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Wing v. Neely

United States District Court, N.D. Indiana, Hammond Division

October 23, 2014

MARTHA WING, as Personal Representative for the Estate of Marlene H. Neely, Plaintiff,
v.
CALDER JAMES NEELY and SPENCER MICHAEL NEELY, minors, Defendants.

OPINION AND ORDER

PAUL R. CHERRY, Magistrate Judge.

This matter is before the Court on a Petition for Approval of Confidential Mutual Release and Settlement Agreement [DE 72], filed by Defendants on July 22, 2014, and Defendants' Motion to Approve Attorney Fee [DE 85], filed under seal with leave of Court on October 4, 2014.[1]

On October 21, 2014, Plaintiff Martha Wing, as Personal Representative for the Estate of Marlene H. Neely, deceased, appeared, not in person, but by counsel Mark J. Crandley. Defendants Calder James Neely and Spencer Michael Neely, minors, appeared, not in person, but by their parents and natural guardians Kenneth R. Neely and Julie Neely and by counsel Thomas M. Greenberg. The Court received evidence and arguments on both motions.

I. Background

Calder James Neely is a minor born in 2004; Spencer Michael Neely is a minor born in 2007. They are brothers and the biological children of Kenneth R. Neely and Julie Neely. Both children were born during their parents' marriage. Both have at all times resided in their parents' household.

Thomas Neely and Marlene H. Neely were the paternal grandparents of the minors Calder James Neely and Spencer Michael Neely. Both Thomas Neely and Marlene Neely are deceased. Thomas Neely died before Marlene Neely died.

The grandparents, Thomas Neely and Marlene Neely, left various assets (money accounts and two parcels of real estate) for transfer upon death to the minors Calder James Neely and Spencer Michael Neely. This was accomplished by transferring money from a joint account to a new account titled to Thomas Neely alone, which designated the minors as sole Transfer on Death beneficiaries, and, as to the parcels of real estate, by executing deeds to the minors upon the death of the grandparent to last die.

Plaintiff Martha Wing, as Personal Representative for the Estate of Marlene Neely, on the one hand, and Defendants, by their parents and natural guardians, on the other hand, disputed the legal propriety of the estate planning and transfers of assets to the grandchildren based on alleged fraud and undue influence by grandfather Thomas Neely and alleged incompetence by grandmother Marlene Neely.

The dispute is multifacteted and has gone on for a long time. It has made its way into the state courts of Indiana and Mississippi and the federal courts of Indiana and Missouri. The parties eventually negotiated and entered a written global settlement agreement resolving the dispute as to all of the four courts. All that remains before this Court is the approval of the settlement agreement and an ancillary dispute about which court should approve the attorney fee requests by the attorney for Defendants and a request for approval of payment of Defendants' Indiana state inheritance taxes out of Defendants' gross settlement.

II. Jurisdiction

The nature of this Court's jurisdiction in this case is diversity of citizenship. See 29 U.S.C. § 1332. Under Erie Railroad Co. v. Tompkins, 304 U.S. 65 (1938), and its progeny, "federal courts sitting in diversity apply state substantive law and federal procedural law." Gasperini v. Cntr. for Humanities, Inc., 518 U.S. 415, 427 (1996); see also Gacek v. Am. Airlines, Inc., 614 F.3d 298, 301-302 (7th Cir. 2010). Moreover, although federal courts rarely have jurisdiction over matters that involve probate issues to the extent that this case does, this Court, as explained in District Judge Moody's March 9, 2012 order, has jurisdiction over this case. See DE 17.

On October 2, 2014, the parties orally agreed to have this case assigned to a United States Magistrate Judge to conduct all further proceedings and to order the entry of a final judgment in this case. Therefore, this Court has jurisdiction to decide this case pursuant to 28 U.S.C. § 636(c).

III. Approval of the Settlement Agreement

The Confidential Mutual Release and Settlement Agreement [DE 70] of the parties dated December 9, 2013, has been admitted into ...


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