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Wallace v. Curwen

United States District Court, S.D. Georgia, Augusta Division

February 5, 2015

A. STEPHENSON WALLACE, As Executor of the Estate of Jack Bell, Plaintiff,


J. RANDAL HALL, District Judge.

Presently before the Court is Plaintiff's ("the Estate") Motion to Remand. (Doc. 8.) Defendant Susan Bell Curwen ("Curwen") removed this matter from the Superior Court of Richmond County, Georgia after the Honorable James G. Blanchard, Sr. heard argument at the motion to dismiss stage on whether the Employee Retirement Income Security Act of 1974 ("ERISA") governs the individual retirement account ("IRA") at issue in Count V of the Estate's Complaint (Doc. 1, Ex. A ("Compl.")). No diversity exists between the Estate and Curwen. Accordingly, it is Curwen's burden as the removing party to establish that this case arises under federal law. She has failed to do so. For this reason, the Court GRANTS the Estate's Motion to Remand. (Doc. 8.)


This case arises from Curwen's alleged abuse of (1) her father's assets while acting under a power of attorney and (2) his estate during her tenure as Executrix. (Compl. at 1, ¶ 4.) The Probate Court of Richmond County, Georgia removed Curwen as Executrix by order entered on February 19, 2013. (Id. ¶ 1.) Thereafter, Mr. Wallace, the Successor Executor of the Estate, filed suit against Curwen in the Superior Court of Richmond County on August 20, 2014. (Id. ¶ 2.) The Estate alleged generally that Curwen "breached her fiduciary duties... and removed certain assets and converted said assets to her own use and benefit." (Id. ¶ 4.) Each of the six counts identified the specific property, goods, services, or bank accounts at issue. Of relevance to this motion is Count V. In Count V, the Estate alleges that the late Dr. Bell "purportedly signed a certain IRA beneficiary designation changing the beneficiary of his Solomon Smith Barney IRA account" to Curwen. (Id. at 5, ¶ 1.) Count V further averred that this was done "without the consent of his wife, Edna E. Bell, " and without such consent, "any change of beneficiary would be ineffective." (Id. ¶ 3.) Finally, the Estate alleged that "this change of beneficiary was done intentionally by [Curwen] with the intent to remove certain assets from her father's estate" to the tune of $500, 000.00 or more. (Id. ¶¶ 3, 4.)

On September 23, 2014, Curwen filed a motion to dismiss Count V in the Superior Court, as well as a motion for a more definite statement with respect to the Estate's claims of fraud, duress, etc. (Notice of Removal, Doc. 1, ¶ 16; see also Doc. 1, Ex. 2 ("Hearing Tr."), at 2.) One month later, the Superior Court held a hearing on those motions. (Hearing Tr. at 1.) Curwen's counsel opened the hearing with a request that the Court make "a ruling as a matter of law on Count Five, " explaining that he was "not aware of any Georgia law that says a spouse has to sign" for the beneficiary designation to be effective and that ERISA, which does have such a requirement, "does not apply [to the Smith Barney IRA] on the facts alleged in the complaint." (Id. at 2, 4.) Thus, according to Curwen' s counsel, Count V failed to state a claim upon which relief could be granted. (Id. at 4.)

The Estate's counsel responded that early in the case, a tax lawyer provided an opinion that "these particular accounts... were basically governed by federal law and they required spousal consent." (Id. at 5.) He continued, "I believe there's a question of fact as to whether or not this particular file with Smith Barney [], exactly how it was created and exactly what was signed and how it was signed. There may be a question of whether or not Dr. Bell even signed it." (Id.) In arguing that it would be error to dismiss the claim at that stage without the benefit of discovery, the Estate's counsel concluded:

I have not been able to get with Smith Barney, [the Executor] has not been able to get with Smith Barney, to see exactly what sort of account this was, whether it's a SEP IRA, what sort of account. We believe, according to the opinions that were given by Larry Broyles, a tax lawyer, that this account is governed by ERISA. But you won't know that, Your Honor, until we get the documents as to how the account was created and whether or not the arguments of the defendant have any merit. But only until we get those documents can we find out whether or not it was. It was, obviously, an account on which no taxes were paid when money was put in and the case law, according to Larry Broyles, is that you have to have spousal consent and we know the spouse did not consent, based on the limited information we have.

(Id. at 7.)

On November 20, 2014, Curwen's counsel received the transcript of the hearing. (Def.'s Resp., Doc. 11, at 2.) The Superior Court denied Curwen's motion to dismiss and motion for a more definite statement on November 25, 2014. (Doc. 1, Ex. C.) Curwen then removed the case to this Court on December 18, 2014, contending this Court has (1) original subject matter jurisdiction over Count V pursuant to 28 U.S.C. § 1331 as it "arises under the laws of the United States, namely ERISA" and (2) supplemental jurisdiction under the provisions of 28 U.S.C. § 1367(a) over the remaining state law claims because "they form part of the same case or controversy." (Notice of Removal ¶ 22.) Although the Estate filed its complaint in Superior Court in August, Ms. Curwen further contends that her Notice of Removal is timely because she filed it within 30 days of receipt of an "order or other paper" - namely the hearing transcript and/or the Superior Court's order denying her motion to dismiss - from which she first ascertained that the case was removable. See 28 U.S.C. § 1446(b)(3).

The Estate moved to remand on December 24, 2014, asserting that neither the face of the complaint nor the purported "other papers" present a clear federal question supporting removal. (Pl.'s Br., Doc. 9, at 5.) It further contends that Curwen merely raises the application of ERISA to the IRA as a defense, and any defense presenting a federal question - even a valid one like ERISA preemption - cannot sustain removal jurisdiction. (Id. (citing Whitt v. Sherman Int'l Corp., 147 F.3d 1325 (11th Cir. 1998); see also Pl.'s Reply, Doc. 12, at 3-4.)


On a motion for remand, the burden of establishing federal jurisdiction is placed upon the party seeking removal. Williams v. Best Buy Co., Inc., 269 F.3d 1316, 1319 (11th Cir. 2001). It is well established that removal jurisdiction is construed narrowly with all doubts resolved in favor of remand. Mann v. Unum Life Ins. Co. of Am., 505 F.App'x 854, 856 (11th Cir. 2013) ("[W]e strictly construe removal statutes, resolving all doubts in favor of remand."); Univ. of S. Ala, v. Am. Tobacco Co., 168 F.3d 405, 411 (11th Cir. 1999) (citing Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09 (1941)); Burns v. Windsor Ins. Co., 31 F.3d 1092, 1094 (11th Cir. 1994) ("[R]emoval statutes are construed narrowly."). A district court considering whether removal is proper "has before it only the limited universe of evidence available when the motion to remand is filed - i.e., the notice of removal and accompanying documents." Lowery v. Ala. Power Co., 483 F.3d 1184, 1214 (11th Cir. 2007). If that evidence is insufficient to establish removal, "neither the defendants nor the court may speculate in an attempt to make up for the notice's failings." Id. at 1214-15.

A defendant may only remove an action from state court if the federal court would have original jurisdiction over the subject matter. 28 U.S.C. § 1441(a). A federal district court has original jurisdiction over diversity cases and cases arising under federal law. 28 U.S.C. §§ 1331, 1332. No diversity exists between the Estate and Curwen, so this Court must decide whether the Estate's case arises under federal law.

Removal jurisdiction based on a federal question is governed by the well-pleaded complaint rule. Taylor v. Anderson, 234 U.S. 74, 75-76 (1914); Cmty. State Bank v. Strong, 651 F.3d 1241, 1251 (11th Cir. 2011); Ervast v. Flexible Products Co., 346 F.3d 1007, 1012 (11th Cir. 2003); Kemp v. Int'l Bus. Machs. Corp., 109 F.3d 708, 712 (11th Cir. 1997) (citing Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 11 (1983)). In plain terms, unless the face of a plaintiff's complaint states a federal question, a defendant may ...

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