Community Ins. Co. v. Rowe, C-3-98-422.

• Decision Date: 12 August 1999
• Docket Number: No. C-3-98-422.,C-3-98-422.
• Citation: 85 F.Supp.2d 800
• Court: U.S. District Court — Southern District of Ohio
• Parties: COMMUNITY INSURANCE CO., Plaintiff,<SMALL><SUP>1</SUP></SMALL> v. Jessica Lynn ROWE, et al., Defendants.

Page 800

85 F.Supp.2d 800

COMMUNITY INSURANCE CO., Plaintiff,¹ v. Jessica Lynn ROWE, et al., Defendants.

No. C-3-98-422.

United States District Court, S.D. Ohio, Western Division.

August 12, 1999.

COPYRIGHT MATERIAL OMITTED

Daniel T Downey, Kreiner & Peters Co., L.P.A., Dublin, OH, for Community Insurance Co., plaintiff.

Thomas McCann Baggott, Altick & Corwin-3, Dayton, OH, David Michael Deutsch, David M. Deutsch Co., LPA, Dayton, OH, Roland W. Baggott, III, New Orleans, LA, for defendants.

DECISION AND ENTRY OVERRULING THE ROWES' MOTION TO DISMISS (DOC. # 4-1); DECISION AND ENTRY SUSTAINING THE ROWES' MOTION TO REMAND (DOC. # 4-2); DECISION AND ENTRY OVERRULING COMMUNITY INSURANCE COMPANY'S MOTION TO CONSOLIDATE (DOC. # 14); CAPTIONED CAUSE REMANDED TO THE PROBATE COURT OF PREBLE COUNTY; TERMINATION ENTRY

RICE, Chief Judge.

The instant litigation stems from a one-car accident, which occurred on April 20, 1994, during which Aaron and Jessica Rowe were severely injured.² The driver of the vehicle was Charles Rowe, the children's father. The children, Aaron and Jessica, were qualified dependents under their father's health insurance plan, a benefit which he received as an employee of White Family Companies. Charles Rowe's health insurance plan allegedly paid approximately $116,000 in medical bills due to his children's injuries. The health benefit plan is administered by Community Insurance Company ("CIC"). As early as March, 1995, CIC has maintained, through correspondence, that it had a right of subrogation for medical expenses paid on behalf of Jessica and Aaron.

Following the accident, Lisa Ann Tubbs, the mother and legal guardian of Aaron and Jessica Rowe, filed a personal injury suit in the Common Pleas Court of Preble County, Ohio, on behalf of her children against Charles Rowe, Case No. 96-CV-22404. She reached a settlement with Charles Rowe's automobile insurer, Motorist Mutual Insurance Company ("Motorist Mutual"), in the amount of $100,000 for both children.³

On May 5, 1998, Tubbs filed an application with the Preble County Probate Court to settle the children's claims.⁴ On the same date, Tubbs filed a Narrative Statement with the Probate Court, setting forth the factual circumstances of the accident, the injuries suffered by the children, and the pending issues regarding the settlement. In that document, Tubbs argued that CIC was not entitled to any monies out of the settlement and requested a declaration from the court that the children's claims take precedence over those of the subrogated insurers, namely CIC. Tubbs requested approval of the settlement and the court's advice as to the proper division of the funds among the children. CIC claims that it received a copy of the Narrative Statement on or about September 3, 1998.

On June 30, 1998, the Probate Court approved the settlement of the children's claims. On the same date, Tubbs filed a Motion to Continue three matters, to wit: (1) claims by creditors for money due and owing for medical treatment, (2) the subrogation claim of CIC, and (3) the division of the settlement proceeds. The Motion to Continue was also approved on June 30, 1998. The Probate Court scheduled a hearing for July 17, 1998, on those issues,⁵ and required Tubbs to send notice of the hearing to all creditors who might claim an interest in the settlement, including CIC. A pre-trial conference was held on September 4, 1998.

On September 23, 1998, CIC removed the litigation to this Court, pursuant to 28 U.S.C. §§ 1441 and 1446 (Doc. # 1).⁶ CIC claimed that the matter before the Probate Court required a determination of the rights of an ERISA benefit plan to reimbursement. The claim, therefore, involved matters within the exclusive jurisdiction of the federal courts and raised questions of federal law.

Pending before the Court is the Motion of Jessica and Aaron Rowe to Dismiss for lack of subject matter jurisdiction or under the Burford abstention doctrine (Doc. # 4-1). Alternatively, they move for remand to the Preble County Probate Court (Doc. # 4-2). Also pending before the Court is CIC's Motion to Consolidate this litigation with Case No. C-3-98-493, also before this Court (Doc. # 14). For the reasons assigned, the Rowes' Motion to Dismiss (Doc. # 4-1) is OVERRULED, the Rowes' Motion for Remand (Doc. # 4-2) is SUSTAINED, and CIC's Motion to Consolidate (Doc. # 14) is OVERRULED.

I. The Rowe's Motion to Dismiss (Doc. # 4-1)

The Rowes request that this Court to dismiss this action on the grounds that it lacks subject matter jurisdiction over the claims or, in the alternative, under the Burford abstention doctrine. The Rowes argue that this action is appropriately litigated in the Preble County Probate Court, from whence the case was removed. Because they seek to have this case returned to state court, rather than dismissed in its entirety, the Rowes' request is appropriately raised in a Motion for Remand. The Court, therefore, will consider all the arguments raised by the Rowes under the guise of a Motion to Dismiss (Doc. # 4-1) as part of their Motion, In The Alternative, for Remand (Doc. # 4-2). The Rowes' Motion to Dismiss (Doc. # 4-1) is OVERRULED.

II. Standard for Motion to Remand (Doc. # 4-2)

The party seeking to litigate in federal court bears the burden of establishing the existence of federal subject matter jurisdiction. McNutt v. General Motors Acceptance Corp. of Indiana, 298 U.S. 178, 189, 56 S.Ct. 780, 80 L.Ed. 1135 (1936). This is no less true where, as here, it is the defendant, rather than the plaintiff, who seeks the federal forum. E.g., Ahearn v. Charter Twp. of Bloomfield, 100 F.3d 451, 453-54 (6th Cir.1996). When the party asserting federal jurisdiction finds its allegations challenged, it must submit evidence substantiating its claims. Amen v. City of Dearborn, 532 F.2d 554, 560 (6th Cir.1976). The removing defendant's burden is to prove, by a preponderance of the evidence, that the jurisdictional facts it alleges are true. Gafford v. General Electric Co., 997 F.2d 150, 158 (6th Cir.1993). The district court has "wide discretion to allow affidavits, documents and even a limited evidentiary hearing to resolve disputed jurisdictional facts." Ohio Nat. Life Ins. Co. v. United States, 922 F.2d 320, 325 (6th Cir.1990) (citations omitted). The court may consider such evidence without turning the motion into one for summary judgment. Id.

III. Analysis of the Rowes' Motion for Remand (Doc. #4-2)

The Rowes present four basic arguments in favor of remand of this litigation to the Preble County Probate Court. First, they contend that this Court lacks subject matter jurisdiction over the instant action, because federal courts are not vested with power over probate matters. Second, the Rowes argue that this Court should decline to hear this case under the Burford abstention doctrine. Third, the Rowes assert that CIC has failed to meet the requirements of 28 U.S.C. §§ 1441 and 1446 for removal. Fourth, they contend that ERISA does not provide a basis for removal to this Court. Each of the above arguments will be addressed in turn.

A. Federal Subject Matter Jurisdiction

The Rowes contend that this Court lacks subject matter jurisdiction over the instant action, because federal courts are not vested with power over probate matters. They argue that, under the laws of Ohio, the Probate Court is granted exclusive jurisdiction over probate matters, including the settlement of minor's claims. The Rowes claim that this case concerns the approval and apportionment of a proffered settlement of $100,000 by Motorist Mutual for the claims of minor children, an issue which is exclusively within the province of the Probate Court.

Article III, Section 2 of the Constitution sets forth the subject matter jurisdiction of federal courts. It states:

The judicial Power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority; — to all Cases affecting Ambassadors, other public Ministers and Consuls; — to all Cases of admiralty and maritime Jurisdiction; — to Controversies to which the United States shall be a Party; — to Controversies between two or more States; — between a State and Citizens of another State; — between Citizens of different States; — between Citizens of the same State claiming Lands under Grants of different States, and between a State, or the Citizens thereof, and foreign States, Citizens or Subjects.⁷

Const. Art. III § 2, cl. 1. However, district courts are not necessarily vested with all the jurisdiction permitted under Article III. Palmore v. United States, 411 U.S. 389, 401, 93 S.Ct. 1670, 36 L.Ed.2d 342 (1973) ("[I]f inferior federal courts were created, [Congress was not] required to invest them with all the jurisdiction it was authorized to bestow under Art. III."). In very limited cases, the Supreme Court has stated that, due to the nature of the litigation, federal courts are divested of power to issue decrees. See Ankenbrandt v. Richards, 504 U.S. 689, 703, 112 S.Ct. 2206, 119 L.Ed.2d 468 (1992) ("[T]he domestic relations exception, as articulated by this Court since Barber [v. Barber, 21 How. 582, 16 L.Ed. 226 (1859) ], divests the federal courts of power to issue divorce, alimony, and child custody decrees."); Markham v. Allen, 326 U.S. 490, 494, 66 S.Ct. 296, 90 L.Ed. 256 (1946) (probate exception to diversity jurisdiction).

One such limitation to subject matter jurisdiction is the probate exception. It is well-settled that federal courts lack jurisdiction to probate a will or to administer a decedent's estate. Markham, 326 U.S. at 494, 66 S.Ct. 296 ("It is true that a federal court has no jurisdiction to probate a will or administer an estate, the reason being that the equity jurisdiction conferred by the Judiciary Act of 1789, 1 Stat. 73, and § 24(1) of the Judicial Code, which is that of the English Court of Chancery...