Gauvin v. Balarsky, et al. CV-97-352-M 06/26/98 UNITED STATES DISTRICT COURT
DISTRICT OF NEW HAMPSHIRE
Dorothy Gauvin, Executrix of the Will of Robert L. Sullivan, Plaintiff
v. Civil No. 97-352-M
Colleen Sullivan Balarsky, General Electric Savings and Security Trust, Defendants
O R D E R
Plaintiff Dorothy Gauvin, the executrix of the estate of
Robert L. Sullivan and the decedent's aunt, claims that
Sullivan's former wife, Colleen Sullivan Balarsky, improperly
obtained some $300,000.00 in estate assets held in Sullivan's
employee benefit plan, the General Electric Savings and Security
Trust ("the trust"). Gauvin asserts state law claims against
Balarsky for unjust enrichment, conversion, tortious interference
with contractual relations, and fraud. She asserts claims
against the trust for breach of contract and violation of the
Employee Retirement Income Security Act of 1974, as amended, 29
U.S.C.A. § 1001 et seg. (ERISA). The trust filed cross-claims
against Balarsky asserting violation of ERISA and a federal
common law claim for restitution based on unjust enrichment.
Balarsky moves to dismiss Gauvin's and the trust's claims against
her for lack of personal jurisdiction.
BACKGROUND During their marriage, Sullivan, Balarsky, and their
daughter lived in California, where Sullivan was employed by
General Electric Company. Sullivan participated in the GE
Savings and Security Program, an employee benefit plan governed
by ERISA. The Sullivans separated in 1988 and thereafter began
divorce proceedings.
On January 24, 1992, five months before his divorce from
Balarsky was finalized, Sullivan executed a will that excluded
Balarsky from inheriting any part of his estate. In June of 1992
the marriage was formally dissolved by order of a California
court, and the marital assets were distributed according to the
terms of a divorce settlement agreement. Under the terms of the
settlement agreement, Sullivan was awarded legal title to all
assets in his GE plan, and Balarsky expressly waived any legal
title to those assets. Nevertheless, the agreement also awarded
Balarsky the right to receive a portion, egual to her community
property interest, of Sullivan's plan assets. Although Sullivan
named Balarsky as his beneficiary under the plan in 1984, in 1992
he made his estate the beneficiary of all his plan assets.
Sullivan died on August 6, 1996. Gauvin, a New Hampshire
citizen, was appointed executrix of his estate by the Strafford
County (New Hampshire) Probate Court. Gauvin contacted GE
sometime before August 14, 1996, to inform it of Sullivan's
death.1 On September 27, 1996, Gauvin, through counsel, wrote to
1 All contacts with GE mentioned herein were with the Survivor Support Services office in Schenectady, New York.
2 GE to request that the retirement benefits due Sullivan be paid
to his estate, except for that portion payable by Sullivan to
Balarsky under the terms of the divorce settlement agreement.
However, Balarsky had already written to GE, erroneously
informing the plan that Sullivan left no will, that his daughter
was his sole heir, and that Balarsky was entitled to a portion of
Sullivan's GE "Pension, Profit Sharing and Savings Plans" under
the divorce settlement agreement. In addition, Balarsky
represented that she was acting as her daughter's guardian, who
was entitled to the remaining plan benefits, in requesting
payment. Balarsky enclosed part of the marital settlement
agreement, which explained her community property interest in
Sullivan's plan assets, but did not send the page that made it
clear Sullivan had been awarded complete legal title to his plan
assets.
On September 11, 1996, Gauvin's counsel wrote to Balarsky,
who was residing in Texas, to inform her of Sullivan's will and
Gauvin's status as executrix.2 The letter also asked that
Balarsky refrain from interfering with any assets of the estate
without first obtaining permission from the Strafford County
Probate Court. Despite that notice, Balarsky never informed GE
that she had erroneously represented that Sullivan left no will.
Instead, she continued to demand payment of the ERISA plan funds
held on Sullivan's behalf by the trust.
2 Balarsky was a resident of Texas during the fall of 1996, but she is now a resident of California.
3 Gauvin's counsel again wrote to GE, on October 23, 1996, and
on November 20, 1996, to inquire about Sullivan's benefits. In
December, GE responded that the value of Sullivan's interest in
the ERISA plan was $307,290.71, and that amount would be paid to
the beneficiary of record. Later that month, the trust paid
Balarsky the entire balance of Sullivan's interest in the ERISA
plan (according to GE, the sum was $348,454.06), notwithstanding
the fact that Sullivan had named his estate as beneficiary.
After paying Balarsky, the trust discovered its apparent
error and demanded that Balarsky return the funds. Meanwhile,
Gauvin demanded that the trust pay the estate the full amount of
Sullivan's plan benefits. The trust refused, pending repayment
by Balarsky.
DISCUSSION
When a defendant moves to dismiss for lack of personal
jurisdiction, plaintiff bears the burden of proving jurisdiction.
Sawtelle v. Farrell, 70 F.3d 1381, 1387 (1st Cir. 1995). A
plaintiff may employ a "prima facie" method of proof where, as
here, issues of credibility are not seriously in dispute.
Foster-Miller, Inc. v. Babcock & Wilcox Canada, 46 F.3d 138, 145-
46 (1st Cir. 1995); Bolt v. Gar-Tec Prods., Inc., 967 F.2d 671,
675-76 (1st Cir. 1992).
To make a prima facie showing, plaintiff must go beyond the
pleadings and "adduce evidence of specific facts." Foster-
Miller , 46 F.3d at 145. The court draws "the facts from the
4 pleadings and the parties' supplementary filings, including
affidavits, taking facts affirmatively alleged by plaintiff as
true and construing disputed facts in the light most hospitable
to plaintiff." Ticketmaster-New York, Inc. v. Alioto, 26 F.3d
201, 203 (1st Cir. 1994). In this case, subject matter
jurisdiction over Gauvin's (state law) claims against Balarsky is
premised on diversity of citizenship (28 U.S.C.A. § 1132) while
jurisdiction over the trust's cross-claims is based on federal
guestion jurisdiction (28 U.S.C.A. § 1331) and ERISA (29 U.S.C.A.
§ 1132 (e) and (f)) .
I. PERSONAL JURISDICTION - GAUVIN'S STATE LAW CLAIMS
A. The New Hampshire Long-Arm Statute
In a diversity case, the district court's power to assert
personal jurisdiction over a nonresident defendant is limited by
the forum state's long-arm statute and the Due Process Clause of
the Fourteenth Amendment. Sawtelle, 7 0 F.3d at 1387. New
Hampshire's long-arm statute permits the exercise of personal
jurisdiction over a nonresident defendant who "in person or
through an agent . . . commits a tortious act within the state
. . . ." N.H. Rev. Stat. Ann. § 510:4, I (1983).
The New Hampshire Supreme Court has interpreted the statute
to authorize assertion of personal jurisdiction over nonresident
tortfeasors to the full extent allowed by the Due Process Clause.
Phelps v. Kingston, 130 N.H. 166, 171, 536 A.2d 740, 742 (1987) .
"[W]hen a state's long-arm statute is coextensive with the outer
5 limits of due process, the court's attention properly turns to
the issue of whether the exercise of personal jurisdiction
comports with federal constitutional standards." Sawtelle, 70
F.3d at 1388. Thus, the constitutional inquiry alone determines
whether this court may properly assert personal jurisdiction over
defendant in this case.
B. The Due Process Clause
In order for the assertion of personal jurisdiction to
comply with the tenets of due process, certain "minimum contacts"
must exist between the defendant and the forum state. Sawtelle,
70 F.3d at 1388 (quoting International Shoe Co. v. State of
Washington, 326 U.S. 310 (1945)). This Circuit employs a three-
part test to determine whether sufficient contacts exist to
support the exercise of specific3 personal jurisdiction:
First, the claim underlying the litigation must directly arise out of, or relate to, the defendant's forum-state activities. Second, the defendant's in state contacts must represent a purposeful availment of the privilege of conducting activities in the forum state, thereby invoking the benefits and protections of that state's laws and making the defendant's involuntary presence before the state's courts foreseeable. Third, the exercise of jurisdiction must, in light of the Gestalt factors, be reasonable.
3 Plaintiff's jurisdictional showing varies depending upon whether the plaintiff asserts jurisdiction under a theory of "general" or "specific" jurisdiction. See Ticketmaster, 26 F.3d at 204 n.3 (citing Donatelli v. National Hockey League, 893 F.2d 459, 462-63 (1st Cir. 1990)). Here, as in Ticketmaster, "plaintiff's case stands or falls on a theory of specific jurisdiction." Id.
6 United Electrical Workers v. 163 Pleasant Street Corp, 960 F.2d
1080, 1089 (1st Cir. 1992). Application of this tripartite test
is fact sensitive — so much so that the task of " [d]ivining
personal jurisdiction is 'more an art than a science.1" Sawtelle,
70 F.3d at 1388 (quoting Ticketmaster, 26 F.3d at 206) .4
1. Relatedness
Under the tripartite formula, the court must first consider
whether plaintiff's claims arise out of, or relate to,
defendant's in-forum activities. See Ticketmaster-New York, 26
F.3d at 206. The requirement "focuses on the nexus between the
defendant's contacts and the plaintiff's cause of action." Id.
Plaintiff's cause of action "must directly arise out of the
specific contacts between the defendant and the forum state."
Sawtelle, 70 F.3d at 1389.
Balarsky's contact with New Hampshire was indirect and
minimal. She lived in Texas during the fall of 1996 when she
contacted GE's Survivor Support and Services office in
Schenectady, New York, to inquire about Sullivan's plan assets,
and sent excerpts from their divorce settlement agreement to New
York to show (allegedly fraudulently) that she was entitled to
4 At each of the three steps, the court must analyze the contacts attributable to each individual defendant. Sawtelle, 70 F.3d at 1389. See also Rush v. Savchuk, 444 U.S. 320, 332 (1980) ("The requirements of International Shoe . . . must be met as to each defendant over whom a . . . court exercises jurisdiction.").
7 Sullivan's assets.5 Gauvin's counsel sent a letter from New
Hampshire to Balarsky in Texas informing her that Sullivan's will
was being probated in New Hampshire. Balarsky's counsel sent a
letter from California to Gauvin's counsel in New Hampshire about
Balarsky's interest in the probate of the will. In November,
Balarsky completed a Distribution Election Form for Sullivan's
plan assets which she sent from Texas to GE in New York. The
trust sent Sullivan's plan assets to Balarsky in Texas.
None of Balarsky's allegedly tortious conduct occurred in
New Hampshire.6 Balarsky had minimal contact with New Hampshire
and Sullivan's estate related to her competing claim to
Sullivan's GE plan assets, and that consisted of only incidental
correspondence.
Gauvin's causes of action and her suit against Balarsky,
arise from Balarsky's contacts with GE in New York and her
successful efforts to obtain Sullivan's plan assets. If the
trust had denied Balarsky's claim to the plan assets and had
5 The trust lists its business address as being in Connecticut, although all communication seems to have been with GE's Survivor Support and Services office in Schenectady, New York.
6 Gauvin alleges that Balarsky tortiously converted the plan assets, interfered with the estate's contractual relations with the trust, was unjustly enriched, and fraudulently induced the trust to pay her Sullivan's plan assets. None of the activity alleged to comprise each tort occurred in New Hampshire. See, e.g., E.J. Caron Enterprises, Inc. v. State Operating Co., 87 N.H. 371 (1935) (conversion); Barrows v. Boles, 141 N.H. 382, 392 (1996) (tortious interference with contractual relations);Pella Windows and Doors, Inc. v. Faraci, 133 N.H. 585, 586 (1990) (unjust enrichment); Snow v. American Morgan Horse Ass'n , Inc., 141 N.H. 467, 468 (1996) (fraud). instead paid the funds to Sullivan's estate, Gauvin would not
have any of her present claims against Balarsky. Thus, Gauvin's
causes of action really arose in New York, where Balarsky
communicated with the trust and where she successfully obtained
Sullivan's plan assets.
Gauvin and the trust argue that the relatedness reguirement
is nevertheless satisfied because Balarsky's allegedly tortious
conduct outside the state forseeably caused harm in New
Hampshire. See, e.g.. Gray v. St. Martin's Press, Inc., 929 F.
Supp. 40, 45 (D.N.H. 1996). This so-called "effects test" is
more appropriately considered in the context of the second
factor, purposeful availment.
2. Purposeful Availment
To satisfy the second part of the jurisdictional test, a
plaintiff must show that the defendant's contacts with the forum
represent "a purposeful availment of the privilege of conducting
activities in the forum state." Sawtelle, 70 F.3d at 1389. "The
function of the purposeful availment reguirement is to assure
that personal jurisdiction is not premised solely upon a
defendant's 'random, isolated, or fortuitous1 contacts with the
forum state." Id. at 1391 (guoting Keeton, 465 U.S. at 774).
The First Circuit has identified "two cornerstones of
purposeful availment": Ticketmaster, 26 F.3d at 207. The first
is foreseeability: "defendant's 'conduct and connection with the
forum State [must be] such that he should reasonably anticipate being haled into court there.'" Id. (quoting World-Wide
Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980)). The
second is voluntariness: "Jurisdiction may not rest on the
'unilateral activity of another party or a third person.1" Id.
at 207-08 (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462,
475 (1985)).
Gauvin and the trust rely on the "effects test" described in
Calder v. Jones, 465 U.S. 783 (1984) to satisfy the purposeful
availment requirement (as well as the "relatedness" factor) for
jurisdiction. The Calder "effects test" may be cautiously
applied outside the context of defamation actions as part of a
more general analysis of a defendant's intentional contact with
the forum. See, e.g., Allred v. Moore & Peterson, 117 F.3d 278,
286 (5th Cir. 1997), cert, denied, 118 S.Ct. 691 (1998);
Gutierrez v. Givens, 1998 WL 162195 *5 (S.D. Gal., April 3,
1998); Singing River Hosp. Svs. v. Swenson, 1998 WL 113900 *5
(S.D. Miss., Jan. 14, 1998). See also Noonan v. Winston, 135
F.3d 85, 90 (1st Cir. 1998) (noting Calder effects test
appropriately applied in a defamation case to determine
purposeful availment).
Defendants in Calder wrote and edited an allegedly
defamatory article in Florida about a professional entertainer
who lived and worked in California. Finding that a California
court could exercise jurisdiction over the defendants, the Court
reasoned that defendants had been charged with an intentional
tort, defamation, expressly aimed at California and that
10 defendants knew the brunt of the plaintiff's injury would be felt
in California, where she lived and worked and where the
defendants' paper had its largest circulation. Calder, 465 U.S.
at 7 8 9-90.
In contrast, on the record presented here, Balarsky's
actions were aimed at Sullivan's plan assets, controlled by GE in
Schenectady, New York, and the trust, in Connecticut. If
Balarsky believed she was legitimately entitled to Sullivan's
plan assets, her actions were not intended to harm the estate in
New Hampshire or anywhere else. If, as alleged, Balarsky
intentionally misrepresented her entitlement to the plan assets,
knowing that the estate was the proper recipient, she still aimed
her tortious conduct at the trust not the estate (i.e. seeking to
defraud the trust — the estate's claim would not seem to be
affected by the Trust's falling for a fraud scheme perpetrated by
Balarsky). Thus, justifiably or not, the trust (not Balarsky)
has caused any harm the estate suffered, by refusing to pay
Sullivan's plan assets to his estate. The effect of Balarsky's
actions harmed the trust, if the trust is indeed obligated to pay
the estate, so that any harm Balarsky has caused was aimed at and
was felt primarily in New York. See Sawtelle, 70 F.3d at 1390
(communications in New Hampshire ancillary to defendant's legal
malpractice that occurred outside of New Hampshire.)
Accordingly, the court finds that Gauvin has not shown that
the litigation is sufficiently related to Balarsky's contact with
New Hampshire, or that Balarsky purposefully availed herself of
11 the opportunity to conduct activities in New Hampshire in a
manner sufficient to support personal jurisdiction over her in
New Hampshire. Even if Gauvin had been able to make a weak
showing at the first two steps of the tripartite test, which she
has not done, the exercise of personal jurisdiction would then
have to be fortified by an especially strong showing of
reasonableness under the Gestalt factors. See Sawtelle, 70 F.3d
at 1394. The record here does not support the conclusion that
personal jurisdiction would be reasonable in New Hampshire.
3. The Gestalt Factors
"In constitutional terms, the jurisdictional inguiry is not
a mechanical exercise. The Court has long insisted that concepts
of reasonableness must inform a properly performed minimum
contacts analysis." Ticketmaster, 26 F.3d at 209. This
consideration involves "a panoply of other factors which bear
upon the fairness of subjecting a nonresident to the authority of
a foreign tribunal." Id. The Supreme Court has identified five
such factors:
(1) the defendant's burden of appearing, (2) the forum state's interest in adjudicating the dispute, (3) the plaintiff's interest in obtaining convenient and effective relief, (4) the judicial system's interest in obtaining the most effective resolution of the controversy, and (5) the common interests of all sovereigns in promoting substantive social policies.
Id. (citing Burger King, 471 U.S. at 477). The first factor, the
burden of appearing imposed on defendant Balarsky, has particular
significance here. The burden of summoning a California resident
12 to defend herself in New Hampshire presents an obvious and
substantial burden. See Ticketmaster-New York, 26 F.3d at 210.
Regarding the second factor. New Hampshire's adjudicatory
interest in this matter is minimal at best. Here, Balarsky's
efforts to obtain Sullivan's plan assets occurred entirely
outside of New Hampshire, and therefore this factor weighs
against the exercise of jurisdiction. See Sawtelle, 70 F.3d at
1395. This is so particularly in light of the fact that the
estate's claim against the trust is not weakened by Balarsky's
alleged fraud elsewhere.
Unlike the first two factors, the third factor, the
plaintiff's interest in obtaining convenient relief, supports the
exercise of jurisdiction here because, obviously, the most
convenient location for the estate and its executrix is her place
of residence. New Hampshire.
However, the fourth factor, the administration of justice,
weighs against Gauvin. Gauvin argues that dismissing the claims
against Balarsky will have the effect of splitting the case
because the action will proceed against the trust in this forum,
while Gauvin may bring a second action against Balarsky in a
different forum. While that may be true, Gauvin can avoid dual
actions by seeking to bring the entire action in a more suitable
forum or transfer the case against the trust for joinder with any
suit brought against Balarsky.
13 Finally, under the fifth factor, neither party has raised a
policy argument significant enough to sway the court in either
direction. This factor offers support to neither side.
The Gestalt factors weigh against the exercise of personal
jurisdiction when considered in their totality — this record
hardly presents the "especially strong" showing of reasonableness
necessary to fortify a weak showing on the first two
reguirements. Since the minimum reguirements necessary to
satisfy due process have not been met, the court finds that it
lacks personal jurisdiction over Balarsky with respect to
Gauvin's state law claims based on diversity jurisdiction.
II. THE TRUST'S ERISA CLAIMS
Personal jurisdiction for purposes of claims based on
federal guestion jurisdiction is constrained by the reguirements
of service of process found in Federal Rule of Civil Procedure 4.
See Lorelei Corp. v. County of Guadalupe, 940 F.2d 717, 719 (1st
Cir. 1991). Service is limited to the territorial boundaries of
the court's forum state unless a federal statute provides
otherwise. Fed. R. Civ. P. 4 (k)(1)(D);Lorelei Corp., 940 F.2d at
719-20. ERISA provides for nationwide service of process. 29
U.S.C.A. § 1132(e)(2); see also Cripps v. Life Ins. Co. of North
America, 980 F.2d 1261, 1267 (9th Cir. 1992). Under a statute
providing for nationwide service, such as the ERISA provision, a
court may exercise personal jurisdiction over any defendant
having minimum contacts with the United States. Id.; United
14 Elec., Radio and Mach. Workers v. 163 Pleasant St. Corp., 960
F.2d 1080, 1086 (1st Cir. 1992); cf. Bellaire Gen. Hosp. v. Blue
Cross Blue Shield, 97 F.3d 822, 825-826 (5th Cir. 1996) (same
holding but expressing reservations about constitutionality of
nationwide service). As Balarsky does not contest that she had
sufficient minimum contacts with the United States to satisfy due
process reguirements for nationwide service, this court may
exercise personal jurisdiction over her with respect to the
trust's ERISA claims.7
Although the parties have not raised (or briefed) the
possibility, federal guestion jurisdiction under ERISA permitting
personal jurisdiction over Balarsky might also suggest
supplemental personal jurisdiction for Gauvin's state law claims
against Balarsky. See, e.g.. Rice v. Nova Biomedical Corp., 38
F.3d 909, 913 (7th Cir. 1994); Busch v. Buchman, Buchman &
O'Brien, Law Firm, 11 F.3d 1255, 1256 (5th Cir. 1994); IUE AFL-
CIO Pension Fund v. Herrmann, 9 F.3d 1049, 1056-57 (2d Cir.
1993); Anderson v. Century Products, 943 F. Supp. 137, 144 (D.N.H
1996); but see Junqquist v. Sheikh Sultan Bin Khalifa Al Nahvan,
115 F .3d 1020, 1033 n.12 (D.C. Cir. 1997) (28 U.S.C.A. § 1367(a)
pertains to subject matter not personal jurisdiction); Debrecen!
7 The trust's federal common law claim for restitution alleging that Balarsky is unjustly enriched by Sullivan's plan assets (see, e.g.. Cell v. Trustees of Pipefitters Local 537 Pension Plan, 975 F. Supp. 23, 28-29 (D. Mass. 1997)) presumably is premised on federal guestion jurisdiction. It is not clear whether service, and therefore personal jurisdiction, is nationwide, as provided by ERISA, or is limited to the boundaries of the forum state. Fed. R. Civ. P. 4 (k).
15 v. Bru-Jell Leasing Corp., 710 F. Supp. 15, 19-20 (D. Mass. 1989)
(pendent jurisdiction will not confer personal jurisdiction).
However, even if supplemental personal jurisdiction would be
available through the trust's cross-claims, the court also notes,
without prompting from the parties, that venue in this district
is not appropriate under ERISA.
The ERISA provision for nationwide service of process begins
by setting forth the reguirements of venue. The whole clause
reads:
Where an action under this subchapter is brought in a district court of the United States, it may be brought in the district where the plan is administered, where the breach took place, or where a defendant resides or may be found, and process may be served in any other district where a defendant resides or may be found.
29 U.S.C.A § 1132(e)(2). Venue for the trust's ERISA claims
against Balarsky would be proper where the plan is administered
(probably New York or Connecticut), where the breach took place
(also probably New York or Connecticut, or possibly Texas), or
where the defendant resides (California) or "may be found" (at
least California and Texas). Only if Balarsky "may be found" in
New Hampshire would the claims against her find proper venue
here.
A defendant "may be found" for purposes of the statute in
any district where the plaintiff may obtain personal
jurisdiction, that is, where a defendant meets the minimum
contacts/due process reguirements for personal jurisdiction. See
Varsic v. United States District Court, 607 F.2d 245, 248-49 (9th
Cir. 1979); accord National Pension Fund v. Wakefield Indus.,
16 Inc., 699 F.2d 1254, 1257 (D.C. Cir. 1983); Seitz v. Board of
Trustees of N.Y. Teamsters Pension Fund, 953 F. Supp. 100, 102
(S.D.N.Y. 1997); Board of Trustees v. McD Metals, Inc.,964 F.
Supp. 1040, 1045 (E.D. Va. 1997); McFarland v. Yegen, 699 F.
Supp. 10, 13 (D.N.H. 1988). As was discussed and decided above,
Balarsky lacks sufficient minimum contacts with New Hampshire to
support the exercise of personal jurisdiction over her in this
district. Thus, although the court has personal jurisdiction,
venue is not proper in New Hampshire for the trust's ERISA
claims.
III. RESOLUTION
This court lacks personal jurisdiction over Balarsky with
respect to Gauvin's claims against her. While personal
jurisdiction exists for the trust's ERISA claims, venue is not
proper in New Hampshire. Gauvin's claims against the trust are
unaffected by the present motion to dismiss.
Given this mixed result, the court proposes to transfer the
entire case, if the parties agree, to a district where it could
have been brought originally, which would most likely be an
appropriate district in Texas, New York, or California. The
parties may respond to the court's proposal by filing a joint
stipulation for transfer of the entire case to a particular
district, or by filing other appropriate responses to the
proposal within thirty days of the date of this order. If the
parties cannot agree to the proposed transfer, the court will
17 dismiss Gauvin's claims against Balarsky for want of personal
jurisdiction over her, transfer the trust's ERISA claims to an
appropriate district (as agreed by the parties or as decided by
the court), and retain Gauvin's claims against the trust in this
district.
Before the case, or part of the case, is transferred to
another district, however, the court urges the parties to
seriously discuss and consider settlement. On the present
record, there seems to be little dispute that the trust wrongly
paid Balarsky and that it is independently obligated to pay the
estate. The trust's claim against Balarsky also seems
straightforward - Balarsky does not seem to have been entitled to
receive Sullivan's plan assets from the trust and probably should
not benefit from the trust's apparent error. However, Balarsky
may well be entitled to her community property share of
Sullivan's plan assets from the estate, and her daughter is also
likely to receive the same money from the estate. Rather than
continue to deplete the estate's assets, Balarsky's personal
funds, and funds of the trust properly belonging to all
beneficiaries, by incurring additional attorneys' fees and other
expenses associated with litigation, all parties could benefit
from a mutually acceptable settlement that would appropriately
allocate the disputed funds.
CONCLUSION
18 For the foregoing reasons, the court grants in part
defendant's motion to dismiss for lack of personal jurisdiction
(document no. 7). The parties have thirty (30) days from the
date of this order to respond to the court's proposed transfer.
SO ORDERED.
Steven J. McAuliffe United States District Judge
June 26, 1998
cc: James H. Schulte, Esg. Vincent A. Wenners, Jr., Esg. William D. Pandolph, Esg.