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Morris v. Trust Co. of Virginia

United States District Court, Middle District of Alabama, Northern Division

September 26, 2014

THOMAS MORRIS, on behalf of and as Executor of the Estate of Amy F. Morris, Plaintiff,
v.
TRUST COMPANY OF VIRGINIA, , Defendants. GEORGE MASON UNIVERSITY FOUNDATION, INC., Plaintiff,
v.
THOMAS W. MORRIS, , Defendants.

MEMORANDUM OPINION AND ORDER

W. KEITH WATKINS CHIEF UNITED STATES DISTRICT JUDGE

Before the court in the member case is a motion to dismiss the third-party claims of Third-Party Plaintiffs Thomas W. Morris and Sharon Duncan, filed by Third-Party Defendant Trust Company of Virginia (hereinafter “the Trust Company”). (Member Case Doc. # 86, 87.)[1] The motion to dismiss has been fully briefed. (Member Case Docs. # 91, 94, 97.) The Trust Company renewed its motion, with briefing, when the member case was transferred to this district. (See Lead Case Docs. # 62, 65, 66.)[2] Upon consideration of the parties’ arguments and the relevant law, the court finds that the motion to dismiss is due to be granted for improper impleader of third-party claims.

I. JURISDICTION AND VENUE

Subject-matter jurisdiction is proper pursuant to 28 U.S.C. § 1332(a). The amount in controversy exceeds $75, 000, and there is complete diversity of citizenship between the opposing parties in each case.[3] The Trust Company does not dispute personal jurisdiction or venue.

II. STANDARD OF REVIEW

When evaluating a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), the court must take the facts alleged in the complaint as true and construe them in the light most favorable to the plaintiff. Resnick v. AvMed, Inc., 693 F.3d 1317, 1321–22 (11th Cir. 2012). To survive Rule 12(b)(6) scrutiny, “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)). “[F]acial plausibility” exists “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556).

III. BACKGROUND

This case presents a longstanding guardianship, conservatorship, and probate dispute that likely will be more fully elaborated upon in a future opinion. For now, abbreviated facts and procedural history suffice.

A. Facts

Mr. Morris and Ms. Duncan are siblings. In February 2007, their mother, Amy Falcon Morris, was in a car accident in Virginia Beach, Virginia. Shortly thereafter, Mr. Morris and Ms. Duncan filed an action in the Circuit Court of Virginia Beach, Virginia (hereinafter “the Virginia Court”), in which they sought to be appointed as Amy’s guardians and conservators. Things did not proceed as they hoped. Amy’s attorney, Karen Loulakis, who has been dismissed as a party to these cases, intervened and asserted that Amy’s interests differed from Mr. Morris and Ms. Duncan’s interests. George Mason University Foundation, Inc. (hereinafter “the Foundation”) also intervened based on its understanding that it would be the residual beneficiary of Amy’s Estate under Amy’s 1998 Will. Mr. Morris’s request to be appointed conservator was denied, and instead, the Virginia Court appointed Mr. Morris as Amy’s guardian and the Trust Company as conservator of her property. (Lead Case Doc. # 35-1, at 19–20, ¶¶ A, G.) The Virginia Court voided several transfers of Amy’s property initiated by Mr. Morris and Ms. Duncan and directed them to convey to the Trust Company Amy’s assets that they had transferred to themselves by power of attorney or other documents executed by Amy in Alabama. (Lead Case Doc. # 35-1, at 22, ¶¶ Q–R.)[4] Perhaps most significantly, the Virginia Court also declared a new will, executed in May 2007, void based on Amy’s incapacity. The 2007 Will names Mr. Morris as executor and he, Ms. Duncan, and their family members as beneficiaries.

On December 19, 2008, the Virginia Court entered a final judgment against Mr. Morris and Ms. Duncan, jointly and severally, and in favor of the Trust Company as Conservator for Amy in the amount of $1, 125, 222, plus interest. (Lead Case Doc. # 35-1, at 38.)[5] The same order included a “separate final judgment in the amount of $100, 000” against Mr. Morris and Ms. Duncan, “jointly and severally, in favor of the Foundation, with interest at the legal rate until paid, as that portion of attorney’s fees and costs of the Foundation . . . attributable to” Mr. Morris and Ms. Duncan’s contempt of court. (Lead Case Doc. # 35-1, at 38.) Mr. Morris and Ms. Duncan appealed the judgments without success.

Mr. Morris complains that under the Virginia Court’s conservatorship arrangement, the Trust Company ultimately received $990, 000 in assets belonging to Amy.[6] Mr. Morris claims that $302, 000 of that sum was spent on Amy’s care, while the remainder was allegedly squandered, handled incompetently, or spent on attorneys’ fees. Mr. Morris complains that the Trust Company failed to sell Amy’s house for its full value and unnecessarily incurred large tax penalties by liquidating an IRA.[7] Mr. Morris alleges that the Trust Company “cover[ed] [its] tracks” by expending several hundreds of thousands of dollars of Amy’s money, during her lifetime, on attorneys’ fees. (Lead Case Doc. # 29, at ¶ 40.)

After Amy died on March 25, 2011, Mr. Morris initiated probate proceedings of the 2007 Will in the Montgomery County Probate Court (hereinafter “the Alabama Probate Court”), notwithstanding the Virginia Court’s 2008 determination that Amy lacked the capacity to devise the 2007 Will. On April 7, 2011, the Alabama Probate Court probated Amy’s will and issued certified letters testamentary to Mr. Morris as Executor of the Estate. (Lead Case Doc. # 41-1, at 1.) On May 19, 2011, it ordered the Trust Company to release to Mr. Morris all funds belonging to Amy. (Lead Case Doc. # 41-1, at 3.) Mr. Morris claims that, when he contacted the Trust Company after Amy’s death, it refused to relinquish the Estate’s funds to him unless he and Ms. Duncan released their personal claims against it. The Trust Company allegedly told Mr. Morris that it would consume the remainder of the Estate in litigation expenses if Mr. Morris did not comply. (See Lead Case Doc. # 29, at ¶¶ 44–45.)

Mr. Morris never received the remainder of Amy’s Estate. Upon the Trust Company’s petition for a writ of prohibition or other appropriate relief from the Alabama Supreme Court, that court concluded that the Trust Company was never properly served with process or provided adequate notice of the Alabama Probate Court’s proceedings and that the Alabama Probate Court lacked personal jurisdiction over the Trust Company. Ex parte Trust Co. of Va., 96 So.3d 67, 68 (Ala. 2012). The Alabama Supreme Court directed the probate judge to vacate the orders requiring the ...


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