Young v. Schutz
Filing
28
Enter MEMORANDUM Opinion and Order Signed by the Honorable Elaine E. Bucklo on 12/8/2014. Mailed notice (jdh)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
AARON YOUNG,
)
)
)
)
)
) Case 14 CV 02832
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)
)
)
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)
)
)
Plaintiff,
v.
Klarice Schutz,
Defendant.
MEMORANDUM OPINION AND ORDER
In a complaint filed on April 21, 2014, plaintiff alleges that
he
purchased
Prestige
twelve
Art,
Inc.,
works
a
of
art
(the
non-party,
“Subject
in
November
Art
of
Works”)
from
2002.
By
contemporaneous agreement with Prestige’s owners, Bernard and Louis
Schutz, who are defendant’s father and brother, respectively, the
Subject Art Works were to remain in the possession of Bernard and his
wife, Betty, until both were deceased.
Betty passed away in 2011.
After
2013,
Bernard’s
passing
in
October
of
plaintiff
sought
to
obtain possession of the Subject Art Works, but his efforts were
blocked by defendant, the executor of Bernard’s estate, who had taken
control of the building in which the Subject Art Works were located.
This law
ensued.
suit,
which
asserts
claims
for
conversion
and
replevin,
Before
me
is
defendant’s
motion
to
stay
the
action
under
Colorado River Water Conservation Dist. v. U.S., 424 U.S. 800 (1976),
pending the outcome of ongoing probate and related state proceedings.
For the following reasons, I deny the motion.
I.
Probate proceedings began with the filing of Bernard’s will on
November 12, 2013, and were later consolidated with a related state
action Prestige filed against defendant.
central
dispute
in
the
state
Defendant asserts that a
proceedings
is
over
the
competing claims to ownership of the Subject Art Works.
parties’
Plaintiff is
not a party to the state proceedings, although he filed a document
styled “Notification With Respect To Wrongfully Inventoried Property”
in probate court “to notify the probate court of Young’s ownership of
the Subject Art Works and the pendency of this action in which Young
seeks to enforce those rights.”
Resp. at 4.
Defendant argues that
plaintiff’s federal case should be stayed because his claims here
“depend[]
absolutely”
on
the
probate
judge’s
resolution
of
the
documents
and
competing ownership claims to the Subject Art Works. Mot. at 4.
Although
defendant’s
motion
makes
reference
to
arguments in the state proceedings, she did not attach any materials
from
those
proceedings
to
her
motion.
From
the
materials
that
plaintiff submitted in response, however, it appears that defendant
claims ownership of all of the Subject Art Works.
The transcript of
a hearing before the probate judge on October 23, 2014, indicates
2
that defendant’s claim of ownership derives from two sources.
As to
some of the Subject Art Works, she claims that Bernard gifted them to
her during his lifetime.
As to others, she claims that they were
part of Bernard’s “personal art collection” at the time of his death,
and thus were bequeathed to her pursuant to the terms of his will.
See Oct. 23, 2014, Tr., Pl.’s Supp. Exh. A at 51-53.
At the same
hearing, Prestige expressed its view that plaintiff was the owner of
the Subject Art Works.
Defendant
painstakingly
Id. at 22-23. 1
asserts
that
resolving
“the
the
Probate
competing
Court
has
ownership
committed
interests
to
in
Bernard’s Estate,” and that the parties have undertaken substantial
work towards that end.
Mot. at 4.
Defendant insists that litigating
the ownership of the Subject Art Works in this court would interfere
with
the
probate
court’s
task
and
would
create
the
risk
of
inconsistent results.
Plaintiff
federal
and
argues
state
that
cases
a
stay
involve
is
inappropriate
different
parties
because
and
the
different
issues, and thus do not meet the “parallel proceedings” requirement
of Colorado River.
Plaintiff emphasizes that the Subject Art Works
represent only twelve of the several hundred works of art at issue in
the
state
proceedings,
which
involve
1
a
“family
squabble”
having
Defendant suggests that Prestige has also claimed ownership of the
Subject Art Works in the state proceedings, see Mot. at ¶¶ 10, 13-16,
but she does not point to any portion of the record reflecting that
claim.
3
nothing to do with him. Plaintiff further contends that even if the
proceedings were parallel, application of the Seventh Circuit’s test
for
determining
whether
exceptional
circumstances
justify
the
relinquishment of federal jurisdiction reveals that they do not.
II.
Abstention under Colorado River is the exception, not the norm,
as federal courts have a “virtually unflagging obligation…to exercise
the
jurisdiction
given
them.”
Colorado
River,
424
U.S.
at
817.
Accordingly, the general rule is that “the pendency of an action in
the state court is no bar to proceedings concerning the same matter
in the Federal court having jurisdiction.” Id. (internal quotations
and citation omitted) Nevertheless, when there is concurrent federal
and state court litigation, “exceptional circumstances may exist that
permit a federal court to refrain from exercising that jurisdiction
for reasons of wise judicial administration.”
Interstate Material
Corp. v. City of Chicago, 847 F.2d 1285, 1287 (7th Cir. 1988) (citing
Colorado River, 424 U.S. at 818) (quotation marks omitted).
A two-part inquiry informs a federal court’s analysis of whether
a stay is appropriate.
498 (7th Cir. 2011).
Adkins v. VIM Recycling, Inc., 644 F.3d 483,
First, the court must determine whether the
concurrent federal and state suits are actually parallel.
Id.
This
requirement means that the party seeking the stay must show that
“substantially
substantially
the
the
same
same
parties
issues
are
in
4
contemporaneously
another
forum.”
litigating
Calvert
Fire
Insurance Co. v. American Mutual Reinsurance Co., 600 F.2d 1228, 1229
n. 1 (7th Cir. 1979).
If they are, the court proceeds to determine
whether “exceptional circumstances” justify abstention.
F.3d at 498.
River
Adkins, 644
But “[i]f the actions are not parallel, the Colorado
doctrine
does
not
apply,”
AAR
Intern.,
Inc.
v.
Nimelias
Enterprises S.A., 250 F.3d 510, 518 (7th Cir. 2001), so the inquiry
ends.
Defendant’s
dispute
that
motion
the
only
falters
at
parties
the
to
the
threshold.
There
probate
proceedings
defendant, Louis, and Louis’s wife, Judith Schutz.
is
no
are
Decl. of Jeffrey
Stevenson, Pl.’s Resp., Exh. E at ¶ 4. In fact, at the October 23,
2014, hearing, defendant objected to allowing plaintiff to file any
claim to the Subject Art Works in those proceedings on the ground
that he had failed timely to do so after receiving notice of his
rights. 2
See Oct. 23, 2014, Tr., Pl.’s Supp. Exh. A. at 19:6-10.
The probate transcripts before me confirm that plaintiff is not
a
party
to
the
probate
proceedings,
2
and
that
no
party
to
those
The parties dispute whether the notice plaintiff received adequately
informed him that his ownership of the Subject Art Works was at issue
in the probate proceedings.
Defendant cites her counsel’s June 26,
2014, letter to plaintiff informing him of the proceedings and of his
right to file a claim.
But this letter made no mention of the
Subject Art Works, and defendant offers no other basis from which to
conclude that plaintiff knew his ownership of those works was
contested.
Although defendant, in her capacity as executor of
Bernard’s estate, filed an inventory of the estate’s assets in the
probate proceedings, there is no evidence that plaintiff received a
copy of that inventory any time prior to September 26, 2014, which is
when defendant contends plaintiff’s right to file a claim expired.
5
proceedings is advocating in plaintiff’s interest.
At the October 23
hearing,
dispute
the
probate
judge
initially
viewed
the
over
the
Subject Art Works as a “three-way battle” among defendant, Prestige,
and plaintiff, who had by then filed his “Notification With Respect
To Wrongfully Inventoried Property” but had not participated in any
other proceedings.
Id. at 22:1-2.
After Prestige clarified that in
its view, the Subject Art Works “belong to Aaron Young, and they were
sold to Aaron Young a long time ago,” and that Prestige was “not
going to prosecute any objection to [the executor’s] inventory on
that
artwork,”
id.
at
23:10-14,
the
probate
judge
concluded,
narrow that battle down to two, then, instead of three.”
23:18-20.
“we
Id. at
Once it became clear that the dispute over the Subject Art
Works was between plaintiff and defendant, and that Prestige would
not pursue objections based on plaintiff’s ownership of the Subject
Art Works, the probate judge set a status hearing for November 12,
2014, to address plaintiff’s “Notification With Respect To Wrongfully
Inventoried Property” and ordered plaintiff to attend.
At the November 12 hearing, however, the probate judge ruled
that notwithstanding plaintiff’s filing of the procedurally anomalous
“Notification,” plaintiff was not a party to the proceedings.
12, 2014, Tr., Pl.’s Supp. Exh. E. at 16:4-6.
Nov.
Indeed, defendant
conceded at the hearing that plaintiff would not be bound by the
probate judge’s ruling on the ownership of the Subject Art Works, and
further insisted that she was “not trying to bring [plaintiff] into
6
these proceedings. Id. at 5:19, 6:10.
These developments raise a
“substantial
proceedings
doubt”
that
the
probate
would
“be
an
adequate vehicle for the complete and prompt resolution of the issues
between the parties.”
Moses H. Cone Memorial Hosp. v. Mercury Const.
Corp., 460 U.S. 1, 28 (1983).
likelihood
presented
that
in
determining
the
the
state
federal
whether
the
Yet, “whether there is a ‘substantial
litigation
case,’”
will
the
is
proceedings
dispose
“critical
are
parallel
of
all
claims
question”
under
in
Colorado
River. Huon v. Johnson & Bell, Ltd., 657 F.3d 641, 646 (7th Cir. 2011)
(quoting Adkins, 644 F.3d at 499) (reversing stay).
While defendant is correct that the parties to the two suits
need not be identical, abstention is inappropriate unless the movant
establishes that the interests of some party to the state proceedings
are “closely aligned” with the interests of the absent party.
Adkins,
644
F.3d
at
499
and
n.
6
(acknowledging
that
See
“precise
identity of parties” is not required where parties’ interests are
“closely
aligned,”
but
holding
align,
but
asserts
proceedings
of
Defendant’s only argument on the issue says nothing of
interests
that
alignment
parallel).
parties’
establish
“general
is
the
to
a
interests”
how
insufficient
that
that
“Louis
are
should
properly be a party in interest in the [federal] lawsuit because he
is the person who sold [plaintiff] art from Bernard’s personal art
collection that [defendant] will assert Louis had no legal right to
sell.”
Mot. at 6.
This argument, as best I can discern it, seems to
7
be that instead of suing defendant for converting property plaintiff
claims to have purchased from Prestige, plaintiff should have sued
Louis for purporting to sell property on behalf of Prestige without
the authority to do so, as the property did not belong to Prestige
but to Bernard.
Whatever
the
merits
of
this
hypothetical
claim,
defendant’s
argument that plaintiff could or should have sued Louis does not
support her entitlement to a stay.
for
basing
Colorado
River’s
Indeed, she cites no authority
“parallel
proceedings”
analysis
on
a
federal case plaintiff might have brought, rather than on the actual
case he has brought.
Enterprises,
S.A.,
Her citation to AAR Int’l Inc. v. Nimelias
250
F.3d
510,
518
(7th
Cir.
2001)
(reversing
abstention because proceedings were not parallel) for the general
proposition that “suits need not be identical to be parallel…and the
mere presence of additional parties or issues in one of the cases
will
not
necessarily
preclude
a
finding
that
they
are
parallel,”
likewise does not persuade me that there is a substantial identity of
parties in the concurrent proceedings here.
At bottom, while the two proceedings are likely to address some
of
the
same
issues,
the
Supreme
Court
has
made
clear
that
the
inherent risks and inefficiencies of pursuing overlapping claims in
multiple forums are not a sufficient basis for relinquishing federal
jurisdiction.
See Huon v. Johnson & Bell, Ltd., 657 F.3d 641, 649
(7th Cir. 2011) (“[a]bstention requires more than the pendency of
8
another lawsuit, because judicial economy will always be an issue
when there is concurrent litigation.
Knowing this, the Supreme Court
nevertheless has admonished district judges not to stay or dismiss
actions without strong justification to do so.”). Because there is no
dispute that plaintiff is not a party to the probate proceedings, nor
are
his
interests
represented
in
that
case,
I
conclude
that
the
federal and state proceedings are not parallel.
III.
For the foregoing reasons, defendant’s motion to stay is denied.
ENTER ORDER:
_____________________________
Elaine E. Bucklo
United States District Judge
Dated: December 8, 2014
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