Credit Alliance Corp. v. Wilhelm, CV 87-218-M-CCL.

Decision Date20 July 1988
Docket NumberNo. CV 87-218-M-CCL.,CV 87-218-M-CCL.
Citation693 F. Supp. 884
PartiesCREDIT ALLIANCE CORPORATION, Plaintiff, v. Mary Lou WILHELM, Marianne Wilhelm, Individually and as Personal Representative of the Estate of Jeffrey C. Wilhelm, et al., Defendants.
CourtU.S. District Court — District of Montana

Corneal L. Domeck, III, Louisville, Ky., John K. Tabaracci, Sullivan & Baldassin, Missoula, Mont., for plaintiff.

Patrick D. Dougherty, Worden, Thane & Haines, Missoula, Mont., for Marianne Wilhelm.

Urban L. Roth, Poore Law Firm, Butte, Mont., for Ronald H. and Linda K. Evans.

ORDER

LOVELL, District Judge.

This cause is before the court on the findings of the United States Magistrate and his recommendation that the defendant Marianne Wilhelm's motion to dismiss be granted. Pursuant to 28 U.S.C. § 636(b)(1)(B) and Local Rule 400-4(b), counsel for all parties were sent a copy of the magistrate's findings and recommendation and given ten days within which to file any objections. No party has objected.

The court having reviewed the magistrate's findings, and finding the same to be supported in law and in fact, the findings are approved and

IT IS HEREBY ORDERED that the defendant Marianne Wilhelm's motion to dismiss is GRANTED and the complaint is DISMISSED.

The clerk is directed forthwith to notify counsel of entry of this order.

FINDINGS AND RECOMMENDATION OF UNITED STATES MAGISTRATE AND ORDER

ROBERT M. HOLTER, United States Magistrate.

Pending in this matter is the defendants' motion to dismiss under Rule 12(b)(1) and (6) claiming lack of jurisdiction over the subject matter and failure of the plaintiff to state a claim.

FINDINGS OF FACT
I.

Plaintiff recovered a judgment for $43,115.74 plus interest in United States District Court in New York on April 23, 1982, against Jeffrey C. Wilhelm. The judgment was registered in this court on the same day and was docketed in state court for Missoula County, Montana, on October 23, 1982. The judgment became a lien on Wilhelm's real property.

II.

A writ of execution was issued by this Court on May 7, 1986, under which a sale of Wilhelm's property was scheduled for July 8, 1986. On July 3, 1986, Wilhelm filed a bankruptcy petition in Alaska which stopped the sale. Wilhelm died in an automobile accident on October 21, 1986; thereafter the bankruptcy was dismissed.

III.

Wilhelm's estate is being probated in Alaska; plaintiff has filed its creditor's claim in that estate, which has been approved. In the meantime, ancillary proceedings were undertaken in the state court in Missoula County, Montana. Wilhelm's wife obtained an Alaska order setting aside homestead; on January 29, 1988, the Montana state court ordered the Montana real property distributed to the surviving spouse in satisfaction of the homestead, exempt property and family allowance. That same order specifically gave the homestead, exempt property and family allowance priority over plaintiff's creditor's claim and judgment lien upon the real property.

IV.

The January 29, 1988, order of the state court in Montana has been appealed to the Supreme Court of Montana by the plaintiff here.

V.

This action is brought to quiet title to the real property and declare judgments as to rights acquired under judicial sale under process of this Court, which sale was accomplished after Jeffrey C. Wilhelm's death.

DISCUSSION

Federal jurisdiction in this case is based on diversity of citizenship under 28 U.S.C. § 1332. Therefore, Montana law controls the substantive rights and obligations of the parties herein. Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938); St. Paul Fire and Marine Insurance Co. v. Weiner, 606 F.2d 864 (9th Cir.1979).

Upon the death of a person, his real and personal property devolves to those to whom it is willed or to his heirs, subject to homestead allowance, exempt property, and family allowance, to rights of creditors. Section 72-3-101, Mont.Code Ann. The District Court has exclusive jurisdiction of probate matters. Section 72-3-111, Mont. Code Ann. Section 72-2-801, Mont.Code Ann. grants a homestead allowance of $20,000.00 which is "exempt from and has priority over all claims against the estates". Section 72-2-802, Mont.Code Ann. gives a surviving spouse $3,500.00 of exempt property, or in lieu thereof, assets to make up a deficiency, with priority over other claims. Section 72-2-803, Mont.Code Ann. allows family allowance likewise exempt from and with priority over all claims except the homestead allowance.

The effect of the plaintiff's requests to this Court would subvert the state court's authority to probate the estate of Jeffrey C. Wilhelm. The state court is in better position than this Court to properly construe the rights of the parties to the estate and actively has done so. For this Court to now proceed as requested by the plaintiff would be...

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2 cases
  • Brandt v. STATE FARM MUT. AUTO. INS. CO.
    • United States
    • U.S. District Court — Eastern District of California
    • September 2, 1988
  • Estate of Wilhelm, Matter of
    • United States
    • Montana Supreme Court
    • August 11, 1988
    ...Corporation, in effect, argues that the District Court lacked jurisdiction in two instances. See Credit Alliance Corporation v. Wilhelm, et al., 693 F.Supp. 884, 885 (D.Mont.1988). First, Credit Alliance Corporation contends that the District Court lacked jurisdiction to determine the right......

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