Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alnd-2_14-cv-00610/USCOURTS-alnd-2_14-cv-00610-1/pdf.json

Parties Involved:
Estate of Bryan Wayne Heath
Defendant
Linda Heath
Defendant
Wayne Heath
Defendant
Zachary Heath
Defendant
Christy James Heath
Plaintiff
Heath Financial, Inc.
Defendant
Principal Life Insurance Company
Defendant

Document Text:

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

CHRISTY JAMES HEATH, )

PLAINTIFF, )

VS. ) 2:14-cv-610-JHH

ESTATE OF BRYAN WAYNE )

HEATH, et al.

)

DEFENDANT. )

MEMORANDUM OPINION

The court has before it the Motion (Doc. #30) to Remand filed on August 21,

2014 by Plaintiff Christy James Heath. In accordance with the Order (Doc. #31) of

August 22, 2014, the Motion (Doc. #30) has been fully briefed (Docs. #30, 32, 33)

and is now under submission to the court for review.

I. Procedural History

On February 18, 2014, Plaintiff Christy James Heath filed a complaint in the

CircuitCourt ofJefferson County, Alabama alleging: breach of contract(Count One);

civil contempt (Count Two); breach of fiduciary duty and conspiracy (Count Three);

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FILED

 2014 Sep-24 AM 10:57

U.S. DISTRICT COURT

N.D. OF ALABAMA

Case 2:14-cv-00610-JHH Document 34 Filed 09/24/14 Page 1 of 9
unjust enrichment against defendants Linda Heath and Zachary Heath (Count Four);1

tortious interference with contract(Count Five); breach of professionalresponsibility

(Count Six); civil conspiracy (Count Seven); outrageous conduct (Count Eight);

claims against Principal Life Insurance Company (Count Nine); and equitable relief

(Count Ten). (See Doc. #1, Exh. A). On April 2, 2014, this case wasremoved to this

court by defendant Principal Life Insurance Company (“Principal Life”) with the

consent of all properly joined and served Defendants. (See Doc. #1, ¶ 24). In the

removal, Principal Life asserts diversity of citizenship on the ground that Elizabeth

McElroy, the Administrator of the Estate, was fraudulently joined to the action. 

(See Doc. #1 at 2-11). Plaintiff Heath now asserts that the case should be remanded

to the Circuit Court of Jefferson County because the Estate was not fraudulently

joined to the action and the parties are non-diverse. (See Doc. #30 at ¶¶ 6, 7, 8).

II. Factual Background

The claims center on the pursuit of the proceeds of an insurance policy.

Plaintiff Christy James Heath married Bryan Wayne Heath on November 2, 2001. 

Two children were born into the marriage – James Matthew Heath on December 17,

2003 and Ellen Tyler Heath on June 23, 2005. (See Doc. #1, Exh. A at ¶ 4). Prior to

 On July 30, 2014, the court entered a Memorandum Opinion and Order (Doc. #25) and 1

Order (Doc. #26) dismissing defendants Linda Heath and Zachary Heath from this case for lack

of personal jurisdiction. (See Doc. #26).

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the birth of their first child, the Plaintiff and Bryan Heath each took out life insurance

policies through defendants Wayne Heath and Heath Financial, Inc. on their

respective lives in the amount of $2 million dollars, and named each other as

beneficiaires thereof. (See id. at ¶¶ 5, 6). 

Plaintiff instituted divorce proceedings against Bryan Heath in the Circuit

Court of Jefferson County, Alabama, Domestic Relations Division in 2011. On or

about November 29, 2011, the parties entered into an Agreement in the divorce action

and on December 15, 2011 the court entered an Order adopting the parties’

Agreement. (See id. at ¶ 8). The Agreement and Order created an equitable and/or

constructive trust over the life insurance proceeds in favor of the survivor of the

parties to the divorce action: “Both parties shall maintain the life insurance on his or

her life, Pendente Lite, and shall make no changes of beneficiaries during the

pendency of this matter.” (Id. at ¶ 9). Plaintiff alleges that while the Pendente Lite

order was in effect, defendant Bryan Heath changed the beneficiaries of the $2

million insurance policy on his life on two different occasions. (See id. at ¶ 10). At

the time of the last beneficiary change, the beneficiaries were named as: James

Matthew Heath and Ellen Tyler Heath astwenty-five percent (25%) beneficiaries and

Zachary Heath and Linda Heath as twenty-five percent (25%) beneficiaries,

respectively. (See id.). 

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Plaintiff filed this lawsuit alleging that Bryan Wayne Heath violated the

Pendente Lite order by changing those beneficiaries. (See Compl., ¶ 10). Plaintiff

further alleges that Wayne Heath and Heath Financial, Inc. – acting as Principal

Life’s agents – colluded with Bryan Heath to violate the Pendente Lite order and

deprive Plaintiff of the life insurance proceeds. (See Compl., ¶¶ 11, 13).

III. Legal Standards for Remand

Under 28 U.S.C. § 1441(a), “[a]ny civil case filed in state court may be

removed by the defendant to federal court if the case could have been brought

originally in federal court.” Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353, 1356

(11th Cir. 1996), abrogated on other grounds by Cohen v. Office Depot, Inc., 204

F.3d 1069 (11th Cir. 2000). Federal courts may exercise diversity jurisdiction over

all civil actions where the amount in controversy exceeds $75,000, exclusive of

interest and costs, and the action is between citizens of different states. 28 U.S.C. §

1332(a)(1). However, “[b]ecause removal jurisdiction raises significant federalism

concerns, federal courts are directed to construe removalstatutesstrictly . . . . Indeed,

all doubts about jurisdiction should be resolved in favor of remand to state court.”

University of South Alabama v. American Tobacco Co., 168 F.3d 405, 411 (11th

Cir.1999). That is, when a defendant removes a case to federal court on diversity

grounds, a court must remand the matter back to state court if any of the properly

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joined parties in interest are citizens of the state in which the suit was filed. See

Lincoln Prop. Co. v. Roche, 546 U.S. 81 (2005) (citing 28 U.S.C. § 1441(b)). Such

a remand is the necessary corollary of a federal court’s diversity jurisdiction, which

requires complete diversity of citizenship. See Henderson v. Washington Nat. Ins.

Co., 454 F.3d 1278, 1281 (11th Cir. 2006). 

When a plaintiff names a non-diverse defendant solely in order to defeat

federal question jurisdiction, the district court must ignore the presence of the nondiverse defendant and deny any motion to remand the matter back to state court. The

plaintiff is said to have effectuated “fraudulent joinder,” see Crowe v. Coleman, 113

F.3d 1536, 1538 (11th Cir. 1997), and a federal court may appropriately assert its

removal jurisdiction over the case. A defendant seeking to prove that a co-defendant

was fraudulently joined must demonstrate either that: (1) there is no possibility the

plaintiff can establish a cause of action against the resident defendant; or (2) the

plaintiff has fraudulently pled jurisdictional facts to bring the resident defendant into

state court. See id. The defendant bears the burden of proof on fraudulent joinder

and must make such a showing by clear and convincing evidence. See Parks v. New

York Times Co., 308 F.2d 474, 478 (5th Cir. 1962). If there is a possibility that a state

court would find that the complaint states a cause of action against any one of the

resident defendants, the federal court must find that the joinder is proper and remand

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the case to the state court. See Coker v. Amoco Oil Co., 709 F.2d 1433, 1440 (11th

Cir.1983). In other words, a motion to remand should be denied only if the court is

convinced that there is “no possibility that the plaintiff can establish any cause of

action against the resident defendant.” See Cabalceta v. Standard Fruit Co., 883 F.2d

1553,1561 (11th Cir.1989).

III. Discussion

In this case, Defendants do not allege that Plaintiff has fraudulently pled facts;

instead, they claim that there is no possibility that Plaintiff could maintain a cause of

action against the Estate of Bryan Wayne Heath, the non-diverse defendant, in state

court. (See Doc. #32 at 1). The four causes of action purportedly asserted against the

Estate are: breach of contract; civil contempt; civil conspiracy; and outrageous

2

 Plaintiff concedes that her claim for civil contempt is only properly brought under the 2

purview of the Domestic Relations court. (See Doc. #30-1 at 10) (“Only one of the four claims

[civil contempt] would fall under the purview of the Domestic Relations Division of the Circuit

Court of Jefferson County.”). Her argument for why the other claims against the Estate survive

in federal court are somewhat obscure. She states that: “Just because the Plaintiff is the ex-wife

of the decedent Bryan Wayne Heath does not negate her right to bring an action against the

Estate of Bryan Wayne Heath or require that all matters involving her and the Estate of Bryan

Wayne Heath should be heard in the Domestic Relation Division. Even if the Domestic Relation

Division of the Circuit Court of Jefferson County is the proper court for this matter that is a

decision for the Circuit Court of Jefferson County.” (Doc. #30-1 at 10; see also Doc. #33 at 4). 

But the Plaintiff’s suit rests on violation of the Pendente Lite order in connection with the final

Divorce Decree. It is impossible, and would be wholly improper, to separate the two. See Duerr

v. Duerr, 104 So.3d 229, 233 (Ala. Civ. App. 2012) (holding final divorce judgment barred

former wife from asserting claim against former husband for alleged failure to comply with

pendente lite order); see also Reid v. Reid, 897 So.2d 349, 355 (Ala. Civ. App. 2004) (noting that

a Pendente Lite order “clearly envisions a temporary disposition . . . pending a later final

determination of the . . . dispute.”). Once the Divorce Decree is in place and the Domestic

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conduct. (Compl., ¶¶ 15-18, 19-24, 45-48, 49-50). The problems for plaintiff in

asserting these claims are multifold. But the most basic issue requiring denial of the

3

motion to remand is that the non-diverse Estate can not be sued in state court for 

compliance with the Pendente Lite order for payment of the life insurance policy. 

In Alabama, life insurance proceeds made payable to the parties other than the

deceased person, the estate of the deceased person, or the personal representative of

Relations Court enters a final judgment divorcing two parties, “jurisdiction of all matters arising

from the divorce judgment, including provisions of the marital settlement agreement, remains

with the domestic relations division.” Turenne v. Turenne, 884 So.2d 844, 849 (Ala. 2003); see

also Hill v. Hill, 89 So.3d 116, 119 (Ala. Civ. App. 2010) (“[T]o the extent that the plaintiffs

might properly have asserted any claims that stemmed from alleged noncompliance . . . with the

settlement agreement, those claims would arise under judgment and not the settlement agreement

and would, under Turenne, be within the exclusive jurisdiction of the family-relations division of

the circuit court.”). 

 The individual causes of action also would not stand in state court. For the breach of 3

contract claim, the reasoning set forth in footnote 2, supra, prevails. For the civil conspiracy

claim, because the underlying claim of breach of contract fails against the Estate, the claim for

civil conspiracy must also necessarily fail. See Allied Supply Co., Inc. v. Brown, 585 So.2d 33,

36 (Ala. 1991); see also Avis Rent A Car Sys., Inc. v. Heilman, 876 So.2d 1111, 1124 (Ala. 2003)

(“[L]iability for civil conspiracy rests upon the existence of an underlying wrong and if the

underlying wrong provides no cause of action, then neither does the conspiracy.”). And finally,

for the outrageous conduct claim, “the conduct of the Defendants . . . [must be] so outrageous

that it shocks the conscience and that such conduct should not be tolerated in a civilized society.” 

(Compl., ¶ 50). But the tort of outrage is well recognized as an extremely limited cause of

action. See Potts v. Hayes, 771 So.2d 462, 465 (Ala. 2000). In fact, Alabama recognizes the tort

only for four specific circumstances: (1) wrongful conduct in the family-burial context; (2)

barbaric methods employed to coerce an insurance settlement; (3) egregious sexual harassment

by a supervisor in the workplace; and (4) a family physician, when asked to counsel a teenage

patient concerning the stress of his parents’ divorce, provided the patient with addictive

prescription drugs in exchange for homosexual sex for a number of years, leading to the patient’s

drug addiction. See Ex parte Bole, 103 So.3d 40, 52-53 (Ala. 2012) (citations omitted). Here,

although the Estate is a named Defendant, the Complaint fails to assert any facts showing the

Estate engaged in any tortious conduct. 

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the estate do not become part of the estate. See Rau v. Rau, 429 So.2d 593, 595 (Ala.

Civ. App. 1982) (“[B]y virtue of § 27-14-29, [Ala.] Code 1975, the proceeds of the

policy of insurance in this case would not be a part of the estate or subject to

creditor’s claims.”); see also 31 Am. Jur.2d, Executors and Administrators 257, § 509

(1989) (“The proceeds of a life insurance policymade payable to a named beneficiary

are not assets of the estate, but belong solely to the beneficiary.”); Equitable Life

Assurance Society of the United States v. Sandra Porter, 867 F.2d 79 (1st Cir. 1989)

(satisfying the beneficiary is the contractual responsibility of the insurer not the

fiduciary responsibility of the executor). Elizabeth McElroy, as the administrator of

the former husband’s estate, has no interest in the life insurance policy or the

proceeds therefrom. See First Nat’l Bank of Mobile v. Pope, 270 Ala. 202, 205

(1960) (holding the estate of the insured was not indispensable party in dispute over

insurance proceeds between beneficiary and purported constructive trustees because

“[t]he personal representative has no [ownership] interest in the policies as to require

that he be made a party.”); see also Arnold v. Garrison, 49 So.2d 787, 788 (Ala.

1950) (“The authority of the special administrator is defined by statute . . . he has no

authority to pay debts or receive the presentation of claims or to be rendered liable

to suits on contracts of the decedent.”). Thus, neither the domestic relations court,

nor the state court, can hail McElroy into court for remedy related to the payment of

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the proceeds of the life insurance policy. See Stroeker v. Harold, 111 So.3d 138, 144

(Ala. Civ. App. 2012). 

IV. Conclusion

The non-diverse Defendant, the Administrator of the Estate, was improperly

joined in this action for the purpose of defeating federal jurisdiction and is due to be

dismissed from this action. A separate order will be entered denying the motion to

remand and dismissing the non-diverse Defendant, the Estate of Bryan Wayne Heath,

from this action with prejudice.

DONE this the 24th day of September, 2014.

 

SENIOR UNITED STATES DISTRICT JUDGE 

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