Justia U.S. 6th Circuit Court of Appeals Opinion Summaries

During the course of their marriage, Caroline, a citizen of Canada, made more than $75,000 in loans to Kimberly, of Ohio, which were never repaid. A federal district court dismissed Caroline’s contract and tort lawsuit. While appeal was pending, Kimberly died and Caroline substituted the Estate as the real party in interest. The Sixth Circuit reversed the dismissal, finding that neither the domestic relations exception nor the probate exception to federal diversity under 28 U.S.C. 1332(a) applied. Because a court in Canada had dismissed divorce proceedings upon notice of Caroline’s death, there was no risk of a decision incompatible with a divorce decree, and, at the time Caroline filed the federal complaint, the property that she sought was not “in the custody of a state probate court.” View "Chevalier v. Barnhart" on Justia Law

Plaintiffs filed a pro se complaint on behalf of two estates, claiming that financial institutions fraudulently transferred real estate in Shelby County, Tennessee, and failed to follow proper procedures for selling properties encumbered by outstanding liens. The district court dismissed on the ground that a non-attorney cannot appear in court on behalf of an artificial entity such as an estate, even though plaintiffs claimed that they were the sole beneficiaries of their respective estates. Each signed the notice of appeal as the “Authorized Representative” of the estates. Federal law allows parties to “plead and conduct their own cases personally or by counsel,” 28 U.S.C. 1654. The Sixth Circuit denied a motion to dismiss the appeal, holding that the sole beneficiary of an estate without creditors may represent the estate pro se. The purpose of protecting third parties is not implicated when the only person affected by a nonattorney’s representation is the nonattorney herself. The tradition that “a corporation can only appear by attorney,” has not been extended to estates. View "Bass v. Leatherwood" on Justia Law

Trusts established by James Cartwright before his death have resulted in litigation in several jurisdictions involving his adopted children and others. The cases involve spendthrift trusts, Crummey Trusts, limited partnerships, and other entities, and tort claims of conversion, conspiracy, self-dealing, and manipulation of trust fund assets. The federal district court held that it lacked jurisdiction, reasoning that both state and federal court actions alleged claims involving administration of the trusts and were quasi in rem and that the Tennessee state court first asserted jurisdiction over the property at issue. The Sixth Circuit affirmed. View "Cartwright v. Garner" on Justia Law

A nursing home resident and her community spouse (husband) were penalized based on husband’s purchase of an annuity for himself using funds from his IRA. The district court granted summary judgment in favor of the director of the Ohio Department of Job and Family Services, holding that 42 U.S.C. 1396r-5(f)(1) precluded the transfer of assets because it exceeded husband’s community spouse resource allowance. Section 1396p(c) requires a state to impose a transfer penalty (a period of restricted coverage) if either spouse disposed of assets for less than fair market value during the look-back period. The Sixth Circuit reversed, reasoning that the transfer occurred before the Ohio agency determined that wife was eligible for Medicaid coverage and section 1396p(c)(2)(B)(i) permits an unlimited transfer of assets “to another for the sole benefit of the individual’s spouse.” View "Hughes v. Colbert" on Justia Law

Debtor was married to Plaintiff’s son, John. Plaintiff and John had an extensive model train collection. After John died, Plaintiff sued, seeking $25,000 for Debtor’s alleged conversion of the collection. Debtor was appointed administratrix of John’s probate estate. After completion of an inventory, Plaintiff and Debtor, individually and as administratrix, entered into a settlement resolving the state court litigation and matters in Probate Court, identifying parts of the collection as belonging to Plaintiff and requiring Debtor to surrender possession of those parts. The remainder of the collection was to be sold at auction and the proceeds were to be split. The court subsequently entered multiple orders directing Debtor to turn over certain trains and accessories to Plaintiff and imposed penalty of $100.00 per day. Finally, the court entered judgment in the amount of $32,186.90 plus interest based on Debtor’s “willful contempt.” Debtor then filed a bankruptcy petition and Plaintiff sought to except from discharge the entire debt owed to him pursuant to 11 U.S.C. 523(a)(2)(A) and (a)(7). The bankruptcy court held that the entire amount ($32,186), not just $9,386.90, was nondischargeable under 523(a)(2)(A). The bankruptcy appellate panel affirmed. View "In re: Nicodemus" on Justia Law

In 1975, Brumley assigned to his sons, Robert and William, his interests in a copyright to the hit gospel song, “I’ll Fly Away.” In 2006, Brumley’s four other children sought to terminate the assignment. Robert refused to recognize the termination as valid, arguing that Brumley was not the statutory author of the song and that a 1979 assignment of interests by Brumley’s widow prevented the heirs from later exercising termination rights. The district court ruled in favor of the heirs. The Sixth Circuit affirmed admission of a transcript and recording of a 1977 conversation between Brumley and one of the plaintiffs, but reversed and remanded because of the court’s exclusion of two articles discussing Brumley’s employment status at the time that he composed the song. View "Brumley v. Albert Brumley & Sons, Inc." on Justia Law

Manning, a lawyer who served as the executor of Barney’s estate and the trustee of a trust for Mrs. Barney, set up accounts at National City Bank, one for the estate and one for the trust. He then wired funds, totaling about $1,250,000, from the bank accounts into the account of his business in violation of his fiduciary duties. Manning’s business failed and Manning confessed to Mrs. Barney that he had absconded with the money from the two accounts. The estate, trust, and Mrs. Barney sued Manning’s law firm in state court, but the suit was rejected on summary judgment. The Barneys then sued the successor to National City Bank to try to recover the money Manning stole. The district court dismissed, citing the affirmative defense of Ohio’s version of the Uniform Fiduciaries Act. The Sixth Circuit affirmed, stating that the Barneys failed to plead facts giving rise to an inference that the Bank committed any wrongdoing. View "Estate of Barney v. PNC Bank, Nat'l Ass'n" on Justia Law