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Robinson v. Hilliard

United States District Court, E.D. Missouri, Eastern Division

December 6, 2017

LINDA ROBINSON, Plaintiffs,
v.
J.J.B. HILLIARD, W.L. LYONS, LLC, et al., Defendants.

          MEMORANDUM AND ORDER

          E. RICHARD WEBBER SENIOR UNITED STATES DISTRICT JUDGE

         This matter comes before the Court on Linda Robinson's Motion Regarding Jurisdiction [104].

         I. BACKGROUND

         On January 21, 2015, Linda Robinson (“Robinson”) filed a “Petition to Declare Rights, Conversion, and Unjust Enrichment” against J.J.B. Hilliard, W.L. Lyons, LLC (“Hilliard Lyons”), requesting the Circuit Court of St. Charles, Missouri, declare Robinson did not have to indemnify Hilliard Lyons to receive a transfer on death account from Marjorie Robinson, Robinson's mother [ECF No. 4]. In the alternative, Robinson also asserted claims of conversion and unjust enrichment against Hilliard Lyons [ECF No. 4]. On March 20, 2015, Hilliard Lyons removed the matter to this Court pursuant to diversity jurisdiction under 28 U.S.C. §§ 1332 and 1441, because Robinson is a citizen of Missouri and Hilliard Lyons is considered a citizen of Kentucky, Indiana, Ohio, Michigan, Florida, Tennessee, Illinois, Arkansas, North Carolina, South Carolina, West Virginia, and Pennsylvania.

         In its answer to Robinson's Petition, Hilliard Lyons asserted a counterclaim against Robinson requesting a declaration Robinson is obligated to indemnify Hilliard Lyons pursuant to the terms of the transfer on death agreement before any distribution of the account [ECF No. 9]. On May 21, 2015, Hilliard Lyons amended its counterclaim to include an interpleader action pursuant to 28 U.S.C. § 1335, including Carol Donley (“Donley”) as a counter-defendant, because she asserted a right to the funds in the account [ECF No. 18]. On August 10, 2015, Donley answered Hilliard Lyons' counterclaim and asserted a crossclaim against Robinson to remove Robinson as trustee of the Marjorie Robinson Trust and the Owen Robinson Trust (“the Trusts”) and for undue influence [ECF No. 31]. In her answer to Hilliard Lyons' counterclaim and Donley's crossclaim, Robinson asserted a counterclaim against Donley to compel Donley to distribute the Hilliard Lyons trust accounts and for tortious interference of an expected inheritance by Donley [ECF No. 34].

         On December 1, 2015, the Court entered judgment for Hilliard Lyons, against Robinson, on Counts I, II, and III of her Petition and Count I of Hilliard Lyon's amended counterclaim finding Robinson was obligated to indemnify Hilliard Lyons pursuant to the terms of the transfer on death agreement before Hilliard Lyons dispersed the funds in the account. On December 9, 2015, the Court dismissed Count II of Robinson's counterclaim against Donley for tortious interference of an expected inheritance by Donley. On May 9, 2017, the Court entered a consent order which distributed the interpleaded funds and dismissed Hilliard Lyons from the matter as well as Count II of Donley's crossclaim against Robinson for undue influence. The only remaining matter before the Court is Count I of Donley's crossclaim against Robinson to remove Robinson as trustee of the Trusts. In her pending motion, Robinson challenges the Court's subject matter jurisdiction over the remaining crossclaim asserting the Court lacks jurisdiction over the crossclaim because the interpleaded funds have been disbursed.

         For purposes of this Motion to Dismiss, the Court accepts as true the following facts alleged in Donley's crossclaim. Great Rivers Habitat Alliance v. Fed. Emergency Mgmt. Agency, 615 F.3d 958, 988 (8th Cir. 2010). Donley is a resident of the state of Kansas and Robinson is a resident of the state of Missouri. Both Robinson and Donley are co-trustees of the Trusts.

         Owen and Marjorie Robinson, parents of Robinson and Donley, created Lin-Car Farm, Inc., a company to own real estate operated as a farm. Lin-Car Farm consisted of approximately 499 acres of land in Lincoln County, Missouri. Donley was secretary of Lin-Car Farm and Robinson was treasurer. In April 2006, Robinson was elected to replace Donley as secretary of Lin-Car Farm. When Owen Robinson died on May 30, 1999, Marjorie Robinson (“Marjorie”) became the sole trustee of the Owen Robinson Trust.

         On April 28, 2006, Marjorie sold approximately eight acres of real estate to Robinson and her husband that was held by Lin-Car Farm. In September 2007, the principal place of business for Lin-Car Farm was changed to Linda's address. In 2007, Robinson convinced Marjorie to give Robinson and her husband approximately $324, 000.00. In 2008, Marjorie moved in with Robinson. In January 2009, Marjorie opened an account at Hilliard Lyons, the transfer on death account at issue in this matter. The account was payable only to Robinson or her husband at Marjorie's death, unlike the Trusts and Wills, which were to be divided equally between Donley and Robinson.

         Marjorie died on July 29, 2014. At her death, Marjorie's trust held a home located in Troy, Missouri, and an account at Hilliard Lyons with approximately $1, 272, 000.000 in assets. The Owen Robinson Trust held an account at Hilliard Lyons with approximately $113, 744.00 in assets and stock in Lin-Car Farm. Both trusts provide the assets be divided equally between Robinson and Donley. Marjorie also held an account at People's Bank and Trust, a Hilliard Lyon's IRA payable to Robinson and Donley equally, and the Hilliard Lyons transfer on death account payable only to Robinson.

         Since Marjorie's death, Donley requested an accountant be hired to prepare tax returns for the Trusts, Marjorie's estate and Lin-Car Farm, Inc. and requested information used to prepare the tax returns, both of which Robinson rejected. Robinson represented the Trusts' tax returns were filed, but refused to provide Donley with proof of their filing. Robinson also refused to sign necessary documents with Hilliard Lyons to unfreeze the accounts held by them to distribute the assets in those accounts. Originally, Robinson agreed to sell the house held by the Marjorie Trust. After Donley agreed to Robinson handling the sale of the house, Robinson refused the responsibility and stated she wanted to hire a real estate agent to sell the house. However, she never identified or hired a real estate agent. Then, Robinson demanded the house be auctioned. Donley agreed, but Robinson refuses to provide Donley with a proposed auctioneer's contract. Robinson also refused to provide Donley a copy of the insurance policy for the house or confirmation the premium on the policy is up to date. Donley indicated to Robinson she wishes to hire a manager to operate the Lin-Car farm but Robinson has not done so.

         II. STANDARD

         Under Federal Rule of Civil Procedure 12(b)(1), a party is permitted to challenge a federal court's jurisdiction over the subject matter of the complaint. When the Court's subject matter jurisdiction is challenged, at issue is the Court's “very power to hear the case.” Osborn v. United States, 918 F.2d 724, 730 (8th Cir. 1990). The party invoking the jurisdiction of the federal court has the burden of establishing the court has the requisite subject matter jurisdiction to grant the requested relief. See Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994).

         For an action to be dismissed under Rule 12(b)(1), the complaint must either be successfully challenged on the factual truthfulness of its assertions, or successfully challenged on its face. See Osborn, 918 F.2d at 729. The identification of whether a challenge is facial or factual is a necessary step, and this identification establishes how a court should proceed when resolving a motion to dismiss under 12(b)(1). When subject matter jurisdiction is challenged based on the factual truthfulness of the assertions, a court is permitted to consider “matters outside the pleadings, ” such as testimony and affidavits. Id. at 729, n.2 (citing Menchaca v. Chrysler Credit Corp., 613 F.2d 507, 511 (5th Cir. 1980)). Although matters outside the pleadings can be considered, the motion to dismiss is not converted into one for summary judgment. Id. at 729. When a court's subject matter jurisdiction is challenged in a facial attack, however, the Court “restricts itself to the face of the pleadings.” Id. Under a facial ...


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