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Hatcher v. Stuart

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

April 26, 2018

WILLIAM G. HATCHER, JR., as Executor of the Estate of William G. Hatcher, Sr., and Individually, Plaintiff,
v.
PAMELA HATCHER STUART, Individually and as Trustee of the Pamela H. Stuart GST Trust, Defendant.

          ORDER

          J.RANDAL HALL CHIEF JUDGE

         Before the Court is Plaintiff William G. Hatcher, Jr. ' s ("Plaintiff") motion to remand this case to the Superior Court of Columbia County, Georgia. (Doc. 24.)

         I. BACKGROUND

         Plaintiff, Defendant Pamela Hatcher Stuart ("Defendant"), and their brother, non-party Randall Hatcher, are the children of William G. Hatcher, Sr. ("Decedent"}. (Doc. 1-1, ¶ 7.) On April 3, 2013, Decedent executed a last will and testament (the "Will") and an agreement establishing the William G. Hatcher Sr.

         Revocable Trust (the "Trust").[1] (Id. ¶ 6; see also Doc. 24-2, at 74-79 (the Will); Doc. 24-2, at 80-102 (the Trust agreement).) Decedent passed away on July 13, 2013. (Doc. 1-1, ¶ 7.) Decedent was survived by his wife, Jo Ann Hatcher, and his aforementioned children. (Id.) Decedent's estate (the "Estate") is the subject of still-pending proceedings in the Probate Court of Richmond County, Georgia (the "Probate Court"), namely Case No. 2013-RCGP-482 (the "Probate Case"), wherein Plaintiff has been qualified as executor of the Estate. (Id. ¶ 8.)

         Since Decedent's death, Plaintiff and Defendant have engaged in various disputes regarding the administration of the Estate. In June 2016, Defendant filed a petition in the Probate Case requesting that Plaintiff, as executor, "be required to account for all assets, liabilities and transactions of the Estate." (See Doc. 31, at 1-2; see also Doc. 24-2, Countercl. ¶ 1.) Defendant subsequently filed a second petition for accounting in the Superior Court of Columbia County, Georgia, this time in the matter of Stuart v. Hatcher, Case No. 2016-ECV-0038. (See Doc. 24-2, Countercl. ¶ 1.)

         On November 3, 2017, Plaintiff initiated the instant action in the Superior Court of Columbia County, Georgia, Hatcher v. Stuart, Case No. 2017-CV-0614. (See Doc. 1-1.) In his operative complaint, Plaintiff asserts: (i) two claims for declaratory judgment seeking declarations that his plans as executor to dissolve two corporations - in which the Estate holds controlling interests - are fair and equitable to the Estate's beneficiaries and the shareholders of the aforementioned corporations; (ii) a claim for money had and received against Defendant to recover funds belonging to Plaintiff, in his individual capacity, that he mistakenly contributed to the Estate and then distributed as executor to Defendant; and (iii) a claim for litigation expenses pursuant to O.C.G.A. § 13-6-11. (Id. ¶¶ 38-54.)

         On December 15, 2017, Defendant filed her answer and counterclaim in this action while it was still in the Superior Court of Columbia County. (See Doc. 24-2.) In her counterclaim, Defendant alleges that Plaintiff, in his capacity as executor of the Estate, has breached his fiduciary duties by mismanaging the Estate.[2] (Id., Countercl. ¶¶ 40-54.) In addition to monetary damages for Defendant's breaches, Defendant also seeks an award of punitive damages as well as her litigation expenses pursuant to O.C.G.A. §§ 13-6-11 & 53-12-302. (Id., Countercl. ¶¶ 55-57, 61-62.) Defendant also seeks the imposition of a constructive trust over all property that Plaintiff or anyone else has "improperly received" from the Estate or Trust, as well as injunctive relief barring Plaintiff from utilizing Estate assets to satisfy any attorney's fees incurred in defending himself against claims relating to his alleged misconduct as executor. (Id., Countercl. ¶¶ 58-60, 63-65.) The same day that she filed her answer and counterclaim in state court, Defendant also filed a notice of removal in this Court, asserting original jurisdiction over this action under 28 U.S.C. § 1332(a)(1).[3] (Doc. 1, ¶ 6.)

         On January 16, 2018, Plaintiff filed the instant motion to remand this action. (Doc. 24.) Defendant filed a response in opposition to Plaintiff's motion to remand on January 30, 2018 (doc. 31), and Plaintiff filed a reply in support of its motion on February 13, 2018 (doc. 34). Accordingly, Plaintiff's motion to remand has been fully briefed and is ripe for the Court's review.

         II. DISCUSSION

         Federal courts are courts of limited jurisdiction. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). Federal courts "possess only that power authorized by Constitution and statute . . . which is not to be expanded by judicial decree." Id. (citations omitted). The right to remove a case from state court to federal court derives from 28 U.S.C. § 1441, which provides that [e]xcept as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant ... to the district court of the United States for the district and division embracing the place where such action is pending." 28 U.S.C. § 1441(a). The party seeking to remove a case from state court to federal court bears the burden of demonstrating that jurisdiction is proper at the time the petition for removal is filed. Caterpillar Inc. v. Lewis, 519 U.S. 61, 73 (1996); Conn. State Dental Ass'n v. Anthem Health Plans, Inc., 591 F.3d 1337, 1343 (11th Cir. 2009). Removal jurisdiction is construed narrowly, and any doubts regarding the existence of federal jurisdiction are resolved in favor of the non-removing party. Pacheco de Perez v. AT&T Co., 139 F.3d 1368, 1373 (11th Cir. 1998) (citing Diaz v. Sheppard, 85 F.3d 1502, 1505 (11th Cir. 1996)); see also City of Vestavia Hills v. Gen. Fid. Ins. Co., 676 F.3d 1310, 1313 (11th Cir. 2012) (" [A] 11 doubts about jurisdiction should be resolved in favor of remand to state court.") (citing Univ. of S. Ala, v. Am. Tobacco Co., 168 F.3d 405, 411 (11th Cir. 1999)).

         "Among longstanding limitations on federal jurisdiction otherwise properly exercised are the so-called 'domestic relations' and 'probate' exceptions." Marshall v. Marshall, 547 U.S. 293, 299 (2006) ("Neither [of these exceptions] is compelled by the text of the Constitution or federal statute. Both are judicially created doctrines stemming in large measure from misty understandings of English legal history.").''[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 a state probate court." Id. at 311-12. "But it does not bar federal courts from adjudicating matters outside those confines and otherwise within federal jurisdiction."[4] Id. at 312. Policy justifications for the probate exception include: (i) probate proceedings "are fights over a thing of value that is in the [state] court's control - and another court should not try to elbow its way into the fight"; and (ii) "state courts are assumed to have developed a proficiency in these matters, to have procedures tailored to them, and to work closely with and even employ specialized staff not found in federal courts." See Jones v. Brennan, 465 F.3d 304, 307 (7th Cir. 2006) (citations omitted).

         In determining whether the probate exception applies, federal courts "must examine the substance of the relief that [the parties] are seeking, and not the labels they have used." Mercer v. Bank of N.Y. Mellon, N.A., 609 Fed.Appx. 677, 679 (2d Cir. 2015) (citing Lefkowitz v. Bank of N.Y., 528 F.3d 102, 107 (2d Cir. 2007)). In the Eleventh Circuit, regardless of how an issue is couched, a federal action seeking "a valuation of estate assets or ... an actual transfer of property under probate ... is precluded by the probate exception." Mich. Tech Fund v. Century Nat. Bank of Broward, 680 F.2d 736, 741 (11th Cir. 1982) (citing Turton v. Turton, 644 F.2d 344, 347 (5th Cir. 1981)). Similarly, the probate exception applies to claims requiring a premature accounting of an estate still in probate. See Turton, 644 F.2d at 348 ("The feature that controls federal jurisdiction in such cases is the effect a judgment would have on the jurisdiction of the probate court. Hence, for example, a suit against an executor personally for malfeasance is beyond federal jurisdiction, if it requires a premature accounting of an estate still in probate." (citations omitted)). Nevertheless, a district court, was a court of equity, can fashion the relief granted so that the relief would be within th[e] [district c]ourt's jurisdiction and would not interfere with the jurisdiction of the probate court." Hudson v. Abercrombie, 682 F.Supp. 1218, 1220 (N.D.Ga. 1987) (citing Waterman v. Canal-La. Bank & Tr. Co., 215 U.S. 33, 45-47 (1909)) .

         Here, Defendant's fundamental counterclaim is that Plaintiff, by mismanaging the Estate during probate, has breached his fiduciary duties as executor of the Estate. (See Doc. 24-2, Countercl. ¶¶ 40-54; see also n.2, supra.)In addition to seeking compensatory and punitive damages for these breaches, Defendant seeks the imposition of a constructive trust over any property ''improperly received by [Plaintiff or anyone else] from the Estate or Trust'' as well as an injunction restraining Plaintiff from using "Estate assets to pay his attorney's fees to defend his maladministration" of the Estate. (See Doc. 24-2, ¶¶ 55-65.) Thus, while Defendant's counterclaims do not directly concern the probate or annulment of the Will and purport to be based upon in personam jurisdiction, their resolution would require this Court to: (i) interfere with the administration of the Estate; (ii) dispose of ...


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