Ganoe v. Lummis

• Decision Date: 04 June 1987
• Docket Number: No. 86 Civ. 4859 (RJW).,86 Civ. 4859 (RJW).
• Citation: Ganoe v. Lummis, 662 F.Supp. 718 (S.D. N.Y. 1987)
• Parties: Victor L. GANOE, Thomas A. Ganoe, Edwin A. Ganoe, Daniel K. Ganoe, Sandra I. Ganoe Collar, Mary G. Ganoe Price, Cherrie Ganoe Lo Destro, and Cleo Ganoe Smith, Maternal Heirs of Howard R. Hughes, Jr., Deceased, and William A. Jones, as Authorized Agent and Representative of 300 Paternal Heirs of Howard R. Hughes, Jr., Deceased, Plaintiffs, v. William LUMMIS, Temporary Administrator of the Estate of Howard Robard Hughes, Jr., Defendant.
• Court: U.S. District Court — Southern District of New York

662 F. Supp. 718

Victor L. GANOE, Thomas A. Ganoe, Edwin A. Ganoe, Daniel K. Ganoe, Sandra I. Ganoe Collar, Mary G. Ganoe Price, Cherrie Ganoe Lo Destro, and Cleo Ganoe Smith, Maternal Heirs of Howard R. Hughes, Jr., Deceased, and William A. Jones, as Authorized Agent and Representative of 300 Paternal Heirs of Howard R. Hughes, Jr., Deceased, Plaintiffs, v. William LUMMIS, Temporary Administrator of the Estate of Howard Robard Hughes, Jr., Defendant.

No. 86 Civ. 4859 (RJW).

United States District Court, S.D. New York.

June 4, 1987.

COPYRIGHT MATERIAL OMITTED

Richard D. Grisanti, Buffalo, N.Y., for plaintiffs.

Phillips, Lytle, Hitchcock, Blaine & Huber, Buffalo, N.Y., for defendant; Alexander C. Cordes, Arthur M. Sherwood, of counsel.

ROBERT J. WARD, District Judge.

Plaintiffs, self-proclaimed "close relatives" of the late recluse billionaire Howard R. Hughes, Jr., have commenced this action seeking injunctive and monetary relief against defendant as fiduciary of the Hughes estate on the grounds that defendant entered into a conspiratorial arrangement to determine the disposition of the estate by the Texas probate court. Defendant has moved to dismiss the action on all the grounds contained in Rule 12(b), Fed.R.Civ.P., and for sanctions under Rule 11, Fed.R.Civ.P. Plaintiffs have cross-moved for sanctions under Rule 11, Fed.R. Civ.P. For the reasons to follow, the Court grants defendant's motion to dismiss the complaint. That portion of defendant's motion seeking sanctions is adjourned pending a hearing on the application for fees. Plaintiffs' cross-motion for sanctions is denied.

BACKGROUND

Howard R. Hughes died intestate on April 5, 1976. On April 14, 1976, the Probate Court of Harris County, Texas (the "Probate Court") appointed defendant William R. Lummis and his mother Annette Gano Lummis Temporary Co-administrators of the Hughes Estate. By a judgment dated April 10, 1978, the Probate Court determined that Howard R. Hughes had died a domiciliary of Texas, that a purported 1968 will was not valid, that the Texas Court had "the sole jurisidiction over the administration of Decedent's real and tangible personal property situated in this State and Decedent's intangible personal property wherever situated," and that "the laws of intestacy of the State of Texas are applicable as to Decedent's personal property, both tangible and intangible, wherever situated, and Decedent's real property situated within this State." Defendant's Memorandum of Law in Support of Motion for Dismissal, Appendix 39-40 ("Defendant's App."). Pursuant to its authority, the Probate Court appointed an attorney ad litem to represent the unknown heirs of the estate. The attorney ad litem sent letters to potential relations notifying them of the heirship proceedings. Richard D. Grisanti, attorney for plaintiffs in the instant proceeding, received this notification. On August 14, 1981, four of the present plaintiffs filed in the Texas proceedings an affidavit and geneology claiming that they were paternal relations of Howard R. Hughes.¹

Beginning in July, 1981, the Probate Court conducted a four-phase proceeding to determine the rightful heirs of Howard R. Hughes.² A jury determined on September 4, 1981 that the paternal grandparents of Howard R. Hughes left three descendants who survived him. This finding excluded under Texas law any other paternal claimants who were unable to establish descent from Hughes' paternal grandparents. The jury specifically rejected a claim by a competing group of paternal heirs that Rupert Hughes, a deceased paternal uncle of Howard R. Hughes, had been impotent and could not have fathered his daughter, Elsbeth Hughes Lapp, the deceased mother of the three individuals finally determined to be the paternal heirs. On November 13, 1981, the Probate Court entered a final judgment determining that only descendants of the grandparents of Howard R. Hughes were entitled to share in his estate as intestate distributees under applicable Texas law.

The Ganoe plaintiffs did not appeal from the Probate Court's final judgment, but nevertheless filed an original motion dated May 3, 1985 and an amended motion dated May 29, 1985 to reopen the maternal heirship proceedings and set aside the November 13, 1981 judgment. The Probate Court heard oral argument on the matter and reopened the proceedings. On August 30, 1985, the Probate Court granted summary judgment dismissing the claims of the Ganoe plaintiffs to be entitled to share in the Hughes estate. The Court of Appeals for the First Supreme Judicial District of Texas dismissed the appeal of the decision by the Probate Court for failure to file a bond. The Texas Supreme Court dismissed the application for a writ of error for want of jurisdiction.

Richard D. Grisanti next filed suit in the New York Supreme Court, Erie County, on behalf of the Ganoe plaintiffs and on behalf of William A. Jones who supposedly represents 300 paternal heirs of Howard R. Hughes. The complaint in that action alleged that the defendant entered a conspiratorial agreement to dispose of the assets of the Hughes estate and that the Texas courts illegally aided the conspiracy through a pattern of misfeasance, malfeasance and nonfeasance. The plaintiffs requested various monetary and injunctive relief. In a decision dated May 29, 1986, that court dismissed the case for lack of personal jurisdiction over Lummis.

Undeterred, plaintiffs' counsel filed the present proceeding alleging essentially the same facts contained in the complaint filed in the New York Supreme Court. Specifically, plaintiffs request this Court to 1) open the Texas probate proceedings to vacate all judgments and orders, particularly those in the heirship proceeding, 2) allow them a full and complete hearing on their claims to the Hughes estate, 3) enjoin distribution of the assets of the Hughes estate, 4) order a complete auditing and accounting of the Hughes estate, and 5) grant them judgment, in the aggregate, of two billion dollars. Defendant has moved to dismiss the complaint and for sanctions. Plaintiffs have cross-moved for sanctions.

DISCUSSION

I. Subject Matter Jurisdiction.

A. The Probate Exception.

A federal court has no jurisdiction to probate a will, administer an estate, or entertain any action that would interfere with probate proceedings pending in a state court or with its control over property in its custody. Markham v. Allen, 326 U.S. 490, 494, 66 S.Ct. 296, 298, 90 L.Ed. 256 (1946); Celentano v. Furer, 602 F.Supp. 777, 779 (S.D.N.Y.1985). The probate exception to federal jurisdiction clearly bars the Court from entertaining an application for much of the relief sought by plaintiffs. This Court may not vacate any judgments entered in the Texas Probate Court, enjoin distribution of the assets of the Hughes estate, order an audit or accounting of the estate, or order the estate to pay plaintiffs the sum of two billion dollars. See Dannhardt v. Donnelly, 604 F.Supp. 796, 800 (E.D.N.Y.1985). Accordingly, the Court dismisses under Rule 12(b)(1), Fed.R.Civ.P., for lack of subject matter jurisdiction, so much of the complaint as seeks this relief.

The probate exception does not, however, preclude a federal court from exercising jurisdiction to adjudicate rights to the property of an estate "where the final judgment does not undertake to interfere with the state court's possession save to the extent that the state court is bound by the judgment to recognize the right adjudicated by the federal court." Markham v. Allen, supra, 326 U.S. at 494, 66 S.Ct. at 298; Celentano v. Furer, supra, 602 F.Supp. at 779. As the Second Circuit Court of Appeals has stated:

The standard for determining whether federal jurisdiction may be exercised is whether under state law the dispute would be cognizable only by the probate court. If so, the parties will be relegated to that court; but where the suit merely seeks to enforce a claim inter partes, enforceable in a state court of general jurisdiction, federal diversity jurisdiction will be assumed.

Lamberg v. Callahan, 455 F.2d 1213, 1216 (2d Cir.1972). By this standard, "it generally is not considered an interference with state proceedings for a federal court to declare whether a party has the right to share in an estate. Indeed, doing so has been held specifically within the equity jurisdiction of the federal courts." 13B C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure § 3610 (2d ed. 1984) ("Wright & Miller").

Interpreting and liberally construing the second and fifth aspects of plaintiffs' claim for relief as seeking a declaration that they are entitled to a portion of the Hughes estate, this Court would have the power to entertain the action so long as plaintiffs have established as well either a federal question or diversity as a basis of federal court jurisdiction. Id.

B. Federal Question Jurisdiction.

Although plaintiffs ritually intone that the Texas proceedings deprived them of "`due process' and `equal protection of the law' under the fifth and fourteenth amendment," complaint ¶ 2, the circumstances of this case point out beyond cavil the clear lack of any cognizable federal question. Because the due process and equal protection clauses limit only the power of government, a showing of state action is required to violate those constitutional rights. Plaintiffs have made no argument and the Court is unaware of any precedent for the proposition that defendant Lummis clothed himself in the power of the state once he assumed his position as administrator of the estate of Howard R. Hughes. Consequently, in the absence of any state action by defendants, there could be no constitutional violation on which to premise federal jurisdiction.

Alternatively, even were the Court to equate Lummis' actions with those of the state, principles of abstention preclude this Court from hearing plaintiffs' complaint. In its recent decision in Pennzoil Co. v. Texaco, Inc., ...