Culbertson v. Libco Corp.

Decision Date11 February 1993
Docket NumberNo. 91-3644,91-3644
Citation983 F.2d 82
PartiesNancy M. CULBERTSON, Plaintiff-Appellee, v. LIBCO CORPORATION, Defendant-Appellant.
CourtU.S. Court of Appeals — Seventh Circuit

Thomas P. Ward (argued), Mary A. Francis, McBride, Baker & Coles, Chicago, IL, for plaintiff-appellee.

Morton Denlow, Michael D. Richman (argued), Dardick & Denlow, Chicago, IL, for defendant-appellant.

Before CUMMINGS and MANION, Circuit Judges, and KAUFMAN, Senior District Judge. *

CUMMINGS, Circuit Judge.

Plaintiff Nancy M. Culbertson resides in Vero Beach, Florida, and is a citizen of that state. Defendant Libco Corporation ("Libco"), a Delaware corporation, has its corporate headquarters and principal place of business in Chicago. This diversity suit was brought to recover overdue past installments and interest on a note for $110,381 payable by Libco to plaintiff's late husband, Samuel A. Culbertson II. At the time of the complaint plaintiff asserted that she was owed $78,726.18, including interest plus reasonable attorney's fees as provided in the note, and therefore the complaint sought judgment for $89,000 plus interest and costs.

Defendant filed a motion to dismiss on the ground that plaintiff had only a 50% interest in the note, so that the $50,000 jurisdictional amount in 28 U.S.C. § 1332(a)(1) was not satisfied even by adding attorney's fees sought by plaintiff under the note. The motion to dismiss also claimed that Northern Trust Company as trustee under the will of plaintiff's sister-in-law, Vesta C. Morse, was an indispensable party, so that diversity of citizenship was lacking. The district court rendered an opinion holding that the jurisdictional amount was satisfied because plaintiff was the sole legal titleholder of the note, making the amount in controversy equal to the full value of the note plus costs. The court also held that complete diversity existed because plaintiff was the only successor to her late husband, the holder of the Libco note, and thus failure to join Northern Trust Company, the trustee of Vesta C. Morse's estate, did not amount to a failure to join an indispensable party. Libco preserved its jurisdictional objections below and stipulated to the amount of damages, and the district court ordered Libco to pay Culbertson for the full amount of the note plus costs, or $90,918.60. The sole question on appeal, then, is whether the district court had jurisdiction to enter its judgment. We affirm the district court's disposition.

FACTS

Plaintiff sued Libco on its October 31, 1984, note issued to Samuel A. Culbertson II, plaintiff's husband. Prior to his death In April 1982, the Samuel Culbertson estate settled a claim made by his sister, Vesta C. Morse. The settlement included a declaration of trust providing that plaintiff would hold the SCG interest in trust and that Mrs. Morse, as the beneficiary of the trust, would be entitled to the "earnings, avails and proceeds" from one-half of Samuel Culbertson's estate's interest in SCG. The Culbertson estate was the beneficiary of the other half of the trust. The declaration of trust also provided that no beneficiary would have any right, title or interest in the legal or equitable title to the SCG property, so that plaintiff Nancy Culbertson, as executor of her husband's estate, retained legal title to the entire 8.405% SCG interest. After her husband's estate was closed in August 1988, plaintiff received the note and became its legal owner in her individual capacity, just as she had been in her capacity as executor. When the four installments under the note were received, plaintiff remitted one-half of those proceeds to Vesta C. Morse's estate.

                Mr. Culbertson was the sole owner of an undivided 8.405% interest in Sierra Capital Group ("SCG"), a limited partnership.   That partnership's principal investments were in stock issued by corporations controlled or managed by Clyde W. Engle, the general partner of SCG and president of Libco.   After Mr. Culbertson's death in 1980, plaintiff became his personal representative and sole legatee.   Through her counsel, she sent frequent requests to SCG and Engle to change the registration of Mr. Culbertson's SCG interest to plaintiff, the executor.   Engle refused to acknowledge plaintiff's executorship and continued to make all payments under the note to "Sam Culbertson II."   SCG was liquidated in 1984 and on November 9 of that year, Culbertson's estate received 83 shares of Libco stock for his interest in SCG.   Libco then gave the estate the note in question, payable to the order of Samuel A. Culbertson II, in exchange for his 83 shares of Libco.   Four of the six installments under the note were eventually paid to plaintiff but Libco never paid the fifth and sixth installments due and payable on January 2, 1990, and January 2, 1991, thus causing plaintiff to file this suit
                

In August 1991, the parties stipulated that the entire amount still owed by Libco on the note was $90,918.60 and therefore Judge Aspen granted plaintiff judgment in that amount. Mrs. Vesta C. Morse's estate's share in that amount was not involved in the judgment and is not before this Court.

AMOUNT IN CONTROVERSY

As previously stated, Libco first challenges the district court's jurisdiction on "amount in controversy" grounds, arguing that plaintiff only was entitled to half the proceeds of the note, and therefore that plaintiff does not show the $50,000 in controversy required by 28 U.S.C. § 1332(a)(1). This argument fails because a trustee may litigate on behalf of a trust in federal court where the amount of the trust exceeds the jurisdictional minimum. Bullard v. City of Cisco, 290 U.S. 179, 187-189, 54 S.Ct. 177, 180, 78 L.Ed. 254. See also Navarro Savings Ass'n v. Lee, 446 U.S. 458, 100 S.Ct. 1779, 64 L.Ed.2d 425. It matters not whether certain individual beneficial interests are less than the jurisdictional minimum. In this case, it matters not that the plaintiff held a 50% beneficial interest in the proceeds of the note after her husband's estate closed. Samuel Culbertson's estate held title to the note and the payments due on the note totaled over $89,000, well in excess of the jurisdictional minimum. As trustee of Samuel Culbertson's estate, plaintiff was entitled to litigate for the estate to recover...

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    • United States
    • U.S. District Court — Northern District of Illinois
    • 26 d4 Março d4 2020
    ...the Seventh Circuit, cited in the text, that apply the real party in interest analysis.Plaintiff also quotes Culbertson v. Libco Corp. , 983 F.2d 82, 85 (7th Cir. 1993), for the principle that "the relevant citizenship for diversity purposes is that of the named plaintiff and not that of th......

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