United States District Court, E.D. Kentucky, Central Division, Lexington
OPINION AND ORDER
K. CALDWELL, CHIEF JUDGE.
matter is before the Court on the defendant's motion to
dismiss (DE 8) for lack of subject matter jurisdiction. The
issue on this motion is whether plaintiff Drury Properties,
LLC has sufficiently proved that Donald Drury, its sole
member at the time the complaint was filed, changed his
domicile from Kentucky to Florida in 2013. Because Drury
Properties has not met its burden of proof, the motion to
dismiss must be granted.
root of this matter is a dispute between the heirs of the
late Melvin and Florence Flora. The Floras had three
children: sons Gary and Bobby and daughter Barbara Flora
Drury, who is now deceased. Gary is the executor of his
parents' estates and is the trustee of the testamentary
trust established by his father.
attempt to settle Melvin and Florence's estates has
spawned multiple lawsuits in state court involving Gary, as
executor, and certain of his sister Barbara's heirs. One
of those suits made its way to the Kentucky Supreme Court,
which noted the “incredibly complicated factual
pattern” of the dispute and summarized the background
Melvin O. Flora (“Melvin Sr.”) and his wife,
Florence Flora, were the parents of three children-sons, Gary
and Bobby, and daughter, Barbara Drury. Each executed
separate Wills, with Melvin Sr. leaving all his property to
his wife Florence. He died in July 2009. Florence had a Will
and two subsequent Codicils. Her Will divided her estate
evenly among her three children. In addition, Florence's
Codicils provided for the division of the family farms with
each of her three children receiving certain identified
tracts. However, before her death and about a year after her
husband died, Florence suffered a debilitating stroke. Not
long after her stroke, on November 16, 2010, Florence
executed several documents conveying all of her property to
her daughter Barbara. One of the documents Florence executed
was a Trust which revoked her Last Will and Codicils.
Florence also signed several deeds of conveyance transferring
all of the family farms to Barbara. Leslie Dean, the wife of
Florence's grandson, Melvin, who is also the
daughter-in-law of Barbara, is a Kentucky lawyer [and is
plaintiff's lawyer in this federal case]. She was the
individual who prepared these documents and counseled
Florence to sign. As a result, Melvin and Leslie stood to
eventually inherit all of Florence's estate, thereby
excluding Florence's sons, Gary and Bobby, Barbara's
brothers. Needless to say, this did not bode well for family
harmony and good will.
Drury v. Isaacs, No. 2013-SC-000815-MR, 2014 WL
7238385, at *1 (Ky. Dec. 18, 2014)
the Woodford District Court determined that Florence was not
of sound mind at the time that she executed the trust
document drafted by Dean, who was Florence's
daughter-in-law and is also the plaintiff's attorney in
this case. Again, that document purported to revoke
Florence's last will and codicils. It also named
Florence's grandson, Melvin (“Melvin K.”) -
attorney Dean's husband - as the estate administrator.
Id. at *2. Florence's will and codicils were
admitted to probate and, as provided in the will, Gary was
appointed executor of Florence's estate. Id. It
appears that neither Melvin Sr.'s nor Florence's
estate has been settled and that both actions remain pending
in probate court in Woodford County.
the complexity of the family dispute, the Court has
determined that this federal action involves a discrete issue
involving a single piece of property. The property is owned
by Drury Properties, which, at least during the times
relevant to this motion, was wholly owned by Donald Drury. It
appears that Donald is one of Barbara's heirs.
appears that the property at issue was previously owned by
Melvin K. In 1994, Melvin Sr. and Flora loaned Melvin K.,
their grandson, $52, 500.00 and the loan was secured by a
mortgage on the property at issue. (DE 1-2, Mortgage.) Drury
Properties asserts that the underlying note was paid in full
in 2004 and there does not appear to be any dispute about
that. Drury Properties also asserts that Gary - executor of
Melvin Sr.'s and Flora's estates - was informed that
the underlying note has been paid but that Gary will not
release the mortgage.
Properties asserts that Gary has violated a Kentucky statute
requiring that mortgagees release a mortgage when the
underlying note is paid in full. KRS § 382.365. The
statute requires a lienholder to release a lien on real
property within 30 days from the date that the underlying
note is paid. KRS § 382.365(1).
statute further provides for statutory damages against a
lienholder who fails to comply without “good
cause.” The statute provides the lienholder is at first
liable to the property owner in the amount of $100 per day
for each day “of the violation for which good cause did
not exist.” KRS § 382.365(4). If the lienholder
continues to fail to release the lien without good cause for
45 days after receiving written notice, then the lienholder
is liable to the property owner for $500 per day for each day
“for which good cause did not exist” after the
45th day from the date of the notice. KRS § 382.365(5).
Properties claims statutory damages of $458, 000. It
calculates its damages from October 12, 2012. That is the
date that Gary and Drury Properties entered into a settlement
agreement through which Gary agreed to release the mortgage.
(DE 1-5, Agreement.) In addition, Drury Properties asserts
claims for breach of contract and fraud based on Gary's
failure to comply with the terms of the settlement agreement.
initial complaint, Drury Properties sued only one defendant:
Gary Flora, in his individual capacity and in his capacity as
the executor of Melvin and Flora's estate and as trustee
of the Melvin Owen Flora Testamentary Trust. Drury Properties
later filed an amended complaint, naming two additional
parties: Hartford Fire Insurance Company and the Estate of
Properties later filed a second amended complaint. In the
second and most recent amended complaint, Drury Properties
asserted that this Court has jurisdiction over this matter
pursuant to diversity jurisdiction set forth in 28 U.S.C.
§ 1332. Under that statute, this Court has jurisdiction
over all matters in which the amount in controversy exceeds
$75, 000 and is between citizens of different states. For
subject matter jurisdiction to exist under this statute,
complete diversity of citizenship must exist, meaning ...