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Stevens v. Kary

February 25, 2010

RANDALL STEVENS, PLAINTIFF,
v.
CHERYL KARY, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Gregory G. Hollows United States Magistrate Judge

FINDINGS AND RECOMMENDATIONS

Plaintiff is proceeding in this action pro se and in forma pauperis. This proceeding was referred to this court by Local Rule 72-302(c)(21). Before the court are motions to dismiss, filed August 14, 2009, by defendant Sun Life Assurance Company ("Sun Life"), and August 17, 2009, by defendant Kary.*fn1

On September 15, 2009, this court issued an order to show cause why this case should not be stayed in light of a pending probate proceeding in state court. Plaintiff has now responded to that order.

BACKGROUND

Plaintiff has filed an amended complaint alleging that his step sister, Cheryl Kary, converted personal and trust property. He also alleges that defendant Sun Life Insurance Company assisted Kary in the conversion. (Am. Compl. ¶ 9.) The amended complaint refers to an ongoing probate court proceeding.*fn2 Jurisdiction is predicated both on diversity, and on federal question, including the Arbitration Act, 9 U.S.C. § 4 et seq., and the First, Fifth, and Fourteenth Amendments; however, all of the claims are limited to state law, including conversion, trespass to chattel, reduced life expectancy, intentional tort, duty to mitigate by arbitration and abuse of process, malicious/vexatious litigation to harm, assault, negligence, aiding and abetting, breach of contract, infliction of emotional distress, and estoppel from unjust enrichment.

DISCUSSION

All of the parties acknowledge the pending probate proceeding in state court. It has been well established that probate matters are not within the jurisdiction of the federal court. Marshall v. Marshall, 547 U.S. 293, 308, 126 S.Ct. 1735, 1746 (2006) ("Decisions of this Court have recognized a 'probate exception,' kin to the domestic relations exception, to otherwise proper federal jurisdiction."); Markham v. Allen, 326 U.S. 490, 494 (1946) (noting that federal courts cannot interfere with probate proceedings or assume control of property in the custody of the state court); Sutton v. English, 246 U.S. 199, 205 (1918) (observing that it is not within the jurisdiction of the federal courts to set aside a will or the probate thereof); Waterman v. Canal-Louisiana Bank & Trust Co., 215 U.S. 33, 45 (1909) (holding that the jurisdiction of the probate court may not be interfered with concerning the probate administration of the estate).

In making the determination, the court should query "whether entertaining the action would cause the federal district court to interfere with the probate proceedings or assume general jurisdiction of the probate or assume control of property in the custody of the state court."

Moser v. Pollin, 294 F.3d 335, 340 (2nd Cir. 2002) (after examining first prong which is whether district court would have to directly probate a will or administer an estate), quoting Markham, 326 U.S. at 494. "Thus, the 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. But it does not bar federal courts from adjudicating matters outside those confines and otherwise within federal jurisdiction." Marshall, 547 U.S. at 311-12, 126 S.Ct. at 1748.

The amended complaint is replete with references to the ongoing trust action in probate court. For example, the amended complaint alleges in part:

That Kary's acts, words, deeds and omissions violated the Trust terms and converted Trust property; that because of Kary's conduct and the converting of Trust property, Lloyd was angered because of the breach.

(Am. Compl. ¶ 20.)

Because of the wrongful and erroneous conduct or conversion of Trust property, and breach of the Trust terms, Lloyd modified the Trust and took Kary out of the Trust, on or around March 3, 2004, based on Kary's improper conduct, acts, breach and/or omissions of removing Trust assets from the Safe Deposit Box. Kary is sued for the wrongful and erroneous conduct, from her theft, fraud, breach, conversion, and/or resulting transfer of Trust assets, hereafter more fully set forth. (Id., ¶ 22.)

The amended complaint further alleges that the Department of Housing and Community Development ("HCD") and Walter (non-parties) knew or should have known of the Superior Court's order prohibiting conversion of title, but did assist defendant Kary in wrongfully altering title from plaintiff to Kary, in violation of the court order and the terms of the Trust. Despite the non-party status of HCD and Walter, plaintiff alleges they show "further fraud, concealment, or illegal or wrongful acts or omissions by Defendant Kary over Trust assets." (Id., ΒΆ 38.) The property that is the subject of the instant dispute is alleged to be part of the trust. The amended ...


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