1 UNITED STATES DISTRICT COURT

2 DISTRICT OF NEVADA

3 KENNETH I. DELMAN, ) 4 ) Plaintiff, ) Case No.: 2:19-cv-00302-GMN-DJA 5 vs. ) ) ORDER 6 DAVID A. DELMAN, ) 7 ) Defendant. ) 8 ) 9 Pending before the Court is Defendant David A. Delman’s (“Defendant’s”) Response, 10 (ECF No. 21), to the Court’s Order to Show Cause, (ECF No. 8), regarding why this Court 11 should not remand the case for lack of subject matter jurisdiction. Plaintiff Kenneth I. Delman 12 (“Plaintiff”) also filed a Response, (ECF No. 24), to the Order. 13 Also pending before the Court is Plaintiff’s Motion for Preliminary Injunction, (ECF 14 No. 26). Defendant filed a Response, (ECF No. 27), and Plaintiff filed a Reply, (ECF No. 28). 15 Also pending before the Court is Plaintiff’s Motion for Instructions, or, Alternatively, to 16 Ratify Accounting, (ECF No. 31). Defendant’s response deadline has not yet passed. 17 For the reasons discussed below, the Court REMANDS the case to Clark County 18 District Court. The Court DENIES as moot Plaintiff’s Motion for Preliminary Injunction and 19 Motion for Instructions. 20 I. BACKGROUND 21 This case arises from the administration of the Tilly Delman Revocable Living Trust 22 Agreement (the “Trust”). (See Pet. Assume Jurisdiction (“Trust Pet.”), Ex. A to Pet. Removal, 23 ECF No. 1-1). Tilly Delman (“Grantor”) created the Trust during her life, and the Trust named 24 Louis Delman (“Louis”) and Plaintiff as successor trustees. (Id. ¶¶ 1–2). Louis predeceased 25 Grantor, and Grantor thereafter amended the Trust to name Plaintiff the successor trustee; and 1 later, through subsequent amendment, co-trustee. (Id. ¶¶ 3–4). Grantor passed away on April 2 12, 2018, leaving Plaintiff as the Trust’s sole trustee. (Id. ¶¶ 5–6). 3 Plaintiff, a Nevada resident, petitioned the Eighth Judicial District Court of the State of 4 Nevada for the County of Clark to administer the distribution of the trust res. (See generally 5 Trust Pet.). Defendant, a Trust beneficiary and Florida citizen, has prevented distribution of the 6 Trust’s assets by withholding his Beneficiary Waiver and Release. (Id. ¶ 8). Plaintiff 7 commenced this action as a non-adversarial proceeding in Nevada state court by filing a 8 petition that requests the court to assume jurisdiction over the Trust, confirm Plaintiff as 9 trustee, and grant Plaintiff declaratory relief that he may distribute the assets as set forth in the 10 Trust. (Id. 7:6–9:8). Defendant removed the action to this Court. (Pet. Removal, ECF No. 1). 11 II. LEGAL STANDARD 12 “Federal courts are courts of limited jurisdiction,” and “possess only that power 13 authorized by Constitution and statute, which is not to be expanded by judicial decree.” 14 Kokkonen v. Guardian Life Ins. Co. of America,

(1994) (internal citations 15 omitted). “It is to be presumed that a cause lies outside this limited jurisdiction, and the burden 16 of establishing the contrary rests upon the party asserting jurisdiction.”

(internal citations 17 omitted). 18 The federal removal statute provides that a defendant may remove an action to federal 19 court based on federal question jurisdiction or diversity jurisdiction.

. “The 20 ‘strong presumption against removal jurisdiction means that the defendant always has the 21 burden of establishing that removal is proper,’ and that the court resolves all ambiguity in favor 22 of remand to state court.” Hunter v. Philip Morris USA,

(9th Cir. 2009)

23 (quoting Gaus v. Miles, Inc.,

(9th Cir. 1992) (per curiam)). “If at any time 24 before final judgment it appears that the district court lacks subject matter jurisdiction, the case 25 shall be remanded.”

(c). 1 To remove a state law civil action to federal court on the basis of diversity jurisdiction, a 2 removing defendant must show that the parties are completely diverse and that the matter in 3 controversy exceeds the sum or value of $75,000.00.

(a). Complete diversity 4 of citizenship under

requires that each plaintiff be a citizen of a different state 5 than each defendant. Morris v. Princess Cruises, Inc.,

(9th Cir. 2001). 6 III. DISCUSSION 7 Defendant argues that this Court may properly exercise diversity jurisdiction over the 8 case. (Def.’s Resp. to Order Show Cause 4:24–9:18, ECF No. 21). The Court concludes that 9 the probate exception vests exclusive jurisdiction over the proceedings with the state court. 10 Generally, federal courts sitting in diversity have subject matter jurisdiction over civil 11 actions between citizens of different states when over $75,000 is in controversy.

1332. However, there is a longstanding “probate exception” to federal diversity jurisdiction. 13 See Markham v. Allen,

, 494–95 (1946). The probate exception derives from the 14 Judiciary Act of 1789, which extended the federal courts’ diversity jurisdiction to “all suits of 15 civil nature at common law or in equity.” See Ankenbrandt v. Richards,

, 698–99 16 (1992) (extending the probate exception to the Judiciary Act of 1948). “[E]quity jurisdiction 17 conferred by the Judiciary Act of 1789 . . . did not extend to probate matters.” Markham, 326 18 U.S. at 494. Nevertheless, the probate exception is narrow. Marshall v. Marshall,

(2006). For example, the exception does not remove federal jurisdiction over, “suits 20 to determine the rights of creditors, legatees, heirs, and other claimants against a decedent’s 21 estate . . . .”

In contrast, pure matters of estate administration are left to state courts because 22 “when one court is exercising in rem jurisdiction over a res, a second court will not assume in

23 rem jurisdiction over the same res.”

Therefore, the probate exception “precludes federal 24 courts from endeavoring to dispose of property that is in the custody of a state probate court.” 25

1 Nevada law and the probate exception prevent this Court from exercising jurisdiction 2 over the case. Nevada law provides, “[u]pon petition of any person appointed as trustee of an 3 express trust . . . the district court of the county in which any trustee resides . . . shall assume 4 jurisdiction of the trust as a proceeding in rem . . . .” NRS § 164.010(1). Consequently, the 5 court “[h]as jurisdiction of the trust as a proceeding in rem as of the date of the filing of the 6 petition.” NRS § 164.010(5)(a). Once the trustee files the petition, the state court has 7 “exclusive jurisdiction of [the] proceedings . . . .” NRS § 164.015(1). 8 Plaintiff filed his petition in Nevada state court. (Trust Pet., Ex. A to Pet. Removal, ECF 9 No. 1-1). By operation of law, the court assumed in rem jurisdiction over the trust res. See 10 NRS § 164.010(1) and (5)(a). The probate exception prohibits a federal court from exercising 11 jurisdiction over the distribution of a res once a state court has already assumed jurisdiction 12 over the same. Marshall,

. Thus, because Plaintiff’s petition commences a 13 proceeding in rem that seeks to distribute the assets of the Trust (the trust res), and the state 14 court already has jurisdiction over the trust res by operation of law, this Court may not exercise 15 jurisdiction over the case. The Court must therefore order remand. 16 // 17 // 18 // 19 // 20 // 21 // 22 //

23 // 24 // 25 // 1 IV. CONCLUSION 2 IT IS HEREBY ORDERED that the Court REMANDS the case to the Eighth Judicial 3 District Court of the State of Nevada for the County of Clark. 4 IT IS FURTHER ORDERED that Plaintiff’s Motion for Preliminary Injunction, (ECF 5 No. 26), is DENIED as moot. 6 IT IS FURTHER ORDERED that Plaintiff’s Motion for Instructions, (ECF No. 31), is 7 DENIED as moot. 8 DATED this _2_0___ day of March, 2020. 9 10 ___________________________________ Gloria M. Navarro, District Judge 11 United States District Court 12 13 14 15 16 17 18 19 20 21 22 23 24 25