Perlin v. Bank of Am., N.A.
| Docket Number | Case No. 21-cv-62593-BLOOM/Valle |
| Decision Date | 09 March 2022 |
| Citation | 591 F.Supp.3d 1285 |
| Parties | Gregory PERLIN, Plaintiff, v. BANK OF AMERICA, N.A., AS TRUSTEE OF the JOAN K. PERLIN REVOCABLE TRUST U/A/D JANUARY 3, 2005, f/b/o Gregory Perlin, John Knudsen, Karen Knudsen Dutro, Lisa Porter, Mark Knudsen, and Peter Knudsen, Defendants. |
| Court | U.S. District Court — Southern District of Florida |
Daniel Alan McGowan, Fort Lauderdale, FL, for Plaintiff.
Kathleen Danielle Kilbride, Kimberly Tolland Mydock, Robert Eric Bilik, McGuirewoods, LLP, Jacksonville, FL, for Defendant Bank of America, N.A.
James W. Beagle, James Beagle, P.A., Fort Lauderdale, FL, Casey W. Mills, Pro Hac Vice, Casey W. Mills, P.A., Fort Lauderdale, FL, Robin J. King, Robin J. King, P.A., Fort Lauderdale, FL, for Defendants John Knudsen, Karen Knudsen Dutro, Lisa Porter, Mark Knudsen, Peter Knudsen.
ORDER ON MOTION TO REMAND
THIS CAUSE is before the Court upon Plaintiff Gregory Perlin's ("Plaintiff") Motion to Remand, ECF No. [8] ("Motion"). Defendant Bank of America, N.A. ("Defendant" or "BANA") filed a Response in Opposition, ECF No. [12] ("Response"). To date, Plaintiff has not filed a Reply. The Court has carefully reviewed the Motion, the record in this case, the applicable law, and is otherwise fully advised. For the reasons set forth below, the Motion is denied.
Plaintiff filed this action on November 4, 2021, in the Circuit Court of the Seventeenth Judicial Circuit in and for Broward County, Florida. See ECF No. [1-2] ("Complaint"). In the Complaint, Plaintiff asserts a single count of breach of fiduciary duty against BANA, that agreed to serve as the Trustee to Plaintiff's late mother Joan Perlin's Trust. See id. ¶¶ 26-30. Plaintiff lists Karen Dutro, Mark Knudsen, John Knudsen, Lisa Porte, and Peter Knudsen (collectively, "Remainder Beneficiaries") as Defendants, but does not allege any wrongdoing by the Remainder Beneficiaries. See generally id. BANA removed the case to federal court on December 30, 2021. See ECF No. [1]. When removing the case, BANA realigned Remainder Beneficiaries as plaintiffs, thereby claiming complete diversity of citizenship for diversity jurisdiction. See id. ¶ 22. According to BANA, Plaintiff is a citizen of Minnesota. See id. ¶ 17. John Knudsen, Lisa Porte, and Peter Knudsen are also citizens of Minnesota. See ECF No. [1-5] ¶ 11. BANA is a citizen of North Carolina. See ECF No. [1] ¶ 15.1
Plaintiff thereafter filed the instant Motion, arguing that the Court should remand the case because the realignment of the Remainder Beneficiaries to achieve diversity jurisdiction is improper, Defendant failed to obtain the consent of the Remainder Beneficiaries when removing the case, and the amount in controversy does not exceed $75,000.00. See generally ECF No. [8]. Plaintiff also seeks an award of attorneys’ fees and costs incurred during the removal pursuant to 28 U.S.C. § 1447(c). See id. at 10. Defendant responds that the realignment of the Remainder Beneficiaries is proper, the realignment of the Remainder Beneficiaries moots the unanimity of consent requirement, and Defendant has established that the amount in controversy exceeds the jurisdictional threshold. See generally ECF No. [12]. Defendant also argues, in the alternative, that it had an objectively reasonable basis to seek removal and that an award of attorneys’ fees and costs is not appropriate. See id. at 15-18.
Removal is proper in "any civil action brought in a State court of which the district courts of the United States have original jurisdiction." 28 U.S.C. § 1441(a). To establish original jurisdiction, a lawsuit must satisfy the jurisdictional prerequisites of either federal question jurisdiction, pursuant to 28 U.S.C. § 1331, or diversity jurisdiction, pursuant to 28 U.S.C. § 1332. Federal question jurisdiction exists when the civil action arises "under the Constitution, laws, or treaties of the United States." Id. § 1331. Diversity jurisdiction exists when the parties are citizens of different states, and the amount in controversy exceeds $75,000.00. See id. § 1332(a). A removing defendant bears the burden of showing that federal jurisdiction is proper. Coffey v. Nationstar Mortg., LLC , 994 F. Supp. 2d 1281, 1283 (S.D. Fla. 2014).
The Eleventh Circuit has held that when "examining diversity jurisdiction, the district court is not bound by the formal alignment of the parties provided in the pleadings." St. Paul Fire & Marine Ins. Co. v. Nat'l Union Fire Ins. Co. of Pittsburgh, PA , 890 F.3d 1265, 1267 (11th Cir. 2018) (citing City of Indianapolis v. Chase Nat'l Bank , 314 U.S. 63, 62 S.Ct. 15, 86 L.Ed. 47 (1941) ; City of Dawson v. Columbia Ave. Sav. Fund Safe Deposit, Title & Tr. Co. , 197 U.S. 178, 25 S.Ct. 420, 49 L.Ed. 713 (1905) ). The Eleventh Circuit has further held that "[t]he parties themselves cannot confer diversity jurisdiction upon the federal courts by their own designation of plaintiffs and defendants." St. Paul , 890 F.3d at 1269 (quoting City of Vestavia Hills v. Gen. Fid. Ins. Co. , 676 F.3d 1310, 1313 (11th Cir. 2012) ). Instead, courts have a duty "to look beyond the pleadings, and arrange the parties according to their sides in the dispute." Id. (quoting City of Indianapolis , 62 S.Ct. at 17 ); see also Murphy v. Charter Oak Fire Ins. Co. , 166 F. Supp. 3d 1311, 1314 (S.D. Fla. 2015) ().
The Eleventh Circuit instructs courts to use the "primary purpose" test to determine whether a party should be realigned for diversity jurisdiction purposes. See City of Vestavia Hills , 676 F.3d at 1313. Upon a motion to remand, the courts must consider "the principal purpose of the suit" and "the primary and controlling matter in dispute." Id. ; see also Wheeler's Moving & Storage, Inc. v. Markel Ins. Co. , No. 11-80272-CIV, 2011 WL 3419633, at *2 (S.D. Fla. Aug. 4, 2011). "[I]f interests of a party named as defendant coincide with those of plaintiff in relation to the purpose of the lawsuit, the named defendant must be realigned as plaintiff for jurisdictional purposes." Wheeler's Moving & Storage , 2011 WL 3419633, at *2 (internal citations and quotation marks omitted).
Plaintiff argues that Remainder Beneficiaries Peter Knudsen, Lisa Porte, and John Knudsen (collectively, "Minnesota Defendants") should not be realigned because their interests are antagonistic to Plaintiff's interests. See ECF No. [8] at 3-7. Plaintiff notes that after Plaintiff's death, the remaining Trust corpus will be passed to the Remainder Beneficiaries. See id. at 5-6. Therefore, according to Plaintiff, if he obtains the relief he seeks, more money will be distributed to him, and the Remainder Beneficiaries will receive less money after his death. See id. at 5. Plaintiff also relies on Sutton v. English , 246 U.S. 199, 38 S.Ct. 254, 62 L.Ed. 664 (1918), where the Supreme Court determined that a particular party's antagonistic "attitude" toward the plaintiffs’ claims made the party a defendant. See ECF No. [8] at 7. Plaintiff argues that the Remainder Beneficiaries denied several aspects of the Complaint before the case was removed, including Plaintiff's claim that BANA failed to make necessary distributions in violation of the terms of the Trust. See id. at 6 (citing ECF No. [8-2] ¶¶ 16-20).
Defendant responds that the Eleventh Circuit's primary purpose test defeats Plaintiff's Motion. See ECF No. [12] at 10. Defendant claims that the primary purpose of Plaintiff's cause of action is to determine whether Defendant acted for "its own selfish financial gain" and whether Defendant's actions are directly in conflict with all of the Trust beneficiaries. Id. (quoting ECF No. [1-2] ¶ 18). Defendant argues that if Plaintiff's allegations against BANA are true, Plaintiff's request for a constructive trust and the removal of BANA as Trustee will benefit all of the Trust beneficiaries. See id. at 11. In regard to Plaintiff's argument that the distribution of the discretionary income to Plaintiff would reduce the remaining Trust corpus for the Remainder Beneficiaries, Defendant contends that Plaintiff unpersuasively relies on a speculative future conflict that does not change the primary purpose of the lawsuit or the requested relief. See id.
The Court agrees with Defendant. As noted above, Eleventh Circuit precedent instructs the Court to look to the primary purpose of Plaintiff's Complaint. See City of Vestavia Hills , 676 F.3d at 1313. The Complaint alleges that Defendant breached its fiduciary duties and that Defendant's conduct is in "direct conflict with the interests of the beneficiary [sic ] of the Trust, including but not limited to Plaintiff." ECF No. [1-2] ¶¶ 20-22. As such, the Complaint contains allegations that align the interests of all the beneficiaries of the Trust. Further, as Defendant correctly argues, the relief that Plaintiff seeks would require Defendant to indemnify and account for any assets of the Trust diminished as a result of Defendant's breach of fiduciary duties, impose a constructive trust over the Trust corpus, and remove Defendant as the Trustee. See ECF No. [1-2] ¶ 29. If Defendant is acting for "its own selfish financial gain," then all of the Trust beneficiaries would stand to benefit from the relief sought.
Plaintiff's argument that the discretionary distribution of income to Plaintiff will reduce the amount that will eventually pass to the Remainder Beneficiaries is also unavailing. As Defendant points out, Plaintiff's argument is premised on a speculative future conflict between Plaintiff and the Remainder Beneficiaries that does not change the primary purpose of Plaintiff's lawsuit, which is to determine whether Defendant has breached its fiduciary duties as Trustee.2 In sum, Plaintiff's Complaint indicates that the primary purpose...
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