Jones v. Jones, Civil Action No. 2:16cv93
| Decision Date | 12 September 2016 |
| Docket Number | Civil Action No. 2:16cv93 |
| Citation | 206 F.Supp.3d 1098 |
| Parties | Nancy Alleyn JONES, Plaintiff, v. Carol L. JONES, et al., Defendants. |
| Court | U.S. District Court — Eastern District of Virginia |
Samuel R. Brown, II, for Plaintiff.
Carol L. Jones, Jesse B. Gordon, William A. Lascara, Liberty National, Robert B. Delano, Jr., for Defendants.
This matter is before the Court on a Notice of Removal from the Circuit Court for the City of Virginia Beach, Virginia, filed by Defendant Carol L. Jones,1 in her role as Executor of the Estate of Sandy Ambrose Jones ("Executor of Mr. Jones' Estate"), ECF No. l; Plaintiff Nancy Alleyn Jones' ("Plaintiff") Motion to Remand, ECF No. 13; a Motion to Dismiss for Failure to State a Claim, filed by Defendant Carol L. Jones ("Mrs. Jones"), both individually and in her role as Executor of Mr. Jones' Estate, ECF No. 3; and Plaintiff's Motion for Leave to File her Response to Defendant's Motion to Dismiss, ECF No. 9. The present claims arise from a Final Decree of Divorce and Marital Settlement Agreement between Plaintiff and her former husband, Sandy Ambrose Jones ("Mr. Jones"). Plaintiff initiated the present action against Defendants Mrs. Jones, individually and as the Executor of Mr. Jones' Estate (collectively "Defendant Jones"), and Liberty National Life Insurance Company ("Liberty National"), alleging breach of the Marital Settlement Agreement and seeking declaratory judgment and the imposition of a constructive trust on life insurance proceeds resulting from Mr. Jones' death. Having been fully briefed, each motion is ripe for consideration.
On January 9, 2007, Plaintiff obtained a Final Decree of Divorce from Mr. Jones in the Circuit Court for the City of Virginia Beach, Virginia. Am. & Restated Notice of Removal, Ex. A, Compl., ¶ 3, ECF No. 5-1 [hereinafter "Compl."]. The Final Decree of Divorce incorporated a Marital Settlement Agreement between Plaintiff and Mr. Jones; the parties entered into such Agreement on October 16, 2006. Id. ¶ 4. Paragraph 5 of the Marital Settlement Agreement states that Mr. Jones Id. ¶ 5. Plaintiff alleges that, on October 16, 2006, Mr. Jones had seven (7) life insurance policies in effect with Liberty National, totaling $468,000, id. ¶ 6, and it was "the intent of the [Marital Settlement] Agreement that [ ] Plaintiff would be the beneficiary of [Mr. Jones'] life insurance policies in effect at the time of the entry of the Agreement," id. ¶ 7.
On June 3, 2015, Plaintiff filed a Petition and Affidavit for a Rule to Show Cause ("Petition") in the Virginia Beach Circuit Court, case number CL15-0846, against Mr. Jones. Mem. of Law in Support of Mot. to Remand, 2, ECF No. 14; Pl.'s Mot. to Remand, Ex. A, Pet. & Aff. For Rule to Show Cause, ECF No. 13-1 [hereinafter "Pet."]. Such Petition alleged that Mr. Jones failed to abide by certain terms of the Marital Settlement Agreement, including maintenance and communication regarding the Liberty National life insurance policies. Pet. at 2-3; Mem. of Law in Support of Mot. to Remand at 2. Mr. Jones passed away on June 6, 2015, three days after Plaintiff filed her Petition. Compl. ¶ 2. Following Mr. Jones' death, Plaintiff learned that she was named as a beneficiary on only one $25,000 Liberty National life insurance policy. Id. ¶ 10. Plaintiff alleges that, after completion of the Marital Settlement Agreement, Mr. Jones removed her as beneficiary from six of the seven life insurance policies and, in doing so, violated the terms of the Final Decree of Divorce and the Marital Settlement Agreement incorporated therein. Id. ¶ 8.
On July 8, 2015, Plaintiff filed a Complaint (separate from her previously filed Petition) in the Virginia Beach Circuit Court, case number CL15-2754, against the currently-named beneficiaries of the other six Liberty National life insurance policies (including Mrs. Jones), as well as Liberty National and the Executor of Mr. Jones' Estate. Id. ¶ 9. In Count II of her Complaint, Plaintiff alleged a breach of contract claim, under the Marital Settlement Agreement, against Mr. Jones' Estate for failing to name her as a beneficiary of all the Liberty National life insurance policies and maintaining her as a beneficiary on such policies until Mr. Jones' death. Id. ¶¶ 15-17. In Count III, Plaintiff sought declaratory judgment that she was the rightful recipient of all proceeds from the seven Liberty National life insurance policies, id. ¶¶ 18-20, and in Count I of her Complaint, Plaintiff asked the Court to impose a constructive trust on the disputed life insurance policy proceeds, id. ¶¶ 11-14.
On December 1, 2015, the Virginia Beach Circuit Court entered a Consent Order, providing that Defendant Jones would accept service and allowing for the voluntary dismissal of all beneficiaries of the Liberty National life insurance policies, except for Mrs. Jones. Am. & Restated Notice of Removal ¶ 3; id. Ex. B, Consent Order, ECF No. 5-2 [hereinafter "Consent Order"]. Further, the Consent Order required Liberty National to interplead the proceeds of all seven life insurance policies into the Virginia Beach Circuit Court, pursuant to Va. Code § 8.01–364.3 Id. ¶ 6. On February 11, 2016, Mrs. Jones accepted service as an individual and as Executor of Mr. Jones' estate, and on February 17, 2016, Proof of Service was filed with the Circuit Court for the City of Virginia Beach, Virginia. Am. & Restated Notice of Removal ¶ 4.
On February 29, 2016, the Executor of Mr. Jones' Estate, filed a Notice of Removal, on the basis of diversity jurisdiction, with this Court. ECF No. 1. The Executor of Mr. Jones' Estate filed an Amended and Restated Notice of Removal on March 9, 2016.4 ECF No. 5. At the time the Amended and Restated Notice of Removal was filed, Plaintiff was a resident of Virginia, id. ¶ 1, and Mrs. Jones was a resident of California, id. ¶ 8. Mrs. Jones qualified as the Executor of Mr. Jones' Estate on January 27, 2016 and Mr. Jones' Estate was probated in California. Id. ¶ 9. Further, at the time the Amended and Restated Notice of Removal was filed, Liberty National was incorporated in Nebraska and had its principal place of business and headquarters in Texas. Id. ¶ 10. On March 30, 2016, Plaintiff timely filed a Motion to Remand the case, arguing that this matter "arises exclusively under the domestic relations law of Virginia and falls within the domestic relations exception to [f]ederal subject matter jurisdiction." Mem. of Law in Supp. of Mot. to Remand at 5. On April 12, 2016, Defendant Jones filed an Opposition to Plaintiff's Motion to Remand, ECF No. 16, and on April 15, 2016, Plaintiff filed a Rebuttal to Defendant Jones' Opposition, ECF No. 17. In her Rebuttal Brief, Plaintiff also requested remand based on the abstention doctrine articulated in Colorado River Water Conservation District v. United States , 424 U.S. 800, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976).
On February 29, 2016, Defendant Jones also filed a Motion to Dismiss Plaintiff's Complaint, pursuant to Federal Rule of Civil Procedure 12(b)(6). ECF No. 3. On March 18, 2016, Plaintiff tardily filed an Opposition to Defendant Jones' Motion to Dismiss, ECF No. 7, and on March 21, 2016, Plaintiff filed her Motion for Leave to File a Late Response to the Motion to Dismiss, ECF No. 9. On March 25, 2016, Defendant Jones filed an Opposition to Plaintiff's Motion for Leave to File a Late Response, ECF No. 10, and on March 29, 2016, Defendant Jones filed a Reply to Plaintiff's Opposition to the Motion to Dismiss, ECF No. 11. The Court will first address Plaintiff's Motion to Remand before proceeding to address Plaintiff's Motion for Leave to File and Defendant Jones' Motion to Dismiss.
Federal district courts are courts of limited subject matter jurisdiction. United States ex rel. Vuyyuru v. Jadhav , 555 F.3d 337, 347 (4th Cir.2009) (citing Exxon Mobil Corp. v. Allapattah Servs., Inc. , 545 U.S. 546, 552, 125 S.Ct. 2611, 162 L.Ed.2d 502 (2005) ). They may exercise "only the jurisdiction authorized them by the United States Constitution and by federal statute." Id. (citing Bowles v. Russell , 551 U.S. 205, 127 S.Ct. 2360, 168 L.Ed.2d 96 (2007) ). District courts may exercise diversity jurisdiction in civil actions between "citizens of different states" and "where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs." 28 U.S.C. § 1332(a). If complete diversity, and the appropriate amount in controversy, are present in a case that was initially filed in state court, a federal court may exercise jurisdiction over the case upon proper removal to federal court. 28 U.S.C. §§ 1441, 1446.5 "[A]ny civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants to the district court of the United States for the district and division embracing the place where such action is pending." 28 U.S.C. § 1441(a).
When a case is before the Court on the basis of diversity jurisdiction, the United States Supreme Court has recognized a narrow "domestic relations exception" that "divests the federal courts of power to issue divorce, alimony, and child custody decrees." Ankenbrandt v. Richards , 504 U.S. 689, 703, 112 S.Ct. 2206, 119 L.Ed.2d 468 (1992) ; accord Elk Grove Unified Sch. Dist. v. Newdow , 542 U.S. 1, 12–13, 124 S.Ct. 2301, 159 L.Ed.2d 98 (2004), abro gated on other grounds by Lexmark Int'1, Inc. v. Static...
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