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
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?