Firestone v. Galbreath

• Decision Date: 03 July 1990
• Docket Number: No. C2-89-840.,C2-89-840.
• Parties: Douglas B. FIRESTONE, et al., Plaintiffs, v. Daniel M. GALBREATH, etc., et al., Defendants.
• Court: U.S. District Court — Southern District of Ohio

747 F. Supp. 1556

Douglas B. FIRESTONE, et al., Plaintiffs, v. Daniel M. GALBREATH, etc., et al., Defendants.

No. C2-89-840.

United States District Court, S.D. Ohio, E.D.

July 3, 1990.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Mark Alan Vanderlaan, Dinsmore & Shohl, Cincinnati, Ohio, for Douglas Firestone.

Robert Myron Kincaid, Jr., Baker & Hostetler, Columbus, Ohio, for Daniel Galbreath.

David Joseph Young, Squire, Sanders and Dempsey, Columbus, Ohio, Phillip R. Forlenza, New York City, for Bricker & Eckler, John Eckler and Charles Waterman, III.

Craig Denmead, Denmead, Blackburn & Willard, Columbus, Ohio, John P. Harris, Louis G. Adolfsen, Siff, Rosen & Parker, New York City, for Bolon Hart & Buehler, Inc.

John W. Clark, Jr., Clark, Wiley & Goodall, Dallas, Tex., for Leigh E. Firestone.

Neil B. Jagolinzer, West Palm Beach, Fla., for Mark Firestone.

Paul T. Shoemaker, Liddle, O'Connor, Finkelstein & Robinson, New York City, for David M. and Jeffrey Firestone.

John Patrick Mazza, Roetzel & Andress, Columbus, Ohio, for Deborah Lynn Firestone.

MEMORANDUM AND ORDER

GRAHAM, District Judge.

This is a civil action brought by two grandchildren of the late Dorothy B. Galbreath against the estate of John W. Galbreath, her late husband, as well as members of the Galbreath family and business entities owned or controlled by the Galbreath family. Also named as defendants are the law firm of Bricker and Eckler, and John Eckler, David C. Cummins, Charles H. Waterman, III, and John W. Phillips (also a Galbreath family member), partners of that firm. The defendants further include the accounting firm of Bolon, Hart and Buehler, Inc., and Dolorees I. Dutoit, an employee of John Galbreath who allegedly acted as financial secretary for Dorothy Galbreath. Eight other Firestone grandchildren of Dorothy Galbreath who were named as defendants in the complaint have since been realigned as plaintiffs. Plaintiffs bring this action individually and on behalf of the estate of Dorothy Galbreath and the Dorothy Brian Galbreath Family Trust ("Family Trust"), an intervivos trust created by an instrument dated October 31, 1978 allegedly for the benefit of plaintiffs.

The complaint was originally filed on December 6, 1988 in the United States District Court for the Southern District of New York. On September 28, 1989, the District Court in New York granted the motion of various defendants to transfer this case to the Southern District of Ohio. Certain motions to dismiss were pending at that time, and on October 30, 1989, this court entered an order directing that "any defendant may file a new or supplemental motion to dismiss on or before December 1, 1989." On December 1, 1989, a motion to dismiss was filed by Bolon, Hart & Buehler, Inc. ("Bolon, Hart") and by Bricker and Eckler, John Eckler, David C. Cummins, John W. Phillips and Charles H. Waterman, III (the "Bricker defendants"). A motion to dismiss was also filed on that date on behalf of Daniel M. Galbreath, Joan Galbreath Phillips, James W. Phillips, Lizanne Galbreath, the Estate of John W. Galbreath, the John W. Galbreath Trust, John W. Galbreath's Darby Dan Farm Trust, Darby Dan Farm, John W. Galbreath & Co., Inc., the Galbreath-Ruffin Corporation, the Akron Redevelopment Corporation and Dolorees I. Dutoit (the "Galbreath defendants").

On January 2, 1990, plaintiffs filed a consolidated memorandum contra defendants' motions to dismiss. Defendants filed reply memoranda on January 8, 1990, and on January 9, 1990, oral arguments were heard on the motions. Thereafter, the parties filed various supplemental memoranda and replies on January 19, January 24 and January 26, 1990. On February 7, 1990, plaintiffs filed a motion for leave to file a supplemental memorandum in opposition to defendants' motions to dismiss. That motion is hereby granted. On April 11, 1990, this court requested additional briefs on the issue of plaintiffs' standing to assert claims on behalf of the estate and the Family Trust, and the parties subsequently filed supplemental memoranda. The motions to dismiss are now before the court for a ruling.

A motion to dismiss for failure to state a claim "should not be granted unless it appears beyond a doubt that the plaintiff can prove no set of facts in support of his claim that would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-102, 2 L.Ed.2d 80 (1957). All well-pleaded allegations must be taken as true and must be construed most favorably toward the non-movant. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974). A complaint will be dismissed pursuant to Fed.R.Civ.P. 12(b)(6) if there is no law to support the claims made, if the facts alleged are insufficient to state a claim, or if on the face of the complaint there is an insurmountable bar to relief. See Rauch v. Day & Night Mfg. Corp., 576 F.2d 697 (6th Cir.1978); Westlake v. Lucas, 537 F.2d 857 (6th Cir. 1976).

SUBJECT MATTER JURISDICTION; ABSTENTION; STANDING

The defendants have moved to dismiss plaintiffs' complaint on the basis of lack of subject matter jurisdiction. Defendants invoke the "probate exception" to federal court jurisdiction. In the alternative, defendants have moved this court to abstain from exercising jurisdiction in light of the will contest action filed by plaintiffs in the Probate Court of Franklin County, Ohio. That action challenged the validity of the 1978 will of Dorothy Galbreath. Defendants also challenge the standing of plaintiffs to bring suit in light of the will contest action. Since the filing of defendants' motions to dismiss, plaintiffs have dismissed their complaint in probate court.

It is well established that federal courts have no probate jurisdiction. Markham v. Allen, 326 U.S. 490, 66 S.Ct. 296, 90 L.Ed. 256 (1946); Tonti v. Petropoulous, 656 F.2d 212 (6th Cir.1981). A federal court has no jurisdiction to probate a will or to administer an estate. Markham, 326 U.S. at 494, 66 S.Ct. at 298. However, a federal court does have jurisdiction to entertain suits by heirs against a decedent's estate so long as the federal court does not interfere with the probate proceedings or assume general jurisdiction of the probate or control of the property in the custody of the state court. Id. Likewise, a federal court may adjudicate rights to property in the possession of a state court where the final judgment does not interfere with the state court's possession except to the extent that the state court is bound by the judgment to recognize the rights adjudicated by the federal court. Id.

In this case, plaintiffs seek to recover assets from the defendants which they claim should have been included in the estate of Dorothy Galbreath and which would have benefitted the Family Trust. Thus, this is not an action which involves the administration of the estate, or any other matter within the exclusive jurisdiction of the probate court or which would interfere with any proceedings currently pending in the probate court. This is not a case which falls within the probate exception to this court's subject matter jurisdiction.

Defendants also urge this court to abstain from exercising jurisdiction. However, the basis for those motions, the risk of conflicting adjudications due to the pendency of plaintiffs' will contest action, has now been removed. The Galbreath defendants filed a motion in probate court on January 25, 1990 seeking a hearing at which it could be determined whether there were any disputes as to the validity of Mrs. Galbreath's will. The outcome of that motion, if any, has not been forwarded to this court. However, defendants have offered no evidence at this time that any further action will be taken by any of the parties to contest the validity of the will. There is no necessity at this point to stay or dismiss this case out of deference to state court litigation. See Colorado River Water Conservation District v. United States, 424 U.S. 800, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976); Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983).

Defendants also challenge plaintiffs' standing to maintain this action because of the uncertainty concerning their status as heirs due to the will contest action. However, plaintiffs have now dismissed their will contest action and no other challenge to plaintiffs' position as the beneficiaries of the Family Trust established in that will is currently pending. This branch of defendants' motion is denied as moot.

Defendants further challenge the standing of plaintiffs to assert claims on behalf of the estate and the Family Trust. With the exception of noting a letter dated September 22, 1988, in which plaintiffs demanded that Daniel Galbreath, as executor of Mrs. Galbreath's estate and trustee of the Family Trust, make formal presentations of claims on behalf of the estate and the Family Trust against the estate of John Galbreath in accordance with Chapter 2117 of the Ohio Revised Code, plaintiffs do not allege that they have made a demand upon Daniel Galbreath in any of his capacities to institute an action to assert the claims which plaintiffs now bring.

The general rule is that the heirs of a decedent cannot maintain an action in their own names to assert claims or recover assets belonging to the estate. Davis v. Corwine, 25 Ohio St. 668 (1874); Phillips v. McConica, 59 Ohio St. 1, 51 N.E. 445 (1898); McBride v. Vance, 73 Ohio St. 258, 76 N.E. 938 (1906); Floyd v. Clyne, 108 Ohio App. 16, 154 N.E.2d 771 (1958). However, there is an exception to this general rule where the heirs have made a demand upon the executor to bring the action and the executor has refused to do so. Ex parte Bevan, 126 Ohio St. 126, 184 N.E. 393 (1933); Fecteau v. Cleveland Trust Co., 171 Ohio St. 121, 167 N.E.2d 890 (1960). In such a case, the heirs may bring the action...