Starr v. Rupp

• Decision Date: 12 February 1970
• Docket Number: No. 19384,19385.,19384
• Parties: Harry STARR, Plaintiff-Appellant, v. Lyman G. RUPP et al., Defendants-Appellees. Virginia Ann LILLIE and Margaret M. Armston, Plaintiffs-Appellants, v. Lyman G. RUPP et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

421 F.2d 999 (1970)

Harry STARR, Plaintiff-Appellant, v. Lyman G. RUPP et al., Defendants-Appellees.

Virginia Ann LILLIE and Margaret M. Armston, Plaintiffs-Appellants, v. Lyman G. RUPP et al., Defendants-Appellees.

Nos. 19384, 19385.

United States Court of Appeals, Sixth Circuit.

February 12, 1970.

Emanuel Gersten, Hillside, N. J., for plaintiffs-appellants.

Rupp, Hahn & Hayward, Franklin F. Hayward, Toledo, Ohio, on brief for Lyman G. Rupp, Kenneth E. Brock and American Mat Corp. of Delaware.

Shumaker, Loop & Kendrick, John W. Hackett, Jr., Toledo, Ohio, on brief for Harlan L. Lea, Koneta Rubber Co., Inc., Koneta, Inc. and American Mat Corp. of Ohio.

Before WEICK and COMBS, Circuit Judges, and TAYLOR,^* District Judge.

WEICK, Circuit Judge.

Plaintiffs have appealed from an order of the District Court granting defendants' motion for summary judgment and from the denial of their cross-motion for summary judgment.

Plaintiff Starr, a beneficiary and trustee named in the will of Dudley W. Moor, deceased, brought his action in the District Court for damages against defendant Rupp, as executor¹ and individually, for alleged mishandling of the assets of the estate of the decedent, and against the remaining defendants, who were named as trustees in the will and/or as transferees of the property and assets of decedent's estate, for alleged tortious actions and trespass in concert with defendant Rupp. Plaintiffs Lillie and Armston, daughters of the decedent, are beneficiaries of the trust and trustees named in his will. They instituted a separate action in the District Court against the same defendants, alleging a similar cause of action. Plaintiffs in both cases further alleged that certain provisions of the Ohio Probate Code are in violation of the Due Process Clause of the 14th Amendment and are unconstitutional. The cases were consolidated for trial and appeal.

Plaintiff Starr alleged an additional cause of action for damages against the defendants for wrongful termination of his employment, and also filed a counter-claim against them for slander and libel.

The District Court granted defendants' motion for summary judgment, and denied plaintiffs' cross-motion for summary judgment, on the following grounds:

1 — "* * * All of the issues relating to the operation of decedent\'s estate and the dissolution of his property which are presented in the instant cases were or could have been resolved in the Probate Court proceedings, and, therefore, are res judicata or estop the plaintiffs from relitigating them in these actions;"

2 — The deposition admissions of plaintiff Starr establish that he had no contract of employment, that he was properly discharged, and that he suffered no pecuniary loss by reason of the termination of his employment; and

3 — The counter-claim asserting the action for slander and libel was not filed within the time required by the Ohio one-year statute of limitation.

Mr. Moor died testate on January 18, 1960, a resident of Toledo, Ohio. His Last Will and Testament was admitted to probate in the Probate Court for Lucas County on January 28, 1960. Defendant, Lyman G. Rupp, was appointed and qualified as executor of the estate. Decedent in his will created a trust out of his residuary estate, to continue for twenty-five years. The residuary assets included the controlling stock in several corporations which decedent had organized and operated. Defendant Rupp and plaintiffs Starr and Armston and others were named trustees and beneficiaries of the trust.²

The litigation surrounding the administration of the estate began when plaintiff Starr filed his first action³ in the District Court against defendant Rupp, as executor and individually, and certain other defendants, appellees herein,⁴ for failure to administer properly the assets of Mr. Moor's estate. The relief sought was construction of the will, accounting, delivery of assets, and damages for the alleged tortious misconduct of the defendants. The District Court dismissed the complaint for lack of jurisdiction over the subject matter. Starr v. Rupp, No. C63-47, N.D.Ohio, Oct. 3, 1963.

Following dismissal of the complaint, Starr filed a petition in the Probate Court of Lucas County, Ohio. In Re Dudley W. Moor, Jr., No. 80,081, Jan. 19, 1965. The petition sets forth the following claims:

"The said Lyman G. Rupp, as Executor and individually has:

"(a) Failed to make and file with the Probate Court timely and proper returns, inventories and reports;

(b) Failed to administer the estate according to the directions of said Last Will and Testament (c) Failed to administer the estate according to the probate laws of Ohio;

(d) Disposed of valuable portions of assets of the estate involved, without notice to the interested parties and which was not to the best interests of the estate and the beneficiaries thereunder.

(e) Failed to give proper notice of his acts to the persons directly interested in said estate, thereby denying said interested parties, the opportunity and right to protect the interests of the estate and those of the beneficiaries.

(f) Used dictatorial powers without authority, to administer, perform certain acts, and sell certain properties, rights, assets and benefits of the estate which were not his to administer or dispose of as executor or otherwise.

(g) As executor and individually, in concert with others,⁵ without authority, jointly, severally and individually, taken physical possession of, usurped and carried on and still carries on the decedent\'s various businesses and business holdings. Said actions and conduct were, are and continue to be wrongful, without authority, contrary to the terms, provisions and direction of the said Last Will and Testament and laws of Ohio pertaining thereto.

(h) Committed trespass, with others under his direction, to the rights and powers, to the damage of this plaintiff and others, named as trustees and beneficiaries.

(i) Filed his first account on April 4, 1963, over 3 years after his appointment, without any application or court permission for further time, in violation of R.S. Sec. 2109.30.

(j) Paid out from the funds of the estate, certain fees for appraisals, counsel fees and other funds without the proper application and approval of the court nor in accordance with the probate laws of Ohio.

(k) Failed to set forth specific details to the court on application without notice to interested parties to sell real estate belonging to the estate, to the detriment of the estate and the beneficiaries of the residuary.

(l) Failed to set forth certain details to the court on applications, without notice to interested parties, to sell certain corporate shares and businesses, to the detriment of the estate, the beneficiaries of the residuary estate and in violations of the provision of said Last Will and Testament.

(m) Failed to set forth certain details of a settlement agreement with the decedent\'s previous wife, Dorothy Turner Moor, on an application to this court to effect a settlement with her, whereby certain savings might have been accomplished."

Plaintiffs Lillie and Armston were not made parties to the probate action, nor does the record reveal that they had actual notice of the proceedings.

The prayer of the petition in the Probate Court was for the following relief: (1) construction of the will; (2) review of the accounts of the executor and to compel him to file necessary reports; (3) an order directing the executor to desist from controlling the businesses of decedent and to turn the same over to the trustees named under Item V of the will; (4) appointment of a receiver or substitute fiduciary pending determination of the issues; and (5) appointment of independent accountants and appraisers.

After a full hearing, the Probate Court denied Starr's petition without written opinion and without adopting findings of fact or conclusions of law. At the same time, by separate orders the Probate Court overruled the exceptions of Starr to the executor's second and partial account, and approved and confirmed the executor's sale of assets of the estate to certain of the appellees herein. Starr appealed to the Court of Appeals of Lucas County, Ohio, which affirmed the Probate Court's judgment by order and without written opinion. In Re Dudley W. Moor, Jr., No. 5933, June, 1965. The Supreme Court of Ohio denied Starr's motion to certify the record, and dismissed his appeal filed as of right on the ground that there was no debatable constitutional question involved. In Re Dudley W. Moor, Jr., No. 39695, Nov. 1965.

Jurisdiction of the District Court in the present action was predicated on diversity of citizenship.

The first cause of action in the complaint alleged a breach of duty on the part of defendant Rupp while acting as executor, and tortious activity of the other defendants in concert with Rupp. It related to the probate and administration of the estate and set forth substantially the same claims as were made in the petition filed in the Probate Court, which were adjudicated against Starr.

Item V of Mr. Moor's Last Will and Testament provided that the residue of the estate, which included the controlling stock in several corporations, should be placed in trust; that certain persons should be named trustees; that a particular percentage of the annual profits derived from the trust assets should be distributed to named beneficiaries, including the plaintiffs; that the trust should terminate after twenty-five years and be distributed to particular named beneficiaries, including the plaintiffs.

It should be noted that the plaintiffs in these suits are only a few of the persons named as beneficiaries and/or trustees under this provision of the will. Also, the executor has not made a final accounting in the Probate Court, and no order of distribution has been made by that court, which is necessary before the trust can come into existence.

There has been a partial accounting in the Ohio...