Brozman v. Cor, Inc.

MEMORANDUM AND ORDER

EÁRL E. O’CONNOR, District Judge.

This matter is before the court on plaintiffs motion to dismiss the counterclaim filed by defendant First Business Bank of Kansas City, N.A. (“First Business”) (Doc.. # 117).

Factual Background

Robert Brozman died June 10, 1991. Plaintiff, Jack Brozman, successor trustee of Robert Brozman’s inter vivos declaration of trust dated December 28, 1989, and executor of the estate of Robert Brozman under Robert Brozman’s will and testament dated December 28, 1989, filed an interpleader action pursuant to 28 U.S.C. § 1335. Upon filing this lawsuit, Jack Brozman deposited all trust assets in his possession and custody with the clerk of this court. He also filed a declaration that he would place at this court’s disposal any assets of the trust to which he may come into possession. No estate assets were tendered to this court because the estate must bé and is being probated in the probate division of the District Court of Johnson County, Kansas.

On January 3, 1992, this court stayed all proceedings against the trust until January 1,1993. Prior to the entry of the stay order, First Business filed its answer and counterclaim against plaintiff on August 28, 1991. The counterclaim seeks to collect principal and interest on a $900,000 promissory note executed by, Robert Brozman individually. Additionally, the counterclaimant seeks attorney’s fees and costs.

• Analysis

Plaintiffs motion is unclear. Plaintiffs motion requests this court to dismiss defendant’s counterclaim “pursuant to Federal Rule of [Civil] Procedure 12(b)(6) and for the reasons set forth in the accompanying memorandum of law ...” Plaintiffs memorandum in support refers only to grounds for dismissal based upon lack of subject matter jurisdiction [12(b)(1) ], and as barred by this court’s order dated August 20, 1991.

It is true that a federal court has no jurisdiction to probate a will or administer an estate, the reason being that the equity jurisdiction conferred by the Judiciary Act of 1789 and § 24(1) of the Judicial Code, which is that of the English Court of Chancery in 1789, did not extend to probate mattérs. Kerrich v. Bransby, 7 Brown P.C. 437; Barnesley v. Powel, 1 Ves.Sen. 284; Allen v. Macpherson, 1 Phillips 133, 1 House of Lords Cases 191; Broderick’s Will, supra; Farrell v. O’Brien, 199 U.S. 89 [25 S.Ct. 727, 50 L.Ed. 101]; Sutton v. English, 246 U.S. 199, 205 [38 S.Ct. 254, 256, 62 L.Ed. 664]. But it has been established by a long series of decisions of this Court that federal courts of equity have jurisdiction to entertain suits “in favor of creditors, legatees and heirs” and other claimants against a decedent’s estate “to establish their claims” so long as the federal court does not interfere with the probate proceedings or assume general jurisdiction of the probate or control of the property in the custody of the state court. Waterman v. Canal-Louisiana Bank Co., 215 U.S. 33, 43 [30 S.Ct. 10, 12, 54 L.Ed. 80], and cases cited. See Sutton v. English, supra, 205 [38 S.Ct. at 256]; United States v. Bank of New York Co., 296 U.S. 463, 477 [56 S.Ct. 343, 347, 80 L.Ed. 331]; Commonwealth Trust Co. v. Bradford, 297 U.S. 613, 619 [56 S.Ct. 600, 602]; United States v. Klein, 303 U.S. 276 [58 S.Ct. 536, 82 L.Ed. 840]; Princess Lida v. Thompson, 305 U.S. 456, 466 [59 S.Ct. 275, 280-81, 83 L.Ed. 285].

Markham v. Allen, 326 U.S. 490, 494, 66 S.Ct. 296, 298, 90 L.Ed. 256 (1946).

In McKibben v. Chubb, 840 F.2d 1525 (10th Cir.1988), the Tenth Circuit held:

Federal courts have only limited power in probate matters and may not probate or administer a will. However, they may “entertain actions against administrators, executors, or other claimants in which plaintiffs seek to establish claims against an estate.” 13B C. Wright, A. Miller & E. Copper, Federal Practice and Procedure, § 3610, at 484 (1984); see Markham v. Allen, 326 U.S. 490, 494, 66 S.Ct. 296, 298, 90 L.Ed. 256 (1946).

McKibben v. Chubb, 840 F.2d 1525, 1529 (10th Cir.1988); see also Maxwell v. Southwest National Bank, Wichita, Kansas, 593 F.Supp. 250, 252 (D.Kan.1984).

Here, this court is not attempting to probate or administer the estate of Robert Brozman. We are only entertaining a counterclaim on behalf of a creditor. Consequently, the court does have subject matter jurisdiction.

Additionally, plaintiffs suggestion that First Business’ counterclaim is barred by this court’s order of August 20, 1991, is without merit. The August 20, 1991, order specifically enjoins parties from asserting claims against the Trust “other than the assertion of claims against the Plaintiff as trustee or Trust assets within the confines of this civil action only.” The counterclaim First Business asserts against plaintiff is against plaintiff in his capacity as trustee. Plaintiffs reliance upon that order is misplaced.

Finally, even if this court were to consider plaintiffs 12(b)(6) motion, the same would be denied. “[A] complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957).

IT IS THEREFORE ORDERED that plaintiffs motion to dismiss (Doc. # 117) is denied.