Chevalier v. Estate of Barnhart

• Decision Date: 01 October 2015
• Docket Number: No. 14–3146.,14–3146.
• Citation: 803 F.3d 789
• Parties: Caroline CHEVALIER, Plaintiff–Appellant, v. ESTATE OF Kimberly BARNHART, Defendant–Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

803 F.3d 789

Caroline CHEVALIER, Plaintiff–Appellant

v.ESTATE OF Kimberly BARNHART, Defendant–Appellee.

No. 14–3146.

United States Court of Appeals, Sixth Circuit.

Oct. 1, 2015.

ON BRIEF:David W. Orlandini, Gary C. Safir, Davis & Young, Westerville, Ohio, for Appellant. M. Shawn Dingus, Plymale & Dingus, LLC, Columbus, Ohio, for Appellee.

Before: KEITH, MOORE, and STRANCH, Circuit Judges.

OPINION

KAREN NELSON MOORE, Circuit Judge.

Plaintiff–Appellant Caroline Chevalier and Defendant–Appellee Kimberly Barnhart¹ met, fell in love, and were married. Throughout the course of their marriage, Chevalier made a series of loans to Barnhart, which Barnhart never repaid. Chevalier filed this lawsuit in the United States District Court for the Southern District of Ohio, alleging contract and tort claims in order to recover her loans. Chevalier alleges that the district court had subject-matter jurisdiction to adjudicate her claims pursuant to 28 U.S.C. § 1332(a) (2012) because she is “a citizen[ ] or subject[ ] of a foreign state,” Canada, and Barnhart is a citizen of Ohio, see id. § 1332(a)(2), and Chevalier's claims for damages exceed $75,000. See R. 2 at 1, 10 (Compl. ¶¶ 1–2) (Page ID # 2, 11). But there is a wrinkle: the so-called domestic-relations exception to federal diversity jurisdiction deprives federal courts of jurisdiction to adjudicate “only cases involving the issuance of a divorce, alimony, or child custody decree.” Ankenbrandt v. Richards, 504 U.S. 689, 704, 112 S.Ct. 2206, 119 L.Ed.2d 468 (1992). On Barnhart's motion, the district court concluded that Chevalier's lawsuit required dividing “the parties' property[, which] involves ‘delicate issues of domestic relations' appropriately left to the Canadian court,” and dismissed the suit pursuant to Federal Rule of Civil Procedure 12(b)(1). R. 11 at 12 (D. Ct. Op. & Order) (Page ID # 77) (quoting Elk Grove Unified Sch. Dist. v. Newdow, 542 U.S. 1, 13, 124 S.Ct. 2301, 159 L.Ed.2d 98 (2004), abrogated on other grounds by Lexmark Int'l, Inc. v. Static Control Components, Inc., ––– U.S. ––––, 134 S.Ct. 1377, 1387, 188 L.Ed.2d 392 (2014) ).

Chevalier appeals the district court's dismissal of her state-law claims, arguing that the domestic-relations exception is inapplicable. While this appeal was pending, Barnhart died. (Notice of Death of Appellee). Barnhart's death raised the specter of another potential impediment to federal jurisdiction: the probate exception. See Marshall v. Marshall, 547 U.S. 293, 311–12, 126 S.Ct. 1735, 164 L.Ed.2d 480 (2006) (“[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.”).

For the reasons set forth in this opinion, we hold that neither the domestic-relations exception nor the probate exception prevents the federal courts from resolving Chevalier's claims. Accordingly, we REVERSE the district court's dismissal for lack of subject-matter jurisdiction, VACATE the entry of judgment, and REMAND the case for further proceedings.

I. FACTS AND PROCEDURAL HISTORY

In July 2007, Chevalier and Barnhart wed in Ontario, Canada, where Chevalier is a citizen, and where the government permitted them to marry.² R. 2 at 1 (Compl. ¶¶ 1–2) (Page ID # 2); R. 4 at 1 (Answer ¶¶ 1–2) (Page ID # 13); R. 7–1 at 4 (Appl. for Divorce) (Page ID # 36). After approximately three years of marriage, Chevalier's and Barnhart's relationship soured, and the couple separated. R. 7–1 at 4 (Appl. for Divorce) (Page ID # 36).

Chevalier claims that she made a series of loans between 2007 and 2010 to Barnhart totaling approximately $122,708: $70,000 for mortgage payments, property taxes, insurance, utilities, and construction payments for Barnhart's house in Logan, Ohio; $23,700 for credit-card debt; $19,008 for a car; and $10,000 for legal fees. R. 2 at 2–3 (Compl. ¶¶ 6–16) (Page ID # 3–4). According to Chevalier, each transfer of funds was a loan conditioned upon repayment. See id. (Compl. ¶ 18). Between 2010 and 2011, Barnhart made a series of payments to Chevalier in the amount of $3,000 as partial payment of her debt.Id. at 4 (Compl. ¶ 13) (Page ID # 4). In April 2011, Barnhart gave Chevalier a check in the amount of $4,000 as a partial payment on her loans, but issued a stop-payment order shortly thereafter. Id. (Compl. ¶¶ 14–15). Eventually, apparently fed up with the slow rate of repayment, Chevalier filed this lawsuit in the United States District Court for the Southern District of Ohio, seeking approximately $119,708 in compensatory damages, $500,000 in punitive damages, interest, costs, and attorney fees for breach of contract (Count I), default on loans (Count II), unjust enrichment (Count III), and fraud (Count IV). Id. at 3–10 (Compl. ¶ ¶ 1–55) (Page ID # 4–11). She also requests that the court impose a constructive lien on Barnhart's house in Logan, Ohio (Count V), and foreclose on the property (Count VI). Id. at 8–9 (¶¶ 56–67) (Page ID # 9–10).

On August 20, 2013, shortly before filing the answer to Chevalier's complaint, Barnhart filed for divorce in Windsor, Ontario, seeking spousal support and an equalization of net family properties. R. 7–1 at 2–3, 5 (Appl. for Divorce) (Page ID # 34–35, 37). On August 23, 2013, Barnhart answered the federal complaint, denying all allegations and asserting numerous affirmative defenses, including lack of subject-matter jurisdiction. R. 4 at 1–5 (Answer ¶¶ 5–24) (Page ID # 13–18). Shortly thereafter, on September 30, 2013, Barnhart moved to dismiss the federal complaint pursuant to Rule 12(b)(1) for lack of subject-matter jurisdiction under the domestic-relations exception to federal diversity jurisdiction. R. 7 at 1–7 (Def.'s Mot. to Dismiss) (Page ID # 26–32). In Barnhart's district-court reply brief, she clarified that she was also seeking abstention and urged the district court to stay the federal proceedings until the Ontario Superior Court resolved the application for divorce. R. 10 at 6–7 (Def.'s Rep. to Pl.'s Mem. in Opposition to Mot. to Dismiss) (Page ID # 63–64).

On January 15, 2014, the district court dismissed the complaint on the grounds that the court lacked subject-matter jurisdiction under the domestic-relations exception to federal diversity jurisdiction. R. 11 at 12 (D. Ct. Op. & Order) (Page ID # 77). The district court acknowledged that Chevalier had “framed her complaint in terms of contract and tort claims”—rather than a request for a divorce or alimony decree—but that, nevertheless, the domestic-relations exception barred her claims because she sought “the functional equivalent of a divorce proceeding[ ] insofar as [Chevalier] has, in effect, asked this court to determine her marital property rights and obligations with respect to the monies referred to in the complaint.” Id. at 10 (Page ID # 75). In particular, the district court concluded that the Superior Court of Justice in Ontario would consider Chevalier's claim of right to the money at issue in her tort and contract claims when determining Barnhart's right to spousal support and equalization of net family properties. Id. at 11 (Page ID # 76). The district court also expressed concern that the federal proceedings might subject the parties to “incompatible federal [American] and Canadian decrees.” Id. Finally, the district court noted concern that Ohio's then-existing ban on same-sex marriages would affect the outcome of the federal proceedings. Id. at 11–12 (Page ID # 76–77) (citing OHIO CONST. art. XV, § 11 ; OHIO REV. CODE § 3101.01(C) (2014)). The district court never addressed Barnhart's request that the court abstain from adjudicating this case.See id. at 1–12.

Chevalier filed this timely appeal. On September 2, 2014, while this appeal was pending, Barnhart died. We stayed the appellate proceedings. Chevalier filed a motion to substitute the Estate of Kimberly Barnhart as the party in interest and lift the stay. On October 30, 2014, the Superior Court of Justice in Windsor, Ontario, dismissed the parties' divorce proceedings without terminating the marriage or disposing of the parties' assets or property. Appellant's Notice of Canadian Ct.'s Dismissal of Divorce Proceedings at 2–3; Appellant's Mem. in Resp. to Ct.'s Briefing Ltr. at 7. Before we ruled on Chevalier's motion to substitute Barnhart's estate as the real party in interest, proceedings began in the Probate Court of Hocking County, Ohio, to administer Barnhart's estate. On February 9, 2015, the Probate Court appointed Karla S. Mayberry as the administrator of Barnhart's estate. Appellant's Supplemental Notice of Probate Court's Order at 2. We subsequently granted Chevalier's motion for substitution of parties.

These developments caused us to consider whether the probate exception to federal jurisdiction might prevent adjudication of Chevalier's state-law claims in federal court, and we ordered the parties to address the issue in supplemental briefs. We now turn to answer the question: should the domestic-relations or probate exceptions limit the federal courts' subject-matter jurisdiction in this case?

II. ANALYSIS

We review de novo a district court's dismissal of a complaint for lack of subject-matter jurisdiction. Wisecarver v. Moore, 489 F.3d 747, 749 (6th Cir.2007). The plaintiff has the burden of proving that the federal court has subject-matter jurisdiction. Id. “[F]ederal courts have an independent obligation to ensure that they do not exceed the scope of their jurisdiction, and therefore they must raise and decide jurisdictional questions that the parties either overlook or elect not to press.” Henderson ex rel. Henderson v. Shinseki, 562 U.S. 428, 434, 131 S.Ct. 1197, 179 L.Ed.2d 159 (2011).

A. The Domestic–Relations Exception to Federal Diversity Jurisdiction

“[T]he domestic-relations exception [to federal diversity jurisdiction] encompasses only cases involving the issuance...