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Simpkins v. Wright

United States District Court, D. Utah

September 30, 2019

RICHARD J. SIMPKINS, Plaintiff,
v.
TERRI SIMPKINS WRIGHT, Defendant.

          ORDER ADOPTING REPORT AND RECOMMENDATION IN PART AND DISMISSING CASE

          JILL N. PARRISH UNITED STATES DISTRICT COURT JUDGE.

         Plaintiff Richard J. Simpkins, proceeding pro se, sued defendant Terri Simpkins Wright, alleging tortious interference with his expected inheritance and breach of fiduciary duty. At the heart of the dispute is Simpkins’s allegation that Wright improperly obtained possession of assets of his deceased father, Richard E. Simpkins (the “decedent”), depriving him of his inheritance.

         Wright moved to dismiss the claims against her under Federal Rule of Civil Procedure 12(b)(6). [Docket 20]. Simpkins filed a Motion to Amend/Correct, [Docket 14], and a Motion to Change Venue, [Docket 34]. Magistrate Judge Romero issued a Report and Recommendation suggesting that Wright’s motion be granted and that the action be dismissed because the federal probate exception applies to this case or, in the alternative, because Simpkins failed to state a claim upon which relief can be granted. Judge Romero further recommended that Simpkins’s motions be denied. Simpkins filed an objection to the Report and Recommendation. [Docket 41]. Thus, the court “must determine de novo” whether his objection has merit. Fed R. Civ. P. 72(b)(3).

         MOTION TO DISMISS

         I. Legal Standard

         “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “In evaluating a Rule 12(b)(6) motion to dismiss, courts may consider not only the complaint itself, but also attached exhibits and documents incorporated into the complaint by reference.” Smith v. United States, 561 F.3d 1090, 1098 (10th Cir. 2009) (citations omitted).

         “The burden is on the plaintiff to frame a complaint with enough factual matter (taken as true) to suggest that he or she is entitled to relief.” Robbins v. Oklahoma ex rel. Dep’t of Human Servs., 519 F.3d 1242, 1247 (10th Cir. 2008) (citation omitted). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678.

         II. Federal Probate Exception

         Simpkins first objects to Judge Romero’s conclusion that each of Simpkins’s causes of action is subject to the probate exception and thus is outside of the scope of this court’s jurisdiction. He argues that this case does not fall within the probate exception because the account at issue was a payable-on-death (“P.O.D.”) account. Because such an account is a non-probate transfer under Utah law, Utah Code § 75-6-106, Simpkins contends that any dispute over the account is outside of the scope of the probate exception. The court concludes that Simpkins’s objection has merit.

         Under the federal probate exception, “a federal court has no jurisdiction to probate a will or administer an estate” or “to disturb or affect the possession of property in the custody of a state court.” Markham v. Allen, 326 U.S. 490, 494 (1946). More specifically, this exception “reserves to state probate courts the probate or annulment of a will and the administration of a decedent’s estate; it also precludes federal courts from endeavoring to dispose of property that is in the custody of a state probate court.” Marshall v. Marshall, 547 U.S. 293, 311–12 (2006).

         The United States Supreme Court has made clear, however, that the scope of the federal probate exception is quite narrow. Id. at 305. “[F]ederal courts of equity have jurisdiction to entertain suits in favor of . . . claimants against a decedent’s estate to establish their claims” as long as the 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.” Markham, 326 U.S. at 494 (citations omitted). Thus, an action that affects the distribution of estate assets, but that does not actually constitute the disposal of assets in the custody of the state court, does not fall under the probate exception. Dunlap v. Nielsen, 771 Fed.App’x 846, 850 (10th Cir. 2019); see also Osborn v. Griffin, 865 F.3d 417, 435 (6th Cir. 2017) (“[P]roperty that a party removes from a decedent’s estate prior to his death is not part of the res that is distributed by the probate court.”).

         The court finds persuasive the position of the Sixth Circuit in Wisecarver v. Moore, 489 F.3d 747 (6th Cir. 2007). In that case, the Sixth Circuit held that the probate exception did not bar a plaintiff from bringing in personam claims against defendants for assets that had been transferred to the defendants during the decedent’s lifetime. Id. at 750. Those assets, the court reasoned, were not part of the probate estate. Id. Thus, any dispute over them did not infringe on the state probate court’s disposition of the estate. Id.

         Similarly, Simpkins argues that Wright improperly came into possession of the decedent’s assets pursuant to acts occurring during the decedent’s lifetime. Thus, the account at issue is specifically outside of the scope of the estate. See Utah Code § 75-6-106; see also In re Estate of Uzelac, 178 P.3d 347, 353 (Utah Ct. App. 2008) (“POD accounts are held outside of probate and transfer upon death to the payee.”). And a dispute over Wright’s interest in assets that are not a part of the probate estate is not within the scope of the probate exception, even though the district court’s decision relating to ownership of the assets may be binding on a state probate court. See Markham, 326 U.S. at 494.

         Although Simpkins’s claim rests on the proposition that he should have inherited the funds intestate, the actual dispute centers on Wright’s alleged tortious conduct and her interest in assets outside of the estate. Simpkins’s alleged right to inherit the property may make this action ancillary to a hypothetical state probate court proceeding, but it does not transform the entire dispute into an estate administration. So long as this court does not engage in the actual task of administering an estate, the court has jurisdiction to adjudicate the rights to the P.O.D. account. See Markham, 326 U.S. at 494 (holding that federal courts can exercise jurisdiction to adjudicate rights in property in the custody of a state probate court, so long as they do not interfere with that court’s ...


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