Linton v. Embry

• Decision Date: 27 January 2023
• Docket Number: Civil Action 22-cv-00680-CMA-MDB
• Parties: FREDRICA RENEE LINTON, a citizen and resident of Arizona, Plaintiff, v. BARBARA E. EMBRY, a citizen and resident of Colorado, Defendant.
• Court: U.S. District Court — District of Colorado

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FREDRICA RENEE LINTON, a citizen and resident of Arizona, Plaintiff, v. BARBARA E. EMBRY, a citizen and resident of Colorado, Defendant.

Civil Action No. 22-cv-00680-CMA-MDB

United States District Court, D. Colorado

January 27, 2023

RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE

Maritza Dominguez Braswell Magistrate Judge

This matter is before the Court on Defendant's “Motion to Dismiss for Lack of Subject Matter Jurisdiction Pursuant to Fed.R.Civ.P. 12(b)(1).” ([“Motion to Dismiss”], Doc. No. 7.) Plaintiff has filed a response in opposition to the Motion to Dismiss, Defendant has filed a supplemental set of facts, and Plaintiff has filed a response to Defendant's supplement. ([“Response”] Doc. No. 10; [“Supplement”], Doc. No. 12; [“Response to Supplement”], Doc. No. 13.) The Motion to Dismiss has been referred to the undersigned pursuant to 28 U.S.C. § 636(b)(1) and D.C.COLO.LCivR 72.1, for a recommendation regarding disposition. (Doc. No 8; see Doc. No. 11.) For the following reasons, it is RECOMMENDED that the Motion to Dismiss be DENIED.

STATEMENT OF THE CASE

Plaintiff Fredrica Renee Linton [“Plaintiff”] brings this diversity-based declaratory judgment action against her paternal half-sister, Defendant Barbara E. Embry [“Defendant”], seeking a determination that she is the sole owner of certain bank account funds. (Doc. No. 1 at ¶¶ 1-3, 6, 9.) The parties in this lawsuit are the adult daughters and sole surviving children of Mr. Fred Linton [“Mr. Linton”], an individual who resided in Freemont County, Colorado until his death on January 3, 2022, at the age of ninety-six. (Id. at ¶ 6.) According to the Complaint, in 2004 or thereabouts, Mr. Linton opened a primary checking account with Wells Fargo, and around 2009, he opened an additional high yield savings account with that same bank. (Id. at ¶¶ 7-8.) On March 25, 2010, Mr. Linton reportedly “visited his Wells Fargo branch and submitted two Relationship Change Applications in order to add Plaintiff Ms. Linton as a joint owner of both the primary checking account and the high yield savings account[.]” (Id. at ¶ 10.) The Relationship Change Applications, which were signed by both Mr. Linton and Plaintiff, specifically refer to Plaintiff as the “Secondary Joint Owner” of each of Mr. Linton's accounts [hereinafter, the “Wells Fargo Accounts”]. (Id. at ¶¶ 11-12; see Doc. No. 1-2; Doc. No. 1-3.)

According to the Complaint, on May 4, 2010, Mr. Linton executed the “Last Will and Testament of Fred Linton” [the “Will”], which was “witnessed by two attesting witnesses who are non-family members[,]” and “duly notarized” by way of a self-proving affidavit. (Doc. No. 1 at ¶ 13.) The Will named Plaintiff as Personal Representative of Mr. Linton's estate, and Plaintiff's husband, Mr. Isaacson, as the estate's Successor Personal Representative. (Id. at ¶ 14.) Following Mr. Isaacson's death, on March 1, 2020, Mr. Linton executed the “First Codicil to Last Will and Testament of Fred Linton” [the “Codicil”], which amended the Will to appoint Mr. Linton's other daughter, Defendant Ms. Embry, as the Successor Representative of Mr. Linton's estate. (Id. at ¶ 16.) The Codicil “expressly ratifies and confirms the Will, other than the designation of Defendant Ms. Embry as a potential Successor Personal Representative.” (Id. at ¶ 17.) Neither the Will nor the Codicil references the Wells Fargo Accounts. (Id.)

According to the Complaint, because Defendant lived near Mr. Linton, “she would, from time-to-time, assist him in writing checks to be drawn on his Wells Fargo primary checking account.” (Id. at ¶ 18.) However, according to Plaintiff, “[a]t no time prior to his death” did Mr. Linton “undertake any effort” to add Defendant as a joint owner, or a signatory, on either of the Wells Fargo Accounts. (Id. at ¶ 20.) Nor did Mr. Linton apparently make any other efforts to “change or alter the joint ownership” of the Wells Fargo Accounts. (Id. at ¶¶ 20, 31.)

According to the Complaint, as of December 31, 2021, the total balance of the Wells Fargo Accounts jointly owned by Mr. Linton and Plaintiff was $192,492.97. (Id. at ¶ 21.) Plaintiff alleges that, upon her father's death on January 3, 2022, she became the exclusive owner of those funds, by operation of law, pursuant to Colorado's multi-party account statute, Colo. Rev. Stat. §§ 15-15-201 et seq.. (Id. at ¶¶ 23, 25-29, 34.) Plaintiff alleges that, after her father's death, Defendant started sending “threatening emails and text messages,” in which Defendant “demand[ed] payment from Plaintiff [] in the amount of $100,000 for ‘half of my inheritance.'” (Id. at ¶ 22.) Plaintiff claims that, even though she informed Defendant “about the provisions of Colorado Law related to multi-party accounts and the non-testamentary ownership after the death of one of the owners,” Defendant “continued to send threatening messages,” in which she accused Plaintiff of “trying to steal” her inheritance. (Id. at ¶ 23.)

Ten weeks after Mr. Linton's death, on March 18, 2022, Plaintiff commenced this lawsuit, seeking declarations: (1) “that Plaintiff Ms. Linton is the sole owner of the funds on deposit in [the Wells Fargo Accounts] at the date of Mr. Fred Linton's death, pursuant to the operation of [Colo. Rev. Stat.] § 15-15-212;” and (2) “that the [Wells Fargo Accounts], pursuant to [Colo. Rev. Stat.] § 15-15-214, are not testamentary and are not subject to estate administration.” (Id. at 8.) In the Complaint, Plaintiff alleges subject matter jurisdiction under 28 U.S.C. § 1332, based on diversity of citizenship. (Id. at ¶ 4.) Defendant now moves to dismiss the Complaint, pursuant to Federal Rule of Civil Procedure 12(b)(1), arguing that this case falls within the “probate exception” to federal diversity jurisdiction. (Doc. No. 7 at 1-3.)

STANDARD OF REVIEW

Federal Rule of Civil Procedure Rule 12(b)(1) empowers a court to dismiss a complaint for a lack of subject matter jurisdiction. Fed.R.Civ.P. 12(b)(1). Dismissal under Rule 12(b)(1) is not a judgment on the merits of a plaintiff's case. Rather, it calls for a determination that the court lacks authority to adjudicate the matter, attacking the existence of jurisdiction rather than the allegations of the complaint. See Castaneda v. INS, 23 F.3d 1576, 1580 (10th Cir. 1994) (recognizing federal courts are courts of limited jurisdiction and may only exercise jurisdiction when specifically authorized to do so). The burden of establishing subject matter jurisdiction is on the party asserting jurisdiction. Basso v. Utah Power & Light Co., 495 F.2d 906, 909 (10th Cir. 1974). A court lacking jurisdiction “must dismiss the cause at any stage of the proceedings in which it becomes apparent that jurisdiction is lacking.” Id. at 909. The dismissal is without prejudice. Brereton v. Bountiful City Corp., 434 F.3d 1213, 1218 (10th Cir. 2006).

A Rule 12(b)(1) motion to dismiss “must be determined from the allegations of fact in the complaint, without regard to mere conclusionary allegations of jurisdiction.” Groundhog v. Keeler, 442 F.2d 674, 677 (10th Cir. 1971). When considering a Rule 12(b)(1) motion, however, the Court may consider matters outside the pleadings without transforming the motion into one for summary judgment. Holt v. United States, 46 F.3d 1000, 1003 (10th Cir. 1995). If a party challenges the facts upon which subject matter jurisdiction depends, a court may not presume the truthfulness of the complaint's “factual allegations . . . [and it] has wide discretion to allow affidavits, other documents, and [may even hold] a limited evidentiary hearing to resolve disputed jurisdictional facts under Rule 12(b)(1).” Id.

ANALYSIS

“Federal courts are courts of limited jurisdiction and, as such, much have a statutory basis to exercise jurisdiction.” Montoya v. Chao, 296 F.3d 952, 955 (10th Cir. 2002). “The party invoking federal jurisdiction bears the burden of establishing such jurisdiction as a threshold matter.” Radil v. Sanborn W. Camps, Inc., 384 F.3d 1220, 1224 (10th Cir. 2004). Here, Plaintiff alleges subject matter jurisdiction predicated solely upon diversity of citizenship,^[1]which requires: (1) complete diversity among the parties; and (2) that “the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs.” 28 U.S.C. § 1332(a)(1).

While there is no dispute that the parties are completely diverse^[2]and that the amount in controversy requirement is satisfied,^[3]Defendant argues that Plaintiff's claims are barred by virtue of the probate exception to federal diversity jurisdiction. (Doc. No. 7 at 3.)

Federal courts have long recognized a “probate exception” to otherwise proper diversitybased subject matter jurisdiction. See, e.g., Markham v. Allen 326 U.S. 490, 494 (1946); see also Dragan v. Miller 679 F.2d 712, 713 (7th Cir. 1982) (discussing history and rationale for the probate exception). The exception “reserves to state probate courts the probate or annulment of a will and the administration of a decedent's estate; it also precludes federal courts from endeavoring to dispose of property that is in the custody of a state probate court.” Marshall v. Marshall, 547 U.S. 293, 311-12 (2006). However, “it does not bar federal courts from adjudicating matters outside those confines and otherwise within federal jurisdiction.” Id. at 312. “Thus, where diversity jurisdiction exists, federal courts retain jurisdiction to decide matters that are probate-related or that may impact the state probate court's performance of the three tasks reserved to it, so long as the federal court itself does not engage in these tasks.” Dunlap v. Nielsen, 771 Fed.Appx. 846, 850 (10th Cir. 2019); see, e.g., id. at 299-300 (holding claim did not fall within probate exception even though it...