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upholding claim by ex-wife against husband as it was a claim for breach of contract and did not "involv[e] the elements of the domestic relationship"
Summary of this case from Ross v. RakesOpinion
Civil Action No. 2:16cv93
2016-09-12
Nancy Alleyn JONES, Plaintiff, v. Carol L. JONES, et al., Defendants.
Samuel R. Brown, II, for Plaintiff. Carol L. Jones, Jesse B. Gordon, William A. Lascara, Liberty National, Robert B. Delano, Jr., for Defendants.
Samuel R. Brown, II, for Plaintiff.
Carol L. Jones, Jesse B. Gordon, William A. Lascara, Liberty National, Robert B. Delano, Jr., for Defendants.
MEMORANDUM ORDER
Mark S. Davis, United States District Judge
This matter is before the Court on a Notice of Removal from the Circuit Court for the City of Virginia Beach, Virginia, filed by Defendant Carol L. Jones, in her role as Executor of the Estate of Sandy Ambrose Jones ("Executor of Mr. Jones' Estate"), ECF No. l; Plaintiff Nancy Alleyn Jones' ("Plaintiff") Motion to Remand, ECF No. 13; a Motion to Dismiss for Failure to State a Claim, filed by Defendant Carol L. Jones ("Mrs. Jones"), both individually and in her role as Executor of Mr. Jones' Estate, ECF No. 3; and Plaintiff's Motion for Leave to File her Response to Defendant's Motion to Dismiss, ECF No. 9. The present claims arise from a Final Decree of Divorce and Marital Settlement Agreement between Plaintiff and her former husband, Sandy Ambrose Jones ("Mr. Jones"). Plaintiff initiated the present action against Defendants Mrs. Jones, individually and as the Executor of Mr. Jones' Estate (collectively "Defendant Jones"), and Liberty National Life Insurance Company ("Liberty National"), alleging breach of the Marital Settlement Agreement and seeking declaratory judgment and the imposition of a constructive trust on life insurance proceeds resulting from Mr. Jones' death. Having been fully briefed, each motion is ripe for consideration.
Carol L. Jones, as an individual, is also a named defendant in this matter (individually, "Mrs. Jones"). However, the Notice of Removal was filed by Carol L. Jones in her capacity as Executor of Mr. Jones' Estate ("Executor of Mr. Jones' Estate").
I. FACTUAL AND PROCEDURAL HISTORY
The facts recited here are stated in the light most favorable to Plaintiff, the party seeking remand. See Venezuela v. Massimo Zanetti Beverage USA, Inc. , 525 F.Supp.2d 781, 783 n. 1 (E.D.Va.2007) ("On a motion to remand, because the burden to prove jurisdiction rests on the party opposing remand, the facts are stated in the light most favorable to the party seeking remand." (citing Booth v. Furlough, Inc. , 995 F.Supp. 629, 630 (E.D.Va.1998) ; Kokkonen v. Guardian Life Ins. Co. of Am. , 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994) )).
On January 9, 2007, Plaintiff obtained a Final Decree of Divorce from Mr. Jones in the Circuit Court for the City of Virginia Beach, Virginia. Am. & Restated Notice of Removal, Ex. A, Compl., ¶ 3, ECF No. 5-1 [hereinafter "Compl."]. The Final Decree of Divorce incorporated a Marital Settlement Agreement between Plaintiff and Mr. Jones; the parties entered into such Agreement on October 16, 2006. Id. ¶ 4. Paragraph 5 of the Marital Settlement Agreement states that Mr. Jones "has named [Plaintiff] as the beneficiary to a life insurance policy he owns with Liberty National Life Insurance and will provide [Plaintiff] written documentation of this policy on or about September 15, 2006. Husband must provide annual documentation, which indicates that the life insurance policy is active." Id. ¶ 5. Plaintiff alleges that, on October 16, 2006, Mr. Jones had seven (7) life insurance policies in effect with Liberty National, totaling $468,000, id. ¶ 6, and it was "the intent of the [Marital Settlement] Agreement that [ ] Plaintiff would be the beneficiary of [Mr. Jones'] life insurance policies in effect at the time of the entry of the Agreement," id. ¶ 7.
On June 3, 2015, Plaintiff filed a Petition and Affidavit for a Rule to Show Cause ("Petition") in the Virginia Beach Circuit Court, case number CL15-0846, against Mr. Jones. Mem. of Law in Support of Mot. to Remand, 2, ECF No. 14; Pl.'s Mot. to Remand, Ex. A, Pet. & Aff. For Rule to Show Cause, ECF No. 13-1 [hereinafter "Pet."]. Such Petition alleged that Mr. Jones failed to abide by certain terms of the Marital Settlement Agreement, including maintenance and communication regarding the Liberty National life insurance policies. Pet. at 2-3; Mem. of Law in Support of Mot. to Remand at 2. Mr. Jones passed away on June 6, 2015, three days after Plaintiff filed her Petition. Compl. ¶ 2. Following Mr. Jones' death, Plaintiff learned that she was named as a beneficiary on only one $25,000 Liberty National life insurance policy. Id. ¶ 10. Plaintiff alleges that, after completion of the Marital Settlement Agreement, Mr. Jones removed her as beneficiary from six of the seven life insurance policies and, in doing so, violated the terms of the Final Decree of Divorce and the Marital Settlement Agreement incorporated therein. Id. ¶ 8.
On July 8, 2015, Plaintiff filed a Complaint (separate from her previously filed Petition) in the Virginia Beach Circuit Court, case number CL15-2754, against the currently-named beneficiaries of the other six Liberty National life insurance policies (including Mrs. Jones), as well as Liberty National and the Executor of Mr. Jones' Estate. Id. ¶ 9. In Count II of her Complaint, Plaintiff alleged a breach of contract claim, under the Marital Settlement Agreement, against Mr. Jones' Estate for failing to name her as a beneficiary of all the Liberty National life insurance policies and maintaining her as a beneficiary on such policies until Mr. Jones' death. Id. ¶¶ 15-17. In Count III, Plaintiff sought declaratory judgment that she was the rightful recipient of all proceeds from the seven Liberty National life insurance policies, id. ¶¶ 18-20, and in Count I of her Complaint, Plaintiff asked the Court to impose a constructive trust on the disputed life insurance policy proceeds, id. ¶¶ 11-14.
On December 1, 2015, the Virginia Beach Circuit Court entered a Consent Order, providing that Defendant Jones would accept service and allowing for the voluntary dismissal of all beneficiaries of the Liberty National life insurance policies, except for Mrs. Jones. Am. & Restated Notice of Removal ¶ 3; id. Ex. B, Consent Order, ECF No. 5-2 [hereinafter "Consent Order"]. Further, the Consent Order required Liberty National to interplead the proceeds of all seven life insurance policies into the Virginia Beach Circuit Court, pursuant to Va. Code § 8.01–364. Id. ¶ 6. On February 11, 2016, Mrs. Jones accepted service as an individual and as Executor of Mr. Jones' estate, and on February 17, 2016, Proof of Service was filed with the Circuit Court for the City of Virginia Beach, Virginia. Am. & Restated Notice of Removal ¶ 4.
Liberty National was not able to interplead the proceeds of the disputed life insurance policies before the matter was removed to this Court. Defendant Liberty National has filed a response to Defendant Jones' Motion to Dismiss, requesting that it be permitted to interplead with this Court the balance of the proceeds of the seven life insurance policies held by Mr. Jones, after deduction of Liberty National's attorneys' fees, costs, and expenses, and be dismissed with prejudice after making such interpleader payment. ECF No. 4. To the extent that Liberty National seeks to deposit death benefit funds with the Court and be discharged from the instant case, Liberty National must file the appropriate claim or motion seeking such relief from the Court. Fed. R. Civ. P. 22(a)(2) ; E.D. Va. Local R. 7(A), (F).
On February 29, 2016, the Executor of Mr. Jones' Estate, filed a Notice of Removal, on the basis of diversity jurisdiction, with this Court. ECF No. 1. The Executor of Mr. Jones' Estate filed an Amended and Restated Notice of Removal on March 9, 2016. ECF No. 5. At the time the Amended and Restated Notice of Removal was filed, Plaintiff was a resident of Virginia, id. ¶ 1, and Mrs. Jones was a resident of California, id. ¶ 8. Mrs. Jones qualified as the Executor of Mr. Jones' Estate on January 27, 2016 and Mr. Jones' Estate was probated in California. Id. ¶ 9. Further, at the time the Amended and Restated Notice of Removal was filed, Liberty National was incorporated in Nebraska and had its principal place of business and headquarters in Texas. Id. ¶ 10. On March 30, 2016, Plaintiff timely filed a Motion to Remand the case, arguing that this matter "arises exclusively under the domestic relations law of Virginia and falls within the domestic relations exception to [f]ederal subject matter jurisdiction." Mem. of Law in Supp. of Mot. to Remand at 5. On April 12, 2016, Defendant Jones filed an Opposition to Plaintiff's Motion to Remand, ECF No. 16, and on April 15, 2016, Plaintiff filed a Rebuttal to Defendant Jones' Opposition, ECF No. 17. In her Rebuttal Brief, Plaintiff also requested remand based on the abstention doctrine articulated in Colorado River Water Conservation District v. United States , 424 U.S. 800, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976).
The Court notes that such Amended and Restated Notice of Removal was filed to correct the date of service stated in the original Notice of Removal. Both the original Notice of Removal and the Amended Notice of Removal are timely pursuant to 28 U.S.C. § 1446(b). As such, when discussing Defendant's Notice of Removal, the Court has and will continue to refer and cite to the Amended and Restated Notice of Removal.
On February 29, 2016, Defendant Jones also filed a Motion to Dismiss Plaintiff's Complaint, pursuant to Federal Rule of Civil Procedure 12(b)(6). ECF No. 3. On March 18, 2016, Plaintiff tardily filed an Opposition to Defendant Jones' Motion to Dismiss, ECF No. 7, and on March 21, 2016, Plaintiff filed her Motion for Leave to File a Late Response to the Motion to Dismiss, ECF No. 9. On March 25, 2016, Defendant Jones filed an Opposition to Plaintiff's Motion for Leave to File a Late Response, ECF No. 10, and on March 29, 2016, Defendant Jones filed a Reply to Plaintiff's Opposition to the Motion to Dismiss, ECF No. 11. The Court will first address Plaintiff's Motion to Remand before proceeding to address Plaintiff's Motion for Leave to File and Defendant Jones' Motion to Dismiss.
II. LEGAL STANDARD
A. Diversity and Removal Jurisdiction
Federal district courts are courts of limited subject matter jurisdiction. United States ex rel. Vuyyuru v. Jadhav , 555 F.3d 337, 347 (4th Cir.2009) (citing Exxon Mobil Corp. v. Allapattah Servs., Inc. , 545 U.S. 546, 552, 125 S.Ct. 2611, 162 L.Ed.2d 502 (2005) ). They may exercise "only the jurisdiction authorized them by the United States Constitution and by federal statute." Id. (citing Bowles v. Russell , 551 U.S. 205, 127 S.Ct. 2360, 168 L.Ed.2d 96 (2007) ). District courts may exercise diversity jurisdiction in civil actions between "citizens of different states" and "where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs." 28 U.S.C. § 1332(a). If complete diversity, and the appropriate amount in controversy, are present in a case that was initially filed in state court, a federal court may exercise jurisdiction over the case upon proper removal to federal court. 28 U.S.C. §§ 1441, 1446. "[A]ny civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants to the district court of the United States for the district and division embracing the place where such action is pending." 28 U.S.C. § 1441(a).
The parties do not dispute that federal question jurisdiction is not applicable in this matter.
B. Domestic Relations Exception
When a case is before the Court on the basis of diversity jurisdiction, the United States Supreme Court has recognized a narrow "domestic relations exception" that "divests the federal courts of power to issue divorce, alimony, and child custody decrees." Ankenbrandt v. Richards , 504 U.S. 689, 703, 112 S.Ct. 2206, 119 L.Ed.2d 468 (1992) ; accord Elk Grove Unified Sch. Dist. v. Newdow , 542 U.S. 1, 12–13, 124 S.Ct. 2301, 159 L.Ed.2d 98 (2004), abro gated on other grounds by Lexmark Int'1, Inc. v. Static Control Components , ––– U.S. ––––, 134 S.Ct. 1377, 188 L.Ed.2d 392 (2014) ; Reale v. Wake Cty. Human Servs. , 480 Fed.Appx. 195, 197 (4th Cir.2012) (unpublished).
The Supreme Court has also acknowledged that "[i]t is not inconceivable" that a federal court might decline to hear a case "involving the elements of the domestic relationship," based on abstention principles, "even when the parties do not seek divorce, alimony, or child custody." Ankenbrandt , 504 U.S. at 705, 112 S.Ct. 2206. In particular, the Supreme Court explained that:
This would be so when a case presents ‘difficult questions of state law bearing on policy problems of substantial public import whose importance transcends the result in the case then at bar.’ Such might well be the case if a federal suit were filed prior to effectuation of a divorce, alimony, or child custody decree, and the suit depended on a determination of the status of the parties."
Ankenbrandt , 504 U.S. at 705–706, 112 S.Ct. 2206 (quoting Colo. River Water Conservation Dist. v. United States , 424 U.S. 800, 814, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976) ). However, "[t]he jurisdictional determination underlying the domestic relations exception must be based on the nature of the claim at issue, not merely the relationship between the parties." Hildebrand v. Lewis , 281 F.Supp.2d 837, 842 (E.D.Va.2003) (citing Raftery v. Scott , 756 F.2d 335, 338 (4th Cir.1985) ; Cole v. Cole , 633 F.2d 1083, 1087 (4th Cir.1980) ). "A federal court is not deprived of competence merely because the parties involved are husband and wife or the controversy might be termed a ‘marital dispute.’ " Cole , 633 F.2d at 1088. Unless the alleged breach of tortious or contractual duty "arise[s] solely from family relations law, a federal district court may not deny jurisdiction simply on the grounds of the supposed etiology of the emotions underlying either the alleged breach by the defendant or the decision by the plaintiff to bring suit." Id. Moreover, federal courts have properly exercised jurisdiction, and denied application of the domestic relations exception, in a wide variety of tort and contract claims, even if such claims involve former marital partners. See Ankenbrandt , 504 U.S. at 706–07, 112 S.Ct. 2206 (finding domestic relations exception did not apply in case seeking monetary damages for alleged sexual and physical abuse of children by their father); Cole , 633 F.2d at 1088 (denying application of domestic relation exception because "[t]he duty to abstain from malicious prosecution, from abuse of process, from arson, and from conversion does not arise out of or require, in order to give rise to the duty, a present or prior family relation"); Hildebrand , 281 F.Supp.2d at 842 (finding that domestic relations exception did not apply to claims for breach of fiduciary duty and conversion of funds, related to the dissolution of the parties' marriage, because such claims were "based on Virginia corporate law and do not seek issuance or modification of a divorce or alimony degree"); Van Gaalen v. Sparks , 555 F.Supp. 325, 328 (E.D.Va.1983) (explaining that claims for breach of contract, fraudulent inducement, and intentional infliction of emotional distress, related to a divorce property settlement agreement, do not invoke the domestic relations exception).
C. Motion to Dismiss
A complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a) (2). A motion to dismiss may be granted when a complaint fails "to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). A complaint fails to state a claim if it does not allege "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Though a complaint need not be detailed, "[f]actual allegations must be enough to raise a right to relief above the speculative level." Twombly , 550 U.S. at 555, 127 S.Ct. 1955 ; see Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).
A motion to dismiss tests the sufficiency of a complaint without resolving factual disputes, and a district court " ‘must accept as true all of the factual allegations contained in the complaint’ and ‘draw all reasonable inferences in favor of the plaintiff.’ " Kensington Volunteer Fire Dep't v. Montgomery Cty. , 684 F.3d 462, 467 (4th Cir.2012) (quoting E.I, du Pont de Nemours & Co. v. Kolon Indus., Inc. , 637 F.3d 435, 440 (4th Cir.2011) ). Although the truth of the facts alleged is presumed, district courts are not bound by the "legal conclusions drawn from the facts" and "need not accept as true unwarranted inferences, unreasonable conclusions, or arguments." E. Shore Mkts., Inc. v. Assocs. Ltd. P'ship , 213 F.3d 175, 180 (4th Cir.2000) ; see Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 (citing Twombly , 550 U.S. at 555, 127 S.Ct. 1955 ).
III. DISCUSSION
A. Plaintiff's Motion to Remand
The Executor of Mr. Jones' Estate removed the instant case on the basis of diversity jurisdiction, pursuant to 28 U.S.C. §§ 1332, 1441, and 1446. Plaintiff does not dispute that diversity exists or that the amount in controversy requirement is met. However, Plaintiff seeks remand because, she argues, the domestic relations exception to jurisdiction applies in this matter and this Court should decline to exercise jurisdiction. Alternatively, Plaintiff asserts in her Rebuttal Brief that, even if the domestic relations exception does not apply, the Court should abstain from addressing the case, pursuant to the abstention doctrine recognized in Colorado River Water Conservation Dist. v. United States , 424 U.S. 800, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976), and should remand the case for further proceedings.
The Executor of Mr. Jones' Estate properly removed this case on the basis of diversity jurisdiction. The Court finds, and the parties do not dispute, that removal is appropriate because there is complete diversity of citizenship between the parties and the amount in controversy exceeds $75,000.00. See 28 U.S.C. § 1332(a) ; 28 U.S.C. § 1441(b). Thus, the only issues for the Court to determine on Plaintiff's Motion for Remand are whether the domestic relations exception to federal jurisdiction applies in this matter, or alternatively, if the Court should remand the matter pursuant to the Colorado River abstention doctrine. The Court finds that remand is not appropriate on either basis and DENIES Plaintiff's Motion to Remand.
1. Domestic Relations Exception
Plaintiff's Complaint alleges breach of contract, declaratory judgment, and constructive trust claims against the Executor of Mr. Jones' Estate related to a Marital Settlement Agreement. Plaintiff argues that, because "[t] he issues in this case involve the enforcement of a Virginia marital settlement agreement that is to be construed under Virginia domestic relations law, and particularly the application of § 20-111.1 of the Virginia Domestic Relations Code," this case "falls within the domestic relations exception to [f]ederal subject matter jurisdiction." Mem. of Law in Supp. of Mot. to Remand at 5. In response, Defendant Jones asserts that the domestic relations exception is not applicable to this matter because this case is a "simple breach of contract action," and any reliance on domestic relations law is "incidental to determining whether there was a breach of a contract." Def. Jones' Opp'n to Pl.'s Mot. for Remand at 2.
The Court agrees that the domestic relations exception is not applicable in the present matter. First, the domestic relations exception is inapplicable because Plaintiff's Complaint does not involve the "issuance of a divorce, alimony, or child custody decree." Ankenbrandt , 504 U.S. at 704, 112 S.Ct. 2206. Instead, Plaintiff's claims are based upon Mr. Jones' alleged breach of the Marital Settlement Agreement. Plaintiff's claim, like the breach of marital settlement agreement claim at issue in Rahnema v. Mir – Djalali , 742 F.Supp. 927 (E.D.Va.1989), "does not seek to modify [the divorce] decree or in any way to reopen the divorce proceedings," and thus, Plaintiff's claim merely "involves an action at law for breach of contract to which the domestic relations exception does not apply." Id. at 928 ; see Van Gaalen , 555 F.Supp. at 328 ("The issues of contract and tort which plaintiff alleges are not beyond this court's competence.").
Second, the domestic relations exception is inapplicable because Plaintiff's claims do not "involv[e] the elements of the domestic relationship." Ankenbrandt , 504 U.S. at 705, 112 S.Ct. 2206. Even if there is a former domestic relationship between the parties, the claims at issue are contractual in nature, and the contractual duties at issue arise from the terms of the Marital Settlement Agreement, not from Virginia domestic relations law. See Hildebrand , 281 F.Supp.2d at 842 (explaining that application of the domestic relations exception "must be based on the nature of the claim at issue, not merely the relationship between the parties"); Cole , 633 F.2d at 1088. Moreover, the resolution of Plaintiff's contract claims will not require the Court to weigh in on " ‘difficult questions of state law bearing on policy problems of substantial public import whose importance transcends the result in the case then at bar.’ " Ankenbrandt , 504 U.S. at 705–706, 112 S.Ct. 2206 (quoting Colo. River , 424 U.S. at 814, 96 S.Ct. 1236 ). Instead, it appears that the Court need only apply the familiar contract principles established by Virginia law to resolve Plaintiff's breach of contract claim.
Plaintiff argues that the domestic relations exception is appropriate in this matter because, in resolving her contract claims, the Court will be required to consider § 20-111.1 of the Virginia Domestic Relations Code. Plaintiff's argument on this point is unpersuasive because, while Virginia Code § 20–111.1 addresses the revocation of certain death benefits by divorce or annulment, the "core of this case" is an action for breach of contract and the Court need only address § 20–111.1 for purposes of resolving Plaintiff's breach of contract claim. Rahnema , 742 F.Supp. at 928. Moreover, several federal courts have determined that, where the core dispute is a breach of contract claim, interpreting or applying § 20–111.1 does not trigger the domestic relations exception. See Id. (finding that, while "adjudication of this [contract] dispute may require this Court to interpret some sections ... of the Virginia Code governing domestic relations," this alone was "not enough to invoke the domestic relations exception"); cf. Transamerica Occidental Life Ins. Co. v. Maree , No. 1:08cv24, 2008 WL 2964377, at *2 (E.D.Va. Aug. 1, 2008) (unpublished) (applying § 20–111.1 to a contract dispute regarding a marital settlement agreement and life insurance proceeds); John Hancock Mut. Life Ins. Co. v. Johnson , No. 4:98cv91, 1999 WL 33265758,*2 (W.D.N.C. Oct. 15, 1999) (applying § 20–111.1 to contract dispute regarding proceeds of a life insurance policy (citing Lincoln Nat. Life Ins. Co. v. Johnson , 38 F.Supp.2d 440, 448 (E.D.Va.1999) )). Therefore, the domestic relations exception to subject matter jurisdiction does not apply in this matter.
Virginia Code 20–111.1 states that, except as otherwise provided, "upon the entry of a decree of annulment or divorce from the bond of matrimony ... any revocable beneficiary designation contained in a then existing written contract owned by one party that provides for the payment of any death benefit to the other party is revoked...." Such Virginia Code section also includes an exception which states that "[t]his section shall not apply (i) to the extent a decree of annulment or divorce from the bond of matrimony, or a written agreement of the parties provides for a contrary result as to specific death benefits ...." Va. Code Ann. § 20–111.1(C). Plaintiff argues that her breach of contract claim falls within the exception detailed in § 20–111.1(C).
2. Colorado River Abstention
Plaintiff also argues, in her Rebuttal Brief, that this Court should remand the present matter, pursuant to the Colorado River abstention doctrine, because there is a parallel proceeding currently pending in state court. See Pl.'s Rebuttal to Def. Jones' Opp'n to Pl.'s Mot. to Remand at 5.
Generally, "the pendency of a state court proceeding is no bar to proceedings concerning the same matter in the Federal court having jurisdiction." McClellan v. Carland , 217 U.S. 268, 282, 30 S.Ct. 501, 54 L.Ed. 762 (1910) ; accord McLaughlin v. United Va. Bank , 955 F.2d 930, 934 (4th Cir.1992). However, the Supreme Court noted an exception to this general rule in Colorado River Water Conservation District v. United States , stating that, "though no precise rule has evolved, the general principle is to avoid duplicative litigation," and principles of "[w]ise judicial administration" may counsel abstention in "exceptional" circumstances. 424 U.S. at 817–18, 96 S.Ct. 1236 (internal citations omitted). "The threshold question in deciding whether Colorado River abstention is appropriate is whether there are parallel federal and state suits." Great Am. Ins. Co. v. Gross , 468 F.3d 199, 207 (4th Cir.2006) (citing Chase Brexton Health Servs., Inc. v. Maryland , 411 F.3d 457, 463 (4th Cir.2005) ). "If parallel suits exist, then [the court] must carefully balance several factors ‘with the balance heavily weighted in favor of the exercise of jurisdiction.’ " Id. (quoting Moses H. Cone Mem'l Hosp. v. Mercury Constru. Corp . , 460 U.S. 1, 16, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983) ). "In the final analysis, abstention is the exception, not the rule, and it may be considered only when ‘the parallel state-court litigation will be an adequate vehicle for the complete and prompt resolution of the issues between the parties.’ " Id. (quoting Moses H. Cone , 460 U.S. at 28, 103 S.Ct. 927 ).
The Court notes that application of Colorado River abstention generally requires a case to be dismissed. That is, were this Court to find that the Colorado River abstention doctrine applies, Plaintiff's current suit would be dismissed and not remanded as Plaintiff's Motion requests. See Colorado River , 424 U.S. at 818–19, 96 S.Ct. 1236 ("In assessing the appropriateness of dismissal in the event of an exercise of concurrent jurisdiction ... [o]nly the clearest of justifications will warrant dismissal .")(emphasis added). However, as the Court determines that Colorado River abstention is not appropriate, the Court need not determine whether remand would be available should such abstention doctrine be applicable.
State and federal cases "are parallel if substantially the same parties litigate substantially the same issues in different forums." New Beckley Mining Corp. v. Int'l Union, United Mine Workers of Am. , 946 F.2d 1072, 1073 (4th Cir.1991). If there are parallel state and federal cases, the existence of "exceptional circumstances" counseling abstention may be determined by considering the following factors:
(1) whether the subject matter of the litigation involves property where the first court may assume in rem jurisdiction to the exclusion of others; (2) whether the federal forum is an inconvenient one; (3) the desirability of avoiding piecemeal litigation; (4) the relevant order in which the courts obtained jurisdiction and the progress achieved in each action; (5) whether state law or federal law provides the rule of decision on the merits; and (6) the adequacy of the state proceeding to protect the parties' rights.
Great Am. Ins. Co. , 468 F.3d at 207–08 (citing Chase Brexton Health Servs. , 411 F.3d at 463–64 ).
The Court finds that the Colorado River abstention doctrine is not applicable in this matter, because there is no parallel proceeding pending in state court. Although Plaintiff's Petition filed against Mr. Jones in Virginia Beach Circuit Court addresses, in part, Mr. Jones' failure to comply with the terms of the Marital Settlement Agreement, such Petition is not a parallel proceeding to the present action because each case names a different defendant and seeks different relief. First, Plaintiff's state court Petition is filed against Mr. Jones personally, and not his Estate. Although Plaintiff asserts that she is attempting to substitute Mr. Jones' Estate as a defendant in such action, under Virginia law, contempt proceedings are generally not available against deceased defendants or their estates. See Estate of Hackler v. Hackler , 44 Va.App. 51, 71–73, 602 S.E.2d 426 (2004) (finding that a show cause motion, served on the plaintiff's husband before he died, abated, alongside the divorce proceedings, at his subsequent death and no relief could be granted based on such petition). Thus, the state court Petition currently concerns a defendant who is not before the Court, and it appears unlikely that Plaintiff will be able to amend such Petition to substitute the Executor of Mr. Jones' Estate as a defendant.
Defendant Jones also argues that Mr. Jones was never served with Plaintiff's Petition and the action is currently "dormant" in the Circuit Court for the City of Virginia Beach, Virginia. Defs.' Opp'n to Pl.'s Mot. for Remand, 9-10, ECF No. 16. However, as the Court has determined that such Petition is not parallel litigation, the Court need not address the status of the state court Petition.
Plaintiff contends that her Petition is not a contempt proceeding because she seeks enforcement of the Marital Settlement Agreement, as incorporated in the Final Decree of Divorce, against Mr. Jones' Estate. Pl.'s Rebuttal to Def. Jones' Opp'n to Pl.'s Mot. to Remand at 6. However, the language of the Petition contradicts Plaintiff's argument, because the Petition seeks "issuance of a Rule to Show Cause why [Mr. Jones] should not be held in contempt" for his failure to comply with the Marital Settlement Agreement, as incorporated in the parties' Final Decree of Divorce. Pet. at 3.
Second, the relief sought in each of the two actions filed by Plaintiff differs. The state action is a Petition to Show Cause, the result of which, if Plaintiff were successful, would require that Mr. Jones be held in contempt for his failure to comply with the Final Decree of Divorce and Marital Settlement Agreement. Alternatively, in the present action, Plaintiff seeks the imposition of a constructive trust, damages for breach of contract, and declaratory judgment. A show cause motion is not a parallel proceeding to an action for damages and declaratory judgment, even when filed against the same defendant. See Massey v. Massey , No. 4:96cv39, 1996 U.S. Dist. LEXIS 15456, *14 (E.D.Va. August 5, 1996) (unpublished) (finding that Colorado River abstention doctrine did not apply because state show cause motion was "very different" and not parallel to the compensatory damages and declaratory judgment sought in federal court). Thus, Plaintiff's state court Petition is not a parallel proceeding to the present matter and the Colorado River abstention doctrine does not apply.
As the Court has determined that there is no parallel state court litigation in this matter, the Court need not evaluate whether "exceptional circumstances" exist that warrant exercise of the Colorado River abstention doctrine.
Therefore, the Court finds that the domestic relations exception to subject matter jurisdiction, and the Colorado River abstention doctrine, do not apply in this matter, and the Court DENIES Plaintiff's Motion to Remand.
B. Motion for Leave to File Late Response
Before moving on to address Defendant Jones' Motion to Dismiss, the Court must consider Plaintiff's Motion for Leave to File a Late Response to the Motion to Dismiss. ECF No. 9. Plaintiff filed her Opposition to Defendant Jones' Motion to Dismiss on March 18, 2016—4 days after the response deadline of March 14, 2016. ECF No. 9. On March 21, 2016, Plaintiff's counsel sought leave to file such Opposition, explaining that the Opposition was delivered to the Clerk's Office of this Court on March 14, 2016 but such filing was rejected because it was not submitted electronically. Pl.'s Mot. for Leave to File a Late Resp. to Mot. to Dismiss at 1. Plaintiff's counsel further explained that he completed the requisite steps to register for electronic filing and electronically filed Plaintiff's Opposition on March 18, 2016. Id. On March 25, 2016, Defendant Jones filed an opposition to Plaintiff's Motion for Leave. ECF No. 10.
The Court may, for good cause, extend the period of time for filing a motion paper "on motion made after the time [to file] has expired if the party failed to act because of excusable neglect." Fed. R. Civ. P. 6(b)(1)(B) ; see Local Civ. R. 7(1). "To determine whether a party's delay was caused by excusable neglect, the Court considers ‘the danger of prejudice [to the non-moving party], the length of delay and its potential impact on judicial proceedings, the reason for the delay, including whether it was within the reasonable control of the movant, and whether the movant acted in good faith.’ " Batton v. Commc'ns Workers of Am., AFL – CIO , No. 2:13cv426, 2014 WL 5742409, at *8 (E.D.Va. Aug. 4, 2014) (unpublished) (quoting Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P'Ship , 507 U.S. 380, 395, 113 S.Ct. 1489, 123 L.Ed.2d 74 (1993) ). While Plaintiff's counsel's "reason for delay," that is, counsel's failure to educate himself on the rules and procedures of this Court, weighs against granting Plaintiff's Motion for Leave, the Court finds that counsel's neglect in this matter is excusable. The "danger of prejudice [to the non-moving party], the length of delay and its potential impact on judicial proceedings," are minimal in this matter, particularly as Plaintiff's counsel's error took place so early in the case. Further, Defendant Jones concedes that Plaintiff did not act in bad faith, and, the Court finds, Plaintiff's counsel demonstrated good faith in seeking leave to file and undertaking the necessary steps to comply with the Court's rules. Thus, the Court finds that Plaintiff's delay in filing her Opposition to Defendant Jones' Motion to Dismiss was the result of excusable neglect, and the Court GRANTS NUNC PRO TUNC Plaintiff's Motion for Leave to File her Response to Defendant's Motion to Dismiss.
C. Motion to Dismiss
Defendant Jones asks the Court to dismiss each claim in Plaintiff's Complaint. First, with respect to Count II, Defendant Jones argues that Plaintiff's breach of contract claim should be dismissed because Plaintiff's status as a beneficiary of Mr. Jones' life insurance policies was revoked upon her divorce from Mr. Jones, pursuant to Virginia Code § 20–111.1. Second, with respect to Count III, Defendant Jones asserts that Plaintiff's declaratory judgment claim is not appropriate because such claim can be resolved by addressing Plaintiff's breach of contract claim for money damages. Finally, with respect to Count I, Defendant Jones argues that Plaintiff's claim for a constructive trust should be dismissed because it is merely a remedy, reliant on Plaintiff's breach of contract claim, and not an independent claim.
In response, Plaintiff argues that her breach of contract claim should proceed because her claim falls within an exception to revocation, established by subsection (C) (i) of Virginia Code § 20–111.1. With respect to her declaratory judgment claim, Plaintiff argues that the Court has discretion to hear such claim, particularly in a matter where a third party, like Liberty National, provides and disperses the disputed funds. Finally, Plaintiff argues that a claim for constructive trust is permitted in the present circumstances. The Court will address each argument in turn.
1. Breach of Contract
The Court first addresses Defendant Jones' argument regarding revocation of Plaintiff's beneficiary designation under Virginia Code § 20–111.1. In pertinent part, such section states:
A. Except as otherwise provided under federal law or law of this Commonwealth, upon the entry of a decree of annulment or divorce from the bond of matrimony on and after July 1, 1993, any revocable beneficiary designation contained in a then existing written contract owned by one party that provides for the payment of any death benefit to the other party is revoked. A death benefit prevented from passing to a former spouse by this section shall be paid as if the former spouse had predeceased the decedent. The payor of any death benefit shall be discharged from all liability upon payment in accordance with the terms of the contract providing for the death benefit, unless the payor receives written notice of a revocation under this section prior to payment.
B. The term "death benefit" includes any payments under a life insurance contract, annuity, retirement arrangement, compensation agreement or other contract designating a beneficiary of any right, property or money in the form of a death benefit.
C. This section shall not apply (i) to the extent a decree of annulment or divorce from the bond of matrimony, or a written agreement of the parties provides for a contrary result as to specific death benefits, or (ii) to any trust or any death benefit payable to or under any trust....
Defendant Jones asserts that, pursuant to Virginia Code § 20–111.1(A), Plaintiff's status as a beneficiary of Mr. Jones' life insurance policies was revoked upon entry of the Final Decree of Divorce between Mr. Jones' and Plaintiff. Defendant Jones further asserts that the exception to such revocation, detailed in subsection (C) (i) of § 20–111.1, does not apply because the Marital Settlement Agreement does not discuss "specific death benefits." While § 20–111.1 generally operates to revoke an existing beneficiary designation upon entry of a decree of annulment or divorce, Plaintiff's beneficiary status is not revoked in the present case because the exception to revocation, detailed in § 20–111.1(C)(I), is applicable.
Contrary to Defendant Jones' argument, the language in paragraph 5 of the Marital Settlement Agreement, providing that Mr. Jones "has named [Plaintiff] as the beneficiary to a life insurance policy he owns with Liberty National," is sufficient to identify a "specific death benefit," even if it does not identify a particular life insurance policy number. This finding is consistent with the case of Transamerica Occidental Life Insurance Company v. Maree , No. 1:08CV24, 2008 WL 2964377 (E.D.Va. Aug. 1, 2008) (unpublished), where the court found "the [m]arital [s]ettlement [a] greement between [the deceased] and [defendant] constitutes ‘a written agreement of the parties [that] provides for a contrary result as to specific death benefits,’ " because such agreement "provides that [the deceased] ‘shall be allowed to maintain his existing life insurance policy and shall be allowed to name [defendant] as a beneficiary of this policy.’ " Id. at *3 (citations omitted). Similarly, in Lincoln National Life Insurance Company v. Johnson , 38 F.Supp.2d 440 (E.D.Va.1999), the court found that a marital settlement agreement "provide[d] a contrary result for specific death benefits" when such agreement included the language: "[h]usband shall maintain in full force and effect all insurance on his life, and the beneficiary of such insurances shall be the Wife until such time as a final divorce decree shall be entered by a court of competent jurisdiction. Thereafter the beneficiaries of such insurance shall be the children of the parties." Id. at 447 ; see also John Hancock Mut. Life Ins. Co. v. Johnson , No. 4:98cv91, 1999 WL 33265758, *2 (W.D.N.C. Oct. 15, 1999) (unpublished). Thus, even though the Marital Settlement Agreement in this matter does not identify any specific life insurance policy number, the language in paragraph 5 of the Marital Settlement Agreement is sufficient to invoke the exception to revocation for a specific death benefit, detailed in subsection (C) (i) of § 20–111.1. Therefore, Defendant Jones' Motion to Dismiss Plaintiff's breach of contract claim in Count II is DENIED .
2. Declaratory Judgment Claim
Defendant Jones next argues that Plaintiff's declaratory judgment claim should be dismissed because the breaching conduct has already taken place and a determination of whether Plaintiff is entitled to be a beneficiary of all life insurance policies, as alleged in Plaintiff's declaratory judgment claim, will be a necessary finding in order to determine whether Mr. Jones breached the Marital Settlement Agreement by failing to name and maintain Plaintiff as the beneficiary of all the Liberty National life insurance policies. In response, Plaintiff states that "requests for declaratory relief frequently appear in conjunction with actions in interpleader," and "although a request for declaratory judgment may not have been required, both this Court and the Virginia Circuit Court have discretion to hear and resolve such issues." Pl.'s Opp'n to Defs.' Mot. to Dismiss at 9-10.
Our Court of Appeals has explained that a district court's exercise of its discretionary authority to issue a declaratory judgment "is appropriate ‘when the judgment will serve a useful purpose in clarifying and settling the legal relations in issue, and ... when it will terminate and afford relief from the uncertainty, insecurity, and controversy giving rise to the proceeding.’ " Centennial Life Ins. Co. v. Poston , 88 F.3d 255, 256 (4th Cir.1996) (quoting Aetna Cas. & Sur. Co. v. Quarles , 92 F.2d 321, 325 (4th Cir.1937) ). In contrast, declaratory judgment is generally unavailable when "claims and rights asserted have fully matured, and the alleged wrongs have already been suffered." Hanback v. DRHI, Inc. , 94 F.Supp.3d 753, 758 (E.D.Va.2015) (internal quotation marks and citations omitted). This is so because, when a contract has already been breached causing damages, " ‘there is no guidance’ that can be offered via a declaratory judgment to steer ‘conduct away from a breach of contract.’ " Hanback , 94 F.Supp.3d at 758 (quoting The Hipage Co., Inc. v. Access2Go, Inc. , 589 F.Supp.2d 602, 615 (E.D.Va.2008) ). Further, several courts have recognized that ‘[a] declaratory judgment serves no ‘useful purpose’ when it seeks only to adjudicate an already-existing breach of contract claim.' " See, e.g. , Metra Indus., Inc. v. Rivanna Water & Sewer Auth. , No. 3:12cv49, 2014 WL 652253, *2 (W.D.Va. Feb. 19, 2014) (unpublished) (quoting Torchlight Loan Servs., LLC v. Column Fin., Inc. , No. Ilcv7426, 2012 WL 3065929, *13 (S.D.N.Y. July 25, 2012) (unpublished)) (citation omitted).
"A state court declaratory action that is removed" is treated as "invoking the Federal Declaratory Judgment Act, 28 U.S.C. § 2201." Hartford Fire Ins. Co. v. Harleysville Mut. Ins. Co. , 736 F.3d 255, 261 n. 3 (4th Cir.2013) (citing Jones v. Sears Roebuck & Co. , 301 Fed.Appx. 276, 281 n. 12 (4th Cir.2008) ). Thus, the Court relies on cases discussing the Federal Declaratory Judgment Act.
The Court therefore agrees with Defendant that, in this matter, the parties' dispute does not present an ongoing controversy suitable for resolution by declaratory judgment. First, Plaintiff concedes that declaratory judgment is not necessary for resolution of Plaintiff's claims. Second, Plaintiff's allegations explain that any breach of contract by Mr. Jones, or other alleged harm, has already occurred. Further, the Court notes that it must address the disputed terms of the Marital Settlement Agreement—that is, whether the Marital Settlement Agreement allows Plaintiff to be the beneficiary of all the Liberty National life insurance policies, the question at issue in Plaintiff's declaratory judgment claim—before the Court can determine whether Mr. Jones breached such Agreement in failing to name and maintain Plaintiff as the beneficiary of all the Liberty National life insurance policies. Thus, any relief owed to Plaintiff will be fully addressed by resolution of Plaintiff's breach of contract claim, as set forth in the Complaint. See Bagley v. Wells Fargo Bank, N.A. , 3:12CV617, 2013 WL 350527, *7 (E.D.Va. Jan. 29, 2013) (unpublished) (granting a motion to dismiss a declaratory judgment claim because there was "no reasonably certain future conduct to be prevented or mandated" and the determination of the parties' rights would be "addressed by the underlying contract claim"). Therefore, the Court GRANTS Defendant's Motion to Dismiss Plaintiff's declaratory judgment claim and the Court DISMISSES WITH PREJUDICE Count III of the Complaint.
A determination whether a dismissal is with prejudice or without prejudice is within the Court's discretion. Carter v. Norfolk Cmty. Hosp. Ass'n, Inc. , 761 F.2d 970, 974 (4th Cir.1985). In support of its determination that Count III is dismissed with prejudice, the Court has considered the following: (1) While Plaintiff has informally requested leave to file an amended complaint within her opposition brief, Plaintiff has not filed a separate motion seeking leave to amend, nor has Plaintiff indicated how any pleading deficiencies, with respect to Plaintiff's declaratory judgment claim, can be cured through amendment; (2) Plaintiff has failed to advance an opposition related to dismissal of her declaratory judgment claim, instead stating that such claim is appropriate and, "although a request for declaratory judgment may not have been required," the Court has discretion to hear and resolve such issue, Pl.'s Opp'n to Defs.' Mot. to Dismiss at 10; and (3) the primary basis for the dismissal of Count III of the Complaint is not the lack of sufficient factual allegations, but rather, is that Plaintiff's own allegations demonstrate that relief is unavailable on the legal theories she advances in her declaratory judgment claim.
3. Constructive Trust Claim
Finally, Defendant Jones argues that Plaintiff's constructive trust claim should be dismissed because it is a remedy, not an independent cause of action, and such remedy depends on Plaintiff's breach of contract claim (which Defendant Jones argues ought to be dismissed). Mot. to Dismiss for Failure to State a Claim and Br. in Support at 9. Several courts have found that a claim for a constructive trust under Virginia law is an equitable remedy, dependent on another stated cause of action, and not an independent claim. See, e.g. , Johnson v. D & D Home Loans Corp. , No. 2:07cv204, 2007 WL 4355278, *4 (E.D.Va. Dec. 6, 2007) (unpublished) ("The court shall recognize the Johnsons' plea for constructive trust or resulting trust as a remedy but not as a separate cause of action."); Clarke v. Newell , No. 1:05cvl013, 2005 WL 3157570, *5 (E.D.Va. Nov. 23, 2005) (unpublished) (noting that a constructive trust is an equitable remedy and "equitable remedies are not in and of themselves causes of actions but rather remedies for stated causes of action"); cf. Bank of Hampton Roads v. Powell , 292 Va. 10, 785 S.E.2d 788, (2016) ("A constructive trust is an equitable remedy which is created by operation of law to prevent a fraud or injustice." (citing Leonard v. Counts , 221 Va. 582, 589, 272 S.E.2d 190 (1980) )). However, "to the extent that [a constructive trust is a] remed[y] resulting from the causes of action that Plaintiff otherwise affirmatively states in [her] Complaint, [it] should remain." Johnson , 2007 WL 4355278, at *4 (citing Clarke , 2005 WL 3157570, at *5 ). Defendant Jones concedes that, if proven successful, Plaintiff's breach of contract claim may entitle Plaintiff to imposition of a constructive trust. Mot. to Dismiss for Failure to State a Claim and Br. in Support at 9. As determined above, Plaintiff's breach of contract claim remains and will not be dismissed. Thus, as Plaintiff's claim for a constructive trust results from a cause of action that Plaintiff has "otherwise affirmatively state[d]" in her Complaint, such constructive trust claim will remain as a remedy, but not as a separate cause of action. Therefore, to the extent that Plaintiff's constructive trust claim is a remedy resulting from Plaintiff's breach of contract claim, the Court DENIES Defendant Jones' Motion to Dismiss Plaintiff's constructive trust claim in Count I. However, to the extent that Plaintiff's constructive trust claim was raised as a separate cause of action, the Court GRANTS Defendant Jones' Motion to Dismiss such claim.
IV. CONCLUSION
For the reasons stated above, Plaintiff's Motion to Remand, ECF No. 13, is DENIED . Plaintiff's Motion for Leave to File a Late Response to Motion to Dismiss, ECF No. 9, is GRANTED NUNC PRO TUNC . Defendant Jones' Motion to Dismiss for Failure to State a Claim, ECF No. 3, is GRANTED IN PART and DENIED IN PART . With respect to Count III, Plaintiff's declaratory judgment claim, Defendant Jones' Motion to Dismiss is GRANTED and Count III is DISMISSED WITH PREJUDICE . With respect to Count II, Plaintiff's breach of contract claim, Defendant Jones' Motion to Dismiss is DENIED . With respect to Count I, Plaintiff's constructive trust claim, to the extent that Plaintiff's constructive trust claim is a remedy resulting from Plaintiff's breach of contract claim, Defendant Jones' Motion to Dismiss is DENIED .
The Clerk is REQUESTED to send a copy of this Memorandum Order to all counsel of record.
IT IS SO ORDERED .