Behrens v. Donnelly

236 F.R.D. 509, 2006 WL 897573
CourtDistrict Court, D. Hawaii
DecidedMarch 31, 2006
DocketNo. Civ. 05-00453 JMS/KS
StatusPublished
Cited by3 cases

This text of 236 F.R.D. 509 (Behrens v. Donnelly) is published on Counsel Stack Legal Research, covering District Court, D. Hawaii primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Behrens v. Donnelly, 236 F.R.D. 509, 2006 WL 897573 (D. Haw. 2006).

Opinion

ORDER DENYING DEFENDANT’S MOTION TO DISMISS

SEABRIGHT, District Judge.

Defendant William Patrick Donnelly IV (“William Donnelly”) has filed a motion to dismiss Jean Behrens’s First Amended Complaint. William Donnelly argues that Beh-rens has failed to join two necessary and indispensable parties in this action. Because joinder of either of these parties would destroy diversity, he argues that this case should be dismissed. William Donnelly also argues that this court should not, as a matter of discretion, exercise jurisdiction over Beh-rens’s declaratory judgment claim.

Behrens contends that the proposed join-der of parties will not divest this court of diversity jurisdiction. Behrens further argues that the court should entertain her claim for declaratory relief. For the reasons stated herein, the court concludes that the proposed joinder of parties will not destroy diversity jurisdiction and that the court will entertain Behrens’s claim for declaratory relief. William Donnelly’s motion to dismiss is therefore DENIED.

I. BACKGROUND

This dispute arises out of Behrens’s sale of real property on Molokai to William Donnelly, a citizen of South Carolina, with the alleged understanding that Behrens, a citizen of Hawaii, would retain a life estate in the [511]*511property. The sole ground alleged for the court’s jurisdiction is diversity of citizenship.

In 2003, Behrens and her now deceased husband, Robert Behrens (“the Behrenses”), began seeking buyers for their home, located at Lot 31, Moana Makani Subdivision, Kalua-koi, Hawaii (“the property”). Because the Behrenses were unable to make their mortgage payments, they sought a buyer interested in obtaining the property at a discount in exchange for granting the Behrenses a life estate. Kevin Donnelly, a citizen of Hawaii and a business associate of Jean Behrens, informed the Behrenses that his father, William Donnelly, would be interested in such an arrangement. The parties agree that Kevin Donnelly, a citizen of Hawaii, acted as his father’s agent for purposes of the sale and that the Behrenses dealt exclusively with Kevin Donnelly.

The Behrenses and William Donnelly reached an oral agreement pursuant to which William Donnelly would purchase the property at a discounted price in exchange for granting the Behrenses a life estate in the property. Due to apparent difficulty in negotiating the life estate, the sale did not take place until December 22, 2003, several months after the oral agreement was reached. On December 15, 2003, a week before the closing, the parties signed a “license agreement” under which William Don-nelly granted Behrens the right to remain on the property for the remainder of her natural life and promised to build her a caretaker’s home in which to live.

While the sale was pending, Robert Beh-rens passed away and Jean Behrens experienced increased financial problems. On April 23, 2003, prior to the closing date, Kevin Donnelly allegedly loaned Behrens the funds necessary for her to avoid foreclosure on her home. Behrens contends that she repaid this amount at closing. A few months later, Behrens allegedly borrowed an additional $9,500 from Kevin Donnelly and his wife, Kikue Donnelly (also a citizen of Hawaii). Kevin Donnelly contends that this loan was made with the understanding that Behrens would not have to repay it if the sale between Behrens and William Donnelly went forward as agreed.

Shortly after the closing, Behrens contends that she encountered problems with Kevin and Kikue Donnelly. Kevin Donnelly allegedly stated that the Donnellys had no intention of building Behrens a caretaker’s home as promised in the license agreement. Behrens contends that the Donnellys have not built the additional home as promised nor have they taken steps to make the primary dwelling, where Behrens currently resides, habitable.

Behrens also alleges that Kevin and Kikue Donnelly made frequent trips to the property in order to harass Behrens. Behrens states that she suffers from a stress-induced seizure disorder and that Kevin Donnelly knows about her medical condition. Behrens contends that Kevin Donnelly has harassed and threatened her in a deliberate attempt to exacerbate her medical condition and force her off the property.

On July 27, 2005, Behrens filed her First Amended Complaint against William Donnelly alleging various claims based on fraud and breach of contract. Her claims center on the actions taken by Kevin Donnelly as William Donnelly’s agent during the sale as well as the conduct of Kevin and Kikue Donnelly subsequent to the sale of the property. Beh-rens seeks: (1) recision of the sale of the property; (2) a judicial declaration that the sale of the property is void; (3) special, compensatory, punitive, and consequential damages; and (4) attorneys’ fees and costs.

William Donnelly alleges that in May 2005, prior to the filing of the First Amended Complaint, he and Kevin Donnelly agreed that Kevin Donnelly would take over the mortgage payments for the property beginning in June 2005 and that Kevin Donnelly would eventually purchase the property from him. On September 27, 2005, after the filing of the First Amended Complaint, an Agreement of Sale for the property was allegedly executed between William Donnelly, as seller, and Kevin and Kikue Donnelly, as purchasers.

The court heard arguments from both parties on February 27, 2006.

[512]*512II. STANDARD OF REVIEW

Rule 12(b)(7) provides that an action may be dismissed for failure to join a party under Rule 19. In order to determine whether Rule 19 requires the joinder of additional parties, the court may consider evidence outside of the pleadings. McShan v. Sherrill, 283 F.2d 462, 464 (9th Cir.1960); Charles A. Wright, Arthur R. Miller and Mary Kay Kane, Federal Practice and Procedure: Civil 3d. § 1359 at 68 (2004).

III. ANALYSIS

If Kevin and Kikue Donnelly were necessary and indispensable parties under Rule 19(b) at the time the First Amended Complaint was filed, as William Donnelly contends, then the court must dismiss this case for lack of subject matter jurisdiction because the addition of Kevin or Kikue would destroy diversity. Salt Lake Tribune Publ’g Co. v. A T & T Corp., 320 F.3d 1081 (10th Cir.2003). The court first addresses the issue of Kevin’s and Kikue’s relation to the action at the time the First Amended Complaint was filed and concludes that neither Kevin nor Kikue was a necessary or indispensable party at that time.

Second, the court addresses William Don-nelly’s argument that his post-complaint transfer of the property to Kevin and Kikue Donnelly destroys diversity. The court concludes that a post-complaint transfer of interest in the property does not destroy diversity-

Finally, William Donnelly contends that this court should not, as a matter of discretion, entertain Behrens’s claim for declaratory relief. The court concludes that this argument is without merit.

A. Kevin And Kikue Donnelly Were Neither Necessary Nor Indispensable Parties at the Time the First Amended Complaint Was Filed

The court engages in a two-step analysis to determine whether a ease should be dismissed for failure to join a necessary and indispensable party under Rule 19.

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Cite This Page — Counsel Stack

Bluebook (online)
236 F.R.D. 509, 2006 WL 897573, Counsel Stack Legal Research, https://law.counselstack.com/opinion/behrens-v-donnelly-hid-2006.