Sorenson v. Sorenson

ERIC DAVID SORENSON and MELANIE ANN FORNER, Plaintiffs, v. JOANNE MARIE SORENSON, Defendant.

CIVIL No. 20-2121 (MJD/DTS)

United States District Court, D. Minnesota

February 3, 2022

Adine S. Momoh and Kelly Maxwell, Stinson LLP, Counsel for Plaintiffs.

Ronald B. Sieloff, Sieloff & Associates, P.A., Counsel for Defendant.

MEMORANDUM OF LAW & ORDER

Michael J. Davis Judge United States District Court

I. INTRODUCTION

This matter is before the Court on Defendant Joanne Marie Sorenson's Motion to Dismiss Complaint and Amended Complaint. [Docket No. 32] The Court will decide the motion on the papers.

II. BACKGROUND

A. Factual Background

1. The Parties

Decedent David August Sorenson died on November 14, 2015, at age 80. ([Docket No. 13] First Amended Complaint (“FAC”) ¶ 4.) Decedent had three adult children: Plaintiff Eric David Sorenson, Plaintiff Melanie Ann Forner, and non-party Paul Sorenson. (Id. ¶¶ 1-2; ([Docket No. 8] J. Sorenson Aff. § II.)

Plaintiffs Eric Sorenson and Melanie Forner are Minnesota residents. (FAC ¶¶ 1-2.) Paul Sorenson is a California resident. (Joanne Sorenson Aff. § II.)

Defendant Joanne Marie Sorenson is a resident of California and Decedent's widow. (FAC ¶ 4.) Defendant married Decedent in 1996. (Id. ¶ 29.) Defendant has one adult child, Todd Twining, who is a California resident. (Id. ¶ 4.)

2. Power of Attorney

On October 17, 2001, Decedent signed a notarized Statutory Short Form Power of Attorney naming Defendant as his attorney-in-fact and Eric Sorenson as his successor attorney-in-fact. (FAC ¶ 16; [Docket No. 8] J. Sorenson Aff., Ex. O at 69-71.) Under Part Three of the form, Decedent checked the box stating: “This power of attorney authorizes the attorney-in-fact to transfer my property to the attorney-in-fact.” (Id. at 71.)

3. Decedent's Capacity

Plaintiffs allege that Decedent began to experience dementia and diminished capacity in 2010. (FAC ¶ 3.) They assert that this dementia escalated to late-stage Alzheimer's by the time of his death in November 2015. (Id.)

4. Inheritance

Plaintiffs assert that, in the fall of 2012, Decedent told Eric Sorenson that, if Decedent died before Defendant, each Plaintiff could expect an inheritance of “about $50, 000.” (FAC ¶ 20.)

No probate proceeding was ever commenced for Decedent's estate. (Sorenson Aff., Ex. D, Register of Actions at 18.)

Sometime before October 15, 2018, Defendant removed Decedent's three children (Plaintiffs and their brother, Paul Sorenson) from her will. (FAC ¶ 28.)

Decedent died on November 14, 2015. (FAC ¶ 4.)

5. Certificates of Deposit

a) First CD

In December 2015, Todd Twining's wife, Mary Twining, told Plaintiffs that Decedent had wanted his children to have a $108, 000 certificate of deposit (“First CD” or “CD1”). (FAC ¶ 12.) Eric Sorenson spoke to Defendant, and she stated that she was going to give Plaintiffs the certificate of deposit, but she did not. (Id.)

In mid-2016, Defendant's attorney forwarded Plaintiffs a letter from the South Metro Federal Credit Union in Prior Lake, Minnesota, stating that the $108, 000 certificate of deposit had been opened by Decedent as the sole account holder in 2009. (FAC ¶ 17.) CD1 named Plaintiffs and Paul Sorenson as beneficiaries. (Id.) In the original Complaint, Plaintiffs alleged that Defendant was added as a joint accountholder to CD1 in 2011; however, that allegation was stricken from the FAC. (Id.)

b) Second CD

In 2016, Eric Sorenson located a certificate of deposit at Anchor Bank in Eden Prairie, Minnesota (“CD2” or “Second CD”). (FAC ¶¶ 16-17.) The bank told him that CD2's value was “over $108, 000” and that the payable upon death beneficiaries were Plaintiffs and Paul Sorenson. (Id. ¶ 16.) The bank explained that CD2 could not be paid to them because Defendant's name was still on CD2. (Id.)

Defendant submits Exhibit B, showing that, in 2015, Decedent and Defendant had a joint checking account at Anchor Bank created by Decedent and Defendant each separately and personally signing on the account. (Reply Ex. B, June 12, 2015, Anchor Bank Account Agreement.) No power of attorney was used. Defendant also submits Exhibit A, a letter from Anchor Bank confirming that there was no certificate of deposit with Defendant's name and social security number in 2015 and 2016. (Reply Ex. A.)

c) Closing of CD2

Plaintiffs allege that Eric Sorenson later went to Anchor Bank to obtain more information about CD2. (FAC ¶ 16.) The bank manager told him that Defendant had closed CD2 a couple of weeks after Eric Sorenson had previously visited the bank. (Id.)

Plaintiffs allege that Defendant had Decedent's power of attorney and that she used that power of attorney to add her name to the certificates of deposit in early-to-mid-2015. (FAC ¶ 18.)

d) Defendant's Payments to Plaintiffs

In March 2016, Plaintiffs hired an attorney who requested that the $108, 000 CD1 plus $75, 000 be paid to Decedent's three children (Plaintiffs and their brother, Paul Sorenson). (FAC ¶ 23.) Later in 2016, Decedent sent some amount of money to Plaintiffs. (Id. ¶ 24.) In the original Complaint, Plaintiffs alleged that Defendant gave each sibling $28, 000; this allegation was stricken from the FAC. (Id.) In their Opposition Brief, Plaintiffs admit that Defendant paid Eric Sorenson, Melanie Forner, and Paul Sorenson $28, 000 each, for a total amount of $84, 000, for CD1. (Opp. at 9.) This left $24, 000 from CD1 not paid to Plaintiffs and Paul Sorenson. In mid-2018, Eric Sorenson asked Defendant when Plaintiffs and Paul Sorenson would receive the remaining $24, 000. (Id.; FAC ¶ 25.) Defendant stated that she would pay the last $24, 000 when Plaintiffs and Paul Sorenson signed a release with respect to Defendant's “final estate.” (Opp. at 9; FAC ¶ 25) Plaintiffs assert that they refused to sign the release. (Opp. at 9.)

6. California Lawsuit

In 2018, Plaintiff Eric Sorenson sued Defendant in California Small Claims Court for the remainder of what he thought he was owed from CD1. (FAC ¶ 26.) He sought the “[f]inal payment, plus interest, of (admitted) monies that were to go to me after my fathers passing.” (J. Sorenson Aff., Ex. G, Small Claims Court Claim at 24.) On October 15, 2018, the California court found in favor of Defendant, holding that Defendant did not owe Eric Sorenson any money on his claim. (FAC ¶ 26; J. Sorenson Aff., Ex. G, Notice of Entry of Judgment at 25.)

B. Procedural History

On October 6, 2020, Eric Sorenson and Melanie Forner filed a pro se Complaint against Defendant in this Court based on diversity jurisdiction. [Docket No. 1] The Complaint alleged multiple claims related to the certificates of deposit and various other issues relating to Plaintiffs' inheritance and Decedent's will, which were eliminated from the later-filed First Amended Complaint (“FAC”). The Summons and Complaint were served on Defendant on October 20, 2020. [Docket No. 3]

On November 10, Defendant filed a Motion to Dismiss for Lack of Jurisdiction. [Docket No. 5] Defendant requested that the Court dismiss the Complaint based on 1) lack of diversity jurisdiction; 2) failure to state a claim; and 3) failure to join Paul Sorenson as a necessary party. Defendant asserted multiple bases for dismissal including that the state probate court has exclusive jurisdiction over will contests, the three-year statute of limitations for probate actions, and res judicata based on the California lawsuit. One basis for this motion was that Paul Sorenson was an indispensable party but that, because he is a California resident, inclusion of Paul Sorenson as a Plaintiff would destroy diversity jurisdiction.

After the motion to dismiss was filed, Paul Sorenson executed a letter ([Docket No. 16] Pls. Ex. Ex. W at 64) and an “Assignment of a Claim for Damages” ([Docket No. 16] Pls. Ex. Ex. X at 65-67) in which, in exchange for $1.00, Paul Sorenson sells and transfers to Melanie Forner “any and all claims, demands, and causes of action of any kind whatsoever”: 1) “against Joanne Marie Sorenson in her role as an Attorney in Fact for David August Sorenson;” 2) “against Joanne Marie Sorenson in her role as a spouse of a living David August Sorenson;” 3) “against Joanne Marie Sorenson in her role as an Executor for the Estate of David August Sorenson;” 4) “against Joanne Marie Sorenson as an individual;” 5) “against the Estate of David August Sorenson;” 6) “against any third party service providers to Joanne Marie Sorenson in any role, a living David August Sorenson, and the estate of David August Sorenson;” and 7) “against any individuals known to me or not, that may have assisted or conspired with Joanne Marie Sorenson to facilitate any of the underlying claims to which assignment is being tendered.” Paul Sorenson reserves any claims, demands, and causes of action that Paul Sorenson may have against Defendant with regard to her estate planning and any claims he may have against Defendant's “other potential heirs, the Assignee included.” (Assignment of a Claim for Damages.) The letter is dated November 24, 2020. Paul Sorenson's signature on the Assignment does not have a date, but Melanie Forner's signature on the Assignment is dated November 29, 2020. (Assignment of a Claim for Damages.) The Assignment states that it was made and was effective on November 24, 2020. (Id.)

On December 1, 2020, Plaintiffs filed a First Amended Complaint (“FAC”), which moots Defendant's first motion to dismiss. [Docket No. 13]

The FAC eliminates a significant portion of the factual allegations and claims that were asserted in the original Complaint. It solely seeks damages “for any and all property being found to have the Plaintiffs['] name on the property as beneficiaries and where the Defendant has attached her name...