Selton et al v. U.S. Bank Trust National Association, S.D. et al
Filing
61
ORDER granting in part and denying in part 59 Motion to dismiss. Signed by Judge Roy B. Dalton, Jr. on 8/18/2015. (VMF)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
CYNTHIA J. SELTON; and
MICHAEL J. PAULUCCI,
Plaintiffs,
v.
Case No. 6:14-cv-1278-Orl-37KRS
U.S. BANK TRUST NATIONAL
ASSOCIATION, S.D.; HOWARD J.
RUBIN; RICHARD IHRIG; LINDQUIST
& VENNUM PLLP; and GINA J.
PAULUCCI,
Defendants.
ORDER
This cause is before the Court on the following:
1.
Defendants’ Consolidated Motion to Dismiss the Complaint (Doc. 59), filed
March 27, 2015; and
2.
Plaintiffs’ Response to Consolidated Motion to Dismiss (Doc. 60), filed
April 13, 2015.
This action is part of a multi-court dispute over the administration of the Gina J.
Paulucci Trust (“Trust”). (See Doc. 2, ¶ 1.) Plaintiffs are Cynthia Selton and Michael
Paulucci, who are siblings of Gina Paulucci and contingent remainder beneficiaries of the
Trust. (See id. ¶¶ 8–9.) Defendants are: (1) Gina Paulucci, the current beneficiary of the
Trust; (2) Howard J. Rubin, Richard Ihrig, and U.S. Bank Trust National Association, S.D.
(“U.S. Bank”), the current trustees of the Trust (see id. ¶¶ 2–6); and (3) Lindquist &
Vennum, PLLP, a law firm at which trustee Ihrig is a partner and which allegedly accepted
payment from the Trust for services rendered to Gina Paulucci (see id. ¶¶ 10, 22).
To summarize the Complaint, Plaintiffs claim that Defendants surreptitiously
changed the Trust’s situs designation from Florida to South Dakota so that the trustees
could make distributions and payments that Florida law prohibits but South Dakota law
permits. (See id. ¶¶ 18–22, 26–28.) Further, Plaintiffs claim that Defendants took
advantage of South Dakota’s trust-supervision statutes to obtain an uncontested,
allegedly erroneous order from a South Dakota state court that approved of their conduct
and confirmed the situs change. (See id. ¶¶ 23–25.) Maintaining that Defendants’ actions
violated Florida’s trust-administration laws, Plaintiffs seek a declaration that the South
Dakota state-court order is “void,” as well as other related relief. (See id. ¶¶ 29–57.)
Defendants move to dismiss this action under the Princess Lida doctrine, arguing
that the South Dakota court maintains continuing and exclusive jurisdiction over
quasi in rem actions involving the Trust. 1 (Doc. 59, p. 7 (citing Princess Lida of Thurn &
Taxis v. Thompson, 305 U.S. 456, 465–67 (1939)).) Plaintiffs oppose. (Doc. 60.) The
matter is ripe for adjudication. Upon consideration, the Court finds that the motion is due
to be granted in part and denied in part.
BACKGROUND
In 1996, frozen-food magnate Jeno F. Paulucci executed an irrevocable
agreement (“Agreement”) which created separate trusts for each of his children.
(See Doc. 2-2, pp. 2, 7–8, 22.) Under the terms of the Agreement, all of the children are
contingent remainder beneficiaries of each other’s trusts, taking per stirpes if the primary
beneficiary dies without “issue.” (Id. at 8.) Defendant Gina Paulucci’s Trust is a product
1
Defendants raised several other grounds for dismissal. (See Doc. 59, pp. 16–35.)
However, as Princess Lida is dispositive, the Court declines to address Defendants’
remaining arguments.
2
of the Agreement, so Plaintiffs—her siblings—are contingent remainder beneficiaries.
(Doc. 2, ¶¶ 1, 7–9.)
Pursuant to the Agreement’s floating choice-of-law provision, the Trust is governed
“under the laws of the state that is then the trust situs.” (See Doc. 2-2, p. 19.) The provision
further states:
If there is a change in trust situs, the laws of the state of any new trust situs
shall apply as of the date of the change of situs, and all constructions,
interpretations, limitations and restrictions imposed by the laws of any
previous situs shall be of no further effect.
(Id.) The Agreement grants trustees the discretionary authority to change the situs of the
Trust to any jurisdiction that they deem “advisable.” (Id. at 17.) According to Plaintiffs,
Florida was the Trust’s original situs, and thus Florida law originally governed.
(See Doc. 2, ¶¶ 11–13, 20, 29, 31.)
The impetus for this action began in 2010, when trustee Defendants Ihrig and
Rubin took three important actions: (1) they appointed Defendant U.S. Bank as a third
co-trustee; (2) they transferred the assets of the Trust to U.S. Bank in South Dakota; and
(3) they designated South Dakota as the Trust’s situs. (See id. ¶¶ 3, 20; Docs. 2-3, 59-1.)
The trustee Defendants, including U.S. Bank, memorialized the actions in a document
entitled “Appointment and Acceptance of Co-Trustee” (Docs. 2-3, 59-1), but they
apparently did not provide a copy to Plaintiffs or otherwise notify them (Doc. 2, ¶ 20).
Three years passed without Plaintiffs noticing the changes. (See id. ¶¶ 21–22.)
Then, for reasons unclear, Plaintiffs requested an accounting of the Trust in
October 2013. (Id. ¶ 21.)
On January 2, 2014, the trustee Defendants provided the accounting, which
revealed for the first time that they “had distributed hundreds of thousands of dollars to
3
Gina” and had made “hundreds of thousands of dollars in payments to attorneys for Gina,
including payments to the firm of Lindquist & Vennum, where the co-trustee Ihrig is a
partner.” (See id. ¶ 22.) Plaintiffs contend that the distributions and payments would not
have been permitted under Florida law, as the distributions were improvident and the
payments were “conflict transactions.” (See id. ¶¶ 26–28.)
Also on January 2, 2014—the same day that they provided the Trust accounting—
the trustee Defendants filed a “Petition for Court Supervision, Privacy of Court File, and
Confirmation of Situs and Law of Administration” (“Petition”) in a South Dakota state court.
(See id. ¶ 23; Doc. 59-1.) The trustee Defendants filed the Petition pursuant to
S.D. Codified Laws § 21-22-9, which permits any fiduciary or beneficiary of a trust with a
South Dakota trustee or with assets in South Dakota to request court supervision of the
trust. Additionally, if a § 21-22-9 petition includes a trust accounting, the petitioner can
“request court action as to any matter relevant to the administration of the trust.” See id.
(emphasis added). The trustee Defendants included an accounting in their Petition, and
they requested that the South Dakota court “confirm that the situs of the Trust is in
Minnehaha County, South Dakota, and that the laws of the State of South Dakota govern
the administration of the Trust.” (Doc. 59-1, p. 1.)
The South Dakota court set a January 27, 2014 hearing on the Petition.
(See Doc. 2, ¶ 23.) Plaintiffs received actual notice of the hearing but, after the trustee
Defendants refused to agree to a hearing extension, Plaintiffs refused to appear because
they felt that they had been given inadequate time to prepare. (See id. ¶¶ 23–24.)
On February 4, 2014, following an uncontested hearing, the South Dakota court
entered an order in which it expressly assumed jurisdiction over the Trust and confirmed
4
the Trust’s South Dakota situs and governing law. 2 (Doc. 59-2, p. 6.)
In response, Plaintiffs filed this action in Florida state court, claiming that
Defendants violated the notification, distribution, and payment provisions of Florida’s
trust-administration laws. (See Doc. 2.) As relief, Plaintiffs seek: (1) a declaration that the
South Dakota state-court order is “void,” the situs change was ineffective, and Florida law
governs the Trust; (2) removal of the trustees; (3) voidance of all payments to Lindquist
& Vennum; and (4) surcharges against the trustee Defendants for damages related to
their “malfeasance.” (See id. at 10, 14–15 (wherefore clauses).)
Defendants removed (Doc. 1) and now move to dismiss (Doc. 59).
DISCUSSION 3
Defendants move to dismiss this action under the Princess Lida doctrine
(id. at 6–16), which holds that when two in rem or quasi in rem actions involve the same
property, “the court first assuming jurisdiction over property may maintain and exercise
that jurisdiction to the exclusion of the other,” 305 U.S. at 466. According to Defendants,
Princess Lida is a subject matter jurisdiction doctrine that requires dismissal here because
both this action and the South Dakota action are proceeding quasi in rem, both involve
the Trust, and the South Dakota court assumed jurisdiction first. (Doc. 59, pp. 6–16.)
Plaintiffs disagree. According to Plaintiffs, Princess Lida reflects principles of
abstention—not subject-matter jurisdiction—that have been subsumed within the broader
Colorado River doctrine, which presumes that courts should retain jurisdiction. (Doc. 60,
2
Later, on December 19, 2014, the South Dakota court issued another order in
which it approved of all distributions and administrative acts taken by the trustees
between July 26, 2007, and June 30, 2014, and absolved the trustees of “any and all
liability” arising out of those matters. (Doc. 59-3).
3 See below, note six, for a discussion of the applicable standard of review.
5
pp. 2–4.) Alternatively, Plaintiffs maintain that, regardless of whether it concerns
jurisdiction or abstention, Princess Lida does not require dismissal here because this
action proceeds in personam, not quasi in rem. (Id. at 4–7.)
For context, in Princess Lida, the U.S. Supreme Court granted certiorari to
disentangle parallel state and federal actions involving administration of the same trust.
See 305 U.S. at 461. Each lower court had concluded that it had exclusive jurisdiction
over matters affecting the trust res, and each had enjoined its litigants from proceeding in
the other forum. See id. at 458–61. On review, the U.S. Supreme Court affirmed the state
court’s injunction prohibiting litigation in the federal court, as both actions were quasi in
rem and the state court had assumed jurisdiction over the trust first. Id. at 463–68.
Ambiguity in the Princess Lida opinion’s language has caused a federal circuit split
on whether the doctrine expressed therein pertains to subject matter-jurisdiction or
abstention. 4 Several circuits treat it as a doctrine of subject-matter jurisdiction.
See Cartwright v. Garner, 751 F.3d 752, 759–63 (6th Cir. 2014); Cassity v. Pitts,
995 F.2d 1009, 1012 (10th Cir. 1993); Dailey v. Nat’l Hockey League, 987 F.2d 172, 176
(3d Cir. 1993); cf. State Eng’r v. S. Fork Band of Te-Moak Tribe of W. Shoshone Indians,
339 F.3d 804, 810 (9th Cir. 2003) (holding that the “doctrine of prior exclusive jurisdiction”
implicates subject-matter jurisdiction). Others treat it as a mandatory abstention doctrine.
4
Driving the split, the Princess Lida opinion uses language that evokes subjectmatter jurisdiction but a rationale that evokes abstention. For example, the Court arguably
frames the question presented in terms of subject-matter jurisdiction, asking “whether the
exercise of jurisdiction by a state court over the administration of a trust deprives a federal
court of jurisdiction of a later suit involving the same subject matter.” Princess Lida,
305 U.S. at 457 (emphasis added). Later though, the Court answers the question based
on comity considerations, concluding that yielding jurisdiction to the first-acting state court
“is necessary to the harmonious cooperation of federal and state tribunals.” Id. at 466.
6
See Carvel v. Thomas & Agnes Carvel Found., 188 F.3d 83, 86 (2d Cir. 1999); Crawford
v. Courtney, 451 F.2d 489, 492 (4th Cir. 1971). Only the U.S. Court of Appeals for the
First Circuit treats Princess Lida as a factor in the Colorado River permissive abstention
analysis. United States v. Fairway Capital Corp., 483 F.3d 34, 40 n.2 (1st Cir. 2007). The
Eleventh Circuit has not expressly weighed in, nor has its predecessor, the former Fifth
Circuit. 5
After a thorough review, the Court concludes that Princess Lida is an abstention
doctrine. 6 As the Second Circuit noted in Carvel, the Supreme Court in Princess Lida was
“exploring the difference between in personam and in rem proceedings. Moreover, by
invoking the importance of ‘harmonious cooperation’ between the federal and state
courts, the Court indicated that the doctrine it was expounding was a rule of comity or
abstention, rather than one of subject matter jurisdiction.” 188 F.3d at 86.
However, contrary to Plaintiffs’ characterization, Princess Lida is mandatory and
has not been subsumed within the Colorado River doctrine. See id. (emphasizing that,
while the Princess Lida rule is not a subject-matter-jurisdiction doctrine, but rather “a
5
In Bonner v. City of Prichard, the Eleventh Circuit adopted as binding precedent
all opinions handed down by the Fifth Circuit prior to October 1, 1981. 661 F.2d 1206,
1207 (11th Cir. 1981).
6 As a procedural matter, neither party squarely addresses the appropriate Federal
Rule to employ in deciding an abstention-based motion to dismiss. (See Doc. 59 (citing,
without explanation, both Rule 12(b)(1) and Rule 12(b)(6)); Doc. 60 (citing generally to
Rule 12(b)).) Their avoidance is understandable, as the Eleventh Circuit does not appear
to have addressed the issue, and its sister circuits have intentionally evaded it. See, e.g.,
Courthouse News Serv. v. Planet, 750 F.3d 776, 780 (9th Cir. 2014) (declining to “decide
which Rule, if either, provides the correct vehicle for a motion to abstain”). The Court
likewise declines to address the appropriate standard, as this Order relies only on the
Complaint, its attachments, and judicially noticeable filings from the South Dakota action,
all of which are reviewable under the stricter Rule 12(b)(6) standard. Horne v. Potter,
392 F. App’x 800, 802 (11th Cir. 2010).
7
principle of comity, in the nature of an abstention doctrine, the Princess Lida rule is no
less binding on federal courts”). Unlike the Colorado River doctrine, which permits (but
counsels against)7 abstention based on principles of “wise judicial administration” and
“conservation of judicial resources,” 424 U.S. at 817 (citation and omitted), the
Princess Lida doctrine requires abstention based on principles of comity and in rem
jurisdiction. See, e.g., Citibank, NA v. Data Lease Fin. Corp., 645 F.2d 333, 338 (5th Cir.
1981) (characterizing the doctrine as a mandatory “matter of comity”); Key v. Wise, 629
F.2d 1049, 1059 (5th Cir. 1980) (observing that the Princess Lida doctrine has “especial
importance in its application to Federal and state courts” and “establishes a bar to any
other action in rem or quasi in rem respecting the same property until the first court’s
jurisdiction is properly terminated” (citation omitted)); PPG Indus., Inc. v. Cont’l Oil Co.,
478 F.2d 674, 677 (5th Cir. 1973) (noting that Princess Lida sets out a “virtually
mechanical in rem rule”). 8
Having concluded that the Princess Lida doctrine requires mandatory abstention
where applicable, the Court turns to whether it applies here. The Princess Lida doctrine
applies where two actions involving the same property are proceeding in rem or
quasi in rem. See Princess Lida, 305 U.S. at 466. Here, the parties tacitly agree that both
actions involve the same property and that the South Dakota action proceeds
quasi in rem; however, they dispute whether this action proceeds quasi in rem as well. 9
7
Colorado River abstention “is the exception, not the rule,” 424 U.S. at 813, which
is why Plaintiffs push for its application here (see Doc. 60, pp. 3–4).
8 The former Fifth Circuit’s consistent characterization of the Princess Lida doctrine
as mandatory, albeit in dicta, suggests that the Eleventh Circuit would follow suit.
9 Defendants contend that both this action and the South Dakota action proceed
quasi in rem. (Doc. 59, p. 16.) In their response, Plaintiffs only address this action.
(Doc. 60, pp. 5–6.) Accordingly, the Court presumes that Plaintiffs agree with Defendants’
8
Under Princess Lida, courts look to the plaintiffs’ requested relief to determine
whether an action proceeds quasi in rem; if the presiding court must have a substantial
measure of “control of the property which is the subject of the litigation in order to proceed
with the cause and grant the relief sought,” then the action is quasi in rem. Id. Actions
requiring “a substantial measure of control” include not only “cases where property has
been actually seized under judicial process,” but also cases “brought to marshal assets,
administer trusts . . . liquidate estates, and . . . suits of a similar nature.” Id. at 466–67.
Courts also consider how state law characterizes a particular cause of action, see, e.g.,
Cassity, 995 F.2d at 1012 (considering Oklahoma law), although state-law labels and
characterizations are not controlling, see Dailey, 987 F.2d at 177 (emphasizing that the
term quasi in rem has a specialized meaning in the Princess Lida context).
In all four of their claims in this action, Plaintiffs request relief that would affect the
administration of the Trust and the restoration of its corpus: Count I seeks a declaration
that, inter alia, the Trust “continues to be governed by and administered in accordance
with the State of Florida,” Count II seeks removal of the trustees, and Counts III and IV
seek recovery of allegedly improper Trust distributions and payments. (Doc. 2, pp. 10,
14–15 (wherefore clauses) (emphasis added)). Based on those requests, this is a
paradigmatic quasi in rem proceeding under Princess Lida. 10 See 305 U.S. at 467
position on the South Dakota action. See Local Rule 3.01(b) (requiring opposition to be
addressed and supported in the response memorandum). Regardless, the South Dakota
action—noticed by publication and brought to supervise administration of the Trust—
plainly falls within Princess Lida’s definition of an in rem or quasi in rem action.
See 305 U.S. at 456.
10 Indeed, the federal claims and requests for relief at issue here are strikingly
similar to those found to be quasi in rem in Princess Lida itself. See 305 U.S. at 459
(considering federal claims brought by beneficiaries “against . . . two trustees and the
administrators of [a] deceased trustee, alleging mismanagement of the trust funds and
9
(holding that actions pertaining “solely . . . to administration and restoration of [a trust’s]
corpus” are quasi in rem). In the Court’s research, every federal circuit presented with a
similar fact pattern has reached the same conclusion. See, e.g., Cartwright, 751 F.3d
at 762 (“In suits involving trust administration, the court must control the property in order
to give effect to the resolution of the case, and are quasi in rem.”); Cassity, 995 F.2d
at 1012 (“[A] suit that concerns or determines the ownership, control and administration
of a trust and the powers, duties and liabilities of the trustees is either in rem or quasi in
rem.”); Dailey, 987 F.2d at 177 (“The primary relief sought in both actions is the
restoration of trust funds which were allegedly misappropriated. This is precisely the
situation which was at issue in Princess Lida and which the court stated was
encompassed within the term quasi in rem.”); Beach v. Rome Trust Co., 269 F.2d 367,
371 (2d Cir. 1959) (“[P]laintiff’s demands for accounting of the estate and trust and
removal of the trustee fall within the rule that a previously attached quasi in rem
jurisdiction of property in a state court requires a federal court to dismiss any claim with
regard to the property where the adjudication would interfere with the proceedings in the
state court. This principle is so firmly rooted in our law as to have required and not merely
permitted [the district judge] to dismiss the plaintiff’s claims insofar as they sought an
accounting of the estate and trust.” (citations omitted)). Moreover, Plaintiffs’ claims fall
squarely within Florida’s historical quasi in rem definition. See State ex rel. S. Brevard
Drainage Dist. v. Smith, 170 So. 440, 441 (Fla. 1936) (“A proceeding quasi in rem is
applied to any action between parties where the direct object is to reach and dispose of,
praying that the trustees be removed and all the defendants be made to account and
repay the losses of the estate”).
10
or to adjudicate the title or status of, property owned by the parties, or of some interest
claimed by them, and duly put in issue by the allegations of the pleadings therein.”).
Accordingly, this action is quasi in rem under both state and federal law.
Briefly, Plaintiffs raise two counterarguments that warrant discussion. First, relying
on Marshall v. Lauriault, 372 F.3d 175, 181 (3d Cir. 2004), Plaintiffs claim that this is an
in personam action dealing “primarily with a determination of rights in [the] Trust,” not with
the Trust’s administration, and thus Princess Lida does not apply. 11 (Doc. 60, pp. 5–6.)
The Court disagrees. Tellingly, Plaintiffs’ counterargument ignores their Complaint’s
affirmative allegation that the “administration of [the] Trust is dependent, in part, upon the
facts or the law applicable to the facts” at issue here. (Doc. 2, ¶ 37.) More pertinently,
Marshall is inapposite. Marshall involved a dispute over whether and to what extent adult
adoptees qualified as beneficiaries under the terms of a trust. See 372 F.3d at 177–79.
Here, as addressed above, Plaintiffs know precisely who the Trust beneficiaries are and
how they will take: Defendant Gina Paulucci is the primary beneficiary, and Plaintiffs are
the contingent remainder beneficiaries who will take per stirpes if Gina dies without
surviving issue. (Doc. 2, ¶¶ 1, 7–9; Doc. 2-2, pp. 7–8.) In other words, Plaintiffs are not
simply seeking an adjudication of their rights in the Trust; rather, they are contesting the
11
This in personam argument—versions of which, as discussed below, are
frequently raised and frequently rejected—stems from the following dicta in Princess Lida:
“[The Princess Lida doctrine] has no application to a case in a federal court based upon
diversity of citizenship, wherein the plaintiff seeks merely an adjudication of his right of
his interest as a basis of a claim against a fund in the possession of a state court.”
305 U.S. at 466. Importantly, immediately after that dicta, the Court clarified that the
federal action at issue was “not such a case” because it did not present questions “as to
the right of any person to participate in the res [of the trust] or the quantum of his interest
in it.” Id. at 467. Rather, like this action, the Princess Lida federal action presented
questions “solely as to administration and restoration of [the trust’s] corpus.” Id.
11
trustees’ administration of it, as well as the South Dakota court’s approval of that
administration. Princess Lida therefore applies. See 305 U.S. at 466–67; see also Dailey,
987 F.2d at 177 (rejecting a similar version of Plaintiffs’ argument).
Second, relying on Al-Abood ex rel. Al-Abood v. El-Shamari, 217 F.3d 225, 232
(4th Cir. 2000), Plaintiffs argue that this action—particularly the surcharge claim—seeks
money damages that do not require control of the Trust res to grant and thus do not
implicate Princess Lida. (Doc. 60, pp. 6–7.) Again, the Court disagrees and finds Plaintiffs’
authority inapposite.
In Al-Abood, a wealthy resident of Monaco sued two “former family friends” in a
U.S. district court in Virginia, claiming monetary damages for their alleged fraudulent
conversion of funds from her trust, brokerage account, and “real estate ventures.”
See 217 F.3d at 230–31. Defendants moved to dismiss under Princess Lida, arguing that
the U.S. action was barred by an action they had already filed in a Monacan court. See id.
at 231–32. In the Monacan action, the defendants claimed that the plaintiff had looted
their trust—that is, a different trust than the one at issue in the U.S. action. See id.
The U.S. district court denied the Princess Lida motion, and the Fourth Circuit affirmed,
reasoning that the district court did not have to control the defendants’ trust in order to
award monetary damages for the diminution of the plaintiff’s trust and other accounts.
See id. at 232 (“Even if the Monacan case does concern a trust res, the jurisdiction of the
federal courts in this suit does not depend on or involve exercising jurisdiction over that
res.” (emphasis added)).
In contrast to Al-Abood, this action and the South Dakota action involve the same
trust. Further, unlike the plaintiff in Al-Abood, Plaintiffs here are not presently entitled to
12
any of the Trust assets that they claim have been unduly diminished; they are contingent
beneficiaries, and the contingencies have not occurred. Accordingly, this case does not
present an Al-Abood situation where awarding monetary damages directly to the plaintiff
would resolve the matter; instead, if Plaintiffs here were to prevail on their surcharge and
avoidance claims, any recovery would have to be returned to the Trust corpus, 12 and the
Court cannot effectuate that remedy without substantially controlling the Trust. This action
is therefore quasi in rem. See Cartwright, 751 F.3d at 762 (“[P]laintiff claims that both the
value of the trust assets, and his beneficial interest therein, have been diminished. . . . [I]f
plaintiff were successful in recovering trust assets that he claims were diminished as a
consequence of defendants’ conduct, the court would be required to exercise some
control over . . . the trusts in order to effectuate that remedy. Accordingly, we hold that
the . . . action is quasi in rem.”); see also Cassity, 995 F.2d at 1012 (reaching essentially
the same conclusion on different facts). 13
In sum, for the reasons addressed above, this action proceeds quasi in rem, as
12
After all, under Florida law, the purpose of a surcharge is to make the corpus
whole. See Lawyers Sur. Corp. v. Saltz, 658 So. 2d 1152, 1153 (Fla. 2d DCA 1995).
13 One final point: Plaintiffs raise a third argument—that Princess Lida does not
apply here because the South Dakota action is “objectionable,” “harassing,” and
“vexatious.” (Doc. 60, pp. 7–8.) In support, they cite only the inapposite dissent from
Donovan v. City of Dallas, 377 U.S. 408, 419 (1964) (Harlan, J., dissenting), and thus the
Court rejects their argument for lack of supporting authority. Moreover, Plaintiffs have not
given any reason why the South Dakota court would not be receptive to these arguments,
which may still be raised there at any time. See S.D. Codified Laws § 21-22-13 (providing
that “[a]ny . . . beneficiary of any trust under court supervision may at any time petition
the court for its action as to any matter relevant to the administration of the trust”);
see also id. § 21-22-1(1) (defining “beneficiary” as “any person in any manner interested
in the trust”). Deciding here that the South Dakota action is vexatious without permitting
the South Dakota court to weigh in would assuredly create “the type of legal disharmony
the Princess Lida Court sought to avoid.” Dailey, 987 F.2d at 177.
The Court also rejects any other Princess Lida arguments raised in Plaintiffs’
briefing (Doc. 60) but not expressly addressed in this Order.
13
does the South Dakota action. As the Plaintiffs initiated this action on June 26, 2014
(Doc. 2, p. 1)—nearly six months after the South Dakota court’s January 2, 2014
assumption of jurisdiction over the trust (Doc. 59-1, p. 7)—the Court “must yield” to the
South Dakota court’s quasi in rem jurisdiction and abstain from resolving this action.
See Princess Lida, 305 U.S. at 466.
CONCLUSION
Accordingly, it is hereby ORDERED AND ADJUDGED:
1.
Defendants’ Consolidated Motion to Dismiss the Complaint (Doc. 59) is
GRANTED IN PART AND DENIED IN PART.
a.
The motion is GRANTED in that the Princess Lida doctrine,
305 U.S. at 465–68, requires abstention from and dismissal of this
action.
b.
In all other respects, the motion is DENIED WITHOUT PREJUDICE.
2.
This action is DISMISSED WITHOUT PREJUDICE. 14
3.
The Clerk is DIRECTED to terminate all pending deadlines and to close the
file.
DONE AND ORDERED in Chambers in Orlando, Florida, on August 18, 2015.
14
The dismissal is without prejudice in that the Court has not resolved the merits
of Plaintiffs’ claims. However, Plaintiffs may not refile in this Court.
14
Copies:
Counsel of Record
15
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