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IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF TEXAS


SAN ANTONIO DIVISION
RENEE BENSON
V.
THOMAS MILTON BENSON, JR.
As Trustee of the
SHIRLEY L. BENSON
TESTAMENTARY TRUST

NO: SA: 15-CV-00202-DAE

MOTION TO REMAND
Petitioner Renee Benson submits this Motion to Remand pursuant to 28 U.S.C. 1447
and respectfully states as follows.
Respondents sole basis for removal was the Receivers intervention filed in the state
probate court proceeding on March 2. The intervention was voluntarily dismissed one week after
the case was removed, leaving only the original probate court claimfor Respondents removal
as trustee of a testamentary trust. Though now asserting diversity, Respondent did not remove
the claim when it was filed. Now, after significant, adverse rulings by the probate court, he seeks
to change the forum. Both asserted grounds for federal jurisdictiondiversity and supplemental
jurisdictionshould be rejected on multiple, mandatory grounds. Additionally, the Court has
discretion to remand the state-law claim now that the purported federal question is gone.

I.

The removal statutes must be strictly construed in favor of state court jurisdiction.
The removing party has the burden to establish federal jurisdiction. De Aguilar v. Boeing

Co., 47 F.3d 1404, 1408 (5th Cir. 1995). Any ambiguities are construed against removal
because the removal statute should be strictly construed in favor of remand. Manguno v.
Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002).

Courts must re-examine their jurisdiction at every stage of the litigation, particularly
after dismissal of all federal claims. Enochs v. Lampasas Cnty., 641 F.3d 155, 161 (5th Cir.
2011). [F]ederal[-question] jurisdiction exists only when a federal question is presented on the
face of the plaintiffs properly pleaded complaint. Caterpillar Inc. v. Williams, 482 U.S. 386,
392 (1987). Under the well-pleaded complaint rule, the plaintiff is the master of the claim,
and a plaintiff mayexcept in cases of complete federal preemptionavoid federal jurisdiction
by exclusive reliance on state law. Marren v. Stout, 930 F. Supp. 2d 675, 680 (W.D. Tex.
2013) (quoting Caterpillar, 482 U.S. at 392).

II.

The removal was untimely.


A defendant must file a notice of removal within 30 days after receipt of the initial

pleading. 28 U.S.C. 1446(b)(1). Renee Benson filed her original petition (which has never been
amended and remains her live pleading) on January 21, 2015. Doc. 3 at 5. Respondents attorney
accepted service on January 29, 2015. See Ex. A (attached).1 Consequently, his deadline was
March 2. He did not file his notice of removal until March 18sixteen days after the deadline.

A.

The Receivers intervention cannot form the basis of a removal.

Relying on 1446(b)(3), Respondent contends the notice of removal was timely because
it was filed within 30 days of his March 2 receipt of the Receivers intervention. Ntc. Removal
(Doc. 1) at 2-3. This is incorrect for two reasons. First, that section applies only if the case
stated by the initial pleading is not removable, 28 U.S.C. 1446(b)(3), but Respondent contends
the opposite, asserting diversity jurisdiction for the original (and since unchanged) trusteeremoval claim. Doc. 1 at 9-10. Respondent cannot contend the claim was initially removable

Interestingly, Renees petition named Respondent both individually (as beneficiary) and as
trustee, and Respondents attorney accepted service on Respondents behalf in both capacities.
See Ex. A (attached).
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MOTION TO REMAND

and simultaneously take advantage of 1446(b)(3). Second, even if 1446(b)(3) applied,


removal may not be based on an intervening petition or complaint. McKinney Econ. Devt
Corp. v. McKinney Shores Props., Inc., No. 4:09cv284, 2010 WL 3855553, at *4 (E.D. Tex.
Aug. 27, 2010) (unpublished) (collecting cases); Henderson v. City of Chattanooga, No. 1:02CV-045, 2002 WL 32060139, at *5-6 (E.D. Tenn. Mar. 15, 2002) (unpublished).
Respondent also argues that he became the last-served defendant upon receipt of the
intervention, attempting to trigger the 30-day removal deadline at that point. Doc. 1 at 2 & n.2.
He cites 1446(b)(2(C) in support, but that section addresses consentnot timing. Moreover, in
this circuit the removal clock starts to run when the first defendant is served, not the last. Getty
Oil Corp. v. Ins. Co. of N. Am., 841 F.2d 1254, 1262-63 (5th Cir. 1988).

B.

The intervention does not satisfy the narrow parameters of this Circuits
revival exception.

Respondent also contends the revival exception restarted the removal clock. Doc. 1 at 23. In Johnson v. Heublein, Inc., 227 F.3d 236, 241-42 (5th Cir. 2000), the court recognized that
a lapsed removal right may be restored if a plaintiff amends her complaint so substantially as to
alter the proceedings character and constitute essentially a new lawsuit. There, the Fifth Circuit
applied the revival exception because (1) two of the defendants had realigned with the plaintiff
because of settlement, (2) the claims bore no resemblance whatsoever to those in the original
complaint, and (3) the remaining defendants were exposed to increased damages. Id. at 242. The
Johnson scenario was fairly extreme, and subsequent decisions have made clear that the revival
exception is narrow. See Air Starter Components, Inc. v. Molina, 442 F. Supp. 2d 374, 382-83
(S.D. Tex. 2006) (collecting cases). Merely adding parties or claims is not enough; the
amendment must alter the essential character of the action. Id. at 382.

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MOTION TO REMAND

Here, the revival exception does not apply because the plaintiffRenee Bensondid not
amend her complaint or do anything else to trigger revival. Respondents timeliness-of-removal
argument turns solely on the action of a third-party intervenorthe Receivers. Doc. 1 at 2-3.
Respondent offers no authority or analysis to support such an unprecedented extension of the
revival exception. But even if the exception could be so extended, this case is not remotely
analogous to Johnson. The intervention did not significantly altermuch less completely
transformthe case. There was no re-alignment of the parties, and only one new claim was
added.
Finally, the 30-day limit is designed to deprive the defendant of the undeserved tactical
advantage of seeing how the case goes in state court before removing, and to prevent the delay
and wastefulness of starting over in a second court after significant proceedings in the first.
Johnson, 227 F.3d at 242. That is precisely what Respondent attempts to do here. Significant
proceedings had already occurred in probate court, including a two-day evidentiary hearing that
led the court to suspend Respondent as trustee and appoint receivers to take temporary custody
of the testamentary trust assets. And Respondent had already taken an interlocutory appeal of
that order. Applying the revival exception here would thwart the 30-day limits very purpose.

III.

Alternatively, the probate exception precludes federal jurisdiction.


Federal jurisdictionwhether based on diversity or a federal questionis prohibited

because the state probate court, through the Receivers it appointed, administers the Shirley L.
Benson Testamentary Trust and has custody of a resthe Trust corpus.

A state courts

exclusive authority to administer a res in its custody lies at the heart of the probate exception:
[W]hen one court is exercising in rem jurisdiction over a res, a second court will
not assume in rem jurisdiction over the same res. Thus, the probate exception
reserves to state probate courts the probate or annulment of a will and the

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MOTION TO REMAND

administration of a decedents estate; it also precludes federal courts from


endeavoring to dispose of property that is in the custody of a state probate court.
Marshall v. Marshall, 547 U.S. 293, 311-12 (2006).
In Marshall, the Supreme Court held that an in personam tort action for intentional
interference with an inheritance does not trigger the probate exception to federal jurisdiction. Id.
at 312. The probate exception did not apply because the decedents wife was not seeking to
probate or annul a will, or to reach a res in the custody of a state court. Id. Marshall requires
a two-step inquiry into (1) whether the property in dispute is estate property within the custody
of the probate court and (2) whether the plaintiffs claims would require the federal court to
assume in rem jurisdiction over that property. Curtis v. Brunsting, 704 F.3d 406, 409 (5th Cir.
2013). In Curtis, this test was not satisfied because the case involved an inter-vivos trust that had
never become part of the probate estate. Id. at 409-10.
This case, by contrast, involves a testamentary trust, which is integral to and a part of
Shirley Bensons estate.2 Additionally, in contrast to Curtis, the corpus of the Testamentary
Trust is in the custody of the state probate court through its receivers, which also satisfies the
first element.

As the Supreme Court has explained, when a court appoints a receiver to

administer property, the receiver holds the property on the courts behalf:
When a court exercising jurisdiction in equity appoints a receiver of all the
property of a corporation, the court assumes the administration of the estate. The
possession of the receiver is the possession of the court; and the court itself holds
and administers the estate through the receiver, as its officer.
Porter v. Sabin, 149 U.S. 473, 479 (1893); see also Byers v. McAuley, 149 U.S. 608, 615(1893).
2

Some assets of Shirley Bensons probate estate evidently were never titled in the name of the
trustee of the testamentary trust and instead remain in the name of Respondent in his capacity as
Executor. Therefore, the Receivers were appointed to take charge not only of Shirley Bensons
testamentary trust but also the remnant of her probate estate. See Second Am. Order at 1 (Doc.
1, Attachment 5 at 7) (Such appointment is immediately necessary for purposes of managing
and conserving the Trusts and the Estates property during litigation).
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MOTION TO REMAND

The second element is also satisfied, as plaintiffs claims would require the federal court
to assume in rem jurisdiction over the property. The only claim now pending is for the trustees
removal. When Respondent removed this case, the probate court had suspended him as trustee
and appointed temporary receivers to administer the trust. If this Court assumes jurisdiction, it
will take over custody of the res (the Trust corpus) and supervise the Receivers.3 The probate
exception does not allow federal courts to usurp a state courts control of a res. Marshall, 547
U.S. at 311-12; Porter, 149 U.S. at 480 (The reasons are yet stronger for not allowing a suit
against a receiver appointed by a state court to be maintained, or the administration by that court
of the estate in the receivers hands to be interfered with, by a court of the United States.).
Accordingly, the probate exception defeats both purported sources of federal jurisdiction.

IV.

Moreover, supplemental jurisdiction never attached.


A.

The intervention was not sufficiently related to the trustee-removal claim to


trigger supplemental jurisdiction.

Even if federal jurisdiction existed over the Bensco ownership declarations the Receivers
sought, supplemental jurisdiction would not extend to Renee Bensons trustee-removal claim
because the two claims do not derive from a common nucleus of operative fact. United Mine
Workers of Am. v. Gibbs, 383 U.S. 715, 725 (1966). Even Respondent concedes that the two
claims are drastically different. Doc 1 at 10-11. The mere fact that the Receivers brought the
intervention does not create a common nucleus of operative fact with the trustee-removal claim,
or else every case in which the Receivers are involved would fit that description.
B.

The intervention presented no underlying federal question.

Underlying federal jurisdiction is necessary before supplemental jurisdiction can attach to


a state-law claim. Halmekangas v. State Farm Fire & Cas. Co., 603 F.3d 290, (5th Cir. 2010).
3

In fact, the Receivers were in the process of preparing their Report on the status of the Trusts assets when the case
was removed. They have now completed that report and filed it with this Court. See Doc. 6 & Attachment 1.

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MOTION TO REMAND

Respondent does not contend federal-question jurisdiction exists because of either a federal
claim or a state-law claim that is the subject of complete federal preemption. See Marren, 930 F.
Supp. 2d at 680. Rather, he contends the Receivers state-law claim necessarily raises a
disputed and substantial issue of federal law that a federal court may entertain without disturbing
federal/state comity principles. Id.; see also Doc. 1 at 9. However, he provides no analysis,
failing utterly to demonstrate his right to removal, as is his burden.
1.

The Receivers sought construction of a trust document a state-law


issue.

The Receivers intervention was a state-law declaratory-judgment action seeking the


construction of trust documents. It sought to clarify ownership of Bensco, Inc., a company in
which the Shirley L. Benson Testamentary Trust (the subject of Renee Bensons petition) owns a
substantial interest. The Receivers sought declarations as to two matters: (1) the validity and
ownership of one Bensco share issued in 1997 to Respondent in which the testamentary trust
asserts a 50% interest, and (2) the identity of who co-owns Bensco with the testamentary trust
Respondent or the 2009 Trusts (three trusts that Respondent created in 2009 for the benefit of
Renee Benson and her children). Plea in Intervention (Doc. 12) at 3-5. The 2009 Trusts give
Respondent, the grantor, the power to substitute other property of equivalent value. Doc. 12, Ex.
A at 16-17, 12(a). The Receivers alleged that Respondent attempted to exercise that power in
January 2015, and they disputed the validity and adequacy of his substitution. Doc. 12 at 6-8.
According to the Receivers intervention, resolving the first issue entails an examination
of the relevant corporate records, and resolving the second issue involves construing the 2009
Trust Agreements to determine the requirements for reacquiring trust property and to determine
whether Bensons tender fulfills those requirements. Id. at 6. Therefore, on the face of the
Receivers complaint, they sought declarations regarding the construction of corporate
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MOTION TO REMAND

documents and trust agreements. Both are matters of state law. See TEX. PROP. CODE 111.003,
111.0035 (providing that Texas Trust Code governs express trusts in Texas, and that the terms of
a trust override the statute except in select instances); Perfect Union Lodge No. 10 v. Interfirst
Bank of San Antonio, N.A., 748 S.W.2d 218, 220 (Tex. 1988).
2.

The purported federal issue was neither disputed nor necessary to


resolve the Receivers claims.

Respondent contends the Receivers intervention presents the federal-law question of


when an asset reacquisition exchange becomes effective under 26 U.S.C. 675(4). Doc. 1 at 9.
When trust documents allow the grantor to retain certain administrative powers, such as the
power to reacquire the trust corpus by substituting other property of an equivalent value, 675
governs the tax treatment of those trusts and provides that the grantor will be treated as the
owner for income tax purposes. 26 U.S.C. 675(4).
Respondent does not explain, nor does the Receivers intervention indicate, why or how
determining an asset reacquisition effective date under 675, for federal-tax purposes, has any
relevance to resolving the Receivers state-law claim. It is the trust documentnot the Internal
Revenue Codethat establishes Respondents right to substitute assets (a right Renee does not
challenge) and the procedures for exercising that right. The tax statute merely governs the
resulting income-tax consequencesan issue the Receivers intervention does not raise.
This situation is distinguishable from Marren, where this Court held that an issue of
federal tax law was necessary to a plaintiffs claim because she alleged, as an element of her
state-law Sabine Pilot, fraud, and negligent misrepresentation claims, that she was required to
violate federal tax law regarding her classification as an independent contractor and that her
employer lied about that status. Marren, 930 F. Supp. 2d at 681. The Receivers claims, by
contrast, depend completely on construction of the 2009 Trust documents.
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MOTION TO REMAND

As this Court has observed, a defendant cannot, merely by injecting a federal question
into an action that asserts what is plainly a state-law claim, transform the action into one arising
under federal law . . . . If a defendant could do so, the plaintiff would be master of nothing.
Redus v. Univ. of the Incarnate Word, __ F. Supp. 2d __, No. 5:14-cv-509-DAE, 2014 WL
6656799, at *5 (W.D. Tex. Nov. 25, 2014) (quoting Caterpillar, 482 U.S. at 399). The federaltax issue was neither necessary to nor raised by the Receivers claims.
3.

The federal issue was not substantial.

Respondent also fails to address the requirement that a federal question be substantial.
Marren, 930 F.Supp. 2d at 680. The relevant factors are: (1) whether the issue is fact-bound or a
pure issue of federal law that would control many other cases, (2) whether the federal
government has an important interest in the issue, such as a federal agencys ability to vindicate
its rights in a federal forum, and (3) whether the issue is dispositive. Id. at 683 (citing Empire
Healthchoice Assurance, Inc. v. McVeigh, 547 U.S. 677, 700-01 (2006)).
These factors weigh against federal-question jurisdiction here. First, there is no indication
that the meaning of 675(4) would have been at issue in the Receivers claim, rather than the
statutes application to the facts of this case. See Marren, 930 F. Supp. 2d at 684-86. Second,
there is no indication the federal government has any interest in this issue, nor does it implicate a
federal agencys ability to vindicate its rights in federal court. Like the plaintiff in Marren, the
Receivers did not challenge the actions of any federal agency, did not seek a tax refund, and did
not accuse the IRS of any wrongdoing. Id. at 687. Third, the federal issue would not have been
dispositive. The Court would have had to decide the merits of the Receivers intervention based
on the governing Trust documents irrespective of the asset reacquisitions tax consequences.

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MOTION TO REMAND

4.

Exercising federal jurisdiction would disturb the balance of federal


and state judicial responsibilities.

Even if 675 were integral to the Receivers claims, federal jurisdiction would be
lacking. As this Court has observed, [a]dopting Defendants reasoning and holding that federalquestion jurisdiction exists in any case in which a court must look to and apply federal tax law
would . . . herald[] a potentially enormous shift of traditionally state cases into federal courts.
Marren, 930 F. Supp. 2d at 690 (quoting Grable & Sons Metal Prods., Inc. v. Darue Engg &
Mfg., 545 U.S. 308, 319 (2005)). Federal-question jurisdiction never attached.

V.

In the further alternative, this Court has discretion to remand the original and sole
remaining claim, which is brought under state law.
For the foregoing reasons, remand would be mandatory even if the Receivers had not

voluntarily dismissed their intervention. But now that the intervention is gone, any purported
basis to hold the case in federal court disappears. [A] case properly belongs in state court . . .
when the federal-law claims have dropped out of the lawsuit in its early stages and only state-law
claims remain . . . . Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350 (1988) (citing Gibbs,
383 U.S. at 726-27). In that circumstance, the federal court should decline the exercise of
jurisdiction. Id.
Here, the only purported federal-law claims dropped out at the early stages, and only a
state-law claim remains. It is an abuse of discretion to deny remand when a case became a
purely Texas state law dispute, it was still in its infancy (less than three months old), no
discovery had occurred, no hearings or trial dates had been scheduled, the district court was not
even moderately familiar with any of the Texas state law issues, no financial or other
inconvenience would have occurred, and no prejudice would have arisen. Enochs, 641 F.3d at
162; see also McGhiey v. Metro News Serv., Inc., CV. No. SA-12-CV-00578-DAE, 2013 WL

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MOTION TO REMAND

3338598, at *6-8 (W.D. Tex. July 1, 2013) (applying Enochs factors and remanding case to state
court). That is the precise situation in this case.
Therefore, even if the Court concludes that supplemental federal jurisdiction attached to
the state-law trustee-removal claim, it should nonetheless exercise its discretion and remand to
the state probate court.
WHEREFORE, Petitioner Renee Benson requests that the case be remanded to Probate
Court Number Two of Bexar County, Texas and award her recovery of costs, expenses and
attorneys fees in connection with such remand as may be allowed by law.

Respectfully Submitted,
HARRIET ONEILL
State Bar No. 00000027
honeill@harrietoneilllaw.com
LAW OFFICE OF
HARRIET ONEILL, P.C.
919 Congress Avenue, Suite 1400
Austin, Texas 78701
Telephone: (512) 944-2222
Telecopier: (512) 476-6441
DOUGLAS W. ALEXANDER
State Bar No. 00992350
dalexander@adjtlaw.com
ALEXANDER, DUBOSE,
JEFFERSON & TOWNSEND LLP
515 Congress Avenue, Suite 2350
Austin, Texas 78701-3562
Telephone: (512) 482-9300
Facsimile: (512) 482-9303

/s/ Bennett L. Stahl


BENNETT L. STAHL
State Bar No. 19006500
blstahl@csg-law.com
CURL STAHL GEIS
A PROFESSIONAL CORPORATION

One Riverwalk Place


700 North St. Marys Street, Ste. 1800
San Antonio, Texas 78205
Telephone: (210) 226-2182
Telecopier: (210) 226-1691
EMILY HARRISON LILJENWALL
State Bar No. 12352250
eliljenwall@scs-law.com
SCHOENBAUM, CURPHY
& SCANLAN, P.C.
112 E. Pecan, Suite 3000
San Antonio, Texas 78205
Telephone: (210) 224-4491
Telecopier: (210) 224-7983
ATTORNEYS FOR PLAINTIFF
RENEE BENSON

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MOTION TO REMAND

CERTIFICATE OF CONFERENCE
Pursuant to Local Court Rule CV-7(i) I certify that before filing this Motion to Remand I
conferred with David Beck, counsel for Respondent, in a good faith attempt to resolve the
substance of this motion by agreement. Counsel, however, opposes this motion.

/s/ Bennett L. Stahl

CERTIFICATE OF SERVICE
I hereby certify that on the 9th day of April, 2015, I electronically filed the foregoing
with the Clerk of the Court using the CM/ECF system which will send notification of such filing
to the following:
David J. Beck, Esq.
Troy R. Ford, Esq.
BECK REDDEN LLP
1221 McKinney Street, Suite 4500
Houston, Texas 77010-2010
Telecopier: (713) 951-3720
dbeck@beckredden.com
rpost@beckredden.com
tford@beckredden.com
omcgovern@beckredden.com

Phillip A. Wittmann, Esq.


James C. Gulotta, Jr., Esq.
STONE PIGMAN WALTHER
WITTMANN L.L.C.
546 Carondelet Street
New Orleans, Louisiana 70130-3558
Telecopier: (504) 581-3361
pwittmann@stonepigman.com
malmon@stonepigman.com
jgulotta@stonepigman.com

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MOTION TO REMAND

C. David Kinder, Esq.


Mark J. Barrera, Esq.
Ellen B. Mitchell, Esq.
COX SMITH MATTHEWS INCORPORATED
112 E. Pecan Street, Suite 1800
San Antonio, Texas 78205
Telecopier: (210) 226-8395
dkinder@coxsmith.com
mbarrera@coxsmith.com
emitchell@coxsmith.com
Steven R. Brook, Esq.
Joyce W. Moore, Esq.
LANGLEY & BANACK, INC.
745 East Mulberry Avenue, Suite 900
San Antonio, Texas 78212
Telecopier: (210) 735-6889
sbrook@langleybanack.com
jwmoore@langleybanack.com
Kevin Philip Kennedy, Esq.
1920 Nacogdoches Road, Suite 100
San Antonio, Texas 78209
Telecopier: (210) 824-2731
kpk@texas.net

/s/ Bennett L. Stahl

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MOTION TO REMAND