Gustafson v. Zumbrunnen, 07-3019.

Citation546 F.3d 398
Decision Date01 October 2008
Docket NumberNo. 07-3019.,07-3019.
PartiesSusan GUSTAFSON, Plaintiff-Appellant, v. Kathryn ZUMBRUNNEN, et al., Defendants-Appellees.
CourtUnited States Courts of Appeals. United States Court of Appeals (7th Circuit)

Crooks, Peterson, Johnson & Murray, Madison, WI, for Defendants-Appellees.

Before BAUER, POSNER, and WOOD, Circuit Judges.

POSNER, Circuit Judge.

This diversity suit governed by Wisconsin law presents an issue of federal diversity jurisdiction.

The original complaint named as plaintiff Georgia Gustafson, suing as the personal representative of the estate of her grandfather, George Skille, who had appointed her in his will, which left most of his estate to his eight grandchildren by his first wife. The suit named as defendants Skille's lawyer, the lawyer's law firm, and a bank in which Skille and his second wife, Betty Skille, had a joint account with some $150,000 in it, constituting, according to the complaint, the bulk of George Skille's wealth. All the defendants, but none of the grandchildren, are citizens of Wisconsin, as George Skille had been.

Shortly after George Skille's death, his widow had withdrawn the money from the joint account. Georgia Gustafson, who as personal representative of Skille's estate was legally entitled to control all the property of the estate, Wis. Stat. § 857.01; In re Estate of Peterson, 66 Wis.2d 535, 225 N.W.2d 644, 646 (1975); Peters v. Kell, 12 Wis.2d 32, 106 N.W.2d 407, 413 (1960), sued the defendants in a Wisconsin state court to recover the money in the joint account for the decedent's estate. The suit was settled by the entry of a judgment that required Betty Skille to transfer $100,000 from the joint checking account to her lawyer's trust account and specified that "any money that may remain at the time of Betty Skille's death which came from the now-closed [joint checking account] ... will go to certain beneficiaries named in the last will of George Skille." The agreement further provided that "neither party may raise any further claim or cause of action against the other party except to enforce this Stipulation and Judgment."

Still in her capacity as personal representative of the decedent's estate, Georgia Gustafson brought the present suit in a federal district court in Wisconsin. It seeks the other $50,000 that was in the joint checking account, plus the attorneys' fees incurred in the previous suit, plus punitive damages based on such allegations as that the lawyer defendant had "intentionally and tortiously interfered with the beneficiaries' expectancy of inheritance by concealing or destroying the list [of beneficiaries under Skille's will] and suppressing evidence of [Skille's] testamentary intention."

The suit, though based ultimately on the will, is not within the probate exception to federal jurisdiction. The judgment sought would just add assets to the decedent's estate; it would not reallocate the estate's assets among contending claimants or otherwise interfere with the probate court's control over and administration of the estate. Marshall v. Marshall, 547 U.S. 293, 310-12, 126 S.Ct. 1735, 164 L.Ed.2d 480 (2006); Struck v. Cook County Public Guardian, 508 F.3d 858, 859-60 (7th Cir.2007); Jones v. Brennan, 465 F.3d 304, 306-07 (2006). The defendants, however, moved to dismiss the suit for want of federal subject-matter jurisdiction on a different ground — lack of complete diversity of citizenship. All the defendants, as we mentioned, are citizens of Wisconsin, and while Georgia Gustafson is a citizen of Minnesota the federal diversity statute treats "the legal representative" of a decedent's estate (or the estate of an infant or an incompetent) as a citizen of the same state as the decedent, and that is Wisconsin. 28 U.S.C. § 1332(c)(2). So Georgia Gustafson was a Wisconsinite for purposes of her federal suit and that placed citizens of that state on both sides of the suit.

She responded to the motion to dismiss by asking the court for leave to amend her complaint to change the plaintiff from herself in her representative capacity to herself plus the other grandchildren. (The grandchildren are the "beneficiaries" referred to in the settlement of the first suit and the complaints in this one.) But then she noticed that this wouldn't work either, because the eight grandchildren are to share equally in the decedent's estate and when $370,000 (the total amount of damages sought in the amended complaint) is divided by eight, the quotient ($46,250) is below the minimum amount in controversy ($75,000) required for a diversity suit. So Georgia then filed (though improperly, because without seeking leave of the court) a second amended complaint, in which the only plaintiff is another one of the grandchildren, Susan Gustafson, suing on behalf of the estate. The district judge dismissed the suit for want of federal jurisdiction, and Susan Gustafson appeals.

She argues that Georgia Gustafson, as the personal representative under Skille's will, is the sole "legal representative" of the decedent's estate within the meaning of 28 U.S.C. § 1332(c)(2). Wisconsin law, however, permits any person having an interest in a decedent's estate, such as Susan Gustafson, to sue "on behalf of the estate ... in the court in which the estate is being administered" to recover any property "which should be included in the estate." Wis. Stat. § 879.63. (We need not consider whether, in the teeth of the statutory language, such a suit can be brought in a different court, namely a federal district court, from the court in which the estate is being administered.) The second amended complaint charges one of the defendants, the lawyer, with having tortiously interfered with the legacies to which the will entitled the grandchildren by advising the widow to withdraw the money in the joint checking account rather than turn it over to the estate, from which it would have passed to the grandchildren. The bank is charged with negligence, among other things in allowing the money to be withdrawn from the account, but we can limit our consideration to the tortious-interference claim.

However, the Wisconsin statute permits someone other than the estate's personal representative to sue to bring property into the estate only if "the personal representative has failed to secure the property or to bring an action to secure the property." Georgia Gustafson, the personal representative, did bring such a suit, as we know. It is true that suits for tortious interference with an anticipated bequest, brought by the intended recipient of the bequest, are permitted under Wisconsin law, as under the law of other states. Wickert v. Burggraf, 214 Wis.2d 426, 570 N.W.2d 889, 890 (App.1997); Harris v. Kritzik, 166 Wis.2d 689, 480 N.W.2d 514, 516-17 (App.1992); Anderson v. McBurney, 160 Wis.2d 866, 467 N.W.2d 158, 161-62 (App.1991); Marshall v. Marshall, supra, 547 U.S. at 312, 126 S.Ct. 1735; Restatement (Second) of Torts § 774B (1979) ("one who by fraud, duress or other tortious means...

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    ...of another has the state citizenship of the person on whose behalf he or she sues. See 28 U.S.C. § 1332(c)(2); Gustafson v. zumBrunnen, 546 F.3d 398, 400-03 (7th Cir.2008); Adams v. Purves, Civil No. 10-55-GPM, 2010 WL 378422, at *2 (S.D.Ill. Jan. 27, 2010). The citizenship of a corporation......
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1 books & journal articles
  • Why Federal Jurisdiction Matters: the Impact of Marshall v. Marshall on Probate Court Litigation
    • United States
    • California Lawyers Association California Trusts & Estates Quarterly (CLA) No. 15-2, January 2009
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    ...probate court did not "exercise control over the shares or other property at issue").23. See also Gustafson v. ZumBrunnen (7th Cir. 2008) 546 F.3d 398, 400 (holding that the probate exception was inapplicable where "[t]he judgment sought would just add assets to the estate").24. Struck v. C......

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