Warner v. First National Bank of Minneapolis

• Decision Date: 20 September 1955
• Docket Number: Civ. No. 4812.
• Citation: 135 F. Supp. 687
• Parties: Harold L. WARNER, Plaintiff, v. FIRST NATIONAL BANK OF MINNEAPOLIS, Defendant.
• Court: U.S. District Court — District of Minnesota

135 F. Supp. 687

Harold L. WARNER, Plaintiff, v. FIRST NATIONAL BANK OF MINNEAPOLIS, Defendant.

Civ. No. 4812.

United States District Court D. Minnesota, Fourth Division.

September 20, 1955.

R. H. Fryberger and M. R. Keith, Minneapolis, Minn., for plaintiff.

Dorsey, Colman, Barker, Scott & Barber, Joseph H. Colman and John G. Dorsey, Morley, Cant, Taylor, Haverstock & Beardsley, Harold G. Cant and Frank W. Plant, Jr., Minneapolis, Minn., for defendant.

DONOVAN, District Judge.

This matter comes before the Court on alternative motion by defendant for summary judgment or for a dismissal of the complaint. The motion is based upon the complaint and supporting affidavits and documents, together with the exhibits and other papers on file.

Suit was filed by plaintiff on February 15, 1954. The complaint, consisting of 200 printed pages (including exhibits), evidences the skill of counsel, acquired only by years of practice and experience. The suit is predicated on the theory that the defendant breached its duties as managing advisor of the estate of one E. C. Warner, deceased, hereinafter referred to as the testator.

Plaintiff is a son and one of the heirs of the testator, whose estate had an appraised value of over $10,000,000. E. C. Warner was domiciled in the State of Florida during the latter years of his life. He died testate. Under the terms of his will, the defendant bank was nominated a "managing advisor" to act in the role of a supervisor during probating of the estate.

The probate proceedings in the State of Florida never met with the approval of plaintiff. As a result, he has been in the Florida state and federal courts, as well as in the Minnesota courts, seeking various forms of relief. He has now commenced this proceeding, claiming that the defendant bank committed a breach of trust in its role as "managing advisor." His able counsel describe a loss to the beneficiaries under the will as "evidenced by a shrinkage of the estate from $10,078,243.05 to $2,809,910.59."

Defendant points out that the probate proceedings in Florida have been terminated, and contends its motion should be granted on the following grounds: (a) plaintiff's failure to join indispensable parties; (b) no cause of action stated; (c) res judicata; (d) lack of probate jurisdiction; (e) statute of limitations, and (f) laches.

The foregoing summary seems to be the essence of the issues raised by defendant's motion.

Plaintiff's attorneys have obviously approached this lawsuit fully aware of what they might expect to meet by way of opposition. They chose, therefore, to draft a complaint along the lines of equity practice, purporting to institute a class suit, brought by the plaintiff representing his own and the claims of others in that class. The complaint has been skilfully drawn, and is invulnerable to piecemeal attack.

Defendant as movant has the burden of proof, and concedes for the purposes of this motion that the factual allegations of the complaint must be taken as true. It is doubtless cognizant of the doctrine prevailing in the Eighth and other Circuits that a motion for summary judgment, or to dismiss a complaint, is an extreme remedy, and is usually awarded only in the absence of a genuine material fact issue. The Court of Appeals for the Eighth Circuit has time and again held that the field to be explored on a motion for summary judgment and dismissal is a very narrow one under the applicable Rule, saying: "That rule places the burden of demonstrating the nonexistence of any genuine fact issue upon the moving party and requires that all doubts be resolved against him."¹

Despite the consistent holding of the Eighth Circuit, as above set forth, counsel for defendant have been insistent in arguing the merits of defendant's motion. The thoroughness of their preparation, as well as the several days spent in oral argument, merits serious and studied consideration of the points and authorities relied on by them in support thereof. Plaintiff's counsel, arguing and briefing the issues with like thoroughness, concludes in these words: "The extent to which defendant and its attorneys have labored the points argued in our answering brief indicates that those points have given defendant some concern."

No answer has been interposed. A review of all the defenses raised by the motion, therefore, will be helpful in summarizing the issues of the instant case for determination here and for appeal, if such course follows.²

Defendant, in arguing its grounds for summary judgment or dismissal, has submitted its analysis of the complaint, and has classified plaintiff's claims, as set forth in the pleading, as comprising four categories,³ some of which it argues are claims by the plaintiff for reimbursement on account of moneys paid out, and the others derivative claims on behalf of all beneficiaries under the trust.

Plaintiff vigorously responds by asserting that defendant may not so "dissect" the complaint, but must treat it as a legal theory composed of a "bundle of rights." Plaintiff maintains that the pleading, though admittedly long and detailed, is not misleading; that it was intended to be informative and to avoid demands for a "bill of particulars" or motion to make "more definite and certain."

In view of the fact that there are claims which are for the benefit of the class, the point raised by defendant as to indispensable parties is pertinent and should be discussed first. The issue may therefore be stated thus:

(1) Is this a class suit?

(2) If so, is plaintiff the proper party to prosecute it?

Defendant contends this is not a class suit within the meaning of Rule 23 because the beneficiaries are indispensable parties and are not so numerous as to make their joinder impracticable.⁴ Furthermore, it contends that in any event plaintiff is not the proper party to prosecute the action, for, having actively participated in the Florida litigation, he is particularly vulnerable to such defenses as res judicata and estoppel by judgment.

Plaintiff contends that this is a class action: First, because the class is so large as to make its joinder impracticable (he claims the number to be 30 to 32, where as defendant claims it is 13); second, because under equitable principles where a suit is brought for the protection, preservation and administration of a trust estate it is a true class suit; and third, because the procedural device of a class action should not be circumvented by narrow, arbitrary and technical restrictions. It is plaintiff's position that any recovery will be for the benefit of the estate, where all interests are clearly defined under the terms of the will.⁵

If it is at all questionable whether plaintiff has sufficiently pleaded a class action, any deficiency in that respect is subject to correction by amendment, and if plaintiff has a cause of action, he should not be restricted by a narrow, arbitrary and technical interpretation by this court. Even if other parties were required to be joined, it is doubtful that such joinder would alone oust the court of jurisdiction in light of the academic rule that diversity of citizenship is determined by the initial parties before the court.⁶

As to whether or not plaintiff is the proper party to prosecute this action, as plaintiff characteristically states with emphasis, he has been the only one who has seen fit to assemble the facts and assume the expense of such prosecution. His recovery, if any, would necessarily be for the benefit of all.

Defendant has next urged that the court is without jurisdiction on an additional ground, namely, lack of statutory power and ability to probate. It attacks the complaint as an attempt to reprobate the estate in this court. Plaintiff and defendant concede that this court has no jurisdiction to probate a will or to administer an estate, but they differ on the effect of the plaintiff's cause of action.⁷

This jurisdictional defense is obviously most serious in nature and could well be fatal to plaintiff's cause of action in the final analysis. It is readily obvious that counsel disagree as to the extent of the Florida probate court's jurisdiction to determine matters affecting the managing advisor.⁸ Defendant contends that the probate court's jurisdiction is in rem and that by the modern rule of res judicata, defendant may assert the same, though not a party nor privy to any of the state court and other related actions. In short, defendant asserts judicial comity should prevail and put an end once and for all to this litigation. Plaintiff, on the other hand, claims the Florida court's jurisdiction is limited by statute, excluding nisi prius courts; hence comity is not involved. Plaintiff also urges a legal theory of estoppel against estoppel.

It would appear that one of the most serious challenges asserted by defendant is that where plaintiff's contentions are solely as to administration, a federal court has no jurisdiction.⁹

Realistically, it is difficult to escape the practical conclusion that the plaintiff now attempts to accomplish by the instant action what he failed to achieve in the probate proceedings. If that is his goal, the Markham case (cited in marginal note 9) affords him little solace for plaintiff may not have duplicate "administration."

As much as the practical seems obvious, however, an analysis of plaintiff's complaint discloses he seeks to establish not only his own claims, but claims for the benefit of the estate. At least as to the claim relative to the defendant's splitting of a real estate commission, there is admittedly a disputed fact question. If such were established by proof, plaintiff might require defendant to surrender to the estate the fees it has collected for its services as managing advisor. By his all-inclusive pleading, therefore, plaintiff seeks to come within the language of the Markham case, supra. Wisdom, therefore, suggests that for the good of all concerned, the trial court should...