Breaux v. Dilsaver

254 F.3d 533, 2001 WL 664225
CourtCourt of Appeals for the Fifth Circuit
DecidedJune 13, 2001
DocketNo. 00-30361
StatusPublished
Cited by31 cases

This text of 254 F.3d 533 (Breaux v. Dilsaver) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Breaux v. Dilsaver, 254 F.3d 533, 2001 WL 664225 (5th Cir. 2001).

Opinion

EDITH H. JONES, Circuit Judge:

This diversity suit arises from Appellants’ claim that the Appellee committed fraud and breached his fiduciary duties while serving as administrator of two decedents’ estates. The district court dismissed the suit, concluding that the probate exception to federal jurisdiction prevented it from hearing the case. We disagree: that the suit is against the administrator only in his personal capacity and does not require federal interference in any state probate proceeding. As the suit does not fall within the probate exception, we reverse and remand.

Ola H. Elverum and Evelyn Breaux Elverum were husband and wife and lived for many years in St. Mary Parish, Louisiana. They had no children. Evelyn Elve-rum, however, had six siblings, two of the “full blood” and four of the “half blood,” because her father had married twice. This full-blood/half-blood distinction is critical, because under Louisiana’s intestate succession laws, full-blood siblings inherit twice as much as their half-blood kin. See La. Civ. Code art. 893.

Ola Elverum died on July 28, 1995. His will left one-sixth of his estate to each of his wife’s six siblings, regardless of their half-blood/full-blood status. Appellee John Dilsaver, husband of one of Evelyn’s half-blood siblings, was appointed executor of Mr. Elverum’s estate. Dilsaver was already serving as curator for Mrs. Elverum under a court ordered interdiction.2

Mrs. Elverum died intestate a year later. Her only heirs were her siblings and their descendants. As noted earlier, her full-blood siblings stood to inherit twice as much as their half-blood kin. Dilsaver was appointed administrator of Mrs. Elverum’s estate.

Mr. Elverum’s estate closed on August 8, 1996, as the heirs were placed in possession and a Judgment of Possession was entered by a Louisiana court. However, the closing of Mrs. Elverum’s estate has proven more complicated.

The Appellants in this action are the children of Mrs. Elverum’s two deceased, full-blood siblings. As such, they are entitled to a greater proportion of Mrs. Elve-rum’s assets than they are of Mr. Elve-rum’s assets. Appellants allege that John Dilsaver abused his positions as curator, administrator and executor to misallocate certain community property in order to enhance his wife’s share of the inheritance. They also allege “a pattern of fraud designed to conceal and obfuscate the systematic plundering of the Elverum estates by Dilsaver.”

Despite the controversy surrounding Dilsaver’s actions, Mrs. Elverum’s estate has been largely closed: there is no will contest, there is no dispute as to the identity of the heirs, or the percentages to which they are entitled, and the heirs took possession of the property of the estate in January, 1998, with the exception of $250,000 held in escrow by the state court.3 [536]*536Remaining to be completed are Dilsaver’s discharge from his position as administrator, final decision on the costs of administration, and the disposition of the $250,000 in escrow with the Louisiana court.4

Appellants filed this suit in federal court against Dilsaver pursuant to Louisiana Civil Code article 3191,5 seeking damages against him personally for his alleged fraud and breach of fiduciary duty in his administration of the two Elverum estates. The federal district court, acting upon the report and recommendation of a federal magistrate judge, dismissed claims for want of subject matter jurisdiction, concluding that this case falls within the probate exception to federal diversity jurisdiction. This appeal followed.

Federal jurisdiction ordinarily exists over lawsuits that could have been brought in a state court, so long as complete diversity of citizenship and the requisite amount in controversy are present. See Turton v. Turton, 644 F.2d 344, 347 (5th Cir.1981). For compelling historical reasons, however, a federal court “has no jurisdiction to probate a will or administer an estate.” Markham v. Allen, 326 U.S. 490, 494, 66 S.Ct. 296, 90 L.Ed. 256 (1946) (discussing antecedent history of probate exception). Nevertheless, the Supreme Court has held that,

federal courts of equity have jurisdiction to entertain suits “in favor of creditors, legatee, 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 custody of the state court.

Markham, 326 U.S. at 494, 66 S.Ct. 296 (quoting Waterman v. Canal-Louisiana Bank & Trust Co., 215 U.S. 33, 43, 30 S.Ct. 10, 54 L.Ed. 80 (1909)). In determining whether a suit in federal court “interferes” with state probate proceedings, this court considers whether the plaintiffs claim “implicates the validity of the probate proceedings or whether the plaintiff is merely seeking adjudication of a claim between the parties.” Blakeney v. Blakeney, 664 F.2d 433, 434 (5th Cir.1981)(citing Akin v. Louisiana National Bank, 322 F.2d 749 (5th Cir.1963)). Once a will has been probated, the danger of federal interference is abated and “an action by a legatee, heir, or other claimant against an executor becomes a suit between the parties that is a justiciable controversy within the scope of federal jurisdiction if the other jurisdictional requirements are met.” Akin, 322 F.2d at 751.

In the present case, allowing the Appellants’ action against Dilsaver to move forward would not result in federal interference in state probate proceedings. Appellants’ claims are against Dilsaver personally, not against the estate of either Ola or Evelyn Elverum. Ola Elverum’s estate [537]*537is closed and, regardless of the outcome of Appellants’ action, it will not be reopened. Appellants do not seek a reopening, and any judgment favoring them would be satisfied from Dilsaver’s own property, not that of Mr. Elverum’s closed estate. Similarly, Evelyn Elverum’s estate has been finally distributed to the heirs, excepting only the $250,000 in escrow. Even if appellants obtain a judgment against Dilsaver, their judgment could not extend to an order directing distribution of the escrow. Turton v. Turton, 644 F.2d 344, 347-48 (5th Cir.1981).

In Turton, this court observed that a suit against an executor personally for malfeasance is beyond federal jurisdiction “if it requires a premature accounting of an estate still in probate.” 644 F.2d at 348. Dilsaver relies on this statement and on the fact that he has not yet been discharged as administrator of Evelyn’s estate. His reliance is misplaced in both instances.

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Bluebook (online)
254 F.3d 533, 2001 WL 664225, Counsel Stack Legal Research, https://law.counselstack.com/opinion/breaux-v-dilsaver-ca5-2001.