IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF TEXAS

SAN ANTONIO DIVISION

RENEE BENSON

V. NO: SA: 15-CV-00202-DAE

THOMAS MILTON BENSON, JR.

As Trustee of the

SHIRLEY L. BENSON

TESTAMENTARY TRUST

MOTION TO REMAND

Petitioner Renee Benson submits this Motion to Remand pursuant to 28 U.S.C. 1447

and respectfully states as follows.

Respondents sole basis for removal was the Receivers intervention filed in the state

probate court proceeding on March 2. The intervention was voluntarily dismissed one week after

the case was removed, leaving only the original probate court claimfor Respondents removal

as trustee of a testamentary trust. Though now asserting diversity, Respondent did not remove

the claim when it was filed. Now, after significant, adverse rulings by the probate court, he seeks

to change the forum. Both asserted grounds for federal jurisdictiondiversity and supplemental

jurisdictionshould be rejected on multiple, mandatory grounds. Additionally, the Court has

discretion to remand the state-law claim now that the purported federal question is gone.

I. The removal statutes must be strictly construed in favor of state court jurisdiction.

The removing party has the burden to establish federal jurisdiction. De Aguilar v. Boeing

Co., 47 F.3d 1404, 1408 (5th Cir. 1995). Any ambiguities are construed against removal

because the removal statute should be strictly construed in favor of remand. Manguno v.

Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002).

MOTION TO REMAND

2

Courts must re-examine their jurisdiction at every stage of the litigation, particularly

after dismissal of all federal claims. Enochs v. Lampasas Cnty., 641 F.3d 155, 161 (5th Cir.

2011). [F]ederal[-question] jurisdiction exists only when a federal question is presented on the

face of the plaintiffs properly pleaded complaint. Caterpillar Inc. v. Williams, 482 U.S. 386,

392 (1987). Under the well-pleaded complaint rule, the plaintiff is the master of the claim,

and a plaintiff mayexcept in cases of complete federal preemptionavoid federal jurisdiction

by exclusive reliance on state law. Marren v. Stout, 930 F. Supp. 2d 675, 680 (W.D. Tex.

2013) (quoting Caterpillar, 482 U.S. at 392).

II. The removal was untimely.

A defendant must file a notice of removal within 30 days after receipt of the initial

pleading. 28 U.S.C. 1446(b)(1). Renee Benson filed her original petition (which has never been

amended and remains her live pleading) on January 21, 2015. Doc. 3 at 5. Respondents attorney

accepted service on January 29, 2015. See Ex. A (attached).1 Consequently, his deadline was

March 2. He did not file his notice of removal until March 18sixteen days after the deadline.

A. The Receivers intervention cannot form the basis of a removal.

Relying on 1446(b)(3), Respondent contends the notice of removal was timely because

it was filed within 30 days of his March 2 receipt of the Receivers intervention. Ntc. Removal

(Doc. 1) at 2-3. This is incorrect for two reasons. First, that section applies only if the case

stated by the initial pleading is not removable, 28 U.S.C. 1446(b)(3), but Respondent contends

the opposite, asserting diversity jurisdiction for the original (and since unchanged) trustee-

removal claim. Doc. 1 at 9-10. Respondent cannot contend the claim was initially removable

1 Interestingly, Renees petition named Respondent both individually (as beneficiary) and as

trustee, and Respondents attorney accepted service on Respondents behalf in both capacities. See Ex. A (attached).

MOTION TO REMAND

3

and simultaneously take advantage of 1446(b)(3). Second, even if 1446(b)(3) applied,

removal may not be based on an intervening petition or complaint. McKinney Econ. Devt

Corp. v. McKinney Shores Props., Inc., No. 4:09cv284, 2010 WL 3855553, at *4 (E.D. Tex.

Aug. 27, 2010) (unpublished) (collecting cases); Henderson v. City of Chattanooga, No. 1:02-

CV-045, 2002 WL 32060139, at *5-6 (E.D. Tenn. Mar. 15, 2002) (unpublished).

Respondent also argues that he became the last-served defendant upon receipt of the

intervention, attempting to trigger the 30-day removal deadline at that point. Doc. 1 at 2 & n.2.

He cites 1446(b)(2(C) in support, but that section addresses consentnot timing. Moreover, in

this circuit the removal clock starts to run when the first defendant is served, not the last. Getty

Oil Corp. v. Ins. Co. of N. Am., 841 F.2d 1254, 1262-63 (5th Cir. 1988).

B. The intervention does not satisfy the narrow parameters of this Circuits revival exception.

Respondent also contends the revival exception restarted the removal clock. Doc. 1 at 2-

3. In Johnson v. Heublein, Inc., 227 F.3d 236, 241-42 (5th Cir. 2000), the court recognized that

a lapsed removal right may be restored if a plaintiff amends her complaint so substantially as to

alter the proceedings character and constitute essentially a new lawsuit. There, the Fifth Circuit

applied the revival exception because (1) two of the defendants had realigned with the plaintiff

because of settlement, (2) the claims bore no resemblance whatsoever to those in the original

complaint, and (3) the remaining defendants were exposed to increased damages. Id. at 242. The

Johnson scenario was fairly extreme, and subsequent decisions have made clear that the revival

exception is narrow. See Air Starter Components, Inc. v. Molina, 442 F. Supp. 2d 374, 382-83

(S.D. Tex. 2006) (collecting cases). Merely adding parties or claims is not enough; the

amendment must alter the essential character of the action. Id. at 382.

MOTION TO REMAND

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Here, the revival exception does not apply because the plaintiffRenee Bensondid not

amend her complaint or do anything else to trigger revival. Respondents timeliness-of-removal

argument turns solely on the action of a third-party intervenorthe Receivers. Doc. 1 at 2-3.

Respondent offers no authority or analysis to support such an unprecedented extension of the

revival exception. But even if the exception could be so extended, this case is not remotely

analogous to Johnson. The intervention did not significantly altermuch less completely

transformthe case. There was no re-alignment of the parties, and only one new claim was

added.

Finally, the 30-day limit is designed to deprive the defendant of the undeserved tactical

advantage of seeing how the case goes in state court before removing, and to prevent the delay

and wastefulness of starting over in a second court after significant proceedings in the first.

Johnson, 227 F.3d at 242. That is precisely what Respondent attempts to do here. Significant

proceedings had already occurred in probate court, including a two-day evidentiary hearing that

led the court to suspend Respondent as trustee and appoint receivers to take temporary custody

of the testamentary trust assets. And Respondent had already taken an interlocutory appeal of

that order. Applying the revival exception here would thwart the 30-day limits very purpose.

III. Alternatively, the probate exception precludes federal jurisdiction.

Federal jurisdictionwhether based on diversity or a federal questionis prohibited

because the state probate court, through the Receivers it appointed, administers the Shirley L.

Benson Testamentary Trust and has custody of a resthe Trust corpus. A state courts

exclusive authority to administer a res in its custody lies at the heart of the probate exception:

[W]hen one court is exercising in rem jurisdiction over a res, a second court will

not assume in rem jurisdiction over the same res. Thus, the probate exception

reserves to state probate courts the probate or annulment of a will and the

MOTION TO REMAND

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administration of a decedents estate; it also precludes federal courts from endeavoring to dispose of property that is in the custody of a state probate court.

Marshall v. Marshall, 547 U.S. 293, 311-12 (2006).

In Marshall, the Supreme Court held that an in personam tort action for intentional

interference with an inheritance does not trigger the probate exception to federal jurisdiction. Id.

at 312. The probate exception did not apply because the decedents wife was not seeking to

probate or annul a will, or to reach a res in the custody of a state court. Id. Marshall requires

a two-step inquiry into (1) whether the property in dispute is estate property within the custody

of the probate court and (2) whether the plaintiffs claims would require the federal court to

assume in rem jurisdiction over that property. Curtis v. Brunsting, 704 F.3d 406, 409 (5th Cir.

2013). In Curtis, this test was not satisfied because the case involved an inter-vivos trust that had

never become part of the probate estate. Id. at 409-10.

This case, by contrast, involves a testamentary trust, which is integral to and a part of

Shirley Bensons estate.2 Additionally, in contrast to Curtis, the corpus of the Testamentary

Trust is in the custody of the state probate court through its receivers, which also satisfies the

first element. As the Supreme Court has explained, when a court appoints a receiver to

administer property, the receiver holds the property on the courts behalf:

When a court exercising jurisdiction in equity appoints a receiver of all the

property of a corporation, the court assumes the administration of the estate. The

possession of the receiver is the possession of the court; and the court itself holds

and administers the estate through the receiver, as its officer.

Porter v. Sabin, 149 U.S. 473, 479 (1893); see also Byers v. McAuley, 149 U.S. 608, 615(1893).

2 Some assets of Shirley Bensons probate estate evidently were never titled in the name of the

trustee of the testamentary trust and instead remain in the name of Respondent in his capacity as

Executor. Therefore, the Receivers were appointed to take charge not only of Shirley Bensons testamentary trust but also the remnant of her probate estate. See Second Am. Order at 1 (Doc.

1, Attachment 5 at 7) (Such appointment is immediately necessary for purposes of managing and conserving the Trusts and the Estates property during litigation).

MOTION TO REMAND

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The second element is also satisfied, as plaintiffs claims would require the federal court

to assume in rem jurisdiction over the property. The only claim now pending is for the trustees

removal. When Respondent removed this case, the probate court had suspended him as trustee

and appointed temporary receivers to administer the trust. If this Court assumes jurisdiction, it

will take over custody of the res (the Trust corpus) and supervise the Receivers.3 The probate

exception does not allow federal courts to usurp a state courts control of a res. Marshall, 547

U.S. at 311-12; Porter, 149 U.S. at 480 (The reasons are yet stronger for not allowing a suit

against a receiver appointed by a state court to be maintained, or the administration by that court

of the estate in the receivers hands to be interfered with, by a court of the United States.).

Accordingly, the probate exception defeats both purported sources of federal jurisdiction.

IV. Moreover, supplemental jurisdiction never attached.

A. The intervention was not sufficiently related to the trustee-removal claim to

trigger supplemental jurisdiction.

Even if federal jurisdiction existed over the Bensco ownership declarations the Receivers

sought, supplemental jurisdiction would not extend to Renee Bensons trustee-removal claim

because the two claims do not derive from a common nucleus of operative fact. United Mine

Workers of Am. v. Gibbs, 383 U.S. 715, 725 (1966). Even Respondent concedes that the two

claims are drastically different. Doc 1 at 10-11. The mere fact that the Receivers brought the

intervention does not create a common nucleus of operative fact with the trustee-removal claim,

or else every case in which the Receivers are involved would fit that description.

B. The intervention presented no underlying federal question.

Underlying federal jurisdiction is necessary before supplemental jurisdiction can attach to

a state-law claim. Halmekangas v. State Farm Fire & Cas. Co., 603 F.3d 290, (5th Cir. 2010).

3 In fact, the Receivers were in the process of preparing their Report on the status of the Trusts assets when the case

was removed. They have now completed that report and filed it with this Court. See Doc. 6 & Attachment 1.

MOTION TO REMAND

7

Respondent does not contend federal-question jurisdiction exists because of either a federal

claim or a state-law claim that is the subject of complete federal preemption. See Marren, 930 F.

Supp. 2d at 680. Rather, he contends the Receivers state-law claim necessarily raises a

disputed and substantial issue of federal law that a federal court may entertain without disturbing

federal/state comity principles. Id.; see also Doc. 1 at 9. However, he provides no analysis,

failing utterly to demonstrate his right to removal, as is his burden.

1. The Receivers sought construction of a trust document a state-law issue.

The Receivers intervention was a state-law declaratory-judgment action seeking the

construction of trust documents. It sought to clarify ownership of Bensco, Inc., a company in

which the Shirley L. Benson Testamentary Trust (the subject of Renee Bensons petition) owns a

substantial interest. The Receivers sought declarations as to two matters: (1) the validity and

ownership of one Bensco share issued in 1997 to Respondent in which the testamentary trust

asserts a 50% interest, and (2) the identity of who co-owns Bensco with the testamentary trust

Respondent or the 2009 Trusts (three trusts that Respondent created in 2009 for the benefit of

Renee Benson and her children). Plea in Intervention (Doc. 12) at 3-5. The 2009 Trusts give

Respondent, the grantor, the power to substitute other property of equivalent value. Doc. 12, Ex.

A at 16-17, 12(a). The Receivers alleged that Respondent attempted to exercise that power in

January 2015, and they disputed the validity and adequacy of his substitution. Doc. 12 at 6-8.

According to the Receivers intervention, resolving the first issue entails an examination

of the relevant corporate records, and resolving the second issue involves construing the 2009

Trust Agreements to determine the requirements for reacquiring trust property and to determine

whether Bensons tender fulfills those requirements. Id. at 6. Therefore, on the face of the

Receivers complaint, they sought declarations regarding the construction of corporate

MOTION TO REMAND

8

documents and trust agreements. Both are matters of state law. See TEX. PROP. CODE 111.003,

111.0035 (providing that Texas Trust Code governs express trusts in Texas, and that the terms of

a trust override the statute except in select instances); Perfect Union Lodge No. 10 v. Interfirst

Bank of San Antonio, N.A., 748 S.W.2d 218, 220 (Tex. 1988).

2. The purported federal issue was neither disputed nor necessary to

resolve the Receivers claims.

Respondent contends the Receivers intervention presents the federal-law question of

when an asset reacquisition exchange becomes effective under 26 U.S.C. 675(4). Doc. 1 at 9.

When trust documents allow the grantor to retain certain administrative powers, such as the

power to reacquire the trust corpus by substituting other property of an equivalent value, 675

governs the tax treatment of those trusts and provides that the grantor will be treated as the

owner for income tax purposes. 26 U.S.C. 675(4).

Respondent does not explain, nor does the Receivers intervention indicate, why or how

determining an asset reacquisition effective date under 675, for federal-tax purposes, has any

relevance to resolving the Receivers state-law claim. It is the trust documentnot the Internal

Revenue Codethat establishes Respondents right to substitute assets (a right Renee does not

challenge) and the procedures for exercising that right. The tax statute merely governs the

resulting income-tax consequencesan issue the Receivers intervention does not raise.

This situation is distinguishable from Marren, where this Court held that an issue of

federal tax law was necessary to a plaintiffs claim because she alleged, as an element of her

state-law Sabine Pilot, fraud, and negligent misrepresentation claims, that she was required to

violate federal tax law regarding her classification as an independent contractor and that her

employer lied about that status. Marren, 930 F. Supp. 2d at 681. The Receivers claims, by

contrast, depend completely on construction of the 2009 Trust documents.

MOTION TO REMAND

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As this Court has observed, a defendant cannot, merely by injecting a federal question

into an action that asserts what is plainly a state-law claim, transform the action into one arising

under federal law . . . . If a defendant could do so, the plaintiff would be master of nothing.

Redus v. Univ. of the Incarnate Word, __ F. Supp. 2d __, No. 5:14-cv-509-DAE, 2014 WL

6656799, at *5 (W.D. Tex. Nov. 25, 2014) (quoting Caterpillar, 482 U.S. at 399). The federal-

tax issue was neither necessary to nor raised by the Receivers claims.

3. The federal issue was not substantial.

Respondent also fails to address the requirement that a federal question be substantial.

Marren, 930 F.Supp. 2d at 680. The relevant factors are: (1) whether the issue is fact-bound or a

pure issue of federal law that would control many other cases, (2) whether the federal

government has an important interest in the issue, such as a federal agencys ability to vindicate

its rights in a federal forum, and (3) whether the issue is dispositive. Id. at 683 (citing Empire

Healthchoice Assurance, Inc. v. McVeigh, 547 U.S. 677, 700-01 (2006)).

These factors weigh against federal-question jurisdiction here. First, there is no indication

that the meaning of 675(4) would have been at issue in the Receivers claim, rather than the

statutes application to the facts of this case. See Marren, 930 F. Supp. 2d at 684-86. Second,

there is no indication the federal government has any interest in this issue, nor does it implicate a

federal agencys ability to vindicate its rights in federal court. Like the plaintiff in Marren, the

Receivers did not challenge the actions of any federal agency, did not seek a tax refund, and did

not accuse the IRS of any wrongdoing. Id. at 687. Third, the federal issue would not have been

dispositive. The Court would have had to decide the merits of the Receivers intervention based

on the governing Trust documents irrespective of the asset reacquisitions tax consequences.

MOTION TO REMAND

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4. Exercising federal jurisdiction would disturb the balance of federal

and state judicial responsibilities.

Even if 675 were integral to the Receivers claims, federal jurisdiction would be

lacking. As this Court has observed, [a]dopting Defendants reasoning and holding that federal-

question jurisdiction exists in any case in which a court must look to and apply federal tax law

would . . . herald[] a potentially enormous shift of traditionally state cases into federal courts.

Marren, 930 F. Supp. 2d at 690 (quoting Grable & Sons Metal Prods., Inc. v. Darue Engg &

Mfg., 545 U.S. 308, 319 (2005)). Federal-question jurisdiction never attached.

V. In the further alternative, this Court has discretion to remand the original and sole remaining claim, which is brought under state law.

For the foregoing reasons, remand would be mandatory even if the Receivers had not

voluntarily dismissed their intervention. But now that the intervention is gone, any purported

basis to hold the case in federal court disappears. [A] case properly belongs in state court . . .

when the federal-law claims have dropped out of the lawsuit in its early stages and only state-law

claims remain . . . . Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350 (1988) (citing Gibbs,

383 U.S. at 726-27). In that circumstance, the federal court should decline the exercise of

jurisdiction. Id.

Here, the only purported federal-law claims dropped out at the early stages, and only a

state-law claim remains. It is an abuse of discretion to deny remand when a case became a

purely Texas state law dispute, it was still in its infancy (less than three months old), no

discovery had occurred, no hearings or trial dates had been scheduled, the district court was not

even moderately familiar with any of the Texas state law issues, no financial or other

inconvenience would have occurred, and no prejudice would have arisen. Enochs, 641 F.3d at

162; see also McGhiey v. Metro News Serv., Inc., CV. No. SA-12-CV-00578-DAE, 2013 WL

MOTION TO REMAND

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3338598, at *6-8 (W.D. Tex. July 1, 2013) (applying Enochs factors and remanding case to state

court). That is the precise situation in this case.

Therefore, even if the Court concludes that supplemental federal jurisdiction attached to

the state-law trustee-removal claim, it should nonetheless exercise its discretion and remand to

the state probate court.

WHEREFORE, Petitioner Renee Benson requests that the case be remanded to Probate

Court Number Two of Bexar County, Texas and award her recovery of costs, expenses and

attorneys fees in connection with such remand as may be allowed by law.

Respectfully Submitted,

HARRIET ONEILL State Bar No. 00000027

honeill@harrietoneilllaw.com

LAW OFFICE OF

HARRIET ONEILL, P.C. 919 Congress Avenue, Suite 1400

Austin, Texas 78701

Telephone: (512) 944-2222

Telecopier: (512) 476-6441

DOUGLAS W. ALEXANDER

State Bar No. 00992350

dalexander@adjtlaw.com

ALEXANDER, DUBOSE,

JEFFERSON & TOWNSEND LLP

515 Congress Avenue, Suite 2350

Austin, Texas 78701-3562

Telephone: (512) 482-9300

Facsimile: (512) 482-9303

/s/ Bennett L. Stahl BENNETT L. STAHL

State Bar No. 19006500

blstahl@csg-law.com

CURL STAHL GEIS A PROFESSIONAL CORPORATION

One Riverwalk Place

700 North St. Marys Street, Ste. 1800 San Antonio, Texas 78205

Telephone: (210) 226-2182

Telecopier: (210) 226-1691

EMILY HARRISON LILJENWALL

State Bar No. 12352250

eliljenwall@scs-law.com

SCHOENBAUM, CURPHY

& SCANLAN, P.C.

112 E. Pecan, Suite 3000

San Antonio, Texas 78205

Telephone: (210) 224-4491

Telecopier: (210) 224-7983

ATTORNEYS FOR PLAINTIFF

RENEE BENSON

MOTION TO REMAND

12

CERTIFICATE OF CONFERENCE

Pursuant to Local Court Rule CV-7(i) I certify that before filing this Motion to Remand I

conferred with David Beck, counsel for Respondent, in a good faith attempt to resolve the

substance of this motion by agreement. Counsel, however, opposes this motion.

/s/ Bennett L. Stahl

CERTIFICATE OF SERVICE

I hereby certify that on the 9th day of April, 2015, I electronically filed the foregoing

with the Clerk of the Court using the CM/ECF system which will send notification of such filing

to the following:

David J. Beck, Esq.

Troy R. Ford, Esq.

BECK REDDEN LLP 1221 McKinney Street, Suite 4500

Houston, Texas 77010-2010

Telecopier: (713) 951-3720

dbeck@beckredden.com

rpost@beckredden.com

tford@beckredden.com

omcgovern@beckredden.com

Phillip A. Wittmann, Esq.

James C. Gulotta, Jr., Esq.

STONE PIGMAN WALTHER

WITTMANN L.L.C. 546 Carondelet Street

New Orleans, Louisiana 70130-3558

Telecopier: (504) 581-3361

pwittmann@stonepigman.com

malmon@stonepigman.com

jgulotta@stonepigman.com

MOTION TO REMAND

13

C. David Kinder, Esq.

Mark J. Barrera, Esq.

Ellen B. Mitchell, Esq.

COX SMITH MATTHEWS INCORPORATED

112 E. Pecan Street, Suite 1800

San Antonio, Texas 78205

Telecopier: (210) 226-8395

dkinder@coxsmith.com

mbarrera@coxsmith.com

emitchell@coxsmith.com

Steven R. Brook, Esq.

Joyce W. Moore, Esq.

LANGLEY & BANACK, INC. 745 East Mulberry Avenue, Suite 900

San Antonio, Texas 78212

Telecopier: (210) 735-6889

sbrook@langleybanack.com

jwmoore@langleybanack.com

Kevin Philip Kennedy, Esq.

1920 Nacogdoches Road, Suite 100

San Antonio, Texas 78209

Telecopier: (210) 824-2731

kpk@texas.net

/s/ Bennett L. Stahl