Caroline CHEVALIER, Plaintiff-Appellant, v. ESTATE OF Kimberly BARNHART, Defendant-Appellee.
No. 14-3146.
United States Court of Appeals, Sixth Circuit.
Oct. 1, 2015.
803 F.3d 789
Before: KEITH, MOORE, and STRANCH, Circuit Judges.
OPINION
KAREN NELSON MOORE, Circuit Judge.
Plaintiff-Appellant Caroline Chevalier and Defendant-Appellee Kimberly Barnhart1 met, fell in love, and were married. Throughout the course of their marriage, Chevalier made a series of loans to Barnhart, which Barnhart never repaid. Chevalier filed this lawsuit in the United States District Court for the Southern District of Ohio, alleging contract and tort claims in order to recover her loans. Chevalier alleges that the district court had subject-matter jurisdiction to adjudicate her claims pursuant to
Chevalier appeals the district court‘s dismissal of her state-law claims, arguing that the domestic-relations exception is inapplicable. While this appeal was pending, Barnhart died. (Notice of Death of Appellee). Barnhart‘s death raised the specter of another potential impediment to federal jurisdiction: the probate exception. See Marshall v. Marshall, 547 U.S. 293, 311-12, 126 S.Ct. 1735, 164 L.Ed.2d 480 (2006) ([T]he probate 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.).
For the reasons set forth in this opinion, we hold that neither the domestic-relations exception nor the probate exception prevents the federal courts from resolving Chevalier‘s claims. Accordingly, we REVERSE the district court‘s dismissal for lack of subject-matter jurisdiction, VACATE the entry of judgment, and REMAND the case for further proceedings.
I. FACTS AND PROCEDURAL HISTORY
In July 2007, Chevalier and Barnhart wed in Ontario, Canada, where Chevalier is a citizen, and where the government permitted them to marry.2 R. 2 at 1 (Compl. ¶¶ 1-2) (Page ID # 2); R. 4 at 1 (Answer ¶¶ 1-2) (Page ID # 13); R. 7-1 at 4 (Appl. for Divorce) (Page ID # 36). After approximately three years of marriage, Chevalier‘s and Barnhart‘s relationship soured, and the couple separated. R. 7-1 at 4 (Appl. for Divorce) (Page ID # 36).
Chevalier claims that she made a series of loans between 2007 and 2010 to Barnhart totaling approximately $122,708: $70,000 for mortgage payments, property taxes, insurance, utilities, and construction payments for Barnhart‘s house in Logan, Ohio; $23,700 for credit-card debt; $19,008 for a car; and $10,000 for legal fees. R. 2 at 2-3 (Compl. ¶¶ 6-16) (Page ID # 3-4). According to Chevalier, each transfer of funds was a loan conditioned upon repayment. See
On August 20, 2013, shortly before filing the answer to Chevalier‘s complaint, Barnhart filed for divorce in Windsor, Ontario, seeking spousal support and an equalization of net family properties. R. 7-1 at 2-3, 5 (Appl. for Divorce) (Page ID # 34-35, 37). On August 23, 2013, Barnhart answered the federal complaint, denying all allegations and asserting numerous affirmative defenses, including lack of subject-matter jurisdiction. R. 4 at 1-5 (Answer ¶¶ 15-24) (Page ID # 13-18). Shortly thereafter, on September 30, 2013, Barnhart moved to dismiss the federal complaint pursuant to
On January 15, 2014, the district court dismissed the complaint on the grounds that the court lacked subject-matter jurisdiction under the domestic-relations exception to federal diversity jurisdiction. R. 11 at 12 (D. Ct. Op. & Order) (Page ID # 77). The district court acknowledged that Chevalier had framed her complaint in terms of contract and tort claims — rather than a request for a divorce or alimony decree — but that, nevertheless, the domestic-relations exception barred her claims because she sought the functional equivalent of a divorce proceeding[] insofar as [Chevalier] has, in effect, asked this court to determine her marital property rights and obligations with respect to the monies referred to in the complaint.
Chevalier filed this timely appeal. On September 2, 2014, while this appeal was pending, Barnhart died. We stayed the appellate proceedings. Chevalier filed a motion to substitute the Estate of Kimberly Barnhart as the party in interest and lift the stay. On October 30, 2014, the Superior Court of Justice in Windsor, Ontario, dismissed the parties’ divorce proceedings without terminating the marriage or disposing of the parties’ assets or property. Appellant‘s Notice of Canadian Ct.‘s Dismissal of Divorce Proceedings at 2-3; Appellant‘s Mem. in Resp. to Ct.‘s Briefing Ltr. at 7. Before we ruled on Chevalier‘s motion to substitute Barnhart‘s estate as the real party in interest, proceedings began in the Probate Court of Hocking County, Ohio, to administer Barnhart‘s estate. On February 9, 2015, the Probate Court appointed Karla S. Mayberry as the administrator of Barnhart‘s estate. Appel-
These developments caused us to consider whether the probate exception to federal jurisdiction might prevent adjudication of Chevalier‘s state-law claims in federal court, and we ordered the parties to address the issue in supplemental briefs. We now turn to answer the question: should the domestic-relations or probate exceptions limit the federal courts’ subject-matter jurisdiction in this case?
II. ANALYSIS
We review de novo a district court‘s dismissal of a complaint for lack of subject-matter jurisdiction. Wisecarver v. Moore, 489 F.3d 747, 749 (6th Cir.2007). The plaintiff has the burden of proving that the federal court has subject-matter jurisdiction. Id. [F]ederal courts have an independent obligation to ensure that they do not exceed the scope of their jurisdiction, and therefore they must raise and decide jurisdictional questions that the parties either overlook or elect not to press. Henderson ex rel. Henderson v. Shinseki, 562 U.S. 428, 434, 131 S.Ct. 1197, 179 L.Ed.2d 159 (2011).
A. The Domestic-Relations Exception to Federal Diversity Jurisdiction
[T]he domestic-relations exception [to federal diversity jurisdiction] encompasses only cases involving the issuance of a divorce, alimony, or child custody decree. Ankenbrandt, 504 U.S. at 704. It is not compelled by the text of the Constitution or federal statute, but rather is a judicially created doctrine[] stemming in large measure from misty understandings of English legal history. Marshall, 547 U.S. at 299. Despite the domestic-relations exception‘s questionable roots, the Supreme Court concluded in Ankenbrandt that the domestic-relations exception to federal diversity jurisdiction endures to this day as a matter of statutory interpretation. See Ankenbrandt, 504 U.S. at 700. In addition, there are sound policy reasons to leave the issuance of divorce, alimony, and child-custody decrees to the state courts: Issuance of decrees of this type not infrequently involves retention of jurisdiction by the court and deployment of social workers to monitor compliance, and state courts are more eminently suited to work of this type than are federal courts, which lack the close association with state and local government organizations dedicated to handling issues that arise out of conflicts over divorce, alimony, and child custody decrees. Id. at 703-04. In addition, state courts have judicial expertise in the area of issu[ing] these types of decrees because of the special proficiency developed by state tribunals over the past century and a half in handling issues that arise in the granting of such decrees. Id. at 704 (citing Lloyd v. Loeffler, 694 F.2d 489, 492 (7th Cir.1982)).3
Since Ankenbrandt, the Court has reemphasized that the [domestic-relations] exception covers only ‘a narrow range of domestic relations issues,’ Marshall, 547 U.S. at 307 (quoting Ankenbrandt, 504 U.S. at 701), and that federal courts have no more right to decline the exercise of jurisdiction which is given, than to usurp that which is not given, id. at 298-99 (quoting Cohens v. Virginia, 19 U.S. (6 Wheat.) 264, 404, 5 L.Ed. 257 (1821)). The message from Ankenbrandt and Marshall is clear: the domestic-relations exception is narrow, and lower federal courts may not broaden its application.
We have had few occasions to address the scope of the domestic-relations exception since Ankenbrandt. In the first post-Ankenbrandt case in this circuit, the plaintiff sought a final declaratory judgment, pursuant to
Since Catz, our cases have clarified that the domestic-relations exception deprives federal courts of diversity jurisdiction if the plaintiff seeks to modify or interpret the terms of an existing divorce, alimony, or child-custody decree. In McLaughlin v. Cotner, we held that the domestic-relations exception deprived the federal courts of jurisdiction to adjudicate a breach-of-contract claim arising from the alleged breach of a divorce decree. The divorce decree incorporated a separation agreement that required the sale of real estate. 193 F.3d 410, 414 (6th Cir.1999). The basis for the alleged breach of contract was a separation agreement that was incorporated in the divorce decree, and it was important that the divorce decree — not the law of contract or torts — was the source of the obligations that the plaintiff sought to enforce. Id. In other words, McLaughlin stands for the uncontroversial proposition that a plaintiff may not artfully
Our sibling circuits have also limited the domestic-relations exception to suits seeking to obtain or modify a divorce, alimony, or child-custody decree. See, e.g., Matusow v. Trans-County Title Agency, LLC, 545 F.3d 241, 246 (3d Cir.2008) (reasoning that a modification of a divorce decree is analogous to the issuance of a divorce decree, and therefore subject to the domestic-relations exception to federal diversity jurisdiction); Norton v. McOsker, 407 F.3d 501, 505 (1st Cir.2005) (Even if the Rhode Island Family Court did have jurisdiction, the domestic relations exception ... would not apply[] because [the plaintiff] did not bring any claim related to a divorce, alimony, or child custody decree.); Dunn v. Cometa, 238 F.3d 38, 41 (1st Cir.2001) ([L]awsuits affecting domestic relations, however substantially, are not within the [domestic-relations] exception unless the claim at issue is one to obtain, alter or end a divorce, alimony or child custody decree.); Lloyd, 694 F.2d at 493 (holding that the domestic-relations exception to federal diversity jurisdiction does not prevent federal courts from adjudicating a tort action when the plaintiffs do not contest the validity of the [state] custody decree, because the tort issues ... [were] not entangled with issues that only state courts are competent to resolve.). Thus, the domestic-relations exception to federal diversity jurisdiction does not deprive federal courts of jurisdiction to adjudicate a claim that meets the requirements of
When analyzing the applicability of the domestic-relations exception, we must focus on the remedy that the plaintiff seeks: Does the plaintiff seek an issuance or modification or enforcement of a divorce, alimony, or child-custody decree? See Catz, 142 F.3d at 292; Cf. Mercer v. Bank of New York Mellon, N.A., 609 Fed.Appx. 677, 679-80 (2d Cir.2015) (holding that under the probate exception to federal diversity jurisdiction a court must examine the substance of the relief that Plaintiffs are seeking, and not the labels that they have used). If the plaintiff is seeking to dissolve the marriage and resolve all matters concerning property and children, then the case falls within the domestic-relations exception. See BLACK‘S LAW DICTIONARY 498 (10th ed.2014) (defining divorce decree). If the plaintiff asks a federal court to calculate and order payment of an allowance for maintenance of a spouse during divorce proceedings or after a divorce is finalized, then the plaintiff seeks alimony and a federal court may not take jurisdiction over the matter. See
The domestic-relations exception to federal diversity jurisdiction does not apply when the parties do not ask the federal court to perform these status-related functions — issuing a divorce, alimony, or child-custody decree — even if the matter involves married or once-married parties. [F]ederal courts [are] as equally equipped [as state courts] to deal with complaints alleging the commission of torts and breach of contract. Marshall, 547 U.S. at 308 (citing Ankenbrandt, 504 U.S. at 704).
We now turn to whether Chevalier seeks the issuance or modification of a divorce, alimony, or child-custody decree. In doing so, we focus on the remedy Chevalier seeks. Although Chevalier does not explicitly request dissolution of her marriage or calculation of alimony, the district court concluded that Chevalier has asked that the federal courts perform the functional equivalent of divorce proceedings because the court must determine her marital property rights and obligations with re-
We disagree. Chevalier does not request that the federal courts nullify her marriage. See R. 2 at 10 (Compl.) (Page ID # 11). She does not seek an order that Barnhart regularly pay her an allowance, i.e., alimony.
Finally, we acknowledge that our approach is slightly different from that of the Eighth Circuit. In Wallace v. Wallace, the Eighth Circuit held that a person who claimed that his ex-wife committed identity theft could not litigate his claim in federal court because a Missouri family court had already consider[ed] ‘the conduct of the parties during the marriage’ and labeled the debt ‘marital’ before dividing the debt between the two ex-spouses. 736 F.3d 764, 767 (8th Cir.2013) (quoting
We do not adopt the Eighth Circuit‘s approach to determining whether the domestic-relations exception to federal diversity jurisdiction applies. In concluding that the plaintiff‘s state identity-theft damages remedy in federal court would modify the state court‘s marital distribution, the Eighth Circuit relied on the statutorily required considerations that a divorce court must consider before dividing property and awarding alimony. Id. (These [identity-theft] remedies would essentially require that the federal court remove the label ‘marital debt’ and reallocate the debt division the state court has already ‘deem[ed] just after considering’ the conduct at issue here. (quoting
Our opinion today also departs from the Seventh Circuit‘s opinion in Friedlander v. Friedlander. In that case, the court noted that the domestic relations exception has a core and a penumbra. 149 F.3d 739, 740 (7th Cir.1998). The core consists of cases in which the plaintiff is seeking in federal district court under the diversity jurisdiction one or more of the distinctive forms of relief associated with the domestic relations jurisdiction: the granting of a divorce or an annulment, an award of child custody, a decree of alimony or child support. Id. By contrast, the penumbra consists of ancillary proceedings ... that state law would require be litigated as a tail to the original domestic relations proceeding. Id. The court acknowledged that supposed dicta in Ankenbrandt cast[s] doubt on the existence of the penumbra, but concluded that issues of the penumbra were not before the Court. Id. However, that is not how we read Ankenbrandt, and we are reluctant to broaden the exception beyond what the Supreme Court has advised.
The district court here noted an additional policy reason[] for its conclusion that the federal courts do not have subject-matter jurisdiction to adjudicate Chevalier‘s claims: the danger ... that federal adjudication of this action would increase the risk of incompatible federal [American] and Canadian decrees. R. 11 at 11 (D. Ct. Op. & Order) (Page ID # 76). But when Chevalier filed her complaint in federal court, no such risk was present; Barnhart filed for divorce in Canada after Chevalier filed this federal lawsuit. Nor does that risk exist now; the Superior Court of Justice in Ontario dismissed Chevalier‘s and Barnhart‘s divorce proceedings upon notice of Barnhart‘s death. In any event, whether Barnhart initiated divorce proceedings before or after Chevalier filed her federal civil suit does not affect whether the federal court has subject-matter jurisdiction to adjudicate Chevalier‘s claims because our subject-matter jurisdiction is based on the remedy Chevalier seeks, not whether Chevalier filed her suit before or after Barnhart brought suit.
B. The Probate Exception
The ‘probate exception,’ kin to the domestic relations exception, to otherwise proper federal jurisdiction[] has [also] been linked to language contained in the
Despite the probate exception‘s questionable origins, it also endures. In Markham v. Allen, 326 U.S. 490, 494, 66 S.Ct. 296, 90 L.Ed. 256 (1946), the Supreme Court stated that a federal court may not exercise its jurisdiction to disturb or affect the possession of property in the custody of a state 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.
After Markham, [l]ower federal courts ... puzzled over the meaning of the words ‘interfere with the probate proceedings,’ and some ... read those words to block federal jurisdiction over a range of matters well beyond probate of a will or administration of a decedent‘s estate. Marshall, 547 U.S. at 311 (quoting Markham, 326 U.S. at 494). In Marshall, the Supreme Court reined in expansive application of the probate exception and clarified that the ‘interference’ language in Markham [is] essentially a reiteration of the general principle that, when one court is exercising in rem jurisdiction over a res, a second court will not assume in rem jurisdiction over the same res. Id.6
Thus, the probate exception reserves to the state probate courts the probate or annulment of a will and the administration of a decedent‘s estate; it also pre-
In addition, the Court addressed whether a Texas provision that reserve[d] to its probate courts the exclusive right to adjudicate a transitory tort deprived the federal courts of jurisdiction to adjudicate the tort claim. Id. at 313-14. There was no dispute that Texas law govern[ed] the substantive elements of [the plaintiff‘s] tortious interference claim. Id. at 313 (citing Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938)). But the Court firmly rejected the proposition that a federal court‘s subject-matter jurisdiction is dependent upon state law: Jurisdiction is determined ‘by the law of the court‘s creation and cannot be defeated by the extra-territorial operation of a state statute, even though it created the right of action.’ Id. at 314 (quoting Tennessee Coal, Iron & R.R. Co. v. George, 233 U.S. 354, 360, 34 S.Ct. 587, 58 L.Ed. 997 (1914)) (internal alterations omitted). We therefore look to only federal law to determine whether the probate exception to federal diversity jurisdiction applies.
Since Marshall, we and our sibling circuits have agreed that the probate exception is narrowly limited to three circumstances: (1) if the plaintiff seek[s] to probate a will; (2) if the plaintiff seek[s] to annul a will; and (3) if the plaintiff seek[s] to reach the res over which the state court had custody. Wisecarver, 489 F.3d at 750; see also Lee Graham Shopping Ctr., LLC v. Estate of Kirsch, 777 F.3d 678, 681 (4th Cir.2015) ([The probate exception] applies only if a case actually requires a federal court to perform one of the acts specifically enumerated in Marshall: to probate a will, to annul a will, to administer a decedent‘s estate; or to dispose of property in the custody of a state probate court. A case does not fall under the probate exception if it merely impacts a state court‘s performance of one of these tasks.); Curtis v. Brunsting, 704 F.3d 406, 409 (5th Cir.2013) (Marshall requires a two-step inquiry into (1) whether the property in dispute is estate property within the custody of the probate court and (2) whether the plaintiff‘s claims would require the federal court to assume in rem jurisdiction over that property.); Three Keys Ltd. v. SR Util. Holding Co., 540 F.3d 220, 227 (3d Cir.2008) (It is clear after Marshall that unless a federal court is endeavoring to (1) probate or annul a will, (2) administer a decedent‘s estate, or (3) assume in rem jurisdiction over property that is in the custody of the probate court, the probate exception does not apply.).
Chevalier does not request that the federal courts probate or annul a will, or administer Barnhart‘s estate, and so the question we must answer is whether Chevalier seek[s] to reach the res over which the state court had custody. Wisecarver, 489 F.3d at 750. First, we must identify whether Chevalier‘s causes of action are in personam or in rem actions. An in personam action is [a]n action brought against a person rather than property, and the judgment is binding on the judgment-debtor and can be enforced against
Here, Chevalier has asserted six claims. Her first four claims — for breach of contract, default, unjust enrichment, and fraud — are in personam actions. See, e.g., 71 Am.Jur.2d SPECIFIC PERFORMANCE § 196 (2d ed. 2015) ([A]n action for specific performance of a contract, even though it relates to real property, is in personam insofar as it is sought to compel performance by the defendant....). For her fifth claim, Chevalier seeks the imposition of a constructive lien on Barnhart‘s house in Ohio. R. 2 at 8 (Compl. ¶¶ 56-62). Under Ohio law,7
A constructive trust is ... an appropriate remedy against unjust enrichment. This type of trust is usually invoked when property has been acquired by fraud. However, a constructive trust may also be imposed where it is against the principles of equity that the property be retained by a certain person even though the property was acquired without fraud.
Ferguson v. Owens, 9 Ohio St.3d 223, 225, 459 N.E.2d 1293, 1295 (1984). A judgment imposing a constructive trust over a specified property is an in personam action under Ohio law, and the court need not have in rem jurisdiction to enter the judgment. Groza-Vance v. Vance, 162 Ohio App.3d 510, 834 N.E.2d 15, 25-26 (2005); see also Ingersoll v. Coram, 211 U.S. 335, 359, 29 S.Ct. 92, 53 L.Ed. 208 (1908) (One object of the bill ... was to declare and foreclose a lien upon property within the district, ... and we do not think that jurisdiction thus established [in federal court] and supported was taken away by the mere fact that the settlement of the estate of Davis was pending in the Probate Court of Suffolk County.); Parker v. Handy (In re Handy), 624 F.3d 19, 22 (1st Cir.2010) (holding that, under Maine law, [c]onstructive trusts are not substantive rights that confer a cause of action; they are remedial devices employed by courts once liability is found and where equity requires, and therefore do not transform a case seeking that remedy into a cause of action in rem) (citing Yavuz v. 61 MM, Ltd., 576 F.3d 1166, 1176 (10th Cir.2009); Mayo v. Hartford Life Ins. Co., 354 F.3d 400, 409 (5th Cir.2004)). Thus, Chevalier‘s claim seeking to impose a constructive trust is not an in rem action, and so her fifth claim is not barred by the probate exception.
Chevalier‘s sixth claim seeking foreclosure, however, requires that a court assume quasi in rem jurisdiction of the property at issue. Huntington Mortg. Co. v. Shanker, 92 Ohio App.3d 144, 151, 634 N.E.2d 641, 648 (1993); 59A C.J.S. MORTGAGES § 874 (2015); BLACK‘S LAW DICTIONARY, supra (defining quasi in rem action as action involving or determining the
Pursuant to the doctrine of prior exclusive jurisdiction, [i]f two suits are in rem or quasi in rem, so that the court must have possession or some control over the property in order to grant the relief sought, the jurisdiction of one court must yield to that of the other. Cartwright v. Garner, 751 F.3d 752, 761 (6th Cir.2014); see also Chapman v. Deutsche Bank Nat‘l Trust Co., 651 F.3d 1039, 1043 (9th Cir.2011). The prior-exclusive-jurisdiction doctrine is similar if not identical to the probate exception. Indeed, when describing how the prior-exclusive-jurisdiction doctrine operates, courts have used the language of Marshall: when one court is exercising in rem jurisdiction over a res, a second court will not assume in rem jurisdiction over the same res. Chapman, 651 F.3d at 1043 (quoting Marshall, 547 U.S. at 311) (citing Princess Lida of Thurn & Taxis v. Thompson, 305 U.S. 456, 466-67, 59 S.Ct. 275, 83 L.Ed. 285 (1939)). The rule provides that the court first assuming jurisdiction over property may maintain and exercise that jurisdiction to the exclusion of the other. Princess Lida, 305 U.S. at 466. In rem jurisdiction attaches when a complaint is filed, process issued, and process duly served. Farmers’ Loan & Trust Co. v. Lake St. Elevated R.R. Co., 177 U.S. 51, 61, 20 S.Ct. 564, 44 L.Ed. 667 (1900). A defendant cannot defeat jurisdiction thus acquired.
Case law addressing the federal courts’ subject-matter jurisdiction in forfeiture actions is also instructive because forfeiture is also an in rem action. In Republic National Bank of Miami v. United States, the Supreme Court addressed whether the federal courts lose subject-matter jurisdiction to adjudicate a forfeiture action if the property in dispute has been removed from the court‘s judicial district. 506 U.S. 80, 83-84, 113 S.Ct. 554, 121 L.Ed.2d 474 (1992). The Court held: Stasis is not a general prerequisite to the
With these principles in mind, we now hold that the probate exception does not divest a federal court of subject-matter jurisdiction unless a probate court is already exercising in rem jurisdiction over the property at the time that the plaintiff files her complaint in federal court. Accordingly, the probate exception does not divest the federal courts of subject-matter jurisdiction to adjudicate Chevalier‘s foreclosure action because, at the time she filed the federal complaint, the property that she seeks to foreclose was not in the custody of a state probate court. Marshall, 547 U.S. at 311. Once jurisdiction vested in the federal courts, Barnhart‘s subsequent death and the admission of her estate to state probate court did not divest the federal court of subject-matter jurisdiction.
III. CONCLUSION
For the foregoing reasons, we REVERSE the district court‘s dismissal for lack of subject-matter jurisdiction, VACATE the judgment, and REMAND this case for further proceedings consistent with this opinion.
Notes
694 F.2d at 492.The typical divorce decree provides for alimony payable in installments until the wife remarries, and if there are children it will provide for custody, visitation rights, and child support payments as well. These remedies — alimony, custody, visitation, and child support — often entail continuing judicial supervision of a volatile family situation. The federal courts are not well suited to this task. They are not local institutions, they do not have staffs of social workers, and there is too little commonality between family law adjudication and the normal responsibilities of federal judges to give them the experience they would need to be able to resolve domestic disputes with skill and sensitivity.