United States District Court, M.D. Alabama, Northern Division
THOMAS MORRIS, on behalf of and as Executor of the Estate of Amy F. Morris, Plaintiff,
TRUST COMPANY OF VIRGINIA, et al., Defendants. GEORGE MASON UNIVERSITY FOUNDATION, INC., Plaintiff,
THOMAS W. MORRIS, et al., Defendants.
MEMORANDUM OPINION AND ORDER
W. KEITH WATKINS, Chief District Judge.
The facts of these cases give new meaning - even double entendre - to the tired cliche "where there's a will, there's a way." And "the way" is a seemingly endless trail of "nomadic controversies, " with litigants roving from one court to another. First Tenn. Bank N.A. Memphis v. Smith, 766 F.2d 255, 259 (6th Cir. 1985). Why litigate perpetually across jurisdictions? Because "[t]he defense of res judicata is universally respected, but actually not very well liked." Riordan v. Ferguson, 147 F.2d 983, 988 (2d Cir. 1945) (Clark, J., dissenting).
Decedent Amy Falcon Morris executed two wills - one in 1998, and another in 2007. The 1998 Will left almost everything to George Mason University Foundation in Virginia. The 2007 Will left everything to Amy's family. In 2008, during her lifetime, a Virginia court ruled that Amy's 2007 Will was null and void because she lacked the capacity to execute it. When she died in Alabama in 2011, her son, Thomas W. Morris, was undeterred by the Virginia Court's ruling. He successfully petitioned an Alabama court to probate the 2007 Will, which survived, at least in Alabama, uncontested and unscathed. The Virginia court later probated the 1998 will that was, in its view and according to its prior ruling, the only valid one.
These are but two cases in a series of legal proceedings in Virginia, Alabama, and Maryland spanning eight years concerning Amy, her Estate, or her children's rights concerning the same. There are now competing state court orders, estates, executors, and beneficiaries, and this is the seventh federal court opinion in two districts. A large portion, if not all, of Amy's Estate has been consumed in attorneys' and conservator's fees, and the parties persist in litigation. Presently their disputes are over the viability of two sorts of claims: actions to collect on monetary judgments imposed by a Virginia state court against Amy's children during prior litigation, and tort claims by the children, Mr. Morris and his sister, Sharon Duncan, against their opponents in that prior litigation.
First, George Mason University Foundation, Inc. (hereinafter "the Foundation") seeks to collect two separate Virginia monetary judgments against Mr. Morris and Ms. Duncan arising directly out of Mr. Morris and Ms. Duncan's dealings with Amy's assets during the pendency of the guardianship and conservatorship proceedings in a Virginia Court. This is the basis of the member case which originated in the Eastern District of Virginia.
Second, Mr. Morris and Ms. Duncan raise tort claims against their long-time legal nemeses - the Trust Company of Virginia (hereinafter "the Trust Company"), which was appointed conservator of Amy's estate during her last years, and the Foundation, the named residual beneficiary under the 1998 Will. Mr. Morris raises tort claims on behalf of Amy's Estate in the lead case, but in the member case, Mr. Morris and Ms. Duncan, in their individual capacities, have lodged counterclaims against the Foundation.
There are four pending dispositive motions in the cases. Before the court in the lead case are two motions to dismiss Mr. Morris's Amended Complaint, filed by the Trust Company and the Foundation. (Lead Case Docs. # 34, 37.) The motions to dismiss have been fully briefed. ( See Lead Case Docs. # 35, 38, 41, 45, 46.) Before the court in the member case are cross motions for summary judgment between the Foundation (Member Case Docs. # 51, 52) and Mr. Morris and Ms. Duncan (Member Case Docs. # 48, 55). Each side responded to the other's motion. (Member Case Docs. # 54, 60.) The court has also received supplemental briefing and submissions for the record to solidify the parties' positions concerning full faith and credit. (Lead Case Docs. # 86, 87, 89, 93, 94, 95, 97.)
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. No party disputes personal jurisdiction or venue.
II. STANDARDS OF REVIEW
A. Motion to Dismiss for Failure to State a Claim
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).
A defendant may raise the plaintiff's lack of capacity to sue under a Rule 12(b)(6) motion to dismiss. See Graca v. Rosebank Mar., Inc., No. 04-14302, 2005 WL 6458603, at *2 (11th Cir. Mar. 8, 2005); see also Klebanow v. N.Y. Produce Exch., 344 F.2d 294, 296 n.1 (2d Cir. 1965) ("Although the defense of lack of capacity is not expressly mentioned in rule 12(b), the practice has grown up of examining it by a 12(b)(6) motion when the defect appears upon the face of the complaint."). Generally, when a district court "considers materials outside of the complaint, [it] must convert the motion to dismiss into a summary judgment motion, " but "[i]n ruling upon a motion to dismiss, the district court may consider an extrinsic document if it is (1) central to the plaintiff's claim, and (2) its authenticity is not challenged." SFM Holdings, Ltd. v. Banc of Am. Sec., LLC, 600 F.3d 1334, 1337 (11th Cir. 2010). A district court may thus take judicial notice of documents in legal proceedings which are public records that are "not subject to reasonable dispute" and "capable of accurate and ready determination by resort to sources whose accuracy could not reasonably be questioned." Horne v. Potter, 392 F.Appx. 800, 802 (11th Cir. 2010) (quoting Fed.R.Evid. 201(b)).
B. Motion for Summary Judgment
To succeed on summary judgment, the movant must demonstrate "that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). The court must view the evidence and the inferences from that evidence in the light most favorable to the nonmovant. Jean-Baptiste v. Gutierrez, 627 F.3d 816, 820 (11th Cir. 2010).
The party moving for summary judgment "always bears the initial responsibility of informing the district court of the basis for its motion." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). This responsibility includes identifying the portions of the record illustrating the absence of a genuine dispute of material fact. Id. Or a movant who does not have a trial burden of production can assert, without citing the record, that the nonmoving party "cannot produce admissible evidence to support" a material fact. Fed.R.Civ.P. 56(c)(1)(B); see also Fed.R.Civ.P. 56 advisory committee's note ("Subdivision (c)(1)(B) recognizes that a party need not always point to specific record materials.... [A] party who does not have the trial burden of production may rely on a showing that a party who does have the trial burden cannot produce admissible evidence to carry its burden as to the fact."). If the movant meets its burden, the burden shifts to the nonmoving party to establish - with evidence beyond the pleadings - that a genuine dispute material to each of its claims for relief exists. Celotex, 477 U.S. at 324. A genuine dispute of material fact exists when the nonmoving party produces evidence allowing a reasonable fact finder to return a verdict in its favor. Waddell v. Valley Forge Dental Assocs., 276 F.3d 1275, 1279 (11th Cir. 2001).
This opinion is the court's third and final one in a trilogy. Abbreviated facts and procedural history have been set out in two prior opinions (Lead Case Docs. # 71, 72), but a full account of the facts is necessary to give context to the remaining claims and defenses. When considering the pending motions, the court will view the allegations or evidence as required by the applicable standard of review. When necessary, judicial notice will be taken of documents admitted, allegations pleaded, and decisions rendered in prior court proceedings in various Virginia and Alabama state and federal courts. These judicial facts are relevant to the parties' arguments concerning full faith and credit of state court orders and the application of preclusion law.
Amy Falcon Morris died testate in Montgomery, Alabama, in March 2011. Amy's first will was prepared in 1998 by Ms. Loulakis, an attorney from Virginia, while Amy lived in Virginia. No one disputes that Amy had the requisite mental capacity to devise the 1998 Will. The 1998 Will named Ms. Loulakis as the Executor of Amy's Estate and named the Foundation as the residual beneficiary of the Estate. Mr. Morris and his family members were basically disinherited by their mother in that will.
On February 22, 2007, Amy was in a car wreck in Virginia Beach, Virginia. Afterward, she was admitted to Chesapeake General Hospital. Shortly after the accident, 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. In their amended petition for appointment of guardian and conservator, filed April 10, 2007, Mr. Morris and Ms. Duncan, with the assistance of counsel, represented to the Virginia Court that Amy "suffers from dementia of Alzheimer's type with psychosis. Her dementia has progressed to the point that she does not recognize [Mr. Morris and Ms. Duncan] and cannot communicate in complete sentences with them." (Member Case Doc. # 52-3, at ¶ 6.) Mr. Morris and Ms. Duncan further averred that Amy was "physically and mentally incapacitated" and there was no indication that she would recover from her disability. (Member Case Doc. # 52-3, at ¶ 7.)
On April 27, 2007, during the pendency of the guardianship and conservatorship proceedings, Mr. Morris had Amy discharged from Chesapeake General Hospital. On May 2, 2007, Mr. Morris moved Amy into a residential nursing facility in Montgomery, Alabama. The Foundation represents that Mr. Morris and Ms. Duncan moved their mother without court approval and against the advice of medical care providers, but Mr. Morris and Ms. Duncan say that Amy wanted to move ( see Member Case Doc. # 49, at 16, ¶ 9), that the court had notice beforehand, and that the guardian ad litem appointed to represent Amy, Charles Johnson, approved. Mr. Morris and Ms. Duncan further assert that a document conferring power of attorney upon Mr. Morris was "located, validated[, ] and filed" with the Virginia Court. (Lead Case Doc. # 88, at 3.)
On April 27, 2007, Ms. Loulakis moved to intervene in the Virginia guardianship and conservatorship proceedings and asserted that Amy's interests differed from Mr. Morris and Ms. Duncan's interests. (Lead Case Doc. # 93-2, at 29.) Allegedly at the prompting of Ms. Loulakis, the Foundation intervened on or around May 20, 2007, based on its understanding that it would be the residual beneficiary of Amy's Estate under the 1998 Will. On May 23, 2007, Judge A. Bonwill Shockley, the presiding judge in the Virginia Court proceedings, appointed Ms. Loulakis as Amy's counsel in the proceedings and permitted the Foundation's intervention in the case. ( See Lead Case Docs. # 93-2, at 32-33.) Ms. Loulakis's appointment was distinct from the continued representation of Amy by Mr. Johnson, the guardian ad litem. 
On May 5, 2007, shortly after arriving in Montgomery, Amy executed a deed of gift transferring her Virginia Beach home, as well as her Smith Barney stock accounts worth roughly $1.6 million, to Mr. Morris and Ms. Duncan. Montgomery Attorney Mark Chambless witnessed and notarized the deed of gift. Mr. Chambless reportedly referred Amy to another Montgomery law firm for the drafting of a new will. Montgomery Attorney Lee Hamilton drafted a new will for Amy, which Amy executed on May 25, 2007. The 2007 Will names Mr. Morris the Executor of Amy's Estate and makes Mr. Morris, Ms. Duncan, and their families the beneficiaries of the Estate. Mr. Morris and Ms. Duncan represent that the 2007 Will was drafted and executed according to Amy's wishes. About the same time, Mr. Morris and Ms. Duncan listed Amy's Virginia Beach house for sale because she would not be returning to Virginia.
Mr. Morris and Ms. Duncan filed a competing action in the Probate Court of Montgomery County, Alabama (hereinafter the "Alabama Probate Court") to be appointed as Amy's guardian and conservator. The Alabama Probate Court stayed its proceedings pending the outcome of the Virginia Court guardianship and conservatorship proceedings, and it appears that the Alabama conservatorship and guardianship proceedings never resumed.
In Virginia, Mr. Morris and Ms. Duncan filed a "Notice" declaring their intent to move for a nonsuit or voluntary dismissal of their petition pursuant to Virginia statute. (Lead Case Doc. # 93-3, at 113.) No formal motion for nonsuit was filed. On May 30, 2007, the Foundation informed the Virginia Court that it would oppose dismissal of the case and that it would file an answer, counterclaim, and crossclaim. (Lead Case Doc. # 93-3 at 102-03, 115-23.) The Foundation's countersuit sought an accounting from Mr. Morris and Ms. Duncan. During a hearing on June 8, 2007, the court ruled from the bench that Mr. Morris and Ms. Duncan's oral motion for nonsuit was denied. (Lead Case Doc. # 93-3, at 56.)
The same date, the court entered an order enjoining the parties from transferring or disposing of any of Amy's assets. ( See Lead Case Doc. # 93-3 at 126 (prohibiting Mr. Morris and Ms. Duncan from "making any distributions, by exercise of authority under any power of attorney or otherwise, out of [Amy's] assets other than distributions for those costs directly related to [her] care.").) The Foundation alleges that Mr. Morris and Ms. Duncan violated the Virginia Court's injunction by wrongfully transferring Amy's property, including financial accounts and her Virginia Beach home, to themselves. However, the June 8, 2007 order was entered after the property transfers of May 5, 2007, and after the execution of the will on May 25, 2007.
Ms. Loulakis, in her capacity as Amy's appointed attorney, came to Amy's nursing home facility in Montgomery in July 2007, allegedly with a forged order from Montgomery County Probate Judge Reese McKinney authorizing her visit to see Amy. Mr. Morris and Ms. Duncan claim that Amy was alert and communicated her wishes that Ms. Loulakis and the Foundation cease meddling in her affairs. According to Mr. Morris and Ms. Duncan, Ms. Loulakis lied to the Virginia Court, saying that Amy was unresponsive to inquiries when Ms. Loulakis tried to question her. Mr. Morris and Ms. Duncan claim further that Montgomery Attorney Ed Parish witnessed Ms. Loulakis's visit with Ms. Morris, but Judge Shockley refused to hear Mr. Parish's testimony. The Foundation has rebutted Mr. Morris and Ms. Duncan's representations by showing the transcript of Mr. Parish's limited testimony in Virginia. (Lead Case Doc. # 94-7.) The transcript explains that the Virginia Court sustained the Foundation's objection to Mr. Parish's testimony and restricted him from testifying against Ms. Loulakis because he participated in the act of secretly and illegally taping a live conversation on July 28, 2007, involving Ms. Loulakis, without her awareness or consent.
On February 29, 2008, after receiving testimony and evidence during a trial, the Virginia Court entered orders retroactively declaring Amy to be an incapacitated person as of February 22, 2007, appointing Mr. Morris as Amy's guardian only, and appointing the Trust Company as conservator of her property. (Lead Case Doc. # 35-1, at 19-20, ¶¶ A, G.) The Virginia Court found that Amy's incapacity was perpetual and that she would not improve. (Lead Case Doc. # 35-1, at 17, ¶ 7.) The Virginia Court also relieved Amy of her authority to perform legal acts, and significantly, the order declared that the 2007 Alabama Will was "invalid and of no effect." (Lead Case Doc. # 35-1, at 20-21, ¶ L.) The Virginia Court declared all transfers of Amy's assets after February 22, 2007, void ab initio and directed Mr. Morris and Ms. Duncan 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.)
On August 8, 2008, the Virginia Court held a hearing and found by clear and convincing evidence that Mr. Morris and Ms. Duncan had "acted in bad faith since the Feb. 29, 2008, final decree, and... deliberately failed to fully comply with the June 8, 2007 injunction and order, and the Feb. 29, 2008 final decree, including, but not limited to, failing to return the assets that they took from Amy... to the Conservator." (Lead Case Doc. # 93-2, at 38.) For that reason, the court found Mr. Morris and Ms. Duncan in contempt and issued a capias order as to both of them. (Lead Case Doc. # 93-2, at 38-41.) The capias order appears to still be in effect.
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, ¶ 13.) 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, ¶ 10(d).) It is undisputed that Virginia's appellate courts denied Mr. Morris and Ms. Duncan's appeals of the judgments against them. ( See Member Case Docs. # 52-5, 52-7, 52-8 (letters from the Virginia Court of Appeals and the Virginia Supreme Court).) Mr. Morris and Ms. Duncan complain that the judgment is based on inflated and unaudited sums of assets, but it is a valid judgment nonetheless.
On January 9, 2009, the Trust Company filed the Virginia Court's judgment in the Circuit Court of Montgomery County, Alabama. The Foundation was joined as an indispensable party. Mr. Morris responded by filing a motion for relief pursuant to Rule 60(b)(4) of the Alabama Rules of Civil Procedure. (Lead Case Doc. # 93-1.) In the motion, Mr. Morris asserted that the Foundation lacked standing to intervene in the Virginia case once Amy executed her 2007 Will. Mr. Morris argued the judgment was void because the Virginia Court lacked jurisdiction over the Foundation's claims and further that the Virginia Court lost jurisdiction when he and Ms. Duncan exercised their statutory right to a nonsuit. (Lead Case Doc. # 93-3, at 8-11.) On May 25, 2010, after receiving thorough briefing, the Circuit Court of Montgomery County denied Mr. Morris's Rule 60(b) motion.
Mr. Morris complains that under the Virginia Court's conservatorship arrangement, the Trust Company ultimately received $990, 000 in assets belonging to Amy. 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. He also claims that the Foundation interfered with his attempt to sell Amy's home by wrongfully filing a lis pendens action against the property, defeating a sale on terms more favorable to Amy than the contract the Trust Company later negotiated. Mr. Morris alleges that the Trust Company and the Foundation then "cover[ed] their tracks" by expending several hundreds of thousands of dollars of Amy's money, during her lifetime, on their attorneys' fees. (Lead Case Doc. # 29, at ¶ 40.)
In 2010, Mr. Morris, purportedly acting as Amy's "attorney-in-fact, " filed a satisfaction of judgment in Montgomery County Circuit Court, releasing himself from liability on the $1, 125, 222 judgment. The Foundation moved to strike the satisfaction in the pending suit to domesticate the Virginia judgment, but it appears that the motion was not decided. Amy died on March 25, 2011, and the domestication suit was dismissed. ( See Member Case Doc. # 55-6.)
After Amy died, Mr. Morris initiated probate proceedings of the 2007 Will in 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.) Necessarily, the Alabama Probate Court found that Amy was an inhabitant of Montgomery County, Alabama, at the time of her death, that she was "of... sound mind and disposing memory and understanding" when she signed the will, that the court was "satisfied as to its jurisdiction, " and that Thomas Morris was "in no way disqualified from serving" as executor. (Lead Case Doc. # 97-1, at 11.) None of the Virginia parties - Ms. Loulakis, the Foundation, or the Trust Company - was given legal notice of the proceedings. Neither did any of those parties appear on their own initiative in Alabama to contest the 2007 Will. On May 19, 2011, the Alabama Probate Court 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; Member Case Doc. # 49, at 27, ¶ 67.)
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 his prior orders that required the Trust Company to transfer conservatorship assets to Mr. Morris and that enjoined the Trust Company from disbursing assets without court approval. Id. at 70.
By an order dated July 20, 2012, the Alabama Probate Court denied as moot Mr. Morris's "Second Petition to Compel Release of Trust Funds" because the Trust Company had already distributed Amy's assets pursuant to the orders of the Virginia Court, and the Trust Company's administration of the conservatorship of Amy's Estate was complete. ( See Lead Case Doc. # 41-1, at 5.) Indeed, although Mr. Morris had presented the 2007 Will for probate in Alabama, proceedings were also ongoing in Virginia, where the Trust Company filed an interpleader action concerning the disposition of about $106, 000 held by it and remaining in Amy's Estate because of Mr. Morris's and Ms. Loulakis's competing claims to represent Amy's Estate.
The Virginia Court admitted the 1998 Will to probate in August 2011. The Virginia Court found, based on its prior rulings in 2008, that Virginia remained Amy's legal domicile at the time of her death because she lacked the capacity to change her domicile. ( See Member Case Doc. # 52-12, at ¶¶ 3, 6.) It consequently appointed Ms. Loulakis - not Mr. Morris - as the Executor of Amy's Estate. ( See Member Case Doc. # 52-12, at ¶ C.) Mr. Morris and Ms. Duncan were parties to the interpleader and probate proceedings in Virginia in 2011, along with the Foundation and Ms. Loulakis, (Doc. # 52-12, at ¶ 1), and Mr. Morris and Ms. Duncan did not appeal the Virginia court's interpleader or probate orders.
Pursuant to an order of the Virginia Court on October 27, 2011, the Trust Company assigned to Ms. Loulakis the December 19, 2008 judgment against Mr. Morris and Ms. Duncan and in favor of Amy, and paid over or delivered all other remaining assets in the Estate to Ms. Loulakis. On November 26, 2012, Ms. Loulakis, in her capacity as Executor, executed an Instrument of Assignment conveying to the Foundation all of the Estate's interest in the December 19, 2008 judgment in the amount of $1, 125, 222 against Mr. Morris and Ms. Duncan. ( See Member Case Doc. # 41-3.)
Mr. Morris alleges that Ms. Loulakis failed to protect Amy's assets, both before and after Amy's death, and that she and the Trust Company proceeded to oppose Mr. Morris in the Virginia interpleader suit, in spite of their knowledge of Mr. Morris's first-in-time appointment as Executor of Amy's Estate in the Alabama Probate Court.
B. Procedural History
1. Lead Case Proceedings
Mr. Morris sued the Trust Company, the Foundation, and Ms. Loulakis in the Circuit Court of Montgomery County, Alabama, on October 19, 2012. The Trust Company removed the case to federal court. (Lead Case Doc. # 1.) Both the Foundation and the Trust Company filed motions to dismiss the complaint for failure to state claims against them. (Lead Case Docs. # 8, 9.)
The court entered a memorandum opinion and order granting in part and denying in part the Trust Company and the Foundation's motions to dismiss the original complaint. (Lead Case Doc. # 28.) The court concluded that Mr. Morris could not sue the three defendants for torts committed against Amy because the torts did not survive her death, or for torts against himself because he abandoned those claims by failing to respond to the motions to dismiss those claims. (Lead Case Doc. # 28, at 5-7.) This left only the tort claims against Amy's Estate, but the original complaint failed to develop the facts adequately to give the lead case defendants notice of which torts they allegedly committed against the Estate. ( See Lead Case Doc. # 28, at 7.) Consequently, the court struck the original complaint and directed Mr. Morris to file an amended complaint. Mr. Morris complied on May 27, 2013, but the amended pleading still blurs the lines and conflates alleged torts against Amy with alleged torts against the Estate. ( See Lead Case Doc. # 29.)
Mr. Morris's amended complaint raises seven counts, of which the following five remain before the court: (1) Count One against the Trust Company for breach of fiduciary duty; (2) Count Two against the Trust Company for conversion; (3) Count Three against the Foundation for interference with contractual relations; (4) Count Four for conversion against the Foundation; (5) Count Seven against the Trust Company and the Foundation for civil conspiracy. Before the court are motions to dismiss the amended complaint in its entirety. (Lead Case Docs. # 34, 37.)
2. Member Case Proceedings
On December 21, 2011, the Foundation filed suit against Mr. Morris and Ms. Duncan in the Eastern District of Virginia to enforce the Virginia Court's judgment in its favor for $100, 000, plus interest. (Member Case Doc. # 1.) Mr. Morris and Ms. Duncan sought to dismiss the case, or alternatively, to transfer the case to this district. (Member Case Docs. # 5, 6.) The Eastern District of Virginia denied their motions on April 11, 2012. (Member Case Doc. # 10.)
On August 19, 2013, with leave of that court, the Foundation amended its complaint to add a claim to enforce the $1, 125, 222, plus interest, judgment in favor of Amy, which Ms. Loulakis, as Executor, assigned to the Foundation as the beneficiary under the 1998 Will. ( See Member Case Doc. # 41.) Again, Mr. Morris and Ms. Duncan filed a motion to dismiss, or alternatively, to transfer the case to this district. These motions were denied. Not long thereafter, Mr. Morris and Ms. Duncan filed a motion for summary judgment on the Foundation's claims, which remains pending. (Member Case Doc. # 48.) The Foundation opposes the motion. (Member Case Doc. # 54.)
Mr. Morris and Ms. Duncan then filed an answer to the amended complaint with counterclaims against the Foundation. (Member Case Doc. # 49.) The pending counterclaims of Mr. Morris and Ms. Duncan include: (1) Count III against the Foundation for conspiracy; (2) Count VI against the Foundation for breach of fiduciary duty; (3) Count VII against the Foundation for wanton breach of fiduciary duty; (4) Count VIII against the Foundation for conversion; (5) Count IX against the Foundation for abuse of process; and (6) Count X against the Foundation for tortious interference with expectancy of inheritance. Mr. Morris and Ms. Duncan seek millions of dollars in compensatory and punitive damages. (Member Case Doc. # 49, at 41.)
On October 3, 2013, the Foundation filed a motion for summary judgment on its two claims against Mr. Morris and Ms. Duncan and on all counterclaims against it ( i.e., Counts III, VI, VII, VIII, IX, and X). (Member Case Doc. # 51, 52) Mr. Morris and Ms. Duncan oppose the motion and request summary judgment in their favor on the six counterclaims. (Member Case Doc. # 60.) Their opposition brief contains a request for judgment in their favor on their counterclaims. The parties' cross motions for summary judgment remain pending.
3. Transfer to the Middle District of Alabama and Consolidation
On November 15, 2013, the Trust Company filed a motion to dismiss the third-party claims against them, or alternatively, to transfer venue to this district. ( See Member Case Docs. 86, 87, 88, 89.) Mr. Morris and Ms. Duncan opposed the Trust Company's motion to dismiss. (Member Case Doc. # 91.) The Eastern District of Virginia granted the Trust Company's Motion to Transfer Venue to this court on December 9, 2013, pursuant to 28 U.S.C. § 1404(a), without ruling on the alternative motion to dismiss. ( See Member Case Docs. # 92, 93.) After the Eastern District of Virginia transferred the member case to this district, the two actions were consolidated on January 30, 2014, upon the Trust Company's motion and after finding that consolidation was the simplest and most expeditious way of resolving these proceedings. ( See Lead Case Doc. # 57.)
The court asked the parties to disclose any other pending cases concerning the underlying judgment, decrees, or claims. It learned that an action to collect one or both judgments against Ms. Duncan is pending in the Circuit Court for Harford County, Maryland, case number 12-cv-09-088. ( See Lead Case Docs. # 52, 54, 55, 56.) Ms. Duncan and the Trust Company were the original parties to that case, but the Trust Company says it is no longer a party because, on December 20, 2012, the Maryland Court of Special Appeals substituted Ms. Loulakis for the Trust Company. ( See Lead Case Doc. # 56-1.) Ms. Loulakis is apparently no longer a party either. (Lead Case Doc. # 54.) The court deduces that the action is now being litigated by the Foundation, as Ms. Loulakis's assignee of the $1, 125, 222 judgment. (Lead Case Doc. # 55.) Mr. Morris and Ms. Duncan represent that the Maryland case has been stayed pending resolution of this litigation. (Lead Case Doc. # 52, at 3.) As will be discussed infra, Mr. Morris attempted to satisfy the domesticated Maryland judgment against his sister, but the satisfaction was set aside.
On September 26, 2014, the court dismissed all claims in both cases against Ms. Loulakis for lack of personal jurisdiction. (Lead Case Doc. # 71.) The same day, the court granted the Trust Company's motion to dismiss all third-party claims of Mr. Morris and Ms. Duncan in the member case. (Lead Case Doc. # 72.) The court ordered additional briefing from the parties concerning the Virginia Court's authority to invalidate Amy's 2007 Will during her lifetime, the full faith and credit due to Virginia's order appointing Ms. Loulakis as executor of Amy's Estate, and the abatement of any breach of fiduciary duty claims against the Trust Company. (Lead Case Doc. # 73.) The parties responded by submitting supplemental briefing. (Lead Case Docs. # 86, 87, 89.) On December 2, 2014, oral argument was held on the pending dispositive motions, ( see Lead Case Doc. # 92), and per the court's requests, second supplemental briefs, court documents, and evidence have been filed. (Lead Case Docs. # 93, 94, 95, 97.)
The claims before the court cannot be resolved by recognizing both Mr. Morris and Ms. Loulakis's rights to serve as the representative of Amy's Estate. Hence, the discussion will begin with an inquiry into whether Alabama or Virginia's probate proceedings are entitled to full faith and credit. All other arguments supporting the parties' pending motions to dismiss and for summary judgment, which are necessary to the resolution of the issues in the cases, will then be addressed.
A. Mr. Morris's Capacity to Sue and to Defend Suit as Executor or Beneficiary Under the 2007 Will
The court is mindful of the "well-settled proposition that a federal court will not assume jurisdiction over a petition whose object is to avoid a will or set aside its probate." Moore v. Graybeal, 670 F.Supp. 130, 131 (D. Del. 1987) aff'd, 843 F.2d 706 (3d Cir. 1988). "[A] federal court has no jurisdiction to probate a will or administer an estate, " and must 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 v. Allen, 326 U.S. 490, 494 (1946). In the present scenario, wills have been proven and probate administrations in each state are completed. There is no estate property left (save the $1, 125, 222, judgment, which has been assigned to the Foundation) over which to assume control. No party to these cases has come to court seeking equitable or declaratory relief - for instance, asking for a judicial determination of which of two wills, admitted to probate in Alabama and Virginia, is the true last will and testament of Amy. Cf. Eyber v. Dominion Nat'l Bank of Bristol Office, 249 F.Supp. 531 (W.D. Va. 1966) (refusing to exercise jurisdiction where complaint sought declaratory relief). While it could be argued that this court is being asked, in effect, to set aside the probate of one of Amy's two wills, the court has before it several non-probate, legal claims and defenses that require the court to grant or deny full faith and credit to prior probate orders. Even if the claims and defenses before this court had been brought in a state court, a state court would be pressed to resolve the question of full faith and credit.
A fundamental ground for dismissal of Mr. Morris's amended complaint in the lead case is his alleged lack of capacity as Executor to sue on behalf of Amy's Estate. The issue of capacity is also pertinent to resolving the Foundation's second claim for $1, 125, 222 in the member case. The quandary created by the probate of competing wills was acknowledged prior to the transfer of the member case from the Eastern District of Virginia. ( See Member Case Doc. # 58, at 15 ("[T]he jurisdiction of the Virginia Beach Circuit Court to probate [Amy]'s 1998 Will is in question in light [of] collateral proceedings in the state of Alabama. Alabama and Virginia state courts each appear to have recognized different Executors to [Amy]'s [E]state under separate wills. As such, there is a question as to which state court should be accorded full faith and credit regarding their jurisdictional findings and probate of [Amy]'s respective wills.").)
The Foundation argues that because the Virginia Court ruled before Amy died that Amy's 2007 Will was invalid, and because the Virginia Court also ruled, after Amy's death, that Ms. Loulakis - not Mr. Morris - is the Executor of Amy's Estate, Mr. Morris lacks the capacity to sue on behalf of Amy's Estate. ( See Lead Case Docs. # 36, at 13-14 (arguing that Mr. Morris lacks standing), 22-23 (requesting that full faith and credit be given to the Virginia Court's rulings); # 38, at 7 (adopting the same arguments).) The argument is really Ms. Loulakis's, but the Foundation has adopted it as its own. The Trust Company never has taken a position on which will is valid,  but agrees that if the 2007 Will is invalid, Mr. Morris lacks the capacity to sue. (Lead Case Doc. # 35, at 3 n.1.) The parties denominate this as an issue of whether Mr. Morris has "standing" to sue, but there is no discussion of Article III standing. This appears actually to be a question of Mr. Morris's "capacity" to sue. See State v. Property at 2018 Rainbow Drive, 740 So.2d 1025, 1027-28 (Ala. 1999) (discussing differences between the principles of "real party in interest" and "standing"); see also Ex parte Tyson Foods, Inc., 146 So.3d 1041, 1049 (Ala. 2013) (Shaw, J., concurring) ("Standing' and capacity' are two distinct issues....").
The Foundation is correct that "[a]n action filed on behalf of an estate must be brought by the executors." Douglass v. Jones, 628 So.2d 940, 941 (Ala. Civ. App. 1993); see also Ala. Code § 43-2-833(c) ("Except as to proceedings which do not survive the death of the decedent, a personal representative of a decedent domiciled in this state at death has the same standing to sue and be sued in the courts of this state and the courts of any other jurisdiction as the decedent had immediately prior to death."). But deciding whether Mr. Morris is an executor with the capacity to bring this action is complicated by the existence of orders of Alabama and Virginia courts that recognize different executors of Amy's Estate. Mr. Morris acknowledges the conundrum. (Lead Case Doc. # 41, at 4-5.)
In the October 17, 2014 Order requesting supplemental briefing, this court asked the parties to offer legal arguments why it must refuse to recognize either order appointing Mr. Morris or Ms. Loulakis as executor or executrix. (Lead Case Doc. # 73.) The Trust ...