George v. Lewis

• Decision Date: 07 April 1964
• Docket Number: Civ. A. No. 8238.
• Citation: 228 F. Supp. 725
• Parties: George T. GEORGE, Plaintiff, v. John L. LEWIS, Josephine Roche and Henry G. Schmidt, Individually, and as Trustees of the United Mine Workers of American Welfare and Retirement Fund, Defendants.
• Court: U.S. District Court — District of Colorado

228 F. Supp. 725

George T. GEORGE, Plaintiff, v. John L. LEWIS, Josephine Roche and Henry G. Schmidt, Individually, and as Trustees of the United Mine Workers of American Welfare and Retirement Fund, Defendants.

Civ. A. No. 8238.

United States District Court D. Colorado.

April 7, 1964.

Carmel A. Garlutzo, Trinidad, Colo., for plaintiff.

Zarlengo, Zarlengo & Seavy, Anthony F. Zarlengo, Denver, Colo., and Val J. Mitch, Harold H. Bacon, and Charles L. Widman, Washington, D. C., for defendants.

ARRAJ, Chief Judge.

The subject matter of this litigation is before the Court a second time on the motion of plaintiff to remand to the District Court in and for the County of Las Animas, Colorado. The suit was originally initiated in that Court in 1961. Thereafter, defendants removed the case to this Court and moved to dismiss for improper service of process, lack of jurisdiction and venue, or in lieu thereof, to quash the return of service of summons. Plaintiff moved to remand. His motion was granted by this Court in April of 1962 on the grounds that the requisite jurisdictional amount had not been satisfied. George v. Lewis, 204 F. Supp. 380 (D.Colo.1962). Following remand, the state Court in July of 1963, granted defendants' motions to quash service of process and dissolved plaintiff's writs of attachment and garnishment. That court refused, however, to dismiss the action, affording plaintiff the opportunity to obtain service of process in some other manner if possible.

On September 24, 1963, plaintiff served Dr. William A. Dorsey, Area Medical Administrator of the United Mine Workers of America Welfare and Retirement Fund in Denver, Colorado. Defendants promptly filed a petition for removal to this Court together with motions to dismiss for improper service of process, lack of jurisdiction and venue, or in lieu thereof, to quash the return of service on Dr. Dorsey. Plaintiff moved to remand to the District Court of Las Animas County, Colorado, on the grounds that the requisite jurisdictional amount is not in controversy and that the legal problems involved are the same as those heretofore resolved by this Court in its Order of April 1962.

It is not necessary to review in detail our prior decision. Suffice it to say that it rested on a factual situation which materially differs from that now before the Court in two ways: (1) jurisdiction in the first instance was quasi in rem in nature, thereby limiting any possible recovery to the amount of the res brought within the control of the Court by attachment and garnishment. Since the amount of that res was less than $10,000.00, plaintiff's motion to remand was granted. As above noted, the writs of attachment and garnishment which formed the basis of that quasi in rem jurisdiction were dissolved by the state Court. Recovery now, therefore, is limited only by the bounds of the complaint. (2) service of process has now been obtained on the Area Medical Administrator of the Fund of which defendants are trustees. The personal service on the trustees previously obtained outside of Colorado was quashed by the state Court. There is therefore now the question whether personal jurisdiction over the trustees has been obtained by service upon the Area Medical Administrator within Colorado.

With these differences in mind, we turn first to plaintiff's motion to remand. There appears to be no dispute that the parties to this suit have the requisite diversity of citizenship required by 28 U.S.C. § 1332. The controversy is whether plaintiff's complaint alleges the requisite jurisdictional amount. We think it does.

Returning briefly to our prior decision, it is notable that there we did not hold that plaintiff had not alleged the requisite jurisdictional amount. We held only that because jurisdiction was quasi in rem in nature, recovery was limited to the amount of the res within the control of the Court, which was less than $10,000.00, and therefore plaintiff could not legally recover the requisite jurisdictional amount. George v. Lewis, supra, 204 F.Supp. at 383-385. As we have noted above, this action is no longer based on jurisdiction quasi in rem. We look, therefore, to the complaint for the measure of recovery. In our prior decision we noted that "The object which is sought to be accomplished by the plaintiff may be looked to in determining the value of the matter in controversy." George v. Lewis, supra, 204 F.Supp. at 382. The object of plaintiff's complaint is clearly twofold in nature: (1) he seeks judgment in the amount of $8,600.00 for alleged accrued pension benefits and hospitalization coverage, and (2) he prays for an Order directing defendants to place him on the pension rolls. The value of the Order which plaintiff seeks may properly be considered in determining whether the jurisdictional amount is satisfied. See cases cited in George v. Lewis, supra, 204 F.Supp. at 382. The value of this Order, when added to the Judgment of $8,600.00 prayed for, clearly raises the amount in controversy above $10,000.00 exclusive of interest and costs. As defendants have demonstrated in their brief in opposition to the motion to remand, the pension benefits computed to the date service of process was obtained upon Dr. Dorsey (the only person upon whom process has been served) bring the recovery sought above the minimum jurisdictional amount. Even if that were not so, we think it would still be proper to consider the monetary value of claimant's future pension rights as measured by his life expectancy in determining whether the jurisdictional amount has been satisfied. In either event, we think it evident that the requisite amount is in controversy. Plaintiff's motion to remand must therefore be denied.

Defendants' motion to dismiss for lack of jurisdiction over the subject matter of the suit—the administration of a trust—will next be considered. The essence of this argument is that the Trust Fund is an irrevocable trust of movables with its situs in the District of Columbia and that its administration may be supervised only by the Courts of the District of Columbia. Granted, at least arguendo, that the Trust Fund is an irrevocable trust situated in the District of Columbia, we think defendants' conclusion that any suit relating to its administration can be brought only in the District of Columbia is too broad. In so deciding, we are aware that there are some decisions in which this specific question involving this same Trust Fund has been decided which can be construed in support of defendants' argument. See, e. g., Wilder v. United Mine Workers of America, 346 S.W.2d 27 (Ky.1961); Hobbs v. Lewis, 197 Tenn. 44, 270 S.W. 2d 352 (1954); United Mine Workers of America, Local Union No. 5834, of Thealka v. Daniel, 317 S.W.2d 183 (Ky. 1958); Lewis v. Hogwood, 300 F.2d 697 (D.C. Cir. 1962). (The unreported cases cited by defendants are not available to the Court and have not, consequently, been considered.) After a review of the authorities, we think the better rule to be the contrary. See Rittenberry v. Lewis, 222 F.Supp. 717 (E.D.Tenn.1963); Pavlovscak v. Lewis, 168 F.Supp. 839 (W.D. Pa.1958), aff'd, 274 F.2d 523 (3rd Cir. 1960), cert. den., 362 U.S. 990, 80 S.Ct. 1078, 4 L.Ed.2d 1023 (1960); Myhalyk v. Lewis, 398 Pa. 395, 158 A.2d 305, 88 A.L.R.2d 486; Stampolis v. Lewis, 186 Pa.Super. 285, 142 A.2d 348, cert. den., 359 U.S. 907, 79 S.Ct. 582, 3 L.Ed.2d 572 (1959). And see generally Annotation, 88 A.L.R.2d 493, 502-505 (1963).

In rejecting defendants' ultimate conclusion, we note agreement with that phase of their argument which contends that all matters relating to administration of the trust are to be determined by the law of its situs. See Restatement (Second), Conflict of Laws, Section 297 (Tentative Draft No. 5 April 24, 1959). This, however, is a question of choice of law, not of jurisdiction. We are also in agreement with defendants that, as a general proposition, the interests of all are usually best served by confining judicial action relating to trust administration to courts in the state of the situs. We do not think, however, that all interests are always best served by confining judicial action to the situs state. The amended rule of the Restatement appears most reasonable: "The administration of a trust of interests in movables is usually supervised by the courts of the state whose local law governs the administration of the trust." Restatement (Second), Conflict of Laws, Section 299 and Reporters Note thereto (Tentative Draft No. 5, April 24, 1959) (Emphasis added). See also Section 108a(2) and Comments c and d thereto (Tentative Draft No. 4, April 5, 1957). The possibility that suit may be brought by a beneficiary against his trustee in a state other than the situs is also recognized in the Restatement (Second) of Trusts, Section 199 and Comment f thereto (1959).

It is notable that several of the cases relied on by defendants rest in large part upon the older rule of the Restatement. See, e. g., Wilder v. United Mine Workers of America, Local Union No. 5834, of Thealka, supra, and Hobbs v. Lewis, supra. Both cases explicitly cite and rely on Section 299 of the Restatement of Conflict of Laws (1934) which provides that "The administration of a trust of movables is supervised by the courts of that state only in which the administration of the trust is located." That Section has since been modified, as quoted above, recognizing that under certain circumstances a suit outside of the situs state is not only possible, but is in the best interests of justice. In Rittenberry v. Lewis, supra, the most recent case dealing with the question, the Court indicates that the rationale of the cases relied on by defendants actually rests on the doctrine of forum non conveniens. The Court then goes on to indicate that its conception of the policy involved calls for accepting local jurisdiction. We find the Court's reasoning persuasive:

"When a trust seeks to operate upon a

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