzuti, 148 Conn.App. 80 (2014). “Because the
establishment of changed circumstances is a condition precedent to a party’s
relief, it is pertinent for the trial court to inquire as to what, if any, new
circumstance warrants a modification of an existing order [for alimony or
support]. In making such an inquiry, the trial court’s discretion is essential.”
Winters v. Winters, 140 Conn. App. 816, 822 (2013). This is exclusively a state
court function as further exemplified by the fact that this Court can find no
decisions issued by a federal court in the Second Circuit applying the
Connecticut statute governing the modification of alimony or support orders and
judgments, Conn. Gen. Stat. § 46b-86(a).
Accordingly, this action is barred by the domestic relations exception to
federal jurisdiction and must be dismissed. See, e.g., Hamilton v. HamiltonGrinols, 363 F. App’x 767, 769 (2d Cir. 2010) (ex-husband’s claim to have his name
removed from loans held jointly with his ex-wife was precluded by domestic
relations exception to federal court’s jurisdiction, despite his contention that exwife’s actions jeopardized his federal employment, where claim was “matrimonial
in nature” as it was grounded in his ex-wife’s purported violation of state court
order for temporary support and state court final judgment of divorce);
McLaughlin v. Cotner, 193 F.3d 410, 413 (6th Cir. 1999) (action was barred by the
domestic relations exception where plaintiff ex-wife, who was a party to a
separation agreement incorporated into a divorce decree which called for the sale
of marital property, was “attempting to disguise the true nature of the action by
claiming that she [was] merely making a claim for damages based on a breach of
contract,” but where “the alleged ‘contract’ is part of a separation agreement that
was voluntarily entered into by the parties, and the separation agreement was
incorporated into the divorce decree” and therefore “involve[d] issues arising out
of conflict over a divorce decree, and, according to Ankenbrandt, [came] within
the domestic relations exception.”); Weiss v. Weiss, 375 F. Supp. 2d 10 (D. Conn.
2005) (ex-wife’s diversity action against former husband and law partner alleging
breach of contract, breach of fiduciary duty, fraud, and conversion, arising out of
ex-husband's alleged non-compliance with certain terms of their marital
dissolution agreement, was barred by the domestic relations exception); Puletti v.
Patel, 05 CV 2293 (SJ), 2006 WL 2010809 (E.D.N.Y. July 14, 2006) (action alleging
conspiracy to violate father’s due process rights and his right to associate with
his child was barred by domestic relations exception, as father was effectively
asking court to review a portion of his state court custody proceeding, which
would force federal court to reexamine and reinterpret the evidence presented
before the state court if action were to proceed); Rabinowitz v. New York, 329 F.
Supp. 2d 373 (E.D.N.Y. 2004) (action against state, state courts, judge, law
guardian, and attorneys was barred by domestic relations exception where father
challenged grant of sole custody of children to their mother and where court
would be forced to reexamine and reinterpret the evidence brought before the
state court in earlier proceedings if district court were to entertain action);
Elmasri v. England, 111 F. Supp. 2d 212 (E.D.N.Y. 2000) (action alleging a
conspiracy to lie to state court justice handling plaintiff's divorce and custody
proceedings was barred by domestic relations exception to the jurisdiction of the
federal courts, even though plaintiff sought relief he did not seek in his divorce
and custody trial, as the court would be forced to reexamine and reinterpret the
evidence presented before the state court if action were to proceed).
For the foregoing reasons, the Court DISMISSES this action for lack of
subject matter jurisdiction. The Clerk is directed to close this case.
IT IS SO ORDERED.
Hon. Vanessa L. Bryant
United States District Judge
Dated at Hartford, Connecticut: May 16, 2014
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