Firestone v. Galbreath
| Decision Date | 27 September 1989 |
| Docket Number | No. 88 Civ. 8631 (LLS).,88 Civ. 8631 (LLS). |
| Citation | 722 F. Supp. 1020 |
| Parties | Douglas B. FIRESTONE and Amy Firestone Del Valle, Plaintiffs, v. Daniel M. GALBREATH, Individually, as Executor of the Estate of Dorothy B. Galbreath, as Trustee of the Dorothy Bryan Galbreath Family Trust, u/a dated October 31, 1978, and (with Joan Galbreath Phillips) doing business as Darby Dan Farm, the Estate of John W. Galbreath, by Daniel M. Galbreath, Executor, the John W. Galbreath Trust, u/a dated June 10, 1976, by Daniel M. Galbreath, Trustee, John W. Galbreath's Darby Dan Farm Trust, u/a dated June 10, 1976, by Daniel M. Galbreath, Trustee, Joan Galbreath Phillips, Individually and (with Daniel M. Galbreath) doing business as Darby Dan Farm, James W. Phillips, John W. Phillips, Lizanne Galbreath, John W. Galbreath & Co., Inc., Galbreath-Ruffin Corporation, Akron Redevelopment Corporation, Bricker & Eckler, John Eckler, David C. Cummins, Charles H. Waterman, III, Bolon, Hart & Buehler, Inc., Dolorees I. Dutoit, River House Realty Co., Inc., the Jockey Club, Inc., Andrew P. Firestone, Leigh E. Firestone, Mark Firestone, Russell A. Firestone, III, David M. Firestone, Jr., Jeffrey Firestone, Deborah Lynn Firestone and Cindy Graham, Defendants. |
| Court | U.S. District Court — Southern District of New York |
Milbank, Tweed, Hadley & McCloy (Edward H. Reilly, of counsel), New York City, for plaintiffs.
Leboeuf, Lamb, Leiby & MacRae (Frederick B. Lacey, Bradley Hummel, Robert M. Kincaid, Jr., John F. Winkler, Baker & Hostetler, Columbus, Ohio, of counsel), New York City, for Daniel M. Galbreath, et al.
Patterson, Belknap, Webb & Tyler (Philip Forlenza, Robert D. Orlin, David A. Kissinger, Squire, Sanders & Dempsey, Columbus, Ohio, of counsel), for defendants Bricker & Eckler, John Eckler, David C. Cummins, John W. Phillips and Charles H. Waterman III.
Siff, Rosen & Parker, P.C. (Louis G. Adolfsen, of counsel), New York City, for defendant Bolon, Hart & Buehler, Inc.
Liddle, O'Connor, Finkelstein & Robinson, New York City, for defendants Jeffrey Firestone and David M. Firestone, Jr.
Joan E. O'Dell, Washington, D.C., for defendant Russell A. Firestone III.
Various defendants move to dismiss or transfer this action to the United States District Court for the Southern District of Ohio, Eastern Division. The motions to transfer are granted.
This case concerns the estate of Dorothy Firestone Galbreath. Plaintiffs, two of Mrs. Galbreath's grandchildren from her first marriage, claim that Mrs. Galbreath's second husband and some of his family members wrongfully used or transferred her property to themselves, or to entities they owned, at a time when Mrs. Galbreath lacked mental capacity to understand or approve such transactions. The following background descriptions primarily summarize assertions in the complaint, a document of some 115 pages.
In 1925 Dorothy Bryan married Russell A. Firestone. Mr. Firestone's father was the founder of the Firestone Tire & Rubber Company ("Firestone Tire"), of which Mr. Firestone was a director. The Firestones were horse raising enthusiasts and breeders of thoroughbred horses; Mr. Firestone was a director of The Jockey Club, Inc., the Saratoga Association, and the racetrack in Hialeah, Florida. The Firestones had two children, Russell, Jr. and Morgan. When he died in 1951, Mr. Firestone left his widow shares in Firestone Tire, and numerous thoroughbred horses.
In 1955 Dorothy Bryan Firestone married John W. Galbreath. Mr. Galbreath was the founder, chairman, and principal shareholder of John W. Galbreath & Co., Inc., former chairman and a principal shareholder of Galbreath-Ruffin Corporation, and president of Akron Redevelopment Corporation. He had residences in New York City, Saratoga Springs, New York, Miami Beach, Florida, and Ohio. Mr. Galbreath had two children, Daniel M. Galbreath and Joan Galbreath Phillips, by a previous marriage. Dorothy and John Galbreath did not have any children together.
Like his second wife, Mr. Galbreath was a horse enthusiast. He owned Darby Dan Farm, a horse breeding, training and racing operation in Kentucky, to which Dorothy Galbreath's horses were taken after their marriage.
In July 1978 Dorothy Galbreath was diagnosed as having temporal arteritis. She was hospitalized, and then given steroids. Readmitted to a hospital in Ohio for two weeks in January 1979, she was diagnosed as having probable cerebral atrophy, a condition akin to presenile dementia.
Mrs. Galbreath spent the next several months in Florida, where she was regularly visited by her physician, Dr. Jean Jones Perdue. She returned to Ohio in April 1979, and soon was back in the hospital for about three months.
In October 1979 Mrs. Galbreath developed severe herpes zoster with brain involvement. Again she entered the hospital, and stayed about two months.
According to the complaint, Mrs. Galbreath's physical, mental and psychological condition deteriorated rapidly after July 1978, and defendants took advantage of her impaired mental functioning to transfer portions of her property to themselves, charge their expenses to her accounts, and deplete her estate.
Mrs. Galbreath died in Miami Beach, Florida on February 24, 1986. Her second husband, John W. Galbreath, died on July 20, 1988.
On October 31, 1978 Dorothy Galbreath established an inter vivos trust (the "Family Trust"). The Family Trust provides that upon her death, its assets are to be divided equally into individual trusts for each of her grandchildren by Mr. Firestone, including plaintiffs.
Mrs. Galbreath on October 31, 1978 also executed a Last Will and Testament (the "Will"). Under the Will, the Family Trust receives the residue of her estate. According to the complaint, because of the challenged inter vivos transfers, and bequests under the Will, there are no assets in Dorothy Galbreath's estate to fund the Family Trust.
The Will is the subject of a will contest commenced by plaintiff Douglas Firestone, and joined by plaintiff Amy Firestone del Valle, pending in the Probate Court of Franklin County, Ohio.
Plaintiffs Douglas B. Firestone and Amy Firestone del Valle are two of Dorothy Galbreath's grandchildren. Both of them reside in California. Each is a beneficiary of the Family Trust. Amy also receives a specific bequest under the Will.
Among the defendants are certain relatives of John W. Galbreath, his estate and two trusts he established (The John W. Galbreath Trust, and John W. Galbreath's Darby Dan Farm Trust), various Galbreath entities, advisers and employees, The Jockey Club, Inc., River House Realty, Inc., and Mrs. Galbreath's remaining grandchildren from her marriage to Russell Firestone, as follow:
a. Galbreath family members: Daniel M. Galbreath, Joan Phillips, James W. Phillips, and Lizanne Galbreath
Daniel M. Galbreath, Mr. Galbreath's son and Mrs. Galbreath's stepson, is a citizen of Ohio and has residences in Manhattan and Saratoga Springs, New York. He is the executor of both Dorothy Galbreath's and John W. Galbreath's estates, a beneficiary under the Will, and trustee of the Family Trust as well as of the two trusts established by John Galbreath. He holds positions similar to his father's: president and shareholder of John W. Galbreath & Co., Inc.; president, chairman and principal shareholder of Galbreath-Ruffin Corp.; and vice president of Akron Redevelopment Corp.
Daniel and his sister, Joan Galbreath Phillips, operate Darby Dan Farm. Joan is a principal shareholder of Galbreath-Ruffin Corp., and a beneficiary under the Will. Joan's husband is James W. Phillips, secretary of John W. Galbreath & Co. Both are citizens of Ohio.
Daniel's daughter, Lizanne Galbreath, is a director and employee of Galbreath-Ruffin Corp. She lives at Apartment 10G in the River House at 435 East 52nd Street in Manhattan, an apartment originally owned by Dorothy Galbreath.
b. Galbreath entities
John W. Galbreath & Co., Inc. is an Ohio corporation which has an office in New York City, where it owns or manages several office buildings. Galbreath-Ruffin Corp. is a New York corporation which also owns several New York office buildings. Akron Redevelopment Corp. is an Ohio corporation. All the stock of the first two companies is owned or controlled by John Galbreath's estate and trusts and Galbreath family members; Akron Redevelopment Corp. is wholly owned by Galbreath family members or interests.
c. Galbreath advisers and employees
Bricker & Eckler is a law firm in Columbus, Ohio which performs legal services for the Galbreath family. Bricker & Eckler prepared the Will and the Family Trust documents. It represents both John Galbreath's and Dorothy Galbreath's estates, as well as Daniel Galbreath in his roles as executor of each estate and as trustee of the various trusts. It does not have a New York office. John Eckler, David C. Cummins, Charles H. Waterman, III, and John W. Phillips all reside in Ohio and are all partners of the firm. John W. Phillips, the son of Joan and James Phillips, provides legal services and management assistance for Darby Dan Farm.
Bolon, Hart & Buehler, Inc. ("Bolon Hart") is an accounting firm in Columbus, Ohio which performs accounting services for the Galbreath family and the Galbreath entities. It does not have a New York office.
Dolorees I. Dutoit is a citizen of Ohio who worked for Mr. Galbreath and various Galbreath entities for 60 years. She was Dorothy Galbreath's financial secretary from 1955 until Mrs. Galbreath's death.
d. The Jockey Club, Inc. and River House Realty Co., Inc.
The Jockey Club, Inc. ("Jockey Club") has its principal place of business in New York City, but maintains its racing and breeding records in Lexington, Kentucky. It has sole responsibility in the United States for registering thoroughbreds, partnerships, stable names, horse...
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