FLORIDA FIRST NAT. BANK, ETC. v. Bagley, 79-725-Civ-J-WC.

• Decision Date: 10 April 1980
• Docket Number: No. 79-725-Civ-J-WC.,79-725-Civ-J-WC.
• Citation: 508 F. Supp. 8
• Parties: FLORIDA FIRST NATIONAL BANK OF JACKSONVILLE, as Corporate Trustee of the Julia Gustafson Bagley Trust, et al., Plaintiff, v. Thomas W. BAGLEY et al., Defendants.
• Court: U.S. District Court — Middle District of Florida

508 F. Supp. 8

FLORIDA FIRST NATIONAL BANK OF JACKSONVILLE, as Corporate Trustee of the Julia Gustafson Bagley Trust, et al., Plaintiff, v. Thomas W. BAGLEY et al., Defendants.

No. 79-725-Civ-J-WC.

United States District Court, M. D. Florida, Jacksonville Division.

April 10, 1980.

Thomas R. Prewitt and Edward M. Kaplan, Armstrong, Allen, Braden, Goodman, McBride & Prewitt, Memphis, Tenn., John H. Wilbur and James F. Valenti, Jr., Milam & Wilbur, Jacksonville, Fla., for defendants.

E. Earle Zehmer, Bedell, Bedell, Dittmar & Zehmer, James H. Sheehan, Fisher & Sheehan, Jacksonville, Fla., for plaintiff.

ORDER ON MOTION TO REMAND

CASTAGNA, District Judge.

This Court has for adjudication Plaintiff's Motion to Remand the present proceeding back to the Circuit Court of Duval County, Florida. The proceeding was originally filed in the Circuit Court on August 7, 1979 by the Florida First National Bank of Jacksonville and E. S. Gustafson, Jr., both citizens of Florida and trustees of the Julia Gustafson Bagley Trust (Trust) against Thomas W. Bagley, a citizen of Tennessee and the surviving husband of Julia Gustafson Bagley, and F. N. Gustafson Amana and Gail Gustafson Wagner, both of whom are citizens of Florida and beneficiaries under the Trust. The suit was filed pursuant to Sections 737.201 et seq., 731.303 and 86.041, Florida Statutes requesting judicial instructions, declarations and determination of certain questions arising from the administration of the Trust. A hearing was held on Plaintiff's Motion to Remand and also on a Motion to Dismiss filed in a related case styled Thomas W. Bagley, et al v. Florida First National Bank of Jacksonville, as Corporate Trustee of the Julia Gustafson Bagley Trust, et al, 79-726-Civ-J-WC, which is considered in a separate Court Order.

On August 17, 1979, Defendant Bagley filed a petition for Removal in the United States District Court for the Middle District of Florida seeking to remove the cause from state court to federal court pursuant to 28 U.S.C. § 1441 on the basis of diversity of citizenship. To support the removal, Bagley contends that the other Defendants should be realigned as party Plaintiffs as their true and ultimate interests are adverse to his own. This realignment results in all party Plaintiffs being citizens of Florida and leaves Bagley as the only Defendant who is a citizen of Tennessee and thus creates the requisite diversity of citizenship to confer jurisdiction on this Court. The Plaintiff challenges the removal of this cause as improper because all of the Defendants did not join in the removal petition, because there is an absence of complete diversity of citizenship between the parties, and finally because once a state court obtains prior jurisdiction in an in rem or quasi in rem cause, a federal court is without authority to assert jurisdiction.

The propriety of the removal is determined only after the parties have been realigned according to their actual interests in the cause. City of Indianapolis v. Chase National Bank, 314 U.S. 63, 62 S.Ct. 15, 86 L.Ed. 47 (1941). The Court is not bound by the technical form of the proceedings in state court, City of N.Y. v. Evigo Corp., 121 F.Supp. 748, 750 (S.D.N.Y.1954); but is obligated to ascertain the underlying substantive interests of the parties in dispute and arrange the parties according to their actual interests in the controversy. City of Indianapolis, supra. Further, the proper alignment is determined from an examination of the Plaintiff's pleadings in state court. Id.

An examination of the Decedent's will and Trust reveals the actual nature of the parties' interests. Bagley was completely and entirely disinherited from both his wife's will and her Trust. During decedent's lifetime, conveyances were made from her assets to the Trust she created. The Trust instrument makes no provision for Bagley and provides only for the above named beneficiaries. Decedent's will likewise makes no provision for her husband and further provides for the residue of her estate to be transferred to the Trust. All the beneficiaries and successor beneficiaries of the Trust except one, were named Defendants along with Bagley in the state court complaint. The one exception is E. S. Gustafson, Jr., who is named as a first successor individual trustee under the Trust and was already named as a Plaintiff in the state court complaint, as he has succeeded at least temporarily to that position.

What Bagley ultimately seeks from the Trust is contrary to the interest of the other originally named Defendants. Defendant, Bagley, in his original answer to the removed Complaint, and in Crossclaim and Counterclaim seeks to void the Trust and also seeks to set aside the assets the decedent conveyed to the Trust and that they be returned to the decedent's estate. Defendant has sought leave to amend the Complaint, Crossclaim and Counterclaim. The requested amendment changes the relief requested to where Bagley only seeks to have the Court determine the extent of his rights and interests in the Trust corpus. Either of the above requests for relief can...