Strasen v. Strasen

• Decision Date: 23 August 1995
• Docket Number: No. 94-C-0966.,94-C-0966.
• Citation: 897 F. Supp. 1179
• Parties: Lonnie M. STRASEN, Plaintiff, v. James L. STRASEN and Naoko Strasen, a/k/a Naoko Saegusa, Defendants.
• Court: U.S. District Court — Eastern District of Wisconsin

897 F. Supp. 1179

Lonnie M. STRASEN, Plaintiff, v. James L. STRASEN and Naoko Strasen, a/k/a Naoko Saegusa, Defendants.

No. 94-C-0966.

United States District Court, E.D. Wisconsin.

August 23, 1995.

Thomas E. Warmington, Warmington & Warmington, S.C., Brookfield, Wisconsin, for plaintiff Lonnie M. Strasen.

Robert T. Malloy, Milwaukee, Wisconsin, for defendant James L. Strasen.

Ness Flores, Flores Law Office, Waukesha, Wisconsin, for defendant Naoko Strasen.

DECISION AND ORDER

WARREN, District Judge.

Before the Court are two motions filed by defendant Naoko Strasen (nee Saegusa), and joined by defendant James Strasen. The defendants have asked the Court to either dismiss the above-captioned action pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure, or alternatively to transfer venue to the Southern District of Texas pursuant to 28 U.S.C. § 1406. For the following reasons, both motions will be denied.

I. BACKGROUND

Plaintiff Lonnie Strasen married defendant James Strasen in 1975. The Strasens resided together as husband and wife in Massachusetts, Texas, and the United Kingdom until 1988, when Mrs. Strasen returned from the United Kingdom to the United States — with the couple's children, but without Mr. Strasen. In 1991, James Strasen filed for divorce in Waukesha County, Wisconsin. On June 4, 1993, the Wisconsin Family Court granted a divorce and divided the Strasen estate based upon a marital settlement agreement. After the divorce, James Strasen married defendant Naoko Strasen. Apparently, the defendants began living together in the United Kingdom in 1990, moved to Singapore in 1991, and finally to Texas in 1993, where they currently reside.

The plaintiff claims that during the pendency of the divorce proceedings James Strasen concealed assets, committed perjury, and misrepresented his financial dealings and holdings so as to intentionally deprive Mrs. Strasen of her interest in the couple's marital property. She further claims that James Strasen fraudulently transferred marital assets to Naoko Strasen in an attempt to conceal assets from the family court.

On August 30, 1994, Lonnie Strasen filed this lawsuit in federal court alleging seven causes of action (including conspiracy, fraudulent misrepresentation, conversion, fraudulent transfer, and unjust enrichment) against both James Strasen and Naoko Strasen. Defendant Naoko Strasen filed an answer along with these motions to dismiss on October 4, 1994. Prior to the resolution of these motions, the plaintiff filed a motion for leave to amend her complaint, and on June 19, 1995, this Court granted her motion. In addition to permitting the plaintiff to file an amended complaint, we ordered the parties to submit supplemental briefs discussing the effect of the amendments on the pending motions and the applicability of various abstention doctrines to this lawsuit. Naoko Strasen filed a supplemental brief; James and Lonnie Strasen both failed to submit their supplemental briefs within the time specified by the Court.¹ The defendants' motions are now ready for resolution.

II. MOTION TO DISMISS

Prior to discussing the defendants' jurisdictional objections, we first address an ambiguity in the record which makes our analysis of these motions problematic. After reviewing all the pleadings, motions, and supporting materials in this case, the status of the Wisconsin family court's divorce decree remains unclear to the Court. The defendants claim that there is no final judgment in state court and that "the matter before the Waukesha County Family Court is an ongoing matter placed on the calendar by the court on a day to day basis pending further action by either party and pending further determination of marital, and support and maintenance issues." (Reply Brief of Naoko Strasen at p. 1.) In contrast, the plaintiff has alleged that the divorce decree and related property settlement in the Wisconsin family court constitutes a final decision by the state court.² (Plaintiff's Response Brief at p. 5.)

We are troubled by these contrasting, and unsupported, contentions relating to a fact critical to the resolution of the pending motions. Our attempt to clarify this issue by requesting supplemental briefing was unsuccessful; defendant Naoko Strasen failed to provide any support to her allegation that the divorce proceeding is on-going, and the plaintiff failed entirely to respond to the Court's request. Notwithstanding our uncertainty regarding this important fact, because this case is still in the pleading stage, we must proceed with our analysis assuming the plaintiff's claims are true. See Janowsky v. United States, 913 F.2d 393, 395 (7th Cir. 1990). Accordingly, we presume that the Wisconsin proceeding has run its course and that the court's decision is final.

The defendants cite several grounds in support of their motion to dismiss; we address each in turn.

A. SUBJECT MATTER JURISDICTION

Lack of subject matter jurisdiction is an appropriate basis for a motion to dismiss. Fed.R.Civ.P. 12(b)(1). Although the burden of proving subject matter jurisdiction lies with the plaintiff, Thomson v. Gaskill, 315 U.S. 442, 444, 62 S.Ct. 673, 674, 86 L.Ed. 951 (1942), we are obliged to accept as true all factual allegations in the complaint and draw all reasonable inferences in favor of the plaintiff. See Capitol Leasing Co. v. F.D.I.C., 999 F.2d 188, 191 (7th Cir.1993).

1. Domestic Relations Exception

In support of their motion to dismiss, the defendants first cite the long-standing exception to diversity jurisdiction for cases involving domestic relations. See Ex Parte Burrus, 136 U.S. 586, 593-94, 10 S.Ct. 850, 852-53, 34 L.Ed. 500 (1890) ("The whole subject of the domestic relations of husband and wife, parent and child, belongs to the laws of the States and not to the laws of the United States."); Barber v. Barber, 62 U.S. (21 How.) 582, 584, 16 L.Ed. 226 (1858) ("We disclaim altogether any jurisdiction in the courts of the United States upon the subject of divorce, or for the allowance of alimony."). The Supreme Court has recently reaffirmed the continued vitality of the domestic relations exception to diversity jurisdiction, but emphasized that the "exception encompasses only cases involving the issuance of a divorce, alimony, or child custody decree." Ankenbrandt v. Richards, 504 U.S. 689, 703, 112 S.Ct. 2206, 2215, 119 L.Ed.2d 468 (1992).

Since the plaintiff in this case does not seek a decree of divorce, alimony or child custody, her claim is not barred simply because it has some relation to a divorce proceeding. See Lloyd v. Loeffler, 694 F.2d 489, 492 (7th Cir.1982). Moreover, one of the defendants, Naoko Strasen, has no marital relationship with the plaintiff whatsoever, and appears to stand in the same position vis a vis Lonnie Strasen as "any other opponent in a tort suit brought in federal court pursuant to diversity jurisdiction." Ankenbrandt, 504 U.S. at 704 n. 7, 112 S.Ct. at 2215 n. 7. Accordingly, we conclude that the domestic relations exception does not divest this Court's jurisdiction over this case.

2. Rooker-Feldman Doctrine

The defendants have not invoked the Rooker-Feldman doctrine in support of their motion to dismiss. In fact, in her supplemental brief, defendant Naoko Strasen claims "that Rooker-Feldman is not applicable to this case because the state court has not reached a final determination and that it is an ongoing proceeding." (Supplemental Brief at p. 3.) However, as discussed above, we will accept the plaintiff's claim that the divorce decree and related property settlement in the Wisconsin family court does constitute a final decision by the state court. So doing, we conclude that the Rooker-Feldman doctrine may apply to this case. Inasmuch as this involves a matter of subject matter jurisdiction, we raise the issue sua sponte. See GASH Associates v. Village of Rosemont, 995 F.2d 726, 727 (7th Cir.1993).

Under the Rooker-Feldman doctrine, "lower federal courts lack jurisdiction to engage in appellate review of state-court determinations." Pennzoil Co. v. Texaco, Inc., 481 U.S. 1, 21, 107 S.Ct. 1519, 1531, 95 L.Ed.2d 1 (1987) (Brennan, J., concurring) (citing Rooker v. Fidelity Trust Co., 263 U.S. 413, 416, 44 S.Ct. 149, 150, 68 L.Ed. 362 (1923) and District of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 486, 103 S.Ct. 1303, 1317, 75 L.Ed.2d 206 (1983)). See also Ritter v. Ross, 992 F.2d 750, 753 (7th Cir.1993), cert. denied, ___ U.S. ___, 114 S.Ct. 694, 126 L.Ed.2d 661 (1994). A district court may not entertain an argument that, even if not argued in state court, is "inextricably intertwined" with a state court judgment. Feldman, 460 U.S. at 483 n. 16, 103 S.Ct. at 1316 n. 16; Ritter, 992 F.2d at 753. Allegedly federal claims are inextricably intertwined with a state court judgment when they are not "`separable from and collateral to' the merits of the state court judgment," Pennzoil, 481 U.S. at 21, 107 S.Ct. at 1531 (Brennan, J., concurring), but are such that "the district court is in essence being called upon to review the state-court decision." Feldman, 460 U.S. at 483-84 n. 16, 103 S.Ct. at 1316 n. 16. See also Leaf v. Supreme Court of the State of Wisconsin, 979 F.2d 589, 598-600 (7th Cir.1992) (discussing the "inextricably intertwined" standard), cert. denied, ___ U.S. ___, 113 S.Ct. 2417, 124 L.Ed.2d 639 (1993).

In this lawsuit, the plaintiff alleges that defendant James Strasen misrepresented his financial circumstances during the negotiation of the marital settlement agreement with the plaintiff, and that both defendants conspired to take advantage of that misrepresentation by depriving Lonnie Strasen of her share of the marital estate. (Amended Complaint ¶¶ 11-24.) Moreover, the complaint alleges marital assets were unlawfully converted and placed in the possession of Naoko Strasen. (Amended Complaint ¶¶ 25-52.)

Many of these claims necessarily implicate the Wisconsin ...