Slaugh v. Neidigh

Filing 20

MEMORANDUM DECISION AND ORDER RE: DEFENDANTS MOTION TO DISMISS FOR LACKOF DIVERSITY JURISDICTION AND ABSTENTION - IT IS HEREBY ORDERED that Defendants Motion to Dismiss for Lack of Diversity Jurisdiction and Abstention (Docket No. 3 ) is GRANTED, in part, and DENIED, in part, as follows: 1. Diversity jurisdiction exists. Defendants Motion to Dismiss is denied in this respect; 2. Abstention does not apply. Defendants Motion to Dismiss is denied in this respect. 3. The probate exception will not be applied in toto. Defendants Motion to Dismiss is denied in this respect. However, the Court will apply the probate exception to Plaintiffsclaims related to the at-issue codicil. Defendants Motion to Dismiss is granted in this limited respect. Signed by Judge Ronald E. Bush. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (cjs)

UNITED STATES DISTRICT COURT
DISTRICT OF IDAHO

ROXANNE L. SLAUGH, an individual in her
capacity as Successor Trustee of the Neidigh Trust,
dated April 21, 2010 and amended June 10, 2015
Plaintiff,
vs.
MARIANNE POSELEY WAGNER
MARRQUARDT NEIDIGH,

Case No.: 2:15-cv-00555-REB
MEMORANDUM DECISION AND
ORDER RE: DEFENDANT’S
MOTION TO DISMISS FOR LACK
OF DIVERSITY JURISDICTION
AND ABSTENTION
(Docket No. 3)

Defendant.

Now pending before this Court is Defendant’s Motion to Dismiss for Lack of Diversity
Jurisdiction and Abstention (Docket No. 3). At the close of the June 22, 2016 hearing on
Defendant’s Motion to Dismiss, the Court discussed preliminary assessments of the Motion’s
merits for the benefit of the parties moving forward. Having carefully considered the record, and
now, after additional consideration, that position remains unchanged and is formalized in this
Memorandum Decision and Order.
I. DISCUSSION
Defendant originally moved to dismiss Plaintiff’s Complaint on two grounds: (1) lack of
diversity jurisdiction, and (2) abstention. See generally MTD (Docket No. 3). Since filing her
Motion to Dismiss, an additional basis to dismiss Plaintiff’s Complaint presented itself – the
probate exception to federal jurisdiction. See Reply in Supp. of MTD, pp. 4-6 (Docket No. 8).
Defendant’s Motion to Dismiss is granted, in part, and denied, in part, as follows:

MEMORANDUM DECISION AND ORDER - 1

First, as to diversity jurisdiction, Plaintiff brings this action as a successor trustee of the
Neidigh Trust. Although a personal representative of a decedent’s estate is considered a citizen
of the same state as the decedent, a successor trustee may bring diversity actions in his or her
own name and upon the basis of his or her own citizenship. See Fall v. Keasler, 1991 WL
340182, *1 (N.D. Cal. 1991) (“It is well-settled federal law that a trustee who holds legal title to
trust assets has authority to sue to protect those assets. It is the citizenship of the trustee and not
the beneficiaries of the trust that controls in determining diversities . . . .”) (citing Chappedelaine
v. Dechenaux, 8 U.S. 306, 307 (1808)). Here, Plaintiff is a resident of California. Defendant is a
resident of Idaho. They are diverse, and there is no dispute over the amount-in-controversy.
Accordingly, diversity jurisdiction exists. Defendant’s Motion to Dismiss is denied in this
regard.
Second, as to abstention, Defendant argues that simultaneous state court proceedings
involving state law should proceed first so as to inform – if not also dispose of – any tangential
issues at play here. See MTD, p. 4 (Docket No. 3) (“Ms. Slaugh is a defendant in the State Court
Action, an action that raises virtually all of the issues she wants to litigate in this Court. . . . . No
federal question is presented as only matters involving state law are at issue; no purpose or
economy is served in allowing parallel cases to simultaneously proceed at both the federal and
state levels; and this Court’s decisions may not only conflict with, but interfere in, the judicial
process pending in Idaho.”). However, in the Court’s mind, the particular contours of the
manner in which the dispute is at issue in the state court proceedings are still inchoate. As a
result, it cannot be concluded that there is a sufficient match in what will take place elsewhere,

MEMORANDUM DECISION AND ORDER - 2

how it may take place elsewhere, and the particular effect of whatever rulings might occur
elsewhere, to make it apparent that abstention is appropriate here and now. Some of the disputed
landscape in the two courts share similar characteristics and those similarities have been
carefully scrutinized– in part because they also apply to the questions raised by the probate
exception argument (discussed infra)). But such parallels, standing alone, do not warrant
abstention, where to do so would abdicate this Court’s “virtually unflagging” obligation to
adjudicate claims within its jurisdiction. Colorado River, 424 U.S. at 817. Defendant’s Motion
to Dismiss is denied in this regard.
Third, as to the probate exception, before the ruling in Marshall v. Marshall, 547 U.S.
293 (2006), a strong argument could have been made in favor of the exception’s application
here, given “common denominators” at play between the state court cases and this case.
However the Marshall decision narrowed the circumstances in which the probate exception
applied, with Justice Ginsburg concluding:
[T]he probate exception reserves to state probate courts the probate or annulment of
a will and the administration of a decedent’s estate; it also precludes federal courts
from endeavoring to dispose of property that is in the custody of the state probate
court. But it does not bar federal courts from adjudicating matters outside those
confines and otherwise within federal jurisdiction.
Id. at 311-12. In turn, the Supreme Court reversed the Ninth Circuit and allowed petitioner’s
tortious interference claim to proceed in federal court, alongside a contemporaneous Texas
probate court action, commenting:
As the Court of Appeals correctly observed, Vickie’s claim does not involve the
administration of an estate, the probate of a will, or any other purely probate matter.
Provoked by Pierce’s claim in the bankruptcy proceedings, Vickie’s claim . . . alleges
a widely recognized tort. Vickie seeks an in personam judgment against Pierce, not
the probate or annulment of a will. Nor does she seek to reach a res in the custody
of a state court. . . . . At issue here, however, is not the Texas Probate Court’s
MEMORANDUM DECISION AND ORDER - 3

jurisdiction to entertain Vickie’s tortious interference claim. Under our federal
system, Texas cannot render its probate courts exclusively competent to entertain a
claim of that genre.
Id. at 312, 314 (internal quotation marks and citations omitted).1
In other words, after Marshall, federal courts must narrowly apply the probate exception
to matters strictly within the province of state probate courts (e.g., probating a will,
administering an estate, or disposing property in a state probate court’s custody), keeping in
mind that a party seeking to be heard in federal court and who is entitled to be heard in federal
court, should be provided that forum.
Still, a dilemma remains, because Plaintiff’s claim is not identical to that which is
sometimes found in the claims at play in Marshall (e.g., a state-law tort action for interference
with an expected inheritance or gift). That is, the Complaint in this case essentially represents a
declaratory judgment action – one that, while touching on issues of undue influence, also speaks
to issues surrounding a trustee’s powers. The Court is well aware that, in this setting, such
issues are commonly part of a general estate planning process. But, on balance, the Court is
persuaded, given Marshall, that the dispute framed in this case can and should go forward here
in federal court.

1

In his concurrence, Justice Stevens went even further, stating in part:

Whatever the continuing viability of these individual [jurisdictional] rules, together
they are more than adequate to the task of cabining federal courts’ jurisdiction. They
require no helping hand from the so-called probate exception.
Rather than preserving whatever vitality that the “exception” has retained as a result
the Markham dicta, I would provide the creature with a decent burial in a grave
adjacent to the resting place of the Rooker-Feldman doctrine.
Marshall, 547 U.S. at 318.
MEMORANDUM DECISION AND ORDER - 4

Any hesitation in not applying the probate exception across-the-board is a function of
Plaintiff’s bid to have the at-issue codicil declared invalid. See, e.g., Compl., ¶ 42 & 47 (Docket
No. 1). Such a request is more closely aligned with a probate court’s responsibilities with assets
under its control, to the point that retaining such a claim would “cut too close to the bone” of
taking action that would interfere in some way with that already before the state court. Hence,
Defendant’s Motion to Dismiss is granted in this limited respect.
II. ORDER
Based on the foregoing, IT IS HEREBY ORDERED that Defendant’s Motion to Dismiss
for Lack of Diversity Jurisdiction and Abstention (Docket No. 3) is GRANTED, in part, and
DENIED, in part, as follows:
1.

Diversity jurisdiction exists. Defendant’s Motion to Dismiss is denied in this

respect;
2.

Abstention does not apply. Defendant’s Motion to Dismiss is denied in this

respect.
3.

The probate exception will not be applied in toto. Defendant’s Motion to Dismiss

is denied in this respect. However, the Court will apply the probate exception to Plaintiff’s
claims related to the at-issue codicil. Defendant’s Motion to Dismiss is granted in this limited
respect.
DATED: August 18, 2016

Honorable Ronald E. Bush
Chief U. S. Magistrate Judge

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