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Palmer v. Mahon

United States District Court, M.D. Pennsylvania

June 1, 2018

DAVID D. PALMER, Plaintiff,
v.
JANET M. MAHON, et al., Defendants.

          BRANN, JUDGE

          REPORT AND RECOMMENDATION

          JOSEPH F. SAPORITO, JR. United States Magistrate Judge

         This is a pro se diversity action where the plaintiff, David D. Palmer, asserts that the defendants converted his property, received by inheritance upon the death of his late father, to their own use. Before us is the defendants' motion to dismiss for lack of subject matter jurisdiction. (Doc. 18). For the reasons stated herein, it is recommended that the motion be granted in part, and denied in part.

         I. FACTUAL BACKGROUND

         The plaintiff, David D. Palmer (“David”), commenced this action with the filing of a pro se complaint on August 24, 2017. (Doc. 1). The named defendants are David's sister, Janet M. Mahon (“Janet”), and her husband, George Mahon (“George”). In his complaint, David asserts claims for breach of fiduciary duty, negligence, conversion, fraud, deceit, breach of contract, and replevin in connection with his alleged entitlement to an inheritance under the will of his late father, Charles W. Palmer (“Charles”), who died testate on January 23, 1985. David bases jurisdiction upon diversity of citizenship, as he is an inmate at the Richland Correctional Institution in Mansfield, Ohio, and the defendants are residents of Coudersport, Pennsylvania, and the amount in controversy exceeds $75, 000.

         Based on the complaint, the exhibits attached thereto, and publicly available state court records, [1] we have ascertained the following factual background for this action:

         Charles passed away on January 23, 1985. At the time of his death, Charles had resided in Sweden Township, located in Potter County, Pennsylvania, along with his wife, Dorothy Palmer (“Dorothy”). He appears to have left behind three adult children: David, Janet, and Kermit Palmer (“Kermit”). Charles also left behind a will, which explicitly disinherited Kermit[2] and otherwise bequeathed a life estate in a house and acreage and a business-Palmer's Radiator Shop-to his wife, Dorothy, with the remainder interest bequeathed to David and Janet in equal shares, per stirpes.[3]

         On January 25, 1985, the will was probated, and letters testamentary were granted to Citizens Trust Company (“Citizens”) and Janet, who had been named as co-executors under the will. On April 22, 1985, the two co-executors and the three beneficiaries-Dorothy, David, and Janet in her personal capacity-entered into a family settlement agreement to expedite settlement of the estate.[4] The agreement provided that the parties to it agreed that the net estate be distributed according to an attached “First and Final Account and Schedule of Distribution” without the necessity of filing a formal accounting with the court. The agreement provided an explicit release from liability against Citizens, against Janet as co-executor, and against the estate itself. The agreement included an acknowledgement by the parties that they had received all assets to which they were entitled under Charles's will. Finally, the agreement provided that Citizens would resign as co-executor to reduce future executor fees it would otherwise charge to administer the estate, leaving Janet as the sole, uncompensated executor of the will with respect to the final distribution of assets under the agreement.

         Dorothy subsequently filed a petition to set aside the family settlement agreement, claiming fraud. After multiple hearings, the trial court entered an order on June 16, 1986, setting aside the family settlement agreement. Janet and David filed exceptions to the order, which were denied on January 27, 1987. Janet and David appealed to the Superior Court of Pennsylvania, which reversed the trial court's order vacating the family settlement agreement. In re Estate of Palmer, 536 A.2d 832 (Pa. Super. Ct. 1987) (table decision). No further appeals were taken; the estate assets were presumably distributed in accordance with the family settlement agreement after the appellate court's order became final.

         Dorothy, wife of Charles and mother of Janet and David, passed away in April 1995.

         On April 19, 1995, David was indicted in Ohio for various offenses of child sexual abuse involving a single victim. On June 16, 1995, a superseding indictment was filed, alleging offenses against a second victim as well. On April 29, 1996, pursuant to a negotiated plea agreement, David entered a no-contest plea to two counts of rape of a person under thirteen years of age in exchange for dismissal of the remaining fifteen charges. The Ohio trial court found David guilty and sentenced him to an aggregate term of fourteen to fifty years in prison. David's conviction and sentence were subsequently affirmed on appeal, as was his designation as a sexual predator. State v. Palmer, No. 16017, 1997 WL 452010 (Ohio Ct. App. July 25, 1997); State v. Palmer, No. 18259, 2001 WL 256303 (Ohio Ct. App. Mar. 16, 2001).

         On May 17, 1996, while he was incarcerated in Ohio, David executed a general power of attorney in favor of his sister, Janet. David allegedly mailed the power of attorney to Janet on July 1, 1996, together with a handwritten cover letter in which he attempted to limit the scope of the power of attorney to a specified series of transactions involving the withdrawal of retirement funds from a retirement plan sponsored by his former employer and the deposit of these same funds into a Coudersport bank for David's later use.

         On September 14, 1998, Janet and George acquired the property previously held by Kermit through a tax upset sale. A Tax Claim Bureau Deed conveying the property was recorded on December 31, 1998.

         On June 1, 2006, Janet and George executed a deed conveying the two adjacent parcels owned by Janet and David (taken under their father's will upon termination of their mother's life estate) and by Janet and George (acquired in the 1998 tax upset sale) to Janet and George. Janet executed the deed on behalf of David as his attorney-in-fact pursuant to the May 17, 1996, general power of ...


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