United States District Court, N.D. Alabama, Northeastern Division
BARBARA SAULS, Individually and as Beneficiary of the Estate of Davey Michael Sauls, Plaintiff,
RANKIN SNEED, as Administrator of the Estate of Davey Sauls, et al., Defendants.
MEMORANDUM OPINION AND ORDER
MADELINE HUGHES HAIKALA UNITED STATES DISTRICT JUDGE
in this case have created an unusual procedural posture that
has prompted a challenge to this Court's subject matter
jurisdiction. When she filed her initial complaint in this
matter to recover benefits from her late husband's 401(k)
account, plaintiff Barbara Sauls asserted only state law
claims against five defendants. Two of those defendants are
citizens of Alabama. The presence of those forum defendants
precluded removal of the action to federal court because a
civil action that otherwise might be removed based on
diversity jurisdiction “may not be removed if any of
the parties in interest properly joined and served as
defendants is a citizen of the State in which such action is
brought.” 28 U.S.C. § 1441(b)(2).
jurisdiction became an option when Ms. Sauls added a new
defendant against which she asserted an ERISA claim. That
claim gave rise to federal question jurisdiction, and the new
defendant, Voya Institutional Plan Services, LLC, removed
this case to federal court under 28 U.S.C. § 1331. (Doc.
1, p. 2, ¶ 3). In its removal petition, Voya indicated
that it believed that federal diversity jurisdiction also
existed under 28 U.S.C. § 1332. (Doc. 1, pp. 2-3, ¶
Ms. Sauls settled with Voya and the Court dismissed Ms.
Sauls's ERISA claim, Ms. Sauls asked the Court to remand
this case to state court. (Doc. 13). Ms. Sauls contends that
in the absence of a federal question, there is no basis for
federal jurisdiction in this case. (Doc. 13, p. 1). To
resolve the motion to remand, the Court accepts the factual
allegations in Ms. Sauls's complaint.
Sauls seeks benefits from Davey Sauls's 401(k) retirement
account. (Doc. 1-1). Ms. Sauls is the widow of Mr. Sauls. Mr.
Sauls was an employee of Lockheed Martin Corporation for ten
years. During those years, Mr. Sauls accumulated
approximately $600, 000 in his 401(k) account. (Doc. 1-1, p.
3, ¶ 9).
Mr. Sauls died, he and Ms. Sauls separated, and Mr. Sauls
filed for divorce. (Doc. 1-1, p. 3, ¶ 8). Ms. Sauls
moved to Florida, and Mr. Sauls remained in Alabama. (Doc.
1-1, p. 3, ¶ 9). The state court presiding over the
divorce proceeding “ordered both parties to preserve
all assets regardless of title as they may be considered
martial assets.” (Doc. 1-1, p. 3, ¶ 8).
the divorce proceedings were pending, Mr. Sauls became
seriously ill and was hospitalized. (Doc. 1-1, p. 3, ¶
10). Lori Marrow, Mr. Sauls's niece, obtained power of
attorney from Mr. Sauls. (Doc. 1-1, p. 3, ¶ 10).
Sauls decided he wanted to withdraw funds from his pension to
help fund his medical costs, so he petitioned the divorce
court for access to those funds. (Doc. 1-1, pp. 3, ¶
11). Settlement discussions concerning the request were not
successful, so the order requiring Mr. Sauls and Ms. Sauls to
preserve the marital assets remained in place. (Doc. 1-1, pp.
3-4, ¶¶ 12-13).
the settlement discussions failed, Ms. Marrow used her power
of attorney to obtain from Locktec, Inc. a key to the martial
residence. (Doc. 1-1, p. 4, ¶ 14). Ms. Sauls alleges
that Ms. Marrow and her husband, David Marrow, “removed
martial assets from the home including . . . furniture,
tools, and vehicles.” (Doc. 1-1, p. 4, ¶ 15).
Ms. Sauls visited Mr. Sauls in the hospital. Mr. Sauls told
Ms. Sauls that he needed access to his 401(k) funds to pay
for his medical care, and he promised that he “would
not remove or change her as the beneficiary of his
401(k)” if she would not block his access to those
funds. (Doc. 1-1, p. 4, ¶ 16). Based on Mr. Sauls's
promise, after Ms. Sauls's confirmed that Mr. Sauls's
condition was terminal, Ms. Sauls “agreed to dismiss
the divorce.” (Doc. 1-1, p. 4, ¶ 16). The state
court dismissed the divorce case in June 2016. (Doc. 1-1, p.
4, ¶ 17).
Sauls alleges that in July of 2016, Ms. Marrow hired a law
firm to draft a trust agreement so that Ms. Marrow could move
Mr. Sauls's assets to the trust. (Doc. 1-1, p. 4, ¶
19). According to Ms. Sauls, Mr. Sauls signed the trust while
he was in the hospital. Ms. Sauls alleges that medical
records indicate that Mr. Sauls was “under the
influence of heavy narcotics” when he signed the trust.
(Doc. 1-1, p. 4, ¶ 19). Ms. Marrow then changed the
beneficiary of Mr. Saul's 401(k) account from Ms. Sauls
to the newly formed trust. (Doc. 1-1, p. 5, ¶ 20). Mr.
Sauls died a few days later. (Doc. 1-1, p. 5, ¶ 21).
access to the funds in her husband's 401(k) account, on
June 25, 2018, Ms. Sauls sued Rankin Sneed, the administrator
of Mr. Sauls's estate, in the Circuit Court of Madison
County, Alabama. In addition to Mr. Sneed, Ms. Sauls named as
defendants Ms. Marrow, individually and as the trustee of the
Living Trust of Davey Michael Sauls; Mr. Marrow; and Locktec.
(Doc. 1-1, pp. 2-3). Ms. Sauls asked the state court to set
aside the trust, and she asserted claims for damages for
promissory fraud; fraudulent misrepresentation, transfer
and/or conveyance; trespass, theft and/or conversion;
outrage; and negligence. (Doc. 1-1, pp. 5-8).
9, 2018, Ms. Sauls amended her state court complaint and
added Voya Institutional Plan Services, LLC as a defendant.
(Doc. 1-2, p. 7, ¶ 50). Ms. Sauls alleged that Voya
negligently distributed 401(k) funds to Ms. Marrow,
negligently failed to verify whether Ms. Marrow was
self-dealing when she withdrew funds from Mr. Sauls's
retirement account, and negligently administered the 401(k)
plan by “fail[ing] to follow ...