GILL et al v. HARTSHORN et al

Filing 80

ORDER granting 50 Motion to Intervene. Ordered by Judge Clay D. Land on 02/19/2013. (CGC)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
COLUMBUS DIVISION
KAREN GILL, et al.,

*

Plaintiffs,

*

vs.

*

KEVIN HARTSHORN, et al.,

*

Defendants.

CASE NO. 4:12-CV-77 (CDL)

*
O R D E R

Steve

Thomas

(“Thomas”),

Wallace

Whitten

(“Whitten”),

and

Michael Gill (“Michael Gill”) (collectively, “Intervenors”) filed
a Motion to Intervene in this action (ECF No. 50).

The Defendants

in this action do not oppose the motion to intervene.

Plaintiffs,

on the other hand, do oppose the motion to intervene.

For the

reasons set forth below, the Court grants the Motion to Intervene.
DISCUSSION
Thomas, Whitten, and Michael Gill seek to intervene as of
right under Federal Rule of Civil Procedure 24(a)(2) or, in the
alternative, under Federal Rule of Civil Procedure 24(b)(1)(B).
Plaintiffs assert that Intervenors have not demonstrated that the
Court may exercise supplemental jurisdiction over their claims.
Plaintiffs are concerned that that the intervention of Intervenors
may negate jurisdiction over their state law claims.

Therefore,

the Court must determine as a threshold matter whether the Court

would

have

jurisdiction

over

Intervenors’

claims

if

they

were

permitted to intervene.
Intervenors seek to be added as plaintiffs.

Intervenors do

not assert federal question claims, so the Court does not have
original

jurisdiction

over

under 28 U.S.C. § 1331.

their

claims

against

the

Defendants

The Court likewise does not have original

jurisdiction over their claims against the Defendants under 28
U.S.C. §

1332

because

there

is

not

complete

diversity

citizenship between Intervenors and the Defendants.

of

Intervenor

Michael Gill and Defendants Dan Van Gasken and Loren Gill are all
citizens of the state of Washington.

The remaining question is

whether the Court has supplemental jurisdiction over the claims of
Intervenors.1
In

an

action

where

the

district

court

has

original

jurisdiction, the Court has “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.”
28

U.S.C. §

“claims

that

1367(a).
involve

This
the

.

supplemental
.

1

.

jurisdiction

intervention

of

includes

additional

The Court notes that if Thomas and Whitten were the only parties
seeking to intervene as Plaintiffs, then complete diversity of
citizenship would exist.
Based on the allegations in Plaintiffs’
Complaint regarding distributions made from the Cornerstone Trust, the
amount in controversy exceeds $75,000. See, e.g., Compl. ¶ 39, ECF No.
1.
Therefore, if Thomas and Whitten were the only parties seeking to
intervene as Plaintiffs, then the Court would have original jurisdiction
over their claims pursuant to 28 U.S.C. § 1332 and would not need to
exercise supplemental jurisdiction over their claims.

2

parties.”

Id.

It

is

founded

jurisdiction

is

clear,
solely

however,
on

28

that

U.S.C. §

where
1332,

original
“district

courts shall not have supplemental jurisdiction . . . over claims
by plaintiffs against persons made parties under [Federal Rule of
Civil Procedure 24] or over claims by persons . . . seeking to
intervene as plaintiffs under Rule 24.”

28 U.S.C. § 1367(b).

Most of Plaintiffs’ claims are state law claims.

See Compl.

¶¶ 48-51, ECF No. 1 (theft by deception); id. ¶¶ 52-55 (theft by
conversion);
(fraud);

¶¶ 56-59

¶¶ 70-78

reformation

of

(breach

(Georgia
Gill

of

RICO);

Family

fiduciary
¶¶

89-91

Cornerstone

(injunctive and other equitable relief).
jurisdiction
28 U.S.C. §

for
1332

their

state

(diversity

(supplemental jurisdiction).
however,

assert

one

federal

law

duty);

(construction
Trust);

claims

exists

and

28

Compl. ¶¶ 16-17.
a

¶¶

and

92-98

Plaintiffs contend that

jurisdiction)

claim:

¶¶ 60-69

claim

under

U.S.C. §

both
1367

Plaintiffs do,

under

the

Federal

Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18
U.S.C. §

1961

Plaintiffs

et

seq.

contend

Compl.

that

¶¶ 79-88.

the

Court

jurisdiction under 28 U.S.C. § 1331.

In
has

Id. ¶ 15.

their
federal

Complaint,
question

This contention

is presumably based on the federal RICO claim.
Given

that

original

diversity of citizenship

jurisdiction

is

not

based

in this case, the Court

solely

on

may exercise

supplemental jurisdiction over Intervenors’ claims, but only if

3

the claims “are so related to claims in the action within [the
Court’s] original jurisdiction that they form part of the same
case

or

controversy

Constitution.”

under

Article

28 U.S.C. § 1367(a).

III

of

the

United

States

In other words, Intervenors’

claims must “arise out of a common nucleus of operative fact with”
Plaintiffs’

federal

RICO

claims.

Parker

v.

Scrap

Metal

Processors, Inc., 468 F.3d 733, 743 (11th Cir. 2006).
This action concerns a trust formed by John Gill, the Gill
Family

Cornerstone

Trust

(“Cornerstone

Trust”),

as

well

as

approximately three hundred single asset property trusts created
by

John

(“Single

Gill

whose

Asset

beneficiaries.

sole

Trusts”).

certain

In

turn,

is
the

the

Cornerstone

Cornerstone

Trust

Trust

has

Plaintiffs contend that they are beneficiaries of

the Cornerstone Trust.
that

beneficiary

Compl. ¶ 24.

Defendants,

including

Plaintiffs further contend
Dan

Van

Gasken,

Kevin

Hartshorn, and various entities under their direction, exercise
operational

control

over

the

Cornerstone

Trust

and

the

Single

Asset Trusts, including distribution of the income generated by
the Single Asset Trusts.

Id. ¶ 34.

Plaintiffs allege that Van

Gasken, Hartshorn, and the other Defendants developed a scheme to
divert income from the Cornerstone Trust and Single Asset Trusts
to themselves and other Defendants instead of distributing that
income to the beneficiaries of the Cornerstone Trust.
The

crux

of

all

of

Plaintiffs’

4

claims,

including

Id. ¶ 35.
Plaintiffs’

federal RICO claims, is that Defendants engaged in a scheme under
which

(1)

they

Cornerstone

Trust

received
and

improper

Single

Asset

distributions

Trusts,

and

(2)

from

the

they

made

improper distributions from the Cornerstone Trust and Single Asset
Trusts to other individuals and entities, including John Gill.
Id. ¶¶ 37, 39-46.
this

scheme

Plaintiffs assert that Defendants accomplished

largely

by

use

of

mail,

telephone,

and

internet,

including (1) communications by telephone and internet relating to
the scheme, (2) payment by mail and wire of Cornerstone Trust and
Single Asset Trust funds to (or on behalf of) individuals and
entities who are not entitled to receive them, and (3) filing of
false tax returns and reports by mail and wire.

Id. ¶¶ 38-39.

In their proposed Intervenor Complaint, Thomas and Whitten
assert that they are trustees of the Cornerstone Trust and seek to
represent

the

interests

of

the

Cornerstone

Trust.

Mot.

to

Intervene Ex. D, Proposed Intervenor Compl. ¶ 18, ECF No. 50-4.
Michael

Gill

alleges

that

he

is

an

associate

minister

of

the

Healing Water Ministry of the International Academy of Life and
that this ministry is a beneficiary of the Cornerstone Trust.

Id.

¶

the

14.

Michael

Gill

seeks

to

represent

the

interests

of

Healing Water Ministry of the International Academy of Life.

Like

Plaintiffs, Intervenors allege that Hartshorn and Van Gasken have
improperly converted assets of the Cornerstone Trust for their own
use.

Id. ¶ 26.

And like Plaintiffs, Intervenors ask the Court to

5

order

that

Defendants

return

to

the

Cornerstone

distributions they improperly made or received.
with Compl. ¶ 98(C).

Trust

any

Compare id. ¶ 27,

Given that Plaintiffs’ federal RICO claims

and Intervenors’ breach of trust claims arise out of the same
alleged

scheme

by

Defendants,

the

Court

concludes

that

Intervenors’ claims “arise out of a common nucleus of operative
fact with” Plaintiffs’ federal RICO claims.
743.

Therefore,

the

Court

has

Parker, 468 F.3d at

supplemental

jurisdiction

over

Intervenors’ claims.
The

next

intervene

question

under

is

Federal

whether
Rule

Intervenors

of

Civil

are

entitled

Procedure

to

24(a)(2).

Intervention as of right must be granted when the following four
requirements are met:
(1) the application to intervene is timely; (2) the
applicant has an interest relating to the property or
transaction which is the subject of the action; (3) the
applicant is so situated that the disposition of the
action, as a practical matter, may impede or impair his
ability
to
protect
that
interest;
and
(4)
the
applicant’s interest will not be represented adequately
by the existing parties to the suit.
Sierra Club, Inc. v. Leavitt, 488 F.3d 904, 910 (11th Cir. 2007)
(internal

quotation

marks

omitted).

Here,

Plaintiffs

contend that the Motion to Intervene is untimely.

do

not

Plaintiffs also

do not deny that Thomas and Whitten claim to have an interest in
the

Cornerstone

Plaintiffs

Trust,

are

representative

which

skeptical
of

a

is

that

beneficiary
6

the

subject

Michael
of

the

of

Gill

this
is

action.
a

Cornerstone

valid
Trust.

Plaintiffs cannot, however, seriously dispute that Michael Gill
alleges that he is the valid representative of a beneficiary of
the Cornerstone Trust, and the Court cannot decide the merits of
Michael Gill’s allegations at this stage in the litigation.

Based

on Michael Gill’s allegations, the Court finds that Michael Gill
has an interest relating to the Cornerstone Trust.
Plaintiffs do contend that disposition of this matter without
Intervenors

will

not

impede

or

impair

Intervenors’

ability

to

protect their interests, apparently because a decision in this
action will not prevent Intervenors from asserting their claims
for declaratory judgment and breach of trust in a separate action.
It is clear, however, that if the Court were to proceed without
Intervenors, then it may be more difficult for

Intervenors

to

vindicate their rights in a separate action.
Plaintiffs

also

argue

that

Intervenors’

interests

are

adequately represented by Plaintiffs, who allege that they are
beneficiaries of the Cornerstone Trust.
taken

the

trustee,

position
Kevin

that

the

Hartshorn.

Plaintiffs, however, have

Cornerstone
Compl.

Trust

¶ 28.

This

has

only

position

one
is

antagonistic to Intervenors’ position that Thomas and Whitten are
trustees of the Cornerstone Trust, so the Court cannot conclude
that their interests are adequately represented by the Plaintiffs
or by another party already in this action.
the

position

that

the

International

7

Plaintiffs also take

Academy

of

Life

has

no

interest

in

the

Cornerstone

Trust.

Pl.’s

Resp.

to

Mot.

to

Intervene 5, ECF No. 56.

This position is antagonistic to Michael

Gill’s

the

assertion

that

Healing

Water

Ministry

of

the

International Academy of Life is the same thing as the Healing
Water Ministry of the International Academy of Lymphology and is a
beneficiary of the Cornerstone Trust.
¶ 14.

Proposed Intervenor Compl.

Therefore, the Court cannot conclude that Michael Gill’s

interests

are

adequately

represented

by

the

Plaintiffs

or

by

another party already in this action.
Based on the above analysis, the Court finds that Thomas,
Whitten,

and

24(a)(2).

Michael

Therefore,

Gill

meet

these

the

four

individuals

intervene as Plaintiffs in this action.

requirements
shall

be

of

Rule

permitted

to

The Court emphasizes that

supplemental jurisdiction over Intervenors’ claims is based solely
on

the

existence

of

Plaintiffs’

federal

RICO

claims.

If

Plaintiffs’ federal RICO claims are dismissed for any reason, then
Intervenors will have to establish subject matter jurisdiction by
some other method; if they cannot do so, then their claims must be
dismissed.2
CONCLUSION
As discussed above, the Court grants the Motion to Intervene
(ECF No. 50), and the Intervenor Plaintiffs shall electronically

2

As discussed supra note 1, if Thomas and Whitten were the only parties
seeking to intervene as Plaintiffs, then the Court would have original
jurisdiction over their claims pursuant to 28 U.S.C. § 1332.

8

file their Complaint within seven days of today’s order.
Court

instructs

Scheduling

counsel

Order

entered

Revised

Discovery

2013.

Counsel

and

for

for
on

Intervenors
August

Scheduling

Intervenors

24,

Order
shall

to

review

2012,

as

entered
confer

the

well

on

with

The
Joint

as

the

February

1,

counsel

for

Plaintiffs and Counsel for Defendants regarding the feasibility of
maintaining the current schedule in light of the intervention and
shall file a status report within fourteen days of today’s Order.
If the parties decide that a modification of the Scheduling Order
is necessary, they shall inform the Court and shall provide an
amended proposed joint scheduling order.

Given that the schedule

has been in place since August of 2012 and that Intervenors knew
or should have known about this action quite some time ago, the
Court is unlikely to approve a lengthy extension of the discovery
and dispositive motions deadlines.

IT IS SO ORDERED, this 19th day of February, 2013.
S/Clay D. Land
CLAY D. LAND
UNITED STATES DISTRICT JUDGE

9