Kahn v. Kahn, 93-3248
| Citation | 21 F.3d 859 |
| Decision Date | 21 April 1994 |
| Docket Number | No. 93-3248,93-3248 |
| Parties | Linda S. KAHN, Appellant, v. Farrell KAHN, Appellee. |
| Court | United States Courts of Appeals. United States Court of Appeals (8th Circuit) |
Francis G. Slay, St. Louis, MO, argued (Jim J. Shoemake, on the brief), for appellant.
Alan C. Kohn, St. Louis, MO, argued (John A. Klobasa, on the brief), for appellee.
Before BEAM, Circuit Judge, BRIGHT, Senior Circuit Judge, and MORRIS SHEPPARD ARNOLD, Circuit Judge.
Linda Kahn (Linda) appeals from the district court's entry of summary judgment in favor of her ex-husband, Farrell Kahn (Farrell), holding Linda's claims for breach of fiduciary duty, conversion, constructive fraud and fraud barred by res judicata. The present action, seeking tort damages and an accounting, involves allegations of wrongful conduct that occurred in the course of the marital relationship and that are inextricably intertwined with those issues subject to the parties' previously adjudicated dissolution proceeding. Consequently, we hold that the domestic relations exception to diversity of citizenship jurisdiction applies and precludes the exercise of federal jurisdiction. 1 We dismiss the appeal and direct the district court on remand to dismiss the action for lack of subject matter jurisdiction.
Linda filed for divorce after almost thirty years of marriage. She alleged various improprieties as to Farrell's marital conduct, which generally included extramarital affairs, procuring loans secured by marital property and Linda's property without Linda's permission, misappropriating the net profits from the sale of Linda's separate property, converting funds and failing to render an accounting. Citing the aforesaid conduct, Linda's counsel requested that the court award Linda a "heavily disproportionate share of the marital property." Tr. on Appeal, Dissolution Proceeding (Oct. 9, 1990), Vol. I, at 27. Trial of the dissolution action took nine days. Thereafter, on April 12, 1991, the Circuit Court of St. Louis County issued a Second Amended Decree of Dissolution, distributing the property at issue as follows:
Petitioner Linda Kahn Amount Respondent Farrell Kahn Amount
A. Separate Property 1,187,593 A. Separate Property 7,100
B. Marital Property 4,224,423 B. Marital Property 3,743,518
C. Debt Allocation 220,625 C. Debt Allocation 937,341
NET MARITAL PROPERTY 4,003,798 NET MARITAL PROPERTY 2,806,177
% of Net Marital Property 58.8 % of Net Marital Property 41.2
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Appellant's App. at 100. The Missouri Court of Appeals affirmed the circuit court's decree. Kahn v. Kahn, 839 S.W.2d 327 (Mo.Ct.App.1992).
Linda brought the instant action against her ex-husband on January 15, 1992, in the United States District Court for the Eastern District of Missouri. Linda's four-count complaint alleged that Farrell committed the following torts: breach of fiduciary duty, fraud, constructive fraud and conversion. The complaint asserted essentially the same conduct as set forth in the dissolution petition. 2 Linda sought both compensatory and punitive damages and an accounting. The district court granted Farrell's motion for summary judgment, concluding that, based upon the previous dissolution action, res judicata barred litigation of the tort claims. Kahn v. Kahn, No. 4:92CV00063-JCH, slip op. at 11 (E.D.Mo., Aug. 2, 1993).
The domestic relations exception, first articulated in Barber v. Barber, 62 U.S. (1 How.) 582, 584, 16 L.Ed. 226 (1859), divests the federal courts of jurisdiction over any action for which the subject is a divorce, allowance of alimony, or child custody. Ankenbrandt v. Richards, --- U.S. ----, ----, 112 S.Ct. 2206, 2215, 119 L.Ed.2d 468 (1992). In addition, as observed previously, ante n. 1, when a cause of action closely relates to but does not precisely fit into the contours of an action for divorce, alimony or child custody, federal courts generally will abstain from exercising jurisdiction. In the case at bar, we determine that Linda's claims for relief, although drafted to sound in tort, are so inextricably intertwined with the prior property settlement incident to the divorce proceeding that subject matter jurisdiction does not lie in the federal court.
Missouri law establishes a statutory procedure for divorce, in which "the circuit court shall enter a decree of dissolution if " (1) certain residency requirements are met, (2) the marriage is irretrievably broken and (3) "[t]o the extent it has jurisdiction to do so, the court has considered, approved, or made provision for child custody, the support of any child of the marriage who is entitled to support, the maintenance of either spouse, and the disposition of property." Mo.Ann.Stat. Sec. 452.305.1 (Vernon 1986) (emphasis added).
The division of property incident to Missouri's statutory dissolution action, requires consideration of
all relevant factors including:
(1) The economic circumstances of each spouse at the time the division of property is to become effective, including the desirability of awarding the family home or the right to live therein for reasonable periods to the spouse having custody of any children;
(2) The contribution of each spouse to the acquisition of the marital property, including the contribution of a spouse as homemaker;
(3) The value of the nonmarital property set apart to each spouse;
(4) The conduct of the parties during the marriage; and
(5) Custodial arrangements for minor children.
Mo.Ann.Stat. Sec. 452.330.1 (Vernon Supp.1993) (emphasis added). In addition, the distribution of marital property is relevant to whether the trial court awards alimony as well as the amount to be awarded. Sec. 452.335.2(1) (Vernon Supp.1993). Accordingly, the distribution of marital property is intricately related to the divorce determination and the issue of alimony.
Although the division of property under Sec. 452.330.1 does not necessarily require the same proof to support a damages award based on the torts of breach of fiduciary duty, fraud, constructive fraud and conversion 3, cf. Nebbitt v. Nebbitt, 589 S.W.2d 297, 300 (Mo. banc 1979) (divorce action does not affect spouse's right to sue for conversion of property), here the evidence proffered in both proceedings is the same and involves conduct that occurred exclusively throughout the duration of the marital relationship. That Linda received property in the dissolution proceeding in part based on the wrongful conduct constituting the intentional torts is relevant to any award of damages based on that same conduct. 4 By necessity then, proof of Linda's tort claims would require that the district court inquire into matters directly relating to the marital relationship or the property settlement. Compare Gonzalez Canevero v. Rexach, 793 F.2d 417, 418-19 (1st Cir.1986) () and Csibi v. Fustos, 670 F.2d 134, 138 (9th Cir.1982) () with Lannan v. Maul, 979 F.2d 627, 631 (8th Cir.1992) () and Lloyd v. Loeffler, 694 F.2d 489, 493 (7th Cir.1982) ().
Based upon our determination that the district court did not have subject matter jurisdiction, we do not express any opinion as to the merits of Linda's tort claims against Farrell, or whether the prior dissolution action bars said claims from being brought in the state court. Appeal dismissed and case remanded to the district court to enter a dismissal of the action without prejudice, for lack of subject matter jurisdiction.
ADDENDUM
First Amended Petition Federal Complaint
for Dissolution
6. From the beginning and
15. From the beginning of the throughout the duration of the
marriage, Respondent assumed couple's marriage, defendant
exclusive responsibility for who was experienced in business
and control of the business matters, assumed exclusive
affairs of the family and has control over and responsibility
continued to do so throughout for the couple's business
the marriage. In 1979, at the affairs and managed the
request of Respondent, couple's properties and
Petitioner executed two finances
separate powers of attorney
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16. By virtue of the powers of 9. On April 16, 1979
attorney, Respondent has plaintiff, at defendant's
maintained and been in control request, signed two separate
of all transactions involving powers of attorney,....
the purchase and sale of
assets, of all bank accounts
containing marital monies and
Petitioner's separate monies.
All financial and business
records of marital assets and
Petitioner's separate assets
have been maintained by him and his
employees.
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17. As a result of 28. As a result of plaintiff's
Petitioner's granting the granting the aforesaid powers
aforesaid powers of attorney to of attorney to defendant, plaintiff and
Respondent, she and Respondent defendant stood in a fiduciary
stood
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